Like many molding and mold manufacturing companies, Metro Mold & Design (Rogers, MN) has its roots in a family-owned business—John Holland and his wife Carol founded the company in 1973. Over the next 40 years, Metro Mold grew organically and through acquisitions, giving the company a broader range of capabilities and allowing it to stay on the cutting edge of technology.
This growth included multiple expansions, including the acquisition in 2006 of Accutech Mold & Engineering and ICM Plastics, a company specializing in thermoset and extrusion blow molding. In 2011, the company announced the startup of MMD Medical in an 86,000-square-foot facility in nearby Brooklyn Park, MN, to focus on serving Minnesota's fast-growing medical device manufacturing industry. Today, Metro Mold & Design in Rogers operates in a 132,000-square-foot facility, where it employs 120 people. Another 80 people are employed at MMD Medical.
Growth means greater opportunities and challenges
|Greg Heinemann, CEO.|
Growth required changes to maintain strengths, overcome weaknesses and expand technology as the company—and its family management team—matured. Greg Heinemann, who has been with the company since 2009, first as Chief Financial Officer and, since 2015, CEO, followed on the leadership of Tim Holland, who had taken the management role from his father, John Holland.
Heinemann knows the challenges that most family-owned companies face, and how those challenges can expand with a company's growth, changes in the family and the various leadership styles and visions of family members. "With any business you'll find multiple generations of leadership bring different things to the business; things that are needed at a particular stage of the business," comments Heinemann, whose background is in business and finance rather than molding and moldmaking.
"John Holland brought his expertise in manufacturing precision, high-quality injection molds," Heinemann adds. "Tim brought a different focus to the business in deciding to add precision machining and production molding to Metro Mold, while keeping moldmaking as the core capability to serve the most demanding accounts. Today, our well-rounded management team brings different skills to ensure that the manufacturing side of the business is equally competent with the business functions."
As a company grows in management expertise, capabilities, technologies and financial strength, new and better opportunities appear, and this allows the company to develop strategies that will take it down a path where it can make bolder moves and provide value, Heinemann explains. "Companies will develop strategic plans, but pulling the trigger becomes a bit more challenging because of an emotional investment in the company's current customers or capabilities," he adds. "However, these changes are necessary to ensure the company has the right competencies to add greater value to its customers," he says.
Determining value, and then selling it
Metro Mold knows that success requires offering customers greater value than they can get anywhere else. "One of our strategic methods involves selling the customer on what Metro Mold's value actually is," states Heinemann. "Many purchasing people we deal with in our customer base believe their measure of success is captured in the price they pay for our molds, molded parts and other services. With that mindset, they might have a natural inclination to ask for a price decrease."
Heinemann explains that Metro Mold's value is in the company's dedication to understanding its customers' business goals as well as the parts or products they require. "For example, one customer is constantly trying to develop new technology that will enable it to enter new, more price-sensitive markets," says Heinemann. "In that case, we've been able to take their technology and make it more cost competitive to enable the company to penetrate markets that its current price point [wouldn't] allow."
Metro Mold's value also includes taking a radical approach to how the company designs and manufactures its customers' parts. "If we accomplish a customer's goal in entering new markets or increasing market share, the value we bring transcends price," Heinemann states. "And the relationship is a strategic one focused on business objectives, not just buying and selling. When [a company's] technology is the basis on which it competes, we can help it develop its products and honor what we bring to the table. It's a completely different conversation. At that point, the opportunity for Metro Mold—and our value to the customer—is greater than when we simply make parts."
Allocating resources toward profitability
Knowing where to allocate company resources is critical to Metro Mold's approach. Metro Mold applies the "Pareto principle," which focuses on the 80/20 rule. Following this, Metro Mold knows that it needs to allocate its most valuable resources to the 20% of programs that drive 80% of its profitability.
"We design ways to meet the customer's requirements to improve both their costs and our profitability. That might be a small customer that needs a small volume of parts periodically," Heinemann explains. "For them, we might run three years worth of parts and release them on demand, rather than running a small order monthly like JIT encouraged everyone to do. We found that our approach is more profitable for us and helps the customer's price,as well. We focus on the resources that make a bigger impact on both the customer and Metro Mold."
In part two of this article, which will be posted next week, Heinemann explains the importance of breaking down silos in a growing company and why it's important to learn to say no.