Volume 9 | Issue 4 | Year 2006

Here’s a company that started out as a general manufacturer and installer of sheet metal duct systems that found its niche as a supplier of specialty accessories for commercial heating, ventilation and air conditioning (HVAC) systems. Indeed, the name change from General Sheet Metal, founded in 1965 by Pat Booher and family in Indianapolis, Ind., to MicroMetl resulted from a switch in focus to a smaller, though critical, part of HVAC systems – though there is hardly anything “micro” about its growth. In fact, in the mid-1980s, MicroMetl was named by Inc. Magazine as one of the “500 Fastest-Growing Small Companies in the Nation” largely because of its innovative energy-efficient economizers for commercial buildings. Frequently, the heat generated within a building will bring the temperature up higher than the outside air. When that happens, an economizer shuts off the HVAC compressor to bring the outside air in to cool the building. This is not only more energy efficient, but because the economizer introduces fresh air back into the building, it also plays an integral role in maintaining indoor air quality and, consequently, reducing air quality related illnesses. This is why Mark Weber, vice president and general manager, describes air quality concerns as, “the bread and butter of the business.”

A related growth product is energy recovery ventilators (ERVs), which provide significant cost savings and improved efficiency by recycling space-conditioned air and transferring energy to the exhaust air before it leaves the building. “ERV units are extremely efficient,” Weber says, “using a small input of fan energy to recover large amounts of heat and/or moisture. Consequently, peak loads for both heating and cooling are reduced substantially.”

Today, MicroMetl is the largest privately-owned maker not only of economizers and ERVs, but other HVAC accessories such as power exhausts, adjustable roof curbs, concentric diffuser packages, control packages and outside air dampers. It also makes customized products. “In the HVAC industry, one size does not fit all. You can’t use a product that’s almost sort-of-like what you need. That’s why an important part of MicroMetl’s success has been our ability to customize products for unique applications,” Weber says.

MicroMetl sells through both a direct sales force and a distributor network to the premier HVAC OEMs and their distributors, including Carrier, Bryant, Trane and Lennox, among others, primarily in the U.S. and Canada. Although Weber notes that Asia is “an up and coming market,” he adds that, “It’s not something we’re looking at, right now. They have a whole different infrastructure there than we have here.”

Sales are evenly divided between new installation and retrofit. For the latter application, MicroMetl has over 430 pre-designed curb adapters conforming to a variety of OEM units to expedite roof top replacement by utilizing the existing roof curb under the old existing rooftop. Using this method for replacement means that roof and it’s penetrations are left undisturbed, thereby limiting contractor liability and speeding the whole installation process.

Major Assets
Physically, the company is also anything but micro. In 1994, it opened a 33,000-square-foot manufacturing facility in Sparks, Nev., and four years later moved across the street to a new 70,000-square-foot plant. After spending more than 25 years on Roosevelt Avenue in Indianapolis, MicroMetl moved its headquarters to a new 190,000-square-foot facility on the eastside in 1998 to increase productivity and manufacturing capacity, add engineering test labs space and provide larger finished good inventory storage. In late 2005, MicroMetl further expanded to better serve the southern U.S. by opening a new 108,000-square-foot manufacturing facility in Longview, Texas.

The company remains family-owned and managed, and employs over 400. “The experience, knowledge and dedication of our people are a big part of our success,” Weber says. “We continue to invest in our people just as we invest in our facilities and technology to develop the industry’s best products and services.”

He adds that, “What I think is unique about a company that is family-owned is that it is not risk-aversive and that it allows managers to manage. We’re encouraged to take chances, and even if every decision doesn’t always work out, there’s plenty more that do. It promotes a positive business culture that helps make not only our jobs more enjoyable and challenging, but ultimately results in better products and services for our customers.”

Towards that end, a dedicated staff of 17 engineers who use both SolidWorks and ProEngineer design and modeling software to expedite the introduction of new products. Production facilities use Amada CNC-controlled machinery including Pega and Vipros turret punches, four to 10-foot brake presses, and unmanned, lights-out automated load and unload equipment.

MicroMetl also recently instituted a new enterprise resource software to improve inventory movements and transactions. The Made2Manage® Enterprise Business System added features to the forms, data accessibility and scheduling that includes supply chain management capabilities, labor efficiency reporting and improved data collection methods. “This system helps us better input and track our orders, as well as control other internal processes in more sophisticated ways,” Weber says. “The end result is better customer service, and we provide the best customer service in the industry.”

Weber points out that MicroMetl was ISO-9001 certified at the end of last June. “That’s helped us improve our processes tremendously. At the same time, our implementation of an internationally recognized quality management system demonstrates our commitment to provide the best possible products and services as a value-added partner to our customers.”

He also notes that, “Like everyone else, we do a certain amount of outsourcing to keep costs down, but only parts. We don’t outsource manufacturing because doing everything here is how you maintain quality control. Because we make a niche product, they’re really isn’t any overseas competition that can try to undercut our prices, much less beat our quality.”

Weber adds that MicroMetl is a long time practitioner of lean manufacturing. “We currently have about 55 key performance indicators that we’ve developed, and, of course, we’re continually looking to improve our processes to become more efficient and reduce costs. In particular, we’re looking reduce set-up costs and do more high-run jobs wherever possible.”
These efficiencies enable MicroMetl to boast of lead times as short as three days. “I think we’re unique among our competition in being able to achieve such a quick turnaround,” Weber says. “We’re able to do that because we’re better capitalized, which enables us to stock larger inventories so we can complete customer orders as quickly as we do. Having the best turnaround time in the industry is a key competitive differentiator for us.”

Cyclical Conditions
Like most manufacturers, MicroMetl has had to grapple with the dramatic price hikes of raw materials. “Our products are made primarily of aluminum, copper and steel, all of which have had significant increases in cost. Four years ago, steel was 20 cents a pound. Today, it’s more like 50 cents a pound,” Weber points out. “We don’t have much choice but to pass these increases on to our customers, which is what is happening throughout the market generally. One bright spot is that we are starting to see prices stabilize. Unfortunately, where they’re stabilizing is still at a high level, so we’re hoping to see some downturn.”

Where there is some downturn is in the overall construction industry. “Right now is not a boom time,” Weber says. “In fact, for the last three years, business has been flat. But the work we do have has been steady, particularly in the schools sector. It’s not only that older schools are being retrofitted with air conditioning systems. There is a push by the federal government to improve energy performance and at the same time ensure the highest air quality levels that our ERVs and economizers help provide.”

Another area of opportunity is a direct result of Hurricane Katrina. “There are new code requirements along the Gulf Shore that require HVAC units to withstand winds up to 155 miles per hour,” Weber says. “We can supply components that help ensure compliance with the new specifications.”

MicroMetl is also considering entering another niche market, that of general ventilation products. “It’s a little bit of different animal, particularly in terms of how the reps are organized. Right now we’re just in the early stages of discussion.”

Overall, though, MicroMetl’s growth continues to be, well, not micro. “All of our plants are running at capacity, and we’re looking to grow 6 to 10 percent. That growth is coming mainly from picking up increased market share with a number of large customers we picked up this year,” Weber says.

With products that offer better savings with less expense to achieve cleaner air, MicroMetl is a major success.

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