Connecting American Ingenuity and Fun

K’NEX

K’NEX is a construction toy system, invented by Joel Glickman, which consists of interlocking plastic rods, connectors, gears, wheels and other components. The parts can be pieced together to form a variety of models, machines and architectural structures. Joel got the idea for K’NEX during a wedding in 1990 when he started locking straws together to pass the time. This moment of boredom and ingenuity sparked an idea.

By 1992, this bright idea combined with product engineering and investment led to the beginning of K’NEX. After being turned down by some of the nation’s largest toy companies, Joel Glickman partnered with his brother Bob to start the company independently and began selling directly to retailers such as Toys “R” Us. The two gentlemen own The Rodon Group and used the factory to their advantage when developing and producing the original K’NEX line.

Over the years, K’NEX has continued to expand its product line to include pulleys and wheels and introduce new building concepts such as K’NEX Building Sets, K’NEX Thrill Rides, K’NEX Education: America’s STEM building solution and licensed brands with a variety of gaming and other toy companies.

K’NEX products can be used to construct countless creations because the parts can interlock at different angles and directions. Some hobbyists have even been known to construct working bicycles out of K’NEX parts.

The company has a multitude of building sets for kids to create everything including trucks, planes, helicopters and Ferris wheels. Its Thrill Rides product line includes building sets for roller coasters. The company’s Figure Packs give people the ability to recreate their favorite video game or app characters and NASCAR drivers.

Headquartered in Hatfield, near Philadelphia, Pennsylvania, K’NEX is one of the few toy makers that manufacture their products directly in the U.S. instead of overseas.

President and CEO of both K’NEX and The Rodon Group, Michael Araten, spoke extensively about K’NEX’s dedication to manufacturing its products in the United States.

“We make about ninety-five percent of our parts and eighty percent of our finished products are made here in the U.S.,” Mr. Araten says. “We’re one of the few mass-market producers who manufactures at this level.”

K’NEX did have more of its manufacturing overseas, but made a decision in 2009 to re-shore its operations. “We wanted to keep our people employed, and we have grown our employment since then,” explains Mr. Araten.

K’NEX sister company, The Rodon Group, is a third generation family business specializing in custom plastic injection molding which has almost sixty years of investment in robotics and automation. Since 1992, The Rodon Group has manufactured over thirty-two billion parts for the K’NEX building toy system. Araten says this gives K’NEX a home-field advantage and enables it to keep its manufacturing ‘Cheaper than China.’

“As the world has changed over the years, manufacturing has been affected and companies are looking at their total supply-chain costs,” says Mr. Araten. “That includes the cost of transit, time, extra inventory and management from China, making the advantages of cheap labor disappear. We’ve taken away the labor advantage from China by investing in robotics and automation.”

This dedication to manufacturing its products on American soil has been beneficial for the company and its workers. “The manufacturing sector is currently going through a renaissance. The natural gas industry has helped drive down overall supply chain costs not only for that industry, but for other manufacturers. When there is a stable energy supply, manufacturing base and stable infrastructure, you have a strong economy, and that’s where we’re heading over the next ten to twenty years.”

While the renaissance of the manufacturing sector works to the advantage of K’NEX and Rodon, Mr. Araten does acknowledge that having a skilled workforce will be an essential part of his company’s overall strategy. “Right now, there aren’t enough skilled workers to take these jobs, but these are the type of jobs that will be healthy, especially over the next five to ten years. These are good-paying, high skilled jobs that we plan to hire people for.”

He explains that Rodon has a number of training programs and has apprenticeship programs at the company as well as partnering with local community colleges and trade schools to train workers. Araten is also on the board for American Made Matters, an organization that is dedicated to educating consumers of the importance of American manufacturing. It has a regional consortium of two hundred manufacturers that keep people informed about what type of jobs are available in the manufacturing sector.

“The explosion of STEM jobs tend to pay eighteen to twenty percent more than non-STEM jobs and are growing twice as fast,” shares Mr. Araten. “We’re focused on making sure the education is there and the types of skills that are learned are needed in the workforce, especially for young adults out of college who are pursuing a career.”

He acknowledges that finding a labor force with the STEM skills needed remains an ongoing challenge. “As people retire over the next ten to fifteen years, the biggest challenge is finding people to replace them.”

Careful growth is another challenge that K’NEX faces. “Growth is great, but sometimes growing too fast can get you in trouble, so we have a lot of metrics to look at to make sure we can control it,” says Mr. Araten. “Revenue is for vanity, profit is for sanity and cash flow is everything. We want our cash flow to be where we want it to be so we can make the investments we want and still be able to invest for the long term.”

K’NEX is also known for its dedication to teaching students about STEM skills from an early age. Called K’NEX Education, this product line is designed for classroom instructors to teach students about basic and complex science, technology, engineering and math concepts. K’NEX Education products come with lesson plans, meet national education standards and are designed for students from grades 3 through 12 and even some college level products.

“We wanted to have a hands-on solution for STEM. Show-and-tell is an effective method to learn, so we’ve developed a way for students to learn scientific principles with our products. They can learn how a bridge can stand up, or build a solar-powered car or wind-powered turbine.”

Going forward, the team has a vision of expansion for K’NEX to expand its product line and sell more of its products overseas. “It’s all about growth – on the toy side, it’s about going deeper into the international markets, taking our success deeper into Europe, South America and Asia. We’re also taking more advantage of eCommerce since so many people buy things online,” Mr. Araten says. “On the manufacturing side [Rodon Group], it’s all about creating new product lines for other industries, taking on the housing industry, making window and door parts more efficient and rustproof and making them cheaper for consumers. As we look at our growth plans, our manufacturing will be about finding industries that will add value to those consumers.”

Recent accomplishments of K’NEX support the team’s vision for growth and expansion. This includes the opening its own subsidiary in the United Kingdom where it has embarked on a comprehensive marketing campaign throughout the country, including school competitions, a rocket car and advertising. K’NEX has also partnered with companies like Electronic Arts to build toys based on some of its popular video games and apps, and, on the manufacturing side, it has invested millions of dollars in robotics to add capacity to handle major projects and additional product lines. And, “Our workforce is growing by five percent this year and is projected to grow by ten percent next year.”

From an idea that had its roots in passing time during a wedding into a multi-million dollar company that aims to teach children about scientific concepts and make it fun at the same time, K’NEX has come a long way since its humble beginnings. A dedication to manufacturing in the United States and embracing STEM careers and skills ensures that K’NEX will be successful for many years to come.

“The ability to make things controls your company’s destiny,” says Mr. Araten. “I ask myself, ‘Who’s our audience? Is it helpful to them?’ If it is, we help them. If not, how are we building trust with people today, tomorrow and in future. Then we can use the trust we built as we execute our plans for K’NEX.”

October 20, 2017, 8:12 AM EDT

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In the world of renewable energy, wind power is growing fast. It is projected that 10 percent of the energy generated in the United States will come from wind farms by 2020. Offshore wind farms are a relatively new addition to the American energy market, but the technology has been well established in Europe and is now taking off state-side as well.