My time in San Marcos, Texas included visits to more traditional companies, such as Mensor. On my first day, we met with Jason Otto, President of Mensor. He told me that he has been with the company for more than two decades, starting as an engineer, before moving up the management chain as product manager, director of sales, and other positions before becoming President.
He said, “Mensor was started in Houston in 1968 by Jerry Fruit and a small group of engineers from Texas Instruments. Jerry had an idea for designing and manufacturing precision pressure measuring and pressure calibration instruments and systems. The company shipped their first product, a quartz manometer for the aerospace industry, in 1970 and most of the company’s business was government contracts.
The company relocated to San Marcos in 1978, but in 1981, our building caught fire and burned to the ground. The company kept going with the help of vendors and customers while a new 26,000 sq. ft. building was built on the same site in only five months. The employees kept their jobs by actually working to help build the new building.
Otto explained, “We acquired our control line of products from Texas Instruments and introduced new controller products in 1983, 1992, and 1997. We introduced a Quartz Pressure Calibrator in 2001, and the modern CPC6000 Automated Pressure Calibrator in 2004.
In 2006, we were acquired by WIKA Alexander Wiegand SE & Co. KG, a very large privately held company in Germany, with a U. S. facility in Lawrenceville, Ga. It was time for the owners of the company to “cash out,” and it was a smooth transition.
Our core competency is pressure sensor accuracy, and it is a very niche market. It is tricky to hire talent, so we have to hire from competitors, as well as engineering graduates. Texas State University, Texas A &M, and the University of Texas in San Antonio and Austin have provided many of our new engineers. We also need calibration lab technicians, people skilled in technical assembly, as well as machinists for our in-house machine shop. We haven’t had any trouble hiring machinists.
I asked if the company has been through training in Lean Six Sigma, and he said, “Our Lean training started after our acquisition by WIKA. We currently have two Lean Six Sigma Black Belts, who do about 6 -8 kaizen events per year. We practice 5S and use QCSD boards for visual management of teams. We put together cross functional teams, use cellular assembly, and have a vendor qualification program. We have never outsourced any of our manufacturing overseas, but we have customers in China and Malaysia. We use the WIKA global sales team, but use manufacturers reps to sell into Mexico and the maquilas because it is a long sales cycle. WIKA has 48 locations around the world, and as part of the WIKA Calibration Line, we represent about 6 percent of the company’s business.”
Next, we met with John Malik, General Manager of Altra Couplings in San Marcos. Malik said, “I grew up working in my dad’s auto parts store. I have been with the company since I graduated with an engineering degree and have survived three sets of company owners. The company was started in Houston and moved to San Marcos in the early 1980s. We were sold to TH Woods in 1990, and then sold to ATR Inc. in 2007, whose corporate headquarters is located in Santa Ana, Calif. ATR has 28 plants and production facilities around the world, with seven locations in the U. S. We have about 120 employees currently.”
Malik explained, “We are a leading global designer, producer and marketer of a wide range of mechanical power transmission components. Our products control and transmit power and torque in virtually any industrial application involving movement and are sold in more than 70 countries worldwide in industries including: energy, general industrial, material handling, metals, mining, specialty machinery, transportation, and turf and garden. Our portfolio of products includes clutches, brakes, couplings, as well as gearing and power transmission components. However, we don’t do any high-volume couplings for the automotive industry.
When I asked about Lean, he said, “We have a team of company employees who have helped us become lean, and the productive gains are essential. It really comes down to asset utilization of people assets and capital assets. You want to keep them adding value continuously. The approach we have taken is a value stream approach to our products. We go narrow and deep in an area and develop it, and then move on to another area.”
Malik added, “We have even implemented Lean Accounting. I spent a lot of time with engineers to understand the true costs. We have some good decision rules for the “make or buy” decision process. Our biggest promoter is our CFO, but our Lean program goes all the way to the top.”
I asked what Altra’s biggest problem is, and Malik responded, “Finding new employees. This is an area that doesn’t have a long tradition in manufacturing. People don’t know what manufacturing looks like, and the mind set for years has been getting a college degree rather than vocational training. There are never enough trained applicants, so we train our own workers. We now have second and third generation workers. It is a lot about how we treat people and the opportunities for growth.”
He added, “We make all our own castings in our Erie, Penn. plant and buy the forgings we need. We have three manufacturing facilities in the U.S. and have a plant in the U.K. We bought a company in Germany and have a plant in China. That plant makes some parts for us, and we make some parts for them. We also have a small facility in Brazil in order to have local content and avoid the high tariffs.”
On my last day in San Marcos, we visited CFAN, which was formed in 1993, as a 50/50 Joint Venture between GE Aviation and Saffron (SNECMA) of France. The partnership was created to introduce composite fan blades in a GE90 engine that powers the Boeing 777. CFAN has leveraged the success of this product to introduce additional fan blades on the GEnx engines that power the Boeing 787 and Boeing 747-8.
We met with Mo Mattocks, who is the President and Plant Manager for CFAN. He is responsible for all plant operations including over 500 employees executing product delivery, quality, and productivity, as well as plant financial results and personnel safety. Mattocks said, “I am originally from New York, but graduated for the University of Michigan and Georgia Tech. I have worked for GE for 21 years and previously worked at the GE Aviation in Kansas City and Atlanta.”
He explained, ”CFAN successfully transferred the composite fan blade manufacturing process from the laboratory to the shop floor and delivered the first production GE90-94B fan blade in September 1994. At first, our quality level was only about 80 percent, so there were a lot of rejects. We kept improving our processes using the widely recognized Six-Sigma methodology, focusing on eliminating defects and reducing variation in shop floor. Over the years, we kept improving our processes, so that our scrap rate is down to only about 1 percent.
In 2001, we started production of the composite fan blade for the GE90-115B growth engine. The GEnx1B fan blade was introduced to production in 2005 and the GEnx2B in 2007. In 2016, we started to make fan blades for the GE9nx, which had its first test flight last week. We are an approved FAA repair station for the GE90 and GEnx fan blades fan. We have doubled our volume since 2009 and have produced more than 20,000 composite fan blades at our plant. We produce about 165 fan blades per week, and each fan blade takes about 340 hours. We expanded the plant from 160,000 sq. ft. to 275,000 sq. ft., and the whole plant is temperature controlled to keep the composite material from “curing” on hot days.”
I told Mr. Mattocks that in the past, I sold composite parts as a sales rep for a company located in Post Falls, Idaho so am familiar with the painstaking production methods used for pre-preg layup composite parts. When we walked the plant floor to see the whole production cycle from start to finish, I could see how meticulous the hand layup process is for these very critically dimensioned fan blades. It would be too tedious to describe the whole production process from start-to-finish, but the number of steps it takes to produce a finished fan blade was mind-boggling.
My last stop before leaving the San Marcos region to spend the weekend with my nephew and his family at their nearby ranch was to RSI Inc., located in Kyle, Texas. We met with President Harish Malkani, who founded the company in 1983. Malkani is originally from India where he earned a B.S. (Chemistry) from the University of Poona. He also received a degree in Chemical Engineering from the University of California at Berkeley and a Graduate Degree in Marketing from the University of California at Berkeley. He was employed with Ray Chem Corp. from 1969 to 1983.
While RSI’s website describes the company as distributor stocking and supplying standard mil-spec products including, but not limited to high-speed interconnect solutions and a wide range of electro-mechanical components, Malkani said, “I started the company as a distributor but over the years we became a value-added manufacturer. I can’t tell you about all of the defense and military programs for which we have used our expertise to provide solutions to the government and defense contractors because they were classified programs. We specialize in providing RFI/EMI solutions. We have done work for BAE, Lockheed, Raytheon, Aerojet, and other Department of Defense prime contractors. We are a Silver certified supplier for Boeing. We also do work for companies in the energy, industrial, transportation, and the oil and gas industries.”
When we toured the shop floor, I could see that the company has the manufacturing, assembly, and test equipment to produce custom assemblies and systems for a variety of applications.
Malkani noted, “Our biggest problem is getting qualified workers. I have hired from Texas State University, but I need more help in finding people with technical skills who are not engineers. We are going to train some teachers at the local high school in our technology.”
He was assured by Dr. Cara DiMattina-Ryan, Director of Existing Business & Workforce Development at the Greater San Marcos Partnership (GSMP) that they would help him get connected to the local programs at the Austin Community College’s local Hays Campus.
Since finding technical skilled workers is critical to all of the companies I visited, I was happy that my hosts arranged for me to have lunch the first day with Dr. Hector Aguilar, who is the Executive Dean of Austin Community College’s Continuing Education division. He said, “Maintaining a talented and productive workforce in a growing local economy requires a commitment to employee development. ACC meets the training needs of businesses by partnering with them to tailor a custom learning curriculum that can be delivered on-site to employees. We have seven campuses in the western Austin region and have about 60,000 students enrolled. Each community college in the Texas system specializes in training for the types of industries in their area. Houston specializes in oil and gas. Austin specializes in semiconductor, aeronautical, and sensor industries, and San Antonio specializes in training for automotive. “
He explained, “The Texas Workforce Commission is responsible for helping companies get training for their employees, and Texas pays for the training. Samsung was the first large manufacturing company for which we provided training when they came to the region. They received a grant of $3 million for the training. Samsung came up with 12 techniques to be taught in an around the clock program under a three-year program (24-hours a day, seven days a week). The original 12 topics became 63 topics, and we trained 1,530 employees in the three years. We had to hire specialists in industries and then cross-train each one so they could teach multiple topics. We did a pre-test and post-test for students. The average pre-test score is 20 percent, and the average post-test score is 85 percent.
He added, “Under our Workforce Solutions Rural Capital Area, training for future employees is provided for free. For example, when EPIC Piping bought an existing facility in San Marcos in 2014, they needed to hire new employees. They do specialized welding of pipes. GSMP came to us to help set up training for new employees.”
I was informed by Ashley Gossen, Vice President of Marketing & Communications for GSMP that underemployment is high in the region – a selling point for companies looking for talent. She said that the greater San Marcos region has more than 5,400 workers with bachelor or graduate degrees working in jobs that don’t require them.
It is obvious that the San Marcos region has a great deal to offer startup, existing, and transplant manufacturers: a good business climate, low taxes, skilled workers, and the educational facilities and programs to train new workers.
