David Soyka explains how the company remains in the driver seat.
Whether you’re coursing the countryside on your Harley-Davidson motorcycle or manicuring your backyard on a lawn tractor, you’re getting a comfortable ride thanks to a company you’ve most likely never heard of: Milsco Manufacturing.
Each year, the Milwaukee, Wis.-headquartered company designs and manufactures more than three million seats for a variety of commercial and residential vehicles, selling directly to OEMS. “What very little retail we do is sold through distributors, and we don’t put our name on the product,” adds Milsco Vice President of Business Development Bruce Pate.
But anonymity suits the company just fine. Milsco has been making seats since 1924, and it is content to let its products’ value (form, fit and functionality) speak for itself.
FROM FARM HORSE TO IRON HORSE
The company’s roots date back to the early 20th century, when Carl Swenson established the Milwaukee Saddlery Company to make leather harnesses and collars for farm horses. In 1934, Harley-Davidson approached the company with the idea of creating an upholstered, two-person seat for its motorbikes. That began a long partnership. Today, the iconic motorcycle manufacturer accounts for 30 percent of Milsco’s total sales and every Harley-Davidson that hits the road is equipped with a Milsco designed and manufactured seat. In 2008, the year that marked Harley-Davidson’s 100th anniversary, Milsco launched the historically correct FLSTSB Crossbones Seat (the design was based on the 1934 original).
During World War II, the company focused on military production. In 1948, it renamed itself the Milsco Manufacturing Company and shifted strategy to target growing post-war automotive markets. Over the years, Milsco diversified to provide seating solutions for the agricultural and construction, marine recreation, turf care, industrial lift, golf cart and mobility markets. Today, customers include John Deere, Yamaha, Caterpillar, Arctic Cat, Kubota, Toro, BRP, Briggs & Stratton and Toyota, among others. A leading seat manufacturer, Milsco produces more than three million seats a year and in more than 1,000 unique product variations. “Our durable and comfortable quality seating solution helps customers stand out from the competition and sell more of their product,” Pate says, describing that value that Milsco provides clients’ bottom line.
In 1995, the company was acquired by Jason, Inc., a mini-conglomerate of manufacturing companies serving the automotive, industrial finishing and power generation component industries. Jason, also based in Milwaukee, adopted a business model that fosters continuous improvement among all of its companies – thanks to collaborative manufacturing that shares methodologies and best practices. The purchase enabled Milsco to better manage growth and fund expansion.
SEAT OF THE PANTS ENGINEERING
Currently, Milsco maintains five manufacturing facilities totaling 800,000 square feet in Redgranite, Wis., Jackson, Mich., and Thomson, Ga. Its international locations include Merida, Mexico and Nuneaton, United Kingdom. “We have a good position in Europe, where we offer similar products and serve similar customers to those here in North America,” Pate notes, adding that Milsco’s roster includes 800 employees.
Milsco’s approach is to combine customization and off-the-shelf manufacturing. “Our marketing philosophy is designed to develop partnerships,” Pate explains. “Frequently, that means designing a seat from scratch to fit the product need and how it will be used. Our in-house design capabilities and years of experience allow us to come up with an effective, functional design that is the most optimal seating solution. Every year we launch more than 100 new products, many of which are crafted by hand, in response to new and changing customer requirements.”
He adds, “Sometimes, we see situations where the best solution may be to use an off-the-shelf product, or modify it to fit a particular vehicle. But whether it’s a custom or off-the-shelf seat, the customer is going get the highest quality in design, materials and workmanship.”
Milsco’s product development efforts combined with its close customer and supplier relationships is unique in the seating industry. “We compete in a lot of markets,” says Pate. “In some cases, we might have a customer in one market who is our competitor in another market. When you slice and dice the numbers, you’ll find that we might be number one in this particular segment, but look at it from another perspective and maybe you’ll say we’re number three. But we really don’t worry about that. Our business model is so different that we really are a unique company. We provide business-to-business services across the board to multiple markets. We don’t specialize in a particular niche. Rather, we specialize in OEM seating solutions designed to work for any given customer environment.”
Less expensive or more customized options may exist, but Pate discounts these as a relatively insignificant threat. “Milsco encompasses a broad marketplace spectrum,” says Pate. “To one customer, we provide a very high-end, high-quality product, and that comes with a higher price point. If a customer just bought a piece of construction equipment that cost a half-million dollars, do you think they’ll be happy with a cheap vinyl seat? OEMs know that investment in a properly designed, stable product made of foam polyurethane will make a difference in the end-user’s perception of the quality of their product.”
Still, like every manufacturer, Milsco experiences price pressures. “But we address that by placing manufacturing and distribution facilities in proximity to our customers to reduce shipping costs, and by leveraging best-in-class practices – such as just-in-time-inventory – and by continuously improving our operations and lowering our overall costs.”
Also like every manufacturer, Milsco has taken a back seat in sales during the economic slowdown. “When your main customer takes a 35-percent reduction in production, like Harley-
Davidson did, that causes some dramatic changes in your business,” Pate says. “Even though we sell across multiple markets which should provide some balance, the fact is that what was happening with Harley-Davidson was reflective of what happened to many of our customers.”
Pate says the economic challenges over last couple of years started to ease up in August 2010. “We’re starting to see some stabilization in business,” he notes. “Things aren’t picking up appreciably, but they’re not declining, either. And we do see a lot of future opportunity, particularly in the recreation marine, power sports, agricultural and construction markets.”
Pate also points out, “We’ve got a great platform in Europe with our U.K. manufacturing plant, where we see a number of future opportunities. We’re giving serious consideration to both the Chinese and Indian markets, not just in terms of new customers but also for sourcing.”
He anticipates growth, which will be accomplished in part through acquisition. “Acquisition has always been part of our expansion strategy,” he says. “For example, in 2006, we purchased the Michigan Seat Company. The acquisition provided us with new or strengthened existing positions in industrial, agriculture and turf-care vehicle seat products.”
When it comes to the bottom line, Milsco – which weaves quality into the fabric of every seating solution – offers products that meet the highest customer expectations, standards and needs.