By Eric Peterson | Mar 19, 2019
Industry: Contract Manufacturing
Products: Plastic components
Jon Giacchino started Plastics Design & Manufacturing as a fabrication shop, then moved into thermoforming for the medical and computer industries. The company moved from Denver to a 110,000-square-foot facility in what is now Centennial in 1997.
Cunningham joined the company after a career in the printing industry. After the sale of Consolidated Graphics in 2014, he was looking for a next move. "I asked myself, 'What am I going to do now?'" remembers Cunningham. "So I started looking. I looked at 75 to 100 businesses. They all had a lot of hair on them."
But then he found what he saw as a diamond in the rough. "I started talking to Plastics Design & Manufacturing about a year ago and recognized there was a ton of opportunity in the medical and aerospace industries," he says.
The manufacturer of heavy-gauge plastics was also in the midst of a transition, as Giacchino was looking to retire. Cunningham teamed with Giacchino's sons, Keith and Scott (and the company's president and VP, respectively), to buy the company in March 2018.
Plastics Design & Manufacturing not only makes custom thermoformed plastic parts, it also offers value-added services like painting and assembly with a day shift and a skeleton second shift.
Clients include "a lot of large companies, Fortune 500 companies," he notes, without naming names. "Our markets are medical, aerospace, defenese, IT, autonomous vehicles, and robotics."
The company's parts are in water filters in Boeing aircraft, casing for blood-analysis equipment, and camera domes on autonomous vehicles.
Medical accounts for about 65 percent of the business, and aerospace and defense are about 15 percent combined. The remaining 20 percent is spread across the other key markets. About 40 percent of sales are exports.
"I've been focused on sales and growing into some new markets and getting some new certifications," says Cunningham, noting that Plastics Design & Manufacturing currently has a ISO 9001-2015 certification. "It's a door-opener."
The company is also in the process of the certification for AS9100D to bolster its aerospace credentials. "It's a pretty thorough process," he notes, that includes aspects like banning cell phones from the production floor to guard customers' IP. "We put lockers in our lunchroom. When employees come in, they check their cell phones into their locker. It's a new approach to doing business here."
He adds, "The companies in our key markets are looking to have a conversation. They want to know you're ISO-certified and AS9100D-certified."
Those conversations are notably technical. "The buyers are engineers. The end product, we might make three to 20 parts on a machine with 400,000 parts," says Cunningham. "The specs have to be hit exactly. The tolerances are very low. . . . It's all about precision."
Production volumes are typically 100 to 1,000 units of a given part, and the company works with dozens of different materials and is constantly testing new ones.
Cunningham says it all adds up to some serious potential. "I didn't come here to change the way we operate the company," he notes. "My main focus has been growing our sales."
That involved tweaks, not a reinvention. "When I walked in the door in March 2018, the table was set for good growth," he says, commending the "long-tenured" staff. "They're good at what they do and they're efficient."
Likewise, the facility has plenty of room to grow and there's an opportunity to bolster the second shift and add a third shift. "We're good on capacity and good on space," says Cunningham. "We've got a big footprint here and could easily triple in size."
After flat sales from 2015 to 2018, "We are anticipating 15 to 20 percent growth this year ," he adds. "The company is ready to take on more business."
Challenges: "The biggest challenge is that the sales cycle is a very long sales cycle," says Cunningham. "It's an 18- to 24-month sales cycle from the time you start talking to the client to the time you start manufacturing for them."
The flip side of the coin? "Once the manufacturing process is established, they don't move around," he says.
Another challenge is "finding good people in this marketplace," adds Cunningham, "but we've been successful."
Opportunities: "We've talked to a lot of companies developing new products," says Cunningham. "The opportunities are when you start working with a company on a new product, that product is going to have a 10- to 20-year life. A new job tomorrow is going to be a customer for a long time."
With legacy products, "There's an opportunity for replacing metal parts with plastic parts for durability reasons, for weight reasons," he adds. "A lot of companies are looking to reduce their carbon footprint, and reducing weight is a net win for them."
Needs: Employees. "We've increased our workforce by 15 percent in the last six months," says Cunningham. "Attracting good people that are quality-conscious, that are dedicated and reliable, and that can follow our processes."