Innovation is a survival tactic for northeast Wisconsin manufacturers
Story by Rick Berg
The dustbin of manufacturing history is filled with stories of companies that clung too long to their original idea. Fortunately, northeast Wisconsin has several examples of long-lasting companies still going strong because they continued to adapt and innovate. We’ve profiled a few of them here.
The motivation for change can come from many directions. EMT International of Hobart, for example, produced parts for web printing presses, but developed its own line of digital printing presses when it saw that digital printing would soon overwhelm offset printing. Menasha Packaging transformed itself into a leading provider of custom packaging and retail displays to avoid the commodity price pressures of the corrugated packaging market. Lakeside Plastics in Oshkosh expanded into traffic safety cones to avoid losing business when one of its largest customers left the market. Ariens just keeps innovating and expanding because the Ariens family remembers all too well an early business failure during the Great Depression.
Ariens grew out of fertile soil
The Great Depression may have cost Henry Ariens his Brillion Iron Works business, but it paved the way for one of the most successful outdoor power equipment manufacturers in the world.
In 1933, Brillion-based Ariens Company got its start when Henry and his three sons – Steve, Leon and Francis – began building a rotary tiller in Henry’s garage. By 1940, Ariens Company tillers were well established with farmers in the Midwest. In the late 1940s, Ariens introduced the multi-row Tillivator, a power take-off unit for tractors cultivating from four to sixteen rows at a time.
More innovation followed in the 1950s and 1960s, as Ariens introduced products for the residential market, including lawn mowers and snow-throwers. The company produced just under 2,000 Sno-Thro units in 1960, but within a decade Ariens was selling more than 100,000 units per year. Today, Ariens Sno-Thro is widely considered the leading snow-thrower brand in the world.
Henry’s sons carried on the company tradition after his death in 1956. His grandson, Michael Ariens, became company president in 1969, and in 1998, current company president Dan Ariens became the fourth generation to lead the company.
Today, Dan Ariens says, the company expects to continue to grow by maintaining the eye toward innovation that has characterized the company’s entire history.
“I do think there are lessons we learned way back in our history, long before I was born, and they have stayed with us,” Ariens said. “Losing Brillion Iron Works during the Depression, I believe, really created this anxiety about how fragile things are. That drives innovation and creates this impatience about what’s next. How do we not only improve our products, but how do we do it. Every business has its challenges, and with snow-throwers ours is really driven by the weather. It’s very cyclical, so we have to be very vigilant about growing the rest of our business. Without growing you’re dying, so we have to always be asking, ‘what will the growth initiative be each year?’”
Much of Ariens’ growth has come through acquisition, starting with the purchase of Gravely Company, a North Carolina lawn and garden tractor manufacturer, in 1982. Along the way, Ariens has acquired aftermarket parts suppliers and other equipment manufacturers.
Dan Ariens believes innovation can be just as important in processes as it is in products. He launched a lean manufacturing process nearly 20 years ago that is widely recognized for its success.
Dan’s father, Michael, “was a systems guy, driving innovations in the plant, as well as in products,” Dan Ariens said, adding that the lean initiative just took it a few steps further.
“Lean is an innovative process – it’s a strategic system in terms of how you engage your workforce,” Ariens said. “It’s all part of the whole theory of innovation and growth. We see it as a way to make sure our plants are going to be effective and productive, that our skilled workforce is as productive and cost effective as anything in the world. Lean gives a way to drive costs down from the supply chain to inventory control to plant setup. The simple story is that when we weld those parts together, that’s the only time we add value and adding value is all customers want to pay for.”
Whether through product innovation, acquisition or process improvement, Dan Ariens believes his company can be justifiably proud of its record.
“It’s never as pretty on the inside as it looks from the outside,” he said, “but we know we need to keep innovating and growing.
Retool or Die
Born in the 1930s as Economy Machine and Tool, EMT International spent the first 30 years of its existence as a tool-and-die job shop producing a variety of custom tools and equipment, primarily for local and regional customers. By the 1960s, the company had begun specializing in tooling and modules for the printing industry, producing parts for many of the leading printers and printing press manufacturers in the world.
That book of business continued to be Hobart-based EMT’s bread and butter well into the 1980s, when current President Paul Rauscher joined the company as an owner. By then, EMT was internationally established for its quality craftsmanship. By the late 1980s, however, Rauscher was already seeing some ominous handwriting on the wall. Digital printing, he was sure, would soon dominate the industry, but much of EMT’s client base seemed stuck in an analog world.
It took a while for Rauscher to effect the changes he knew would be necessary, but by the late 1990s, EMT had begun to shift from being strictly a parts provider to designing and manufacturing its own line of printing equipment, introducing the Chameleon line in 2001.
In 2007, EMT partnered with a major global technology company to design and develop one of the first digital web printing presses. That initiative launched the largest growth spurt in EMT’s long history. In the past decade, EMT has grown from about 25 employees to about 175, including programmers and mechanical engineers.
Rauscher’s prescience about the market shift to digital printing likely secured EMT’s future.
“If you look at our business base from the 1990s compared to today, we’ve lost more than 50 percent of our old customers,” Rauscher said. “Where are those old customers? A lot of them are just gone, out of business. We knew back then that if we didn’t change, we would sink. The type of business we were doing in the 1990s makes up less than 2 percent of what we do today. We had to pick a place to go and we are fortunate that the place we picked was the right one.”
Staying ahead of the market curve is the continuing challenge.
“I call it the Walmart effect,” Rauscher said. “You have to continue to provide more at a lower cost. To compete in a global market, you have to stay on the high end and provide world-class service. The road we’ve taken, we have had to continually redefine ourselves and that won’t change going forward.”
A Package Deal
Few billion-dollar companies have a history as remarkable as Menasha Corporation and its signature business, Menasha Packaging. The company that would become known as Menasha Packaging was born in the 1850s as a wooden pail manufacturer. The company incorporated as Menasha Wooden Ware in 1872 and quickly became one the largest woodenware manufacturers in the United States.
The major transition into the packaging business came in 1927, when Menasha Corp. entered the corrugated box business. Through the years, the business incorporated plastic packaging and pallets, as well as pressure-sensitive and heat-seal labels. In 1995, Neenah-based Menasha Corp. reorganized into seven business groups, including its packaging group, now known as Menasha Packaging.
Though its 20th century experience was as a “brown box” manufacturer in a commodity market, Menasha Packaging has reinvented itself in the 21st century by expanding into specialty display and custom-designed packaging.
The transition began in the early 2000s with strategic acquisitions that gave Menasha Packaging entry into the retail food market with in-store modular displays. Menasha is now a leading provider of custom packaging to consumer product goods companies.
The company also began to innovate in other ways, including providing more entrepreneurial autonomy within business units. Menasha also launched the Retail Integration Institute, which is designed to provide consumer goods companies and retailers with collaborative packaging and display solutions.
“It’s important that our customers see us as partners, and for us to be able to offer them added value to our relationship. In order to do that, we prefer to be seated at the table when strategic conversations are happening,” said Jeff Krepline, Menasha Packaging vice president for national sales and RII. “The Retail Integration Institute address both by offering a venue that is conducive to strategic conversations and by providing our customers with a perspective that can only be gained with the scale and reach of Menasha Packaging.”
The strategy has paid off. From a company imperiled by the commodity “brown box” pressures as the 20th century drew to a close, Menasha Corp. now boasts strong growth, with annual revenue topping $1.5 billion.
One Word: Plastics
At least a decade before Benjamin Braddock got the word in 1967’s The Graduate that plastics would become the wave of the future, Lakeside Plastics in Oshkosh had already dipped into that wave.
In 1957, Lakeside was originally formed as a plastics and resin division of the A.P. Nonweiler Company, set up to provide synthetic resins for toy and household utensil manufacturers. The company was spun off and sold to Don Seibold and Bill Cuttill in 1972.
Nearly six decades after inception, Lakeside remains a second-generation family-owned business, led by President Jeff Seibold. The company operates from a 77,000-square-foot facility and is still a premier manufacturer of custom plastisol formulations for medical equipment, playground equipment, automotive coatings and tool handles, to name a few. Lakeside also manufactures plastisols for dip coating, rotational molding, slush molding, open form molding and knife coating, as well as plastisol screen printing inks for a number of applications.
Those products still make up the majority of Lakeside’s business, but in 1984 the company expanded into the manufacture and sale of traffic safety products, including safety cones, traffic management barrels and traffic barrel base weights often used by municipalities and for highway construction.
What works today might not work tomorrow. How Lakeside got from 1957 to 2015 is a classic example of a manufacturer staying in tune with the market and adapting to changing market needs.
Seibold noted that sometimes opportunities to diversify and grow come from unexpected directions. In the case of the traffic safety products business, Lakeside had been a major supplier of plastisol to another company who manufactured safety cones. In 1984, Lakeside’s customer decided to divest itself of the traffic safety business. Lakeside was faced with a choice: acquire the business or lose a substantial line of sales. Lakeside made its choice and today ranks as one of the premier providers of traffic safety products in the world and is the largest manufacturer of traffic safety cones in the U.S.
“It had to be a very quick decision at the time, but it was really a matter of self-preservation,” Seibold said. “We couldn’t risk losing that business. It was a pretty big learning curve for us and that learning process still goes on today. It’s important that we maintain and build efficiencies into our manufacturing process. Our employees continue to push us to build better quality products using the most efficient means available. Our employees continue to differentiate us against our competition.”
It’s apparently working. During 2014, Lakeside added approximately 35 employees, increasing its workforce by nearly 50 percent.
Success Is In the Bag
Since Judson Moss Bemis founded his manufacturing business in 1858, producing cotton and burlap bags, Bemis Corp. has become a global packaging powerhouse. During the Civil War, Bemis produced haversacks, oat bags and other materials for the army.
During the 1930s, Bemis began to sell patterned feed sacks and flour bags. As the company approached its 100th anniversary, Neenah-based Bemis saw several changes in the bag market that inspired new, innovative products and shifted business priorities. Bemis opened new paper plants in Arkansas and California to accommodate higher customer demand for convenient, smaller paper bags. In 1959, Bemis entered into the pressure-sensitive adhesives business. Today, those products are used in a wide variety of industries including: printing, graphic design, packaging, digital imaging, photography, assembly engineering and communications.
In 1960, Judson (Sandy) Bemis, grandson of Bemis founder Judson Moss Bemis, became president and ushered in an era of intense diversification. Bemis acquired many companies with specialties ranging from reprographic products to vinyl clothing and wall coverings.
In 1965, Bemis Bro. Bag Company became Bemis Company, Inc. The new name was versatile enough to serve as an umbrella for the increasingly diverse product lines manufactured and marketed by the company. Bemis became a public company in 1885, but in the company’s early days, its stock was not sold on the open market. In 1966, Bemis stock was listed for the first time on the New York Stock Exchange, under the ticker symbol BMS.
In the 1980s, Bemis continued to emphasize long-term development, limiting acquisitions and concentrating on the expansion of its technologically-oriented businesses.
As convenience became the buzzword of the day, Bemis created packaging solutions that fit into consumers’ increasingly on-the-go lifestyles. The company developed convenience products that are now commonplace in modern society such as frozen entrée trays that could be used in microwaves and traditional ovens, heat-in pouches that could be boiled in the bag or microwaved, and vacuum-packed brick pack coffee packages.
At the dawn of the 21st century, Bemis continues to create innovative flexible packaging and pressure sensitive solutions, solving today’s packaging problems with products that address the concerns of the modern world.
Bemis’ international presence has grown significantly since 2000, due in particular to its acquisition of Brazilian company Dixie Toga in 2005 and to Bemis’ European and Asian expansion during the decade.
Rick Berg is a freelance writer and editor based in Green Bay.