Concordville, PA--Not many companies can boast double-digit growth in the '90s. Even fewer can look back on 50 years in business. Latch and access-hardware manufacturer Southco claims both distinctions.
The company had its humble beginnings making specialty fasteners in a previously abandoned building in Essington, PA. Today, Southco has more than 1,200 employees in ten countries and OEM customers in 40 countries. The firm has averaged at least 20% annual sales growth throughout the '90s.
A tour of the Brandywine division and corporate headquarters confirms that the firm is on the move: Though tidy, the offices are crowded; a temporary office annex awaits an addition to the facility, planned for 1996. That growth is not limited to domestic business. In April of '94, Southco Korea Ltd. opened in Seoul. This May, the firm opened a new European Headquarters in Worcester, UK, and was visited by Princess Anne at its gala opening.
Valued employees. At once traditional and dynamic, Southco's corporate culture hasn't changed much since 1945. One indication of the firm's emphasis on stability is the fact that Southco and its parent company have had only five CEO/presidents since its founding in 1899, and had one lay-off since 1945. Although the company has added 600 employees in the past four years, President and CEO Steve Kelly emphasizes that it has not grown into a "bloated bureaucracy" with an army of anonymous employees. "There's no mahogany row here," he says, pointing out the absence of secretaries and buzzers.
However, Southco's products, like the end-products they go into, have had to change dramatically. The company's extensive offering of latches, hinges, magnetic catches, blind rivets, and other fasteners is constantly changing to reflect manufacturing improvements and to suit such varied applications as automotive, electronic, and marine industries. More than half of the Fortune 500 companies are Southco customers, says Bob Ganskopp, vice president of marketing and sales.
Southco has undergone some changes in sales philosophy over the years, as well. Where the sales force was once deliberately isolated from the shop floor, there are now training programs and a dedicated facility called "Southco University" intended expressly to familiarize territory managers with a range of issues. Today, all new Southco salespeople are also engineers.
Kelly estimates that a 5 to 8% time investment in training pays off with a 10 to 12% improvement in productivity. Continuous training and a low employee turnover rate are critical to Southco's success, he adds. "It all comes back to people. They have the knowledge and wisdom that comes here and stays."
Among the company's veteran designers are many patent-holders. For example, Robert Bisbing, the firm's most prolific patent-holder, has 56 patents to his credit. The Inventors Club, created to honor patent-holders, has 20 members. Inventors Club engineers often act as mentors for younger engineers. Club member and Manufacturing Technologies Manager Bill Frame is a 43-year veteran of the company. "I could retire," he says, "But I like the technical work, and working with the young engineers."
One such engineer, Lynn Ziemer, joined Southco three years ago and was recently awarded her second iF award from the Industrie Forum Design Hannover in Germany for her design contributions to the Flush Simplicity(TM) latch. "I came to Southco for the advanced design tools and the family atmosphere," says Ziemer.
Part of the credit for Southco's market strength goes to the Design Partnership program, says Kelly. Intended to connect OEM engineers with Southco's Modifications Group, the program is helping large firms cope with a shrinking work force by providing a dedicated engineering team to help customize hardware. About 30% of Southco products are custom designs--many of them variations on the firm's 100-plus standard products.
To help customers reduce installed cost and integrate access hardware or fasteners into their products, Southco engineers use FEA and CAD software such as ANVIL 5000 from MCS, Scottsdale, AZ. "All of our CAD users worldwide are currently being trained on how to use 3-D drafting, hard metric design, and dimensioning," says Corporate Drafting Coordinator Jeffrey Stevens. Engineers also use failure mode effects analysis (FMEA) and stereolithography to improve design.
Southco's Plastics Technology Center, Bridgeport, NJ, is dedicated to developing new products and manufacturing technologies. The firm's manufacturing capabilities include CNC machining, injection molding, stamping, turning, heat treating, cold heading, die casting, powder coating, and assembly.
All domestic Southco facilities are ISO 9001 certified. Early on in the registration process, Southco decided to go for a single, global certificate rather than individual site certification. This all-or-nothing approach highlights the importance of each facility to operations of the company as a whole, says ISO Coordinator Marjorie Graham. "We feel very strongly that this is not a certificate to just hang on the wall. It's a system that will allow us to continually improve," says Graham. The firm also plans to be certified to the automotive industry's QS9000 standards by April '97.
Among other benefits, ISO 9001 certification helps Southco maintain flexible manufacturing, says Graham. "We've seen enormous benefit internally. Our processes are better-defined, and we can take a process from one facility and move it very smoothly to another facility," she adds.
Product uniformity is critical, especially to customers that rely on automated assembly. Even slight product variations--though they might seem like improvements--can spell disaster. "We want to make sure our processes are consistent," explains Kelly. "For example, certain products are assembled in the U.S., the U.K., and Australia, and they are all the same."
Southco also uses "cell manufacturing" to foster quality and product uniformity. The company manufactures, assembles, stocks, and ships any given product from a vertically integrated facility. The method cuts costs and lead times without affecting product quality, says Production Operations Manager Albert Frattarola. Scrap metal and waste oil are recycled to further reduce costs.
Although catch phrases such as "employee empowerment" aren't used at Southco, technicians are encouraged to run their segment of a facility like a company within a company, says Frattarola. In the Brandywine facility, for example, there are no dedicated janitors. Instead, each operator maintains his or her equipment.
Southco uses operator experience to further manufacturing improvements. For example, insert machine operators and machinists at the Albany, NY, plastics department recently teamed to reduce scrap by more than 50% and increase production by 20%. Their suggestions led to a system that detects non-conforming parts, as well as safety and maintenance enhancements.
What will the next fifty years hold for Southco? Says Kelly: "With our long-term commitment to internal and external partnering and to the process of constant improvement, I am confident that we will continue to view the competition in the rearview mirror."