The Fabricator - November 2013

By Tim Heston, Senior Editor

Six years ago a Caterpillar executive gave a keynote address at FABTECH® in Chicago and asked his audience how many wanted their kids to grow up to be welders. Just a few hands went up. He then asked how many wanted their kids to go on to college. Almost everyone raised their hands.

Although he was addressing the skilled-labor crisis, the broader implication was clear. ;is was 2007, a peak year for many in metal fabrication. Despite this, some fabricators didn’t necessarily want their kids to get into manufacturing. Why, exactly?

It’s di;cult to make a blanket statement, but anecdotal evidence from conversations with shop owners over the years suggests that the nature of this business fundamentally has changed for some. Decades ago relationships between fabricators and their customers lasted years, perhaps generations. Product life cycles were long. And thanks to lengthy apprenticeship programs, workers spent years building up specialized skills, like bending and welding, and earned enough to live a happy, middle-class life.

;is view may be somewhat romantic; reality is a bit messier. Regardless, this perception exists.

;en globalization changed everything. Most
of manufacturing, including metal fabrication, be-
came viewed as a commodity. A public company
touting the fact that it had an e;cient and (most
important) global supply chain made investors
and Wall Street analysts smile. When it came to
supplying a metal fabricated part, who and where
weren’t important. Instead, it was about how much.
It was all about the price. Here’s a request for quote
(RFQ); how low can you go?

;is is the environment Anthony L. Chirchirillo, CEO of Chirch Global® Manufacturing, north of Chicago, saw people in metal manufacturing living in for years. Hypercompetition forced everyone to keep their cards close to the chest, dig their trenches, and fight it out, trying to bid competitively while squeaking out a little margin. ;e best shops continued to improve operations, ensuring their cost reductions outpaced the relentless downward pricing pressure from customers. Shops that didn’t do this fell by the wayside.

Continuous improvement made sense to Chirchirillo, but was it enough? It reduced costs, but it didn’t tackle what he felt was the root cause of the problem: Manufacturing itself was being viewed as a commodity. To combat that perception, many fabricators have delved into design, and not just design-for-manufacturability, but true design assistance that starts with customers early on in product development.

But again, is this enough? After all, it’s usually impossible for a small shop to be all things to all people. At the same time, the metal manufacturing business still is dominated by small companies, many of them family-owned for generations. ;ey have a core competency—be it stamping, sheet metal fabrication, machining, injection molding, powder coating, or anything else—that drives the business. And at their heart, these small shops aren’t just about making parts. ;ey’re about family.

So last year Chirchirillo decided to pursue a new
business model, one he thought would help small
companies escape what he called the “commodity
trap.” Whence came the Chirch Global® Manufac-
turing Network.

Overseas and Back Again

Chirchirillo has witnessed many sides of globalization. In the 1990s he owned several Milwaukee-area product-line manufacturing companies with a diverse mix of work, including welding rod drying ovens, lighting, and medical packaging equipment. In 2002 he sold those businesses and, with a classmate from Harvard Business School, launched Chirch Global LLC—not stateside, but with operations in China.

“Manufacturing in the U.S. over the past 20 years
had been on a decline,” he said, “and I wanted to
find a sustainable strategy for future growth.”
So with his Harvard classmate he formed a stra-
tegic alliance that supplied U.S. manufacturers
with metal and plastic components from China.
But over the next few years, Chirchirillo noticed
the landscape changing. “I saw a shift in the busi-
ness,” he said. “More work was coming back to the
United States, and so it was necessary to have an
operation here.”
So in 2008 he purchased a metal stamping com-
pany north of Chicago. Now with a home base in
Cary, Ill., Chirch Global Manufacturing could o;er
prospects options: Did it make more sense to make
the product in China or the U.S.? ;e company
now could o;er both.

Soon after acquiring the company, Chirchirillo made another move toward diversification. At the time the manufacturer specialized in precision prototyping and progressive stamping, e;ectively serving the low and high end of the volume range. Chirchirillo decided to go after the volumes in the middle, the quick-turnaround sheet metal fabrication of small and midsized runs. “I thought that, even within our own customer base, there were opportunities that we could go after,” he said.

;e goal was to be able to o;er a full range of sheet metal manufacturing options for the entire product life cycle, from prototype and low- and midvolume fabrication to tooling development and progressive-die stamping for high-volume production.

;is was just before the financial crisis, and automotive companies had been hurting for a while. In retrospect, the diversification came just in time. “It was a good thing we made the [fabrication equip- Anthony Dominic Chirchirillo (left), Michael Chirchirillo, and Trisha Hahn stand by their father, Anthony L. Chirchirillo, on the shop floor at their family’s business, Chirch Global Manufacturing in Cary, Ill.