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Excellence in execution leads to contract manufacturer’s growth

Not even the pandemic could slow down the growth of O’Neal Manufacturing Services, The FABRICATOR’s Industry Award winner for 2022

A large part is formed on a press brake.

Each of the OMS manufacturing locations has similar fabricating capabilities, but they also specialize in certain types of work and customers. The Pittsburgh facility, for instance, handles a lot of transportation-related work that requires large fabricated parts. Images: O’Neal Manufacturing Services

During the pandemic, manufacturers emerged as stars, doing what they do best—responding to requests for quick turnaround of fabricated goods. Providing products like beds and medical equipment gained metal fabricators the public seal of approval from governing bodies, who called these manufacturers “essential businesses.” O’Neal Manufacturing Services (OMS) is one such company.

Now this isn’t a small job shop that responded quickly to a plea for help. This is a major contract manufacturer with more than 1,000 employees and multiple locations (Birmingham, Ala.; Cedar Falls, Iowa; Greensboro, N.C.; Houston; Indianapolis; Louisville, Ky.; Monterrey, Mexico; and Pittsburgh) that went from an initial conversation about manufacturing shells for freezers specifically designed to hold Pfizer COVID-19 vaccines at drug stores to actually producing them days later. Typically for OMS, this type of product launch for a customer can take as long as six months in some instances. These were special circumstances, however.

“We certainly responded much faster than we normally might because we were aware of the importance of the project,” said Kent Brown, president/CEO of OMS. “But it was also good for our team to be involved in something like that and get excited about helping in a real, tangible way.”

That’s the type of customer service and commitment to delivering quality goods by deadline that has established OMS as a major source of fabricated metal components and welded assemblies for large equipment manufacturers around the world. And this concept is nothing new for OMS, with roots that reach back to its parent company, O’Neal Industries, the nation’s largest family-owned network of metal service centers and componentry and tube manufacturing businesses that dates back to 1921.

Brown boils down his company’s performance in 2020 and 2021 to a simple observation: “If you can execute now, you can grow.” Any metal fabricator trying to take advantage of customer opportunities can relate to this statement. In the current healthy market for metal fabricating services in North America, fab shops and manufacturers have had to deal with exorbitant metals prices and the shallowest labor pool in recent memory.

Meanwhile, OMS has pushed forward. In The FABRICATOR’s 2021 FAB 40 list, which was highlighted in the June 2021 issue, OMS was the sixth-ranked fabricating operation in terms of reported revenue: $148 million in 2020 and expected sales of $200 million in 2021. Brown said the company should improve on that initial forecast, reaching $210 million in revenue for 2021.

Business growth has occurred with current customers, some of which are the largest names in the manufacturing space, and with new accounts. Michael Richey, OMS director of sales and marketing, said that last year brought new business involving conveyor systems, pellet grills, recreational vehicle components, stairlifts, and robotics. OMS also added processing capabilities such as roll forming, tube bending, and paint and powder coating at various facilities.

This growth doesn’t overlook difficult decisions that were made in the early days of the pandemic. Even at OMS, layoffs occurred, furloughs were issued, and salaries were cut.

“We had to put the brakes on very quickly when COVID came and just had to re-evaluate where we were going. That helped us put a plan in place for 2021,” said Amy Gartman, OMS director of human resources.

Brown said that in 2020 OMS didn’t overreact to the COVID-19-related shutdown. Yes, cuts were made, but they weren’t as deep as what other competitors enacted. That allowed the company to bounce back a bit more quickly.

A welder practices his craft.

As O’Neal Manufacturing Services looks to grow, its management team recognizes the steps necessary for the organization to attract and retain employees. Kent Brown, the company’s president/CEO, calls it the company’s No. 1 challenge moving forward.

“An advantage we had is that we didn’t cut our inventory way back. A lot of our competition was concerned about cash flow, obviously, and they reduced the amount of inventory they had on hand,” Brown said. “When everything picked back up, it became very difficult to get certain steel components. We had an advantage: We kept inventories at near-normal levels heading into the recovery.”

That’s helped to fuel company growth into 2022. OMS is winning work because other competitors couldn’t meet their contract manufacturing obligations.

Also, reshoring is alive and well. Brown said that OMS has seen metal manufacturing work coming back to domestic shores because businesses are looking for stability in their supply chains.

The Birmingham, Ala.-based company is enjoying a resurgence, which just happened to coincide with the 100th anniversary of its parent organization, O’Neal Industries. Because of its market success and commitment to operational excellence and safety, The FABRICATOR has named OMS the recipient of its 2022 Industry Award.

The Key Ingredient: People

No amount of automation and lean production processes can eliminate the need for humans in a metal fabricating company. OMS is no exception to this rule.

When asked about the company’s greatest challenges, Brown responded, “Our biggest challenge is finding the next group of great employees.” It pays to have a positive mindset in the face of a formidable obstacle.

So OMS moves forward while tweaking its approach to recruitment accordingly. “We had to be more innovative and more proactive in our recruiting and retention methods. We also had to evaluate what we were doing and if we were really listening to people out there,” Gartman said. “The pandemic shifted how people are thinking about work and what they are wanting from work.”

With all businesses looking for workers, OMS adjusted wages to ensure it was competitive with what was being offered in the local market and reviewed benefits. It focused on branding efforts to highlight the company as being a desirable place to work, where skills development and career paths were part of the conversation, not just punctuality and passing a drug test. It boosted its social media presence to help customers and candidates understand who the company was, what it did, and how the work was done. Gartman added that a promotion of the organization’s employee referral program has resulted in several new hires joining the metal fabricating family.

On the retention side, management redoubled its efforts to gather feedback from employees. “We have to ask for it, listen to it, and act on it to get better,” Gartman said.

OMS implemented recognition programs and promoted development opportunities to the employee ranks. As many people decided to exit the working world during the pandemic, OMS did its best to retain the expertise of its current employees, so that it might be able to leverage it for future endeavors.

A grinder removes rough edges from fabricated parts.

No matter the amount of automation advancements, people are still the key to some processes operating smoothly and efficiently, like the grinding application in the OMS Greensboro, N.C., plant.

“We appreciate the skills and qualifications of all of our employees,” Gartman said. “That’s why we conduct job functionality assessments to make sure that we’re identifying those skill sets and can put them to use. We offer mentorship opportunities and cross-training to guide less-experienced workers. We also provide tuition reimbursement to pay for further learning and development.”

A formal example of this approach exists at the company’s Pittsburgh facility, where an internal maintenance training program was launched to help find much-needed maintenance help. The 18-month program is designed to train employees from the production floor in maintenance tasks and techniques for four hours each week, allowing them to not only attain the proper skills and experience, but also remain productive in their current role.

Skills development and training creates an internal pool from which to find the next generation of OMS leaders, Gartman said. The byproducts of promoting from within are a motivated workforce; better collaboration between management and their direct reports; and improved efficiencies because managers are more familiar with real-world production, most likely their former stomping grounds.

The focus on employee engagement also extends to leadership development. OMS delivered 14 training sessions for leadership development as of mid-December 2021, all of which were led by an internal certified trainer and were focused on the needs determined by the local facility. Sessions included “Building Trust Under Pressure,” “Influencing Outcomes,” and “Shaping a Motivational Workplace.”

“Identifying specific individuals and complementing that with creating individual development plans and offering leadership development opportunities so that we could do some long-term planning is really important,” Gartman said.

Approximately 80% of OMS managers have been promoted from within, which includes each general manager of the company’s plants.

A large-scale effort to foster production expertise and customer knowledge wouldn’t be much good if a company didn’t try to take that information and improve its operations. That’s why each facility has its own MyCI (continuous improvement) program.

Each month a facility collects continuous improvement ideas from both the front office and the shop floor. A team, not just one individual, meets to vote on what ideas are most worthy of immediate follow-up. Some are even shared with other facilities. Those who submitted the winning ideas receive recognition in the form of time off, parking spots, and even trophies.

“Employees really know what they are doing, and they like it that we value what they do. This type of program helps to create a culture of improving everything, including making it safer for everyone,” said Christopher Thomas, senior quality manager at OMS.

Safety First

Safety doesn’t get a lot of coverage in the pages of The FABRICATOR, and you don’t see a lot about it on company websites. OMS views it as an integral part of its culture, starting at employee orientation and extending to daily reminders of safe working practices.

Sheet metal awaits processing.

Having sheet metal available in the midst of the pandemic, when supply grew very tight, helped OMS maintain its customer commitments and even win some new work.

“A poor working environment is going to affect profitability and morale, and it’s going to harm people’s lives,” Brown said. “So you have to be safe to be successful.”

Each facility has its own safety manager. All new hires go through an orientation process that explains what is expected from them in terms of minimizing injury risk. All production positions require employees to complete an extensive checklist to ensure they are well-equipped to complete job duties successfully before being allowed to operate independently.

But each facility also has flexibility in how it approaches constructing its safety environment, according to Walt Brittain, the company’s director of safety. It’s obviously unfair for a shop that works with plate and large weldments most of the time to approach its safety practices in the same way as a facility where sheet metal represents a majority of the work. A “safety roadmap” provides an outline of what a safety program is supposed to look like (with some of the 20 elements being employee involvement, accident reporting, job safety reviews, identifying high-risk operations, and ergonomic reviews).

“This all comes with a package of written programs that are designed for flexibility,” Brittain said. “You can add, subtract, and modify elements of it.”

A Safety Program Implementation Scorecard guides each facility in establishing and building up its safety culture. For example, Level 1 calls for a Site Safety Committee to be comprised of management and hourly employees, and Level 5 calls for the Site Safety Committee to create subcommittees focused on specific topics, such as emergency preparedness and safety promotion activities. All program elements, no matter what the level, encourage employee participation—which is where the real value is evident.

As safety leaders create a culture that looks to minimize the risk of injury in the facility, employees become teachers themselves, correcting co-workers when poor safety practices are on display. Brittain said such employee engagement has resulted in the reporting of about 4,800 near misses in 2021, many of which were investigated to prevent those same actions in the future.

“We use the same audit system, a cloud-based program, throughout the company. It houses our near-miss instances and audits,” Brittain said. “That way everyone knows what’s going on.”

Several improvements have come out of these employee-initiated comments. These include no-touch tools (tools that employees use to avoid lacerations when handling metal parts), laser-based safety systems, safety lights on lift trucks, press brake sensors that prevent the ram from descending if a hand is in the bending window, and crane sensors that warn operators if cranes are too close to each other.

All of these initiatives have helped OMS to achieve an OSHA recordable incident rate of 1.6. The industry average is over 5.0. (The formula for how to calculate the incident rate is the number of incidents multiplied by 200,000, then divided by the total number of hours worked in a year. The number 200,000 is used because it is the total number of hours 100 employees would work in a year.)

When You Can’t Find the People …

Finding the workforce that will help OMS execute its plans is obviously a current and future challenge. With this in mind, the company has tried to automate those basic tasks that were hard to find workers for in the first place.

Plate is cut on an oxyfuel table.

The OMS Greensboro facility also has oxyfuel cutting capabilities.

For instance, the Greensboro facility recently installed a Lissmac deburring and edge-rounding machine with a conveyor to complement its plasma cutting operations. A table operator now lifts the plasma-cut parts—each about 1 in. thick and weighing more than 120 lbs.—from the machine’s cutting bed and onto a conveyor that feeds the deburring machine, which removes the slag from the parts. An exit conveyor then takes the parts directly to shipping. The entire operation now calls for employees to lift the parts only twice. Previously, the heavy parts had to be lifted as many as five times—from the cutting table to the cleaning table to the deburring machine to staging for shipping and then into the shipping container—before they were finally on their way to the customer.

Brown said that this type of approach is why OMS is now investing in material storage towers for its laser cutting machines, which eliminate the need to have a lift truck and driver that must constantly feed these machines and remove laser-cut parts and their accompanying skeletons. The company also is implementing collaborative robots for the first time, hoping they can take on some of the simple and repetitive welding and plasma cutting chores.

“We’re trying to change those operations that have been historically 100% manual by getting more automation in those areas,” Brown said.

The company is serious about its capital equipment investment. Russ Bagby, OMS chief financial officer, estimated that OMS spends $8 million to $10 million each year on new equipment. Just looking at a 12-month period stretching from fall 2020 to fall 2021, Bagby reported that the company had purchased five fiber laser cutting machines, a laser tube cutting machine, vertical machining centers, and press brakes.

Although OMS has a large budget for capital equipment expenditures, it still maintains an intensive justification process for technology investment. The process involves a well-researched request from a facility management team and then a thorough justification review by the corporate management team. The facility team presents the need for the equipment and explains the impact on new capacity, labor costs, and safety. When considering the purchase request, the corporate team determines if the investment makes sense for that facility or another, if it matches up with strategic objectives, if outsourcing might make more sense, and if the return on investment is an acceptable time frame.

“It’s a very in-depth process that requires multiple iterations to get it across the finish line before we actually issue a purchase order for the new technology,” Bagby said.

Analytics are very important for making such critical decisions, and OMS is in a much better place to collect that information now that the entire organization has moved to the same ERP software system—the first time that has happened since 2010, when the company first stood on its own. The last location came online in March 2021.

OMS implemented Epicor over a three-year time span, rolling out one plant at a time. The new ERP software replaces the four disparate systems that existed within the company.

“A lot of times when you see these ERP implementations, it can be a disaster, and we never had that happen,” Bagby said. “Every one of the implementations was very successful.”

Now with the system in place, Bagby said the management team has a much clearer view into the company’s real-time operations. Streamlined processes in the facilities feed consistent and complete operational data into dashboards that give the decision-makers the necessary information to plan wisely.

Workers arrive to work with the proper PPE.

Providing the proper personal protective equipment is one way that OMS tries to minimize the risk of injury to employees while on the job.

That’s just the beginning, however. Like a continuous improvement effort, an ERP system continuously evolves, Bagby said. New metrics emerge that management deems important to track. Processes change, requiring alterations to the software tools. New software modules become available, and they deserve proper investigation.

“We’ve actually formed a team that came out of our new ERP system implementation,” Bagby said. “Their focus is not only enhancing the software, but also looking for those other technologies that we need to keep or to invest in to get the data that is available to us so that we can make better decisions. We want to make sure we are on that cutting edge of technology and that we’re not falling behind.”

Building That Right Culture

The phrase “Let’s Build Things” is hard to miss when visiting the OMS website. It’s a company slogan, but it’s also an accurate reflection of what the company does and what it hopes to do with its employees. It wants to build a bigger and better organization that delivers for its customers and gives employees a chance to grow and prosper with business expansion.

To achieve its business goals, OMS will need employees. That’s one of the reasons the company is active in supporting apprenticeships throughout its many locations. These on-the-job learning opportunities introduce newcomers to manufacturing and the company’s role in it, and they create a feeder system for new talent.

The Louisville facility participates in the Kentucky Federation for Advanced Manufacturing Education program, where regional manufacturers partner with local community colleges to offer apprenticeships that will create the next generation of manufacturing workers. The apprentices attend classes at a local community college two days a week and work 24 hours a week for a local employer, all while being paid a competitive wage for their work. After five semesters, the student earns an associate degree in applied science in industrial maintenance technology—advanced manufacturing, as well as advanced manufacturing technical certification.

The Greensboro plant has partnered with the local Guilford Apprenticeship Partners, which works to match students interested in earning money while they learn with local manufacturers. When the apprenticeship is completed, students will have been paid for 8,000 hours of on-the-job and classroom training during the four-year program and will have earned an associate degree in applied science from Guilford Technical Community College. All tuition, books, and fees for the associate degree program are covered.

The Pittsburgh, Cedar Falls, and Houston facilities have worked with Catalyst Connection, which is affiliated with the National Institute of Standards and Technology’s Manufacturing Extension Partnership, to create industrial manufacturing technician apprenticeships that are tailored to each facility’s manufacturing focus and processes. These efforts might be a model for other OMS locations to follow.

“The best thing we can do to attract employees is to treat our current employees well, show everybody dignity and respect, and give them a place where they can learn and grow,” Brown said. “If we build the right culture, they will come.”

No matter how hard companies try, they can’t escape the fact that they still need the right employees to succeed. It’s a challenge that every organization faces.

OMS is in the business of building fabrications. It’s now tasked with building a work culture that ensures it can continue to serve its mission and its customers. Indications from the last couple of years suggest the company is on the right track.

Kent Brown, president/CEO of O’Neal Manufacturing Services, is pictured.

Having the right fabricating technology and people in place are keys to growing OMS. “If you can execute now, you can grow,” said Kent Brown, OMS president/CEO.

A Profile in Market Growth

Serving the material handling, construction, and railroad markets over the years, O’Neal Manufacturing Services (OMS) purchased special steel bar profiles from a German company. In 2019 the simple supplier-customer relationship changed a bit.

The German company recognized that OMS was not only a very large purchaser of its high-precision material, but also had plenty of connections in the manufacturing community. It wanted OMS to act as its representative for its steel profiles in North America.

“It was a perfect fit for us because we already understood their material and had worked with their material,” OMS President/CEO Kent Brown said. “So they were able to provide us with a great product that a lot of our customers needed, but we were able to provide them with value-added services such as saw cutting, machining, and welding.”

The latter capabilities really opened new doors for these steel profiles. (Michael Richey, OMS sales and marketing director, said just more than half of all special profile sales now involve some sort of value-added processing.) OMS soon found itself serving new industries, such as the linear bearing market, and strengthening its service to customers, particularly in the Canadian market. The business activity has grown to the point that OMS has negotiated special deals with its logistics provider to have bulk shipments delivered from Germany and some large shipments sent directly to customers in Ontario and Quebec.

OMS officials report that this specialty steel profile business has performed better than expected. Sales of these products grew 50% in 2021 when compared to the first year of the effort in 2020.

Editor's note: In 2020, The FABRICATOR celebrated its 50th anniversary, so we decided to catch up with some past Industry Award winners. Also read about last year's winner, Laystrom Manufacturing.

Workers support a Habitat for Humanity project in Indianapolis.

O’Neal Industries, the OMS parent company, annually allocates at least 1% of its earnings before interest, taxes, and depreciation to charitable causes. In addition to that, O’Neal Industries provides OMS with funds that are made available to each of the OMS locations to use as their discretion. One example of this is the Indianapolis location’s support for Habitat for Humanity.

About the Author
The Fabricator

Dan Davis

Editor-in-Chief

2135 Point Blvd.

Elgin, IL 60123

815-227-8281

Dan Davis is editor-in-chief of The Fabricator, the industry's most widely circulated metal fabricating magazine, and its sister publications, The Tube & Pipe Journal and The Welder. He has been with the publications since April 2002.