What is in this article?:
- Who Says You Can't Manufacture Electronics in the US?
- Rightsizing the Customer Base?!
Firstronic CEO John Sammut explains his strategy for building an electronics company that manufactures in the U.S. -- near ailing Detroit, no less! -- and exports to Korea, China, Mexico and India.
First of a three-part series. Read Part Two: Workforce and Lean Strategies Help Keep Manufacturer in the US. and Part Three: Leveraging IT for Competitive U.S. Production.
We are ... different from the typical contract manufacturer that is chasing any business they can get their hands on.” -- John Sammut
John Sammut is a seasoned manufacturing pioneer whom I have known over the years from my first connection to his Colorado company, EPIC Technologies LLC, a onetime supplier to Respironics. Sammut built EPIC from a small $3-million board producer with 50 employees to a $300 million company with over 3,000 employees. But when Sammut’s little boy, Chase, developed fatal brain cancer, John left the company, and we didn’t hear from him for a while.
Well, Sammut is back, performing another manufacturing miracle at Firstronic LLC in Grand Rapids, Mich., just a few miles outside Detroit. There he’s making electronics for some very special customers and proving that sometimes 'you gotta get small to get big.'
The Firstronic team is doing so well at growing manufacturing in the U.S. that they not only have prevented business from going offshore, they export 75% of production to Korea, China, Mexico and India.
“Overall, most of our industry is offshore, a whole range of products for the auto and medical industries,” Sammut says. “We've been investing in more automation -- we do high-quality products -- to be more competitive with offshore. We’ve seen business re-shored from off-shore competitors -- our customers have moved orders from offshore suppliers to Firstronic in Michigan.
And he is thinking bigger.
Firstronic is actually winning programs that were previously off-shore, or slated to go there, by using lean manufacturing and flat overhead. It seems to work -- customers love it, and we're growing rapidly, doing very high volumes.
John Sammut, President & CEO, Firstronic
Sammut plans to build the business from approximately $8 million in revenue to over $50 million, and will add around 200 jobs in the U.S. alone. After that, he says, “we will likely launch a plant in Mexico for the higher labor content products. …There will be increasing demand for domestic production... I think we're on the early end of a trend that is coming in our industry -- we're blazing the trail to demonstrate that U.S. manufacturing can be done competitively...
"Firstronic is actually winning programs that were previously off-shore, or slated to go there, by using lean manufacturing and flat overhead. It seems to work -- customers love it, and we're growing rapidly, doing very high volumes.
"Our industry (electronic manufacturing) moved off-shore too rapidly and for many customers it simply wasn't the right move... They're starting to figure it out and are looking to migrate back -- with the right suppliers who can competitively supply with lean manufacturing and flexible delivery."
I spoke with Sammut as he prepared for yet another packed day, and followed up with the company as it built its strategy and made critical manufacturing, sourcing, IT and supplier decisions. Small may be an advantage -– there is, as the balloonist quipped, “no place to go but up" -- and despite the recession and aftershocks in the automotive sector, which now makes up about 50% of Firstronic business, the company is well positioned for growth.