By Eric Peterson | Jan 12, 2021
St. George, Utah
CNC prototyping and production
After working for a larger machine shop, Moss saw an opportunity to go out on his own with Alphaeus Manufacturing.
In six short years, the company he started with co-owner Daniel Kitchel has progressed from garage startup with an old mill and lathe to busy job shop in a 5,000-square-foot facility with a dozen CNC machines.
The Alphaeus inventory now includes five vertical three- and four-axis Haas mills, a horizontal mill, and a two-axis lathe, a DMG MORI turn-mill machine, and a number of Swiss screw machines, among other tools of the trade. The company works predominantly with metal, but about 15 percent of production involves plastics.
But Moss points to Alphaeus' ability to prototype and help customers design for manufacturability as a big differentiator. "We excel at going from concept to full production," he says. "We've been able to take a few concepts and ideas and turn them into manufacturable products to save money and be able to have a manufacturable product [customers] can make money on. Customers walk in the door and we take their idea and turn it into a more machinable product, a more affordable product."
The semiconductor industry has been a focal industry for Alphaeus since its launch -- with steady overflow orders from Moss and Kitchel's former employer -- but automotive/powerports and firearms have emerged as complementary markets to the volatile semiconductor industry. Sales are now roughly evenly split between the three industries.
"We're pretty diversified," says Moss. "Our passion is firearms. We love the mechanics of them, we love making them, they're challenging to machine, and we really enjoy it, so we were happy to get some more of that market."
The diversification became especially important in 2020. After five years of 50-plus percent growth, Alphaeus plateaued for the year due to a dip in demand from semiconductor manufacturers. "It was 100 percent due to the pandemic," says Moss.
The balance sheet was resilient in the face of a slowdown. "We went from being machinists to business owners, and we wanted to be conservative in our expenditures and growth," says Moss. "We didn't want to get into something we couldn't handle."
Challenges: Identifying future drivers of growth. "What markets are going to grow?" says Moss. "We've had four years of manufacturing excelling in the United States, and we've kind of benefited from that. We don't know what the future's going to hold. Hopefully, it's going to stay strong and manufacturing will still be a priority on the West Coast and all of the United States. We make parts for OEM manufacturers, so if they're not manufacturing in the States anymore, then that's going to affect us, obviously. "
Opportunities: Moss sees potential from OEMs reshoring in the automotive industry. "We can obviously provide them services that they couldn't get in China, local-level services," he notes. "Our prices were usually in the ballpark, sometimes a little higher, but offset by either quality or [design for manufacturability services]."
Firearms work has also driven growth. "That's been a really big thing [since the onset of the COVID-19 pandemic]," says Moss. "Everybody we're doing work for right now is backordered for weeks or months."
An ongoing (and undisclosed) collaboration on a medical device could also start bearing fruit by 2022, he adds. "This is a product that's very manufacturable," says Moss. "Part of our shop right now is just to fund that. We think we could have been able to grow faster if we weren't funding that, but also think that this is going to be our future. We really want to manufacture our own products, and we have worked with this person and we actually own part of this product, so we will hopefully in the future be manufacturing it. The problem is that we are super green to the medical industry. We had no idea about the red tape and how long it takes to get through stuff. Our product has been going through the FDA now for almost two years and it's been in development since we started our shop."
He adds, "It will likely come to fruition next year, and that will drastically change our shop."
Needs: Talented, versatile machinists. "The manufacturing industry is young here in southern Utah, so there's not a lot of skilled labor," says Moss. "We were working with a school here to hopefully get some new people, and then the program shut down."
Recruitment extends to the Wasatch Front, but Moss notes that Alphaeus "has a hard time competing with wages up there."
The current leased facility has room for Alphaeus to expand to 28,000 square feet in adjacent units, but Moss and Kitchel envisioned building their own shop.
That idea has hit a hitch, however. "Commercial real estate in southern Utah has been greatly affected by the California exodus," says Moss. "The commercial real estate is incredibly expensive, and it's gotten worse over the past two or three years. We wanted to build our own building, but prices keep going up."