Exploring Expansion Opportunities

Tooling Dynamics

Based in York, Pennsylvania, contract manufacturer Tooling Dynamics specializes in precision metal stamping and Swiss screw machining for electronic connectors with customers primarily in the automotive, aerospace, medical, solar, and electronics industries all over the world. The company was founded in 1982 and has since grown from a 15,000-square-foot facility with one stamping press to 80,000 square feet of space featuring more than eighty-five presses.

In the last decade of business, it has undergone four facility expansions and has experienced a significant amount of growth at a more rapid pace than usual. The speed at which the business was growing reached a point at which the previous ownership group foresaw that additional capital investment would be required to keep moving in the same direction.

At the start of 2019, Tooling Dynamics was marketed for acquisition. The owners reviewed a number of options and equity groups and eventually formed a partnership with Sigma Electric. Sigma is “a much larger global company with an aggressive growth strategy. They are also backed up by a private equity investment group and give us that capital and financing that’s required for additional expansions, acquisitions, capital equipment et cetera, that we see are needed for the next level of growth for us,” said Tyson Berkey, President and Chief Operating Officer. Berkey was promoted to his present position in January of 2020, as a part of the succession plan.

Currently, the company is assessing its next expansion strategy. It has approximately two and a half acres of land available on which it could add seventy thousand square feet of manufacturing space over time. However, it is considering other options that require less immediate investment, including leasing space in the interim and examining acquisition opportunities that suit its services.

The coronavirus pandemic has dealt a major setback to many businesses across the globe. Tooling Dynamics, fortunately, was deemed an essential operation because its products support the electronic connector industry, and its stampings are used in ventilator manufacturing. It also facilitates the production of personal computers, laptops, servers, and other products that have been in high demand as a result of the increase in telecommuting.

The change in customer demand affected business in a variety of ways. The automotive market saw a decline, but the leisure market, including recreational vehicles and all-terrain vehicles, experienced a jump in sales. A good portion of the business supports manufacturing in Mexico, which shut down for six weeks, and the company temporarily lost about half of its business.

“It was a significant impact early on, but we have slowly been climbing out of that. I’d say, overall, our business was impacted by about twenty percent with the pandemic,” explained Berkey. “We’re looking forward here and still have strength in pockets of our business, and we’ve been managing through it with our labor force.”

Tooling Dynamics did not permanently lay off employees due to the pandemic. “We managed, through furloughs, to make sure that we retained our skilled labor, and our staff to continue to position ourselves for growth in the future,” said Berkey.

To ensure that all the health and safety protocols were implemented properly, the company restructured, designating some staff members to perform cleaning full-time. Although eight-hour shifts of wearing a mask in a manufacturing environment are not comfortable, all guidelines have been followed, and the staff members are grateful for the opportunity to be employed in such uncertain times.

“I think, in general, everybody has just been happy to be able to continue working through the pandemic, where many were not early in the process with the mandated shutdowns by the state.”

It has continued to concentrate on increasing its skill base through apprenticeship programs. Part of the reason that it has worked to keep all two hundred employees is that the main challenge in manufacturing over the past twenty years has been retaining skilled labor. To set itself up for success, Tooling Dynamics put a great amount of work into building its workforce, and it has no plans to lose them due to the pandemic slowing business.

The company always keeps four employees in Pennsylvania’s state-certified tool and die maker apprenticeship program. It encourages all employees to take part in the program, although it can only enroll four people at a time. For this reason, it developed an in-house die repair apprenticeship program that takes two years rather than the five-year state-certified program. Its training does not go into the same level of detail but does qualify the employee to keep production moving by making minor adjustments to the die and completing setup and tear-down procedures.

“Ultimately, we see the die repair program as the precursor to the apprenticeship program where individuals graduating from that program then pursue the five-year program as opportunities expand. That’s something we’re very committed to, and what allows us to grow is how quickly we can train individuals and grow our skill base,” explained Berkey.

Berkey focuses on individual development by holding one-on-one meetings and encouraging employees to create a development plan for their career. These meetings are also used to find any gaps and see where cross-training can be used to expand the talent pool.

As to the key difference between Tooling Dynamics and its competition, Berkey made it clear that the company’s history of success is based on the people who do the work. It prioritizes its people from the very beginning, making sure to pay a competitive wage, treat people with kindness, and emphasize their career development – an approach that has readied the company for a long, prosperous future.

“It’s been the focus on our people, the low turnover rates we’ve had, and the ability to keep the core group of individuals here that see the opportunity, have watched the company grow, and want to continue to be a part of that moving forward.”

Tooling Dynamics reviews its customer surveys and scorecards thoroughly, seeking to improve its customer service in even the smallest of ways. “We always make it a point to make sure that we have the things in place that our customers are looking for. Do whatever it takes is really the mantra,” said Berkey. “We continue to live by that to make sure our customers remain happy because we know that a lot of our growth through the years has been through wallet share and increases in volume with our existing customers.” Given this service-oriented attitude with new and existing customers, the rapid growth is no surprise.

Although the future of the market is somewhat unknown at the moment, the company is confident that it will continue its growth by focusing on developing new products with its existing customers while diversifying into new markets. The sales team aims to gain new customers and apply its tried and true system of building a relationship with customers to increase volume and grow together.

In the meantime, the company is calculating which additional capabilities would benefit its customers most. In addition to its usual precision metal stamping and Swiss screw machining services, Tooling Dynamics has had a lot of success with its assembly capability.

“We’re really trying to market and show that we can do some other things besides what the traditional stamping and Swiss business has been, and then we’re also evaluating whether it makes sense for us to venture into some other types of capabilities where we’ve seen opportunities in over-molding as well as large stampings for a business,” said Berkey.

Tooling Dynamics is also considering whether it should expand geographically or stick to expanding the York facility. The road ahead is both unpredictable and exciting for this newly-acquired growing company.

Green for Growth

Unless you strongly believe in the idea of making Mars a habitable planet, there really is no Plan B.

Past Issues

January 20, 2021, 9:48 PM EST