What;s NEXt? Growth
NEX Solutions has double-digit growth, even during recession
Figure 1 The staff at NEX Solutions stands in front of one of the company’s products, a chassis for a specialty vehicle manufacturer.
By Tim Heston, Senior Editor
wo months ago Kevin Grossman arrived in Portland, Ore., to meet with a potential customer.
Grossman is general manager of a contract metal
fabricator, so one would assume he’d have a proposal at
the ready, with what he hopes is a hard-to-beat price.
One also would assume he drove into town from about
100 miles away at most.
Thing is, those assumptions would be wrong.
Grossman works for NEX Solutions, a fabricator more
than 2,000 miles away, in Litchfield, a quintessential Midwestern hamlet surrounded by the farmland of south-central Michigan. That’s right—Michigan. And for this trip
Grossman flew all the way out not simply to offer a quote.
He paid a visit to see how the company ticks and to discover additional ways NEX Solutions could provide more
value, be it through powder coating, assembly, design
suggestions, or even supply chain management.
“We’ve had double-digit growth each of the last four
years,” Grossman said. “We’ve been very fortunate to
partner with some of the right customers.”
Since 2004 the company has grown from 33 to 75 em-
ployees (see Figure 1). From its 100,000-square-foot plant,
the company has produced a 58 percent compounded an-
nual growth rate over four years and expects 2010 rev-
enues to reach $10.8 million. The fact that a contract
fabricator—in Michigan, of all places—can grow so dra-
matically through the worst economic downturn in a
generation says that NEX Solutions must be doing some-
thing right.
NEX is young, launched in 2004, and over the past six
years the company has transformed itself from a traditional job shop to a solution provider. Yes, it’s a tired marketing buzz word, but it’s one that NEX has put some
teeth into. The approach strays from the traditional contract manufacturing model, where job shops swarm
around RFQs, particularly ones promising substantial volumes—the makings of a brutal price battle. Through
tough times, some shops have bid extraordinarily low, at
cost or even less, just to bring the work in the door, mainly
to keep the lights on and skilled workers employed. This is
something Grossman and his team wanted to avoid.
From the beginning NEX’s pitch involved offering
comprehensive fabrication services, including plasma cut-
ting, punching, bending, and welding. Still, managers
T
knew that offering conventional metal fabrication alone
wouldn’t be enough to sustain the business through eco-
nomic highs and lows.
More Than Just Making Parts
Grossman recalled one manufacturer that had trouble
juggling multiple suppliers for a motorized conveyor assembly. One supplier produced the plate and sheet, another the electronics, and yet another the drives and
motors. Grossman proposed something that seemed
radical at the time: NEX Solutions could supply the entire assembly—sheet metal, drives, motors, and the rest.
Today the company not only fabricates the sheet
metal, but also manages the mini supply chain tied to the
subassembly, working with motor and electronics suppliers. The end result: The conveyor OEM now receives
an assembled package, and it no longer has the headache
of trying to get multiple companies to supply components to the factory all at the right time. The OEM has
one contact at NEX, and that’s it.
Figure 2 AWS-certified welders work on the chassis assembly
line. The line was created with custom-designed fixturing to
build chassis up to 45 ft. long.
Figure 3 An operator manages the plasma cutting operation.
Soon managers hope to include screens in the shop that will display work orders and associated 3-D drawings, replacing existing paper travelers.
As Grossman explained, “When companies source
from three, four, six, or more suppliers, it adds complexity and freight costs. They perhaps get different quality
standards, different matches of paint, and so on. We propose that they deal with one company, one quality standard, perfectly matched paint, and a substantial
reduction in freight costs.” The final shipment of subassemblies may easily fill an entire container, whereas
parts from myriad suppliers each may fill containers only
partway, making shipping more expensive.
