76 The FABRICATOR DECEMBER 2017
value-adding work she could be doing. At that moment, she could add more value by hanging parts
on the powder coat line.
Sources added that the same thinking goes for
anyone in the operation. On certain weeks, for instance, welders may need to leave their stations and
head to the hardware insertion department. Yes,
Sayles said, they still make a welder’s wage when
they insert hardware. So why would the company
pay someone as highly skilled and paid as a welder
to insert hardware?
“For most of our work, we operate PO [purchase
order] by PO,” she said, adding that although the
company doesn’t have long-term contracts, it does
have long-term relationships. “Some weeks there is
just not that much work in welding. We’re not going
to waste labor dollars on items that don’t need to be
produced, but we also need to keep our folks work-
ing and earning.”
That said, the company does have stocking re-
plenishment programs on certain items. These pro-
grams help serve customers better (considering the
short lead times) and, at least to some extent, help
level-load the operation. For one complicated cabi-
net assembly, the company replenishes a finished-
goods buffer that covers 10 days of demand.
Sources emphasized that stocking programs are
always done strategically and never to the detriment of orders that need to ship immediately. Still,
stocking programs do lessen the effect of demand
spikes, when many customers want deliveries all at
the same time. In this sense, it helps “even out” the
feast and famine nature of metal fabrication, with
operations either extremely slow or scrambling to
Sayles added, however, that this strategy wouldn’t
work without another important ingredient to the
fabricator’s success: revenue diversification.
Why Revenue Diversification Reigns
Sayles’ metal fabrication career spans more than
30 years. She started in accounting at another Wisconsin fabricator, then applied for and received
an inspection position. Soon after she went back
to school, got her engineering degree, climbed
the ranks to quality manager at other companies,
achieved Six Sigma Black Belt credentials, then
came to Jor-Mac in 2008 as quality manager. In
2010 she became director of operations, and the
very next year was offered the general manager and
With her Six Sigma background, she’s a firm believer in continuous improvement and, especially, documented work processes and modern equipment.
“People used to tell me, ‘I don’t really need work
instructions because I’ve been doing this for 30
years,’” she said. “Today, with the millennial employ-
ees we’re bringing in, you need robust training, top-
notch work instructions, and the best equipment.
And that’s really our secret sauce here. We’ll train
you to do anything. If you come here with a can-do
attitude, you’ll win all day long. I’ll take a team play-
er with a positive attitude over people with 20 years
of experience who think they know it all.”
When she arrived in 2008, Sayles saw some of
the company’s challenges not as a result of poor
operations or quality, but as the unintended conse-
quence of high revenue concentration. At the time,
80 percent of the company’s work came from the
defense industry, and much of that came from just
The high revenue concentration exacerbated delivery problems. Jor-Mac would bend over backwards to fulfill orders for its largest customers, but
in doing so forced late deliveries to many other
smaller customers. The company worked to better
the arrangements with its larger clients as the contracts needed updating to reflect current work volumes. But in the end, the parties couldn’t agree on a
mutually beneficial production schedule.
“That really was the beginning of our diversifica-
tion efforts,” Sayles recalled. “We actually told our
largest customer that we weren’t going to do busi-
ness with them anymore because it wasn’t a mutu-
ally viable business relationship. It took guts, but at
the end of the day, that’s what saved us.”
The reason Jor-Mac made that move—during the
Great Recession, no less—was the plethora of smaller
customers the fabricator already served. Indeed, sev-
ering ties with big customers could have been detri-
mental without Jor-Mac’s other existing customers.
A perennial challenge in custom fabrication is
turning new customers, which usually provide a
small amount of work, into large accounts. According to the “2017 Financial Ratios & Operational
Benchmarking Survey,” published by the Fabricators & Manufacturers Association, a custom fabricator gains an average of 12 new customers a year,
but sales from those new customers make up only 5
percent of revenue. This metric has remained consistent for the past few years.
Jor-Mac in 2008, though, already had many exist-
ing customers in many industries, but all of them
gave Jor-Mac only a small percentage of their work.
“We worked the sales field very hard, and for the
most part, we grew sales from customers we al-
ready had,” Sayles said. “And it took time. For some,
we had to regain their trust because we let them
down before, as we kept feeding the big dog.”
The big dog was, of course, those big customers.
Now, almost a decade later, Jor-Mac’s revenue pie
is colorful, its pieces more evenly divided. Sayles
added that the company hasn’t had a single layoff
She connected revenue diversification, along
with investment in modern equipment, directly
with employee retention and success. New equipment includes press brakes programmed offline
and an 8-k W solid-state TRUMPF laser with full automation that Jor-Mac installed in November 2017.
Kwakkel added that for revenue diversification
to succeed, it requires careful capacity planning,
particularly when it comes to fitting new lines of
business into production. Kwakkel should know;
he spent some years at Mayville, Wis.-based MEC, a
very large (No. 1 on The FABRICATOR FAB 40) fabrica-
tor known for its production planning. “Now at Jor-
Mac, when we win a big project, we look at the im-
plications on work centers, predict the challenges,
and work to overcome them from the start.”
Modern manufacturing technology and market
diversification effectively give employees the foun-
dation they need to succeed. If those two elements
weren’t there, the typical tools for employee en-
gagement wouldn’t have the effect they do.
For instance, every quarter the company gives
bonuses based solely on performance metrics shop
floor employees can control: dollars per revenue
hour, parts per million quality metrics, and the like.
If employees work as a team to ship more jobs (that
is, generate more revenue) out the door over a quarter, they receive a larger bonus. “It gives them skin
in the game,” Sayles said.
“We also do a lot of extra niceties that a lot of
companies don’t do anymore,” said Bohman. “We
have employee lunches. We hand out turkeys for
Thanksgiving and hams for Christmas.”
Still, the effect of these niceties, as well as that skin-
in-the-game bonus, would ring hollow if employees
had to spend more time away from their families to
handle the avalanche of work to “feed the big dog”;
or conversely, if the shop had to lay off employees
because a major customer reduced its work volume.
So would the flexible work schedule, the comprehensive training, and career opportunities, as
would Sayles’ “no hierarchy” message she sends as
she lends a hand pulling off parts on the paint line.
Employee engagement tools need a foundation to
stand on. At Jor-Mac, and perhaps at many other
custom fabricators, the right technology and diversification are the critical ingredients.
Senior Editor Tim Heston can be reached at timh@
Photos courtesy of The Jor-Mac Co. Inc., 920-269-8500,
Recent equipment investments at Jor-Mac include
press brakes and software with offline bend simulation