Colorado Springs, Colorado
Industry: Industrial & Equipment
Products: CNC machines
CEO Doug Rhoda sees the CNC icon serving a noble purpose: aiding a revival of American manufacturing.
Diversified Machine Systems, or DMS, makes large computer-controlled, precision shaping and cutting machines -- machines other manufacturers then use in their factories. "We're helping them make their products better and faster," Rhoda says.
DMS has also entered into additive manufacturing with large-scale, industrial 3D printers. "One of the things that really attracted me to Diversified Machine Systems is that I saw there was a good platform to develop 3D printing in conjunction with the core business, which is the material removal," says Rhoda, who joined the company a little over a year ago. "What is unique about our offerings at DMS is we can produce these hybrid machines that are both additive and subtractive."
Rhoda believes DMS, honored as top industrial/equipment manufacturer at the 2018 Colorado Manufacturing Awards, is leading the way with such hybrid machines. "There are some people who are in different areas of that, but it's in the beginning stages for sure."
The costs of DMS' machines range roughly from $50,000 to $1 million, Rhoda says, with customers from small companies doing woodworking or plastics to large aerospace manufacturers. With more and more DMS machines in factories, maintaining those machines is a growing part of the business. "We have a large, growing group of full-time field service people, so we're available 24/7."
The company was originally founded by Patrick Bollar, who has transitioned from CEO to chief technology officer. "He's very active in the hybrid designs," Rhoda says. Company growth, he says, has been "pretty steady. I think it plateaued a little bit before, a couple of years ago, but we're back on a growth trajectory and we have hopes to continue to grow -- at the right pace. You want to make sure that you grow not for growth's sake alone."
Three elements underline DMS' growth strategy, Rhoda says. First is retaining -- and keeping happy -- existing customers. "In our kind of business, the best possible sales tool for new customers is having an existing, happy reference." Second, "it's growing with those existing customers," whether it's providing machines for a new location or introducing them to DMS' newest technology. And, lastly, Rhoda says, "it's winning the right new customers."
Increasingly, those new customers come from aerospace, which has become the key market for DMS. "A real strength of the DMS product, and this long preceded my arrival, is robustness in the quality of the machines," Rhoda says. "In aerospace, there's a huge trend toward using more and more composite materials, and these composites, when you're machining them, can create a very corrosive dust that's very hard on typical machines." The DMS machines, he says, "are very robust to withstand this harsh environment."
Challenges: "It's getting the right people," Rhoda says. "That is the constraint to growth."
Opportunities: The aerospace industry offers the most opportunity for growth, Rhoda says. He points to this year's Space Symposium in Colorado Springs, where it was notable how much the industry has grown, he says. "Aerospace and space is the right market for us as a core focus because of the high demand out there and how that fits with our existing strengths, including our new offerings in the hybrid machines. They fit with the needs of aerospace and space. We're open also to opportunities in other areas."
Needs: Rhoda points again to people. "What we are doing about that is we're really active in the community with UCCS [University of Colorado at Colorado Springs]." DMS, he says, has hired seven young engineers from UCCS through an intern program and also works with other schools, including Pikes Peak Community College, Metro State University of Denver, Colorado State University in Fort Collins and CSU-Pueblo. With some of the schools it's not a regular internship program but a co-op program, in which students rotate from attending school for a semester to working for the company for a semester.