What's the difference between a job-based contract molder and a full-service thermoplastic and thermoset molding manufacturing partner? In the case of Nashotah, Wis.-based Dickten Masch Plastics LLC (DMP), it's the difference between losing and keeping a longtime customer.
Up until recently, DMP had been producing the plastic overmolding for fluid-level indicators made by Milwaukee-based Charter Automotive, a Tier 1 and Tier 2 automotive supplier. However, in 2009, Charter Automotive announced that it was exiting the fluid-level indicator business.
For DMP, which has approximately 250 employees, Charter Automotive's announcement meant up to a dozen DMP jobs hung in the balance. It also meant the company potentially could lose a customer that, "in its heyday," accounted for nearly 20% of DMP's core business, according to DMP President and CEO Steve Dyer.
Dyer admits that the initial reaction of company leaders was, "Oh my goodness, we're going to lose a core anchor piece of business that we've provided for over 20 years."
"We quickly got over that moment of panic and began to think outside of the box," Dyer explains.
DMP's outside-the-box solution was to offer to perform the metal stamping of the fluid-level indicators, or dipsticks, for Charter Automotive. The company was able to convince Charter Automotive -- and Charter's customers -- that DMP was the right choice for the job, and now DMP is expanding its Nashotah facility, with the help of $293,000 in state tax credits, to accommodate the additional business. The expansion will retain 160 jobs and create an additional 75 positions.
"We didn't assume any contracts, and we weren't grandfathered in by anything," Dyer says. "We had to earn the business, through a collaborative approach between DMP and Charter. Working directly with [Charter's] customers, we successfully passed their quality audits, their engineering audits, their procurement audits, and now we're launching that business -- basically taking the people, the assets and the equipment that were in Charter Automotive's facility and moving them 22 miles down the road to our facility -- and providing a very seamless and low-risk integration for those customers to provide this product that's integral to their engine manufacturing."
The move elevates DMP to Tier 1 supplier status, opening up four new markets -- agriculture, aviation, heavy trucks and outdoor power sports -- and adding more than 20 new customers "that we didn't have direct access to" in the past, according to Dyer. Dyer foresees significant growth opportunities, as being a Tier 1 supplier "makes it much easier for you to integrate yourself deeper and more vertically within those customers."
The idea for DMP's pitch to Charter Automotive didn't come out of the blue. Soon after Dyer became president and CEO in fall 2008, the company began reevaluating its business model. Among the major changes that Dyer made -- including a shakeup of the management team -- was to reposition the company's image from that of a contract molder to a full-service strategic partner in customers' success. DMP enlisted the help of Scheibel Halaska Inc., a Milwaukee-based marketing communications firm, to take its message to the marketplace.
Through a redesigned Web site, customer communications and other PR strategies, DMP has been emphasizing its "value proposition" -- the company's ability to help its customers "reduce costs, save time, lower risk and improve quality throughout [their] value stream," as the Web site explains. Mary Scheibel, principal, Scheibel Halaska, notes that those capabilities already existed at DMP, but the company hadn't taken them "to the market in a holistic way."
Dyer explains: "We're taking part of our story, which Scheibel Halaska was critical in helping us to craft and take to the market last year, and that is applying our holistic approach to the business -- not just looking at being a shoot-and-ship provider of a part, but looking at ways that we can truly add value. How can we add vertical assembly integration? How do we optimize presentation of parts to their lines? How do we establish kanbans through our lean tools to provide the right product on time every time to support their manufacturing operations?"
Prior to DMP's new marketing makeover, the dynamic between DMP and its customers was simple: "Our customers provided a purchase order and we provided a part that met their print specifications," Dyer explains. "And we did that very effectively for many, many years and were recognized for that."
"Post-new DMP, if you will, rather then us saying, 'Give us a purchase order and we'll provide you good technical parts at a reasonable price,' we're saying, 'Give us 10 minutes and we'll show you how we can solve your problems.'"
Thanks to the company's success in rebranding itself, among other changes, the new DMP is "much stronger-positioned today than we were prior to the global crisis," Dyer asserts. The company, which was acquired by Patmian LLC in April, is projecting 35% revenue growth and 100% improvement in EBIDTA performance in 2010.
"We think we're pretty good at what we do, and that is adding value in manufacturing," Dyer says. "We are not good at crafting and messaging this story and getting it in front of decision makers to help them understand the value we can bring and earning the opportunity to prove that value on a daily basis. And Scheibel Halaska was critical in both crafting that story and getting it in front of the right decision makers."