How a Small Metal Company Grew Over 80 Percent in Five Years
Larsen Manufacturing, a Chicago-based metal parts manufacturer, has achieved what is more and more difficult in today’s domestic manufacturing environment: double digit growth on a year over year basis for the last five years. So how did they do it?
“When the market was down, after the mortgage crisis, I knew it was time to invest,” said Dave Larsen, co-owner of Larsen Manufacturing. “Our primary business was metal stamping, but we had many customers who often requested prototype parts and other customers whose volumes didn’t justify the investment in hard tooling. So we jumped into the deep end of the metal fabrication business.” Larsen partnered with Amada to equip themselves with the latest technology in lasers, turrets and press brakes. Since its inception in 2009, the fabrication business has continued to grow at a record pace for Larsen.
By expanding its physical footprint and adding fabrication capabilities, Larsen can better accommodate the diverse needs of the metal industry. This gave Larsen the flexibility to grow its customer base and to offer complete solutions. “So clients don’t have to go around the world searching for a metal stamper, a fabricator, a machine shop,” says Dave Larsen, owner of Larsen Manufacturing. “We can provide them with a complete array of services under one roof.”
This was a major undertaking and a very significant change for Larsen. It required an immense investment in terms of equipment, people, and processes that were all very new to the company, and Larsen integrated the new division in only six months – a major accomplishment for the company that speaks to how efficiently the Larsen team works together. Challenges come with growth and managing those challenges is key to success.
The service offering expansion continued as recently as 2015 when Larsen began offering mechanical and electrical contract manufacturing. They now produce, assemble and test components, sub-assemblies or finished goods for a wide range of customers. As of now, Larsen offers full service cradle-to-grave solutions, starting with engineering services and design whereby Larsen takes an advisory role to assist clients in every phase of a project. Larsen’s engineering team, having a keen understanding of the manufacturing process, will help customers throughout the design phase, engineering the product for functionality as well as manufacturability. Larsen will work alongside the customer throughout the prototype phase to get the fine details down so that the final product meets the customer’s exact specifications. A key component to Larsen’s value offering is getting involved early with the project (Early Supplier Involvement). Finally, when products are ready for production, Larsen has the equipment and capabilities to take the project into full-scale production from low through medium and high volume production.
Larsen is a third generation family company. Dave and Denis Larsen, the current owners, were born into the business as their father and grandfather had been in the business before them. The family legacy began at Algonquin Tool and Die Company in 1946 with Leonard Larsen Sr. From the very beginning, the company’s core competency was metal stamping. At this time, the company was stamping parts for World War II-era weaponry.
By the time Leonard Jr. (Dave’s and Denis’s father) joined the company, its name had been changed to Electro Metal Products, and it had refocused its specialty on the manufacture of television tuners and enclosures. Throughout the first two generations of ownership, the company focused entirely on metal stamping and achieved success in the electronics industry, landing a number of large-scale commercial customers including Texas Instruments, RCA, and Compaq. In 1995, the company was sold, but with decades of experience, the Larsen family was not ready to exit the metal stamping industry. In 1999, Dave and Denis took their metal stamping expertise and started a new company that they called Larsen Manufacturing. The company today has sales in excess of $50 million, 225 employees and is headquartered in Mundelein, IL (a Chicago suburb) and has operations in El Paso, TX and Dongguan, Hong Kong. It services North American, Europe and Asia.
Managing the growth
With a long history as a small family-owned company, Larsen is confident running lean and nimble. However, the growth requires hiring resources within all aspects of the company. “Over the last few years we have had to upgrade our talent within the sales, human resources, operational and quality departments,” says Dave Larsen. Having the right people on staff and encouraging a spirit of collaboration between them enables the company to manage through growing pains. Driven from the top down, the company works hard to maintain a culture of teamwork and can-do attitudes, and while bringing in new people creates challenges, Larsen has adapted to the growth with little difficulty. “We try to reduce the noise and focus on the task at hand,” says Rob Kalkowski, Vice President of Sales at Larsen. “That task is getting quality parts out the door on time so we can always be a significant presence in our customers’ business.”
To continue to succeed as they grow, Larsen has a strong emphasis on Lean Manufacturing principles and continuous improvement. “We have to continuously analyze and assess our processes from part and material flow within the plant, to raw material purchases (months of inventory on hand) and economic run quantities. This is on the only way we will always stay competitive and relevant,” says Paul Dickson, Fabrication Production Manager. “Adhering to Lean principles is a must.”
Part of Larsen’s success is attributed to its propensity to take risks and take on projects of varying nature. Larsen gets requests from customers that require extremely intricate parts, tight tolerances – and sometimes things that Larsen has never seen. The company’s technical expertise allows them to take on various projects across a plethora of industries and deliver on these requests successfully.
As a result, the company maintains a healthy, highly diversified customer mix. When it comes to metal stamping, the team has hundreds of years of combined experience, enabling it to deliver on projects that a lot of other stampers can’t do. Because Larsen manufactures its hard tooling in house, Larsen ensures parts consistency, even with tight tolerancing and complex parts. Tooling life is also managed by Larsen to meet the customer’s lifetime volume expectations – which is very important in the automotive industry. Larsen has capabilities that are simply beyond the scope of many of its competitors. The team of experts at Larsen Manufacturing are passionate, engaged, and very capable of meeting and exceeding even the most challenging customer requests.
Range of Parts
Siemens Medical is a leading manufacturer of state-of-the-art medical equipment, and Larsen makes parts for its PET and SPECT scanners. These scanners are some of the highest resolution, top-performing machines of their type. They are very advanced and highly complex devices with precision parts and it really speaks to Larsen’s reputation for quality that Siemens Medical partnered with the company on this project. Larsen has the expertise, the capacity, and the courage to face these very challenging requests and deliver a quality product on schedule. Through this partnership, Larsen has proven that it has the capacity to handle complex parts and is confident that it will land more medical equipment projects going forward.
Indeed, the range and prevalence of parts manufactured by Larsen is vast. There is a good chance that the transmission filter pan, the seats, the airbag system, and the heads-up display in your car are made with Larsen parts. If you own a barbecue grill, Larsen is probably in your backyard. The team manufactures parts for the metal stair-lifts on buses and the thermostat in your home or office. When you go to the store, or the bank, it’s not unlikely that you’re using a Larsen machine when you pay or take your money out of an ATM. The company manufactures parts for industrial appliances, food processing machines, HVAC and refrigeration equipment, and office furniture. As we’ve seen, it makes a wide range of parts for the automotive sector, and high-precision, tight tolerance parts for medical equipment. It makes parts for battery storage and solar panel mounting, and parts that are found in consumer electronics, high-end audio equipment, cable set top boxes, and panels and enclosures for communications equipment. Larsen parts are everywhere.
By delivering top quality products on schedule, putting the customer first, and continually reinvesting in the business, Larsen has set itself on an upward trajectory in spite of the many challenges that face domestic manufacturers. With no sign of slowing down, the company is thinking about the future. Finding good qualified labor is always a challenge for manufacturers in every sector, so Larsen has stepped up to work toward a solution. It has developed an apprenticeship program where it works with local high schools and colleges to bring students into its facilities for apprentice work, and a number of the apprentices from this program have become full time employees of the company. Larsen also sends employees to these schools to present on the manufacturing industry and on why it’s a viable and gratifying career path, in order to help educate students who will soon be joining the workforce. Labor shortages are affecting the entire manufacturing sector, but Larsen is facing them head-on by engaging young people.
Larsen Manufacturing has a strong family legacy in the metal parts manufacturing industry. From metal stamping to fabrication to contract manufacturing, the company has the expertise and the capacity to produce very sophisticated parts with high levels of complexity. Year after year it grows, and invests in further growth. Larsen fully expects to continue reinvesting in the business and offering more products and services. A philosophy of teamwork and continuous improvement is carrying Larsen to a bright future with no end in sight. Check them out at www.larsenmfg.com