David Soyka reports on a business that exemplifies the virtues of applying family values to your customers and your employees.
“My father started the company in 1963 in a 2,400-square-foot garage. Three people worked there: my father, my uncle and my mother, who did the bookkeeping,” recalls David K. Miller, president of Miller Welding and Machine Company. “It was a repair and replacement business for agricultural, mining and lumbering equipment used in western Pennsylvania. It had no product. We’ve gone through a lot of changes over the years, including focusing on different markets, but today we still have no product. What we provide is a range of fabrication, welding, machining, finishing and mechanical assembly services that provide single source solution for OEMs, as well as the processing and refurbishing industries.”
Today, Miller Welding and Machine Company remains a family run (including six members of the third generation of Millers) and family-oriented company that employs about 400 based in Brookville, Pa., a little town of about 4,500 located 80 miles northeast of Pittsburgh. “Lots of in-laws and relatives work here,” Miller says. “But all our employees are treated like family. We provide a work environment that respects people and fosters individual growth. Every year, we spend hundreds of thousands of dollars on training. The first 60 days of employment includes classroom and hands-on training in the competencies they need to succeed in their position; by the end of their first year 90 percent of our shop personnel are cross trained in more than one section of the production area. Adding skill levels and increasing their knowledge base not only gives us more productive workers, it also increases their job satisfaction. That’s one reason why our turnover rate is only 20 percent, which is far lower than the industry norm.”
He adds, “Just to give you an idea of the kind of personal relationships we as a business develop and maintain, when my father first started, he dealt frequently with a particular gentleman who didn’t work directly for us, but represented us. Today, 45 years later, the grandson of that gentleman is doing the same work and has the same business relationship with my own son.”
Over the course of that time, the company had to shift gears as its customer base shifted with the times. “Around the ‘70s we started to focus primarily on the steel industry. Again, we didn’t make product, we repaired products and replaced parts,” Miller notes. “Business was steady because we served all segments of the steel industry, including but not limited to: structural steel, sheet metal used primarily in appliances, and tube mills that made pipes, and if one segment was slow, we’d be busy with another segment that would compensate for it. Then, when nearly every customer we had disappeared in the early 1980s, we discovered that it was possible for an entire industry to collapse. In this case, it was the American steel industry. Our customers evaporated, and many of our competitors went out of business.”
Needless to say, Miller Welding and Machine Company didn’t go out of business; it made what the founder’s son describes as “a major transition for our company; we were forced to reinvent ourselves,” Miller says, “and position our services to OEMs in the materials handling industry, and the construction equipment industry, to name a couple. Today, the OEM manufacturing sector is the bulk of our business. Interestingly enough, we still do work for the steel industry, but where it used to be 95 percent of our business, today it is less than 1 percent.”
He adds, “We’d like to be a little more diversified, because that reduces your exposure to the ups and downs of a particular industry. However, we have had some very good long-term customer relationships over the last 10 to 15 years and because of that, we’ve grown as our customers have grown.”
MADE IN U.S.A.
Another factor working in the company’s favor is that it has very little, if any, competition from offshore with regards to the refurbishing business. “It is not likely that anyone will ship a part that needs to be refurbished across the ocean to China,” Miller says. “For one thing, it’s obviously too expensive and time consuming. A lot of people have had poor experiences with offshore manufacturing just to get something cheaper; what they gain in pricing they lose in quality and time. As an aside, I think that with the dollar falling a lot of manufacturing is going to come back to this country. That’s an opportunity for us to reassert the values of quality and workmanship that once made this country a manufacturing power.”
Miller emphasizes, “Our customers come to us for three things: quality, price and delivery. Now, the fact is, all of our competitors offer quality or they wouldn’t still be in business. So, quality is almost a given. When business is booming, delivery seems to be a higher focus than price. The economy tends to dictate the priority given the current demand for our customer’s product. By the same token, when business is slack, the customer is willing to wait an extra day if they can get the machining done at a cheaper price. So, you’ve got to be flexible.”
Case in point is a 44-year relationship with Hanco, Inc., a contract manufacturer. According to Miller, “Sometimes Hanco notifies us two months in advance when they need us and then there are times they ask us to show up at a steel mill in just two hours. Without having a crew in the shop that’s cross-trained to quickly move to different machines and tasks as needed and is willing to put in extra hours, as sometimes we have to run 24/7 to refurbish Hanco’s parts, it’d be doubtful we’d have the strong relationship we have this customer. And that relationship is what we maintain with all our customers.”
The company positions itself as a solutions provider that combines fabrication, welding, machining, finishing and mechanical assembly to make or refurbish a part following a detailed documentation process to complete the project cost-effectively and ontime. “We get specs from the OEM that tell us everything right down to the number of allowable scratches on the paint job,” Miller explains. “While we don’t design or engineer a part, we do sometimes act as the ‘voice of the manufacturer’ in going back to the customer and saying, you know, in our experience, this might work a little better if we did this instead of that. Otherwise, we put everything into place that’s needed to make and assemble the part. And we’ll do that to make one part, or 1,000 parts. That’s another of our advantages over some of our smaller competitors who find it difficult to pull off large volume jobs.”
EQUIPPING FOR SUCCESS
Miller Welding and Machine Company has two manufacturing facilities. One neighbors Sandy Lick Creek and is named, as you might guess, the Sandy Lick plant, with 98,000 square feet of floor space. It is home to its machining and fabrication services, as well as the corporate home office. The nearby Maplevale plant provides 134,000 square feet to house state-of-the-art finishing systems, which includes an advanced powder coating system, and fabrication on 66 acres to accommodate future expansion. Both are conveniently located near major thoroughfare Interstate 80.
Miller says, “We’re constantly adding equipment and floor space. We just had two new machines installed and recently added 12,000 square feet of floor space. In the past two years, we’ve invested over $10 million in equipment and infrastructure. It’s an ongoing process to do whatever we need to do to better serve our customers and provide our employees with the best facilities.”
Along these lines, it’s not unusual for Miller Welding and Machine Company to serve as an OEM’s vendor for an entire product line. In such cases, the company has handled the complete assembly of large, complex parts and managed all the logistics of shipping the part back to the customer. Sometimes this involves moving the customer’s equipment on-site to Miller’s shop. “When machining and welding are not the OEM’s core competency, it makes sense for them to use us so they can better focus on what they do best in manufacturing a product. We give them just-in-time delivery of parts at a fixed cost with the additional cost savings of no longer having to worry about machine upkeep and employee overtime.”
Like most manufacturers these days, Miller acknowledges that finding skilled labor is an ongoing problem. “Part of the problem is our educational system doesn’t really value vocational training anymore. These days there seems to be a stigma associated with going to a trade school instead of college. The result is that you have a lot of people who in years past might have looked at a trade as an honorable profession are instead being pushed into going into college, and the unfortunate part is they really aren’t interested in being there.”
Consequently, the company is moving more and more towards automation but, Miller emphasizes, “Not to displace employees we already have, but to offset the difficulties in finding the qualified people we’d like to have. Three years ago, we didn’t have a robotic welder on the floor; today we have 10.” To further optimize efficiency, Miller says that the company employs Six Sigma tools and lean manufacturing processes. “We’re a little cautious of buzzwords, but if the idea works, we’ll use it. We may not do it as part of a formal program, but we’re certainly always looking to be as efficient as possible.”
Miller says that despite current economic doldrums, the company is busy and expects that to continue. “We offer the highest quality work for a fair price. Even if the financial markets are unsteady, there’s always going to be a demand for the kind of services we provide.”