Global Neighbors

Segue Manufacturing

Occasionally, however, a company will look ahead and change the way the industry as a whole thinks about how to do business; with one shrewd move, an innovative business can force its competitors to re-evaluate their own practices.

One such company, that has placed an emphasis on changing its business model rather than sharing a plateau with its competitors, is Segue Manufacturing Services. Segue Manufacturing Services is a U.S. owned and operated, global contract manufacturer providing a portfolio of engineering services and manufacturing capabilities from sub-assembly level to complete end-to-end manufacturing. The company supplies cable and harness assemblies to many large companies such as Bayer and 3M in various markets including military, medical life sciences and automotive.

Segue provides its customers a competitive edge through its comprehensive suite of cost-effective, lean manufacturing capabilities that are simply unavailable from other contract manufacturers. By tailoring its manufacturing possibilities, Segue promises to offer the highest quality product, combined with great value for its customers.

Market opportunity

The company started out as the brainchild of company President Bill Roderick in 1991. The opportunity to set up the company, according to Mr. Roderick, came as a result of a perceived gap in the market which he felt he could more than adequately fill. “My background was electronics and I was working for a contract manufacturer in the late 80s,” he explains. “The owner of that company decided that he no longer wanted to be in contract manufacturing and closed that division. At that point, there was a large shift, from what I saw – many, many companies were starting to outsource their electronics. I thought that this was a good opportunity to get into contract manufacturing. With that, I opened a company, the original name of which was Cable Designs and Manufacturing. I started in 1991 with very small means, no employees. I sold about $12,000 in the first year. So I started to get out around the North East and sell my services. I started to develop a clientele of companies that was interested in me doing cable assemblies for them. A few years later we went into more electromechanical assemblies. We then started to get a lot more employees and started to really grow as an organization.”

This steady growth continued for almost twenty years until it became obvious that the company was a viable candidate to become a worldwide organization. “In 2007, I ended up selling the company but retaining ownership, which isn’t unheard of these days,” shares Mr. Roderick. “With that, my effort at that point – with some other partners that got involved – was to become a global manufacturer and to provide superior quality and local engineering; to provide a low volume, high mix company in the States and high volume, low cost in China.”

Following the lead of clients

Quite often in business, it can be more beneficial to be open to change and embrace it rather than stick to your desired route; in the case of Segue, this change to the way the company operates came as a result of an opportunity rather than any preconceived plan. “I think it was really an opportunity that came to us in a lot of ways,” says Mr. Roderick. “Our customers have built facilities over in Asia; we always want to be close to our customers. They kind of nudged us that way and when the opportunity came around for us to buy an existing company that was similar to us, we felt that we were going to be able to open up more markets over here with our existing customers in the U.S. – and also develop some other customers in Asia also.”

It is this decision which paved the way for Segue to really emerge as a market leader. This forward thinking to alter the business model gave the company a real edge on its competitors. The idea is simple yet ingenious; initial design and manufacturing is produced in a low volume, high quality environment in America. This allows the client to participate in the manufacturing process and allows for an extremely high standard of quality control. On completion of this product and once the volume reaches a certain threshold, the manufacturing is exported to the company’s base in Xiamen, China. However, unlike similar models of manufacturing, this factory is part of the Segue family and company engineers are on hand to explain, guide and teach the staff in China the exact specifications and requirements of the products. Only then, when the plant is producing the exact same standards of product, does it fly solo.

The process is not so much outsourcing as intersourcing. “We actually bought another company in China and brought them under the company umbrella and called it Segue,” says Mr. Roderick. “We developed that operation; we roughly have around 400 employees there. We transition products [to China] for some of our major customers with high volumes.”

Kevin Gonor, Vice President, is equally buoyant when discussing this tiered system within which the company operates. “We have developed a strategy, through Bill, that is from what I can see and what I know about the industry, a clear-cut frontrunner with this strategy; we offer all of our customers local engineering in the United States, local customer service and support, local sales, local tech support, we do all of their prototyping work here and then, if it gets into a volume situation we can then send it off to our sister facility in China.”

The next step

The company works in many diverse markets, supporting customers in the Military, Medical and Life Sciences, Automotive, Alternative Energy, Semiconductor and Electronics Capital Equipment, Homeland Security and Industrial Equipment sectors. This broad range is an intentional business decision, as the team at Segue is all too aware of the risks involved in focusing on one type of product alone. As recent history has shown in the world of business, nothing can be taken for granted. “We have looked at it as a company that we want to diversify as much as possible into many different markets because if one market, for example, the military, is not doing well, hopefully we have a pickup in the medical industry,” Mr. Gonor explains. “We made a conscious decision for our company to be diversified in as many markets as possible.”

Given the breadth of industries that Segue works in, it is not initially obvious to the outsider where the company will go next. The benefit of having exposure in so many different areas ensures that competitors cannot second guess and attempt to leapfrog. So where does a company that is the frontrunner of its industry, with a diverse portfolio and global reach go next? “It would be great for us to expand into locations such as California; if we could expand over to that area, that would definitely be a growth area that we would like to develop. We talked a little bit about maybe expanding into another facility in China. One of the reasons we like to try to expand is that we like to be close to our customers. The closer we are, the more they value us as a partner. The chances of them going somewhere else is less and less when you are right next door.”

It is telling that a company which has lead the way in terms of how – and where – it conducts business is so open-minded regarding its future plans. The company is happy to follow its customers around the world if necessary. Keeping its clients local regardless of their location globally, while providing them with the highest American standards of work, is the primary reason Segue Manufacturing is standing out from the crowd.