Leaders from some of southeastern Wisconsin’s best-known manufacturing companies were on hand Thursday to share strategies and insights with attendees at BizTimes Milwaukee’s annual manufacturing summit.
Tracy Pearson, president and CEO of Perlick Corp.; Terry Tuttle, president of HellermannTyton North America; George Baumann, president and CEO of GL Industrial; and Megan Tzanoukakis, president and CEO of Sussex IM, all discussed the numerous issues they’re navigating as manufacturers. Thursday’s main panel discussion touched on everything from the ongoing burden of inflation and interest rates to artificial intelligence and reshoring.
Each panelist had a unique perspective on what their company’s biggest challenge is based on what markets they serve. Given that a large portion of HellermannTyton’s products are used by the automotive industry, the company is closely monitoring the ongoing United Auto Workers strike.
“It requires pre-planning and close communication with the customer, who’s only willing to tell you so much because they don’t want to be out of parts either,” said Tuttle. “We have layered on extra daily analysis of our top customers and what their orders look like versus the past 12 weeks. We have contingency plans and we thankfully have a healthy back order.”
Tzanoukakis said inflationary pressures are something Sussex IM is still navigating, especially as insurance rates are rising. Rising interest rates have fundamentally changed how the manufacturer does business, she said.
Sussex IM not only makes plastic parts for its clients, but also sources components for them in order to fully assemble a final product. The manufacturer typically holds a large amount of inventory for customers, which is no longer possible, Tzanoukakis said. Now, Sussex IM negotiates with clients up front to make sure the company isn’t liable for more inventory than the value the company is adding through its plastic parts.
Tzanoukakis also believes plastics manufacturers are battling an overall image misperception.
“Our industry has a not-so-good reputation over the last several years because of environmentalists and the mainstream media saying all plastic is bad,” she said. “Terry (Tuttle) and I know it’s not. There’s no other durable, low-cost material that is available to the marketplace like plastic. We’re working with our customers to find a way to give them a sustainable manufacturing solution.”
GL Industrial is currently figuring out the challenges that come with rapid growth as the company shifts from being a products-focused brand to more of a service provider. Baumann explained this move will hopefully offset any uncertainties the company is experiencing.
“The philosophy is if we can be more sought after because we’re providing service solutions, then people aren’t looking at our products as just a product,” he said. “They’re coming to us for advice. The key is to be known as a service provider, which is why we’ve invested in software companies and technology, and we’ve invested in our people, to make them smarter.”
To complete this goal, GL Industrial acquired five companies in one year. After experiencing this rapid growth, Baumann said the organization created a middle management department “basically overnight.”
“All of a sudden we went from five departments to almost 12,” he said. “That’s been the biggest struggle for us.”
The COVID-19 pandemic completely changed how Perlick, a manufacturer of refrigeration and bar equipment, does business. The company has combined its commercial and residential segments as the line between home life and entertainment is becoming increasingly blurred.
“Now we’re finding residential products in the suites at Fiserv Forum or AmFam Field. That’s something that’s very different than how they’ve been used before,” said Pearson.
Reshoring efforts
Panelists also discussed the increasing trend of reshoring as manufacturers look to build more resilient supply chains and decrease their dependence on other countries for materials.
“We have a very concerted effort that we started a year and a half ago to in-source,” said Pearson. “We’re not trying to bring work from offshore to on shore, we’re trying to bring it back into our plant, especially around fabricating. Our goal is to increase our reliance on ourselves.”
Perlick aims to increase the amount of in-house fabrication being done by almost 35%. This is being done through added technology as well a recent expansion at the company’s headquarters.
Tzanoukakis said Sussex IM recently introduced two programs aimed at bringing work back to the United States.
“The United States is the largest consumer economy in the world,” she said. “Why not make your parts where they’re going to be consumed?”
Baumann hasn’t necessarily seen huge amounts of onshoring happening for parts manufacturers, but more diversification as companies look to lessen their reliance on Asia.
“There are a lot of complexities in getting out of Asia,” he said. “The reshoring effort is a good effort, but with the products we sell, we’re not seeing that as much.”
When considering what work to bring back in-house, Tzanoukakis explained Sussex IM is only realistically able to bring back production that is being done at a high volume and is highly complex. The know-how of workers in the U.S. makes manufacturers here a better fit for this kind of work.
To support this work, most panelists said they’re increasing automation. HellermannTyton North America and Sussex IM both have their own in-house automation departments. This helps the companies reduce the amount of unskilled labor being done and upskill their employees in more technical skillsets.
“We do it for increased quality. We do it for safety sometimes and it’s just an integral part of who we are,” said Tuttle.
Thursday’s panel also touched on the growing use of artificial intelligence and how the emerging technology can be leveraged.
HellermannTyton North America is inserting AI into its sales process while Perlick is hoping to use AI to enhance its customer service experience.
