Wire-Net and Magnet, two Northeast Ohio manufacturing advocacy nonprofits, are teaming up to help area businesses sell more parts to the aerospace, medical device, water transmission and alternative energy industries.
A worker stands on the generator of a GE wind turbine. Two Northeast Ohio manufacturing advocacy groups are teaming up to encourage companies in the area to pursue more work with wind turbine companies, aerospace companies and medical device makers.CLEVELAND, Ohio -- Companies across Northeast Ohio have the tools and people to make specialty parts for airplanes, windmills, dialysis machines and other specialty equipment, but two manufacturing groups say many small and mid-sized businesses don't know how to target those niches.
So the two nonprofits are teaming up to offer a series of seminars and training sessions to help existing businesses target new work. Funded by more than $300,000 in grants from the Cleveland Foundation, Wire-Net and Magnet, launched the New Markets Initiative this week.
Mark Dawson, president of Cleveland Steel Tool Co. and a board member at Wire-Net, said the new initiative is geared at helping local companies diversify so they're not dependent on any one customer or industry.
"I think [Cleveland Steel Tool] is representative of many small manufacturers," Dawson said. "I know my market. My people know my market. How do I get into other markets?"
Wire-Net and Magnet held their first diversification session on Tuesday in Independence, gathering more than 50 manufacturers to listen to presentations on four industries that the advocacy groups believe will be good fits for Northeast Ohio's manufacturing strengths -- medical devices, aerospace, water transmission and alternative energy.
The groups plan to gather the same speakers for an identical session in Canton next week.
Over the next several years, they hope to hold training sessions or detailed workshops on the challenges faced in providing parts to specific industries every six weeks or so, said Tyler Haines, vice president of manufacturing services for Wire-Net.
"We're just taking our first steps," Haines said.
The New Markets Initiative is patterned after Wire-Net's Great Lakes Wind Network, a 2008 initiative to attract wind turbine companies to Ohio. Wire-Net set up a database of every manufacturer in the region that was interested in making parts for the wind industry and worked to get those companies in touch with those who would need their services.
Wire-Net President and Executive Director John Colm said as with the wind network, the first step in the New Markets Initiative will be to create a database of all local companies looking to get into new fields.
The next step will be helping interested companies get certifications or make plant upgrades to meet the new standards.
"That's where we're really looking forward to working with Magnet," Colm said. The Manufacturing Advocacy and Growth Network tends to work more directly with companies, providing engineering solutions to problems, helping them develop new products or helping train people to meet standards.
During the introductory session Tuesday, representatives of companies already serving the aerospace and medical industries said suppliers who are used to making parts for the auto industry or for consumer products may find it challenging to work in niche fields.
Kevin Webb, business development manager for Sparton Corp.'s Strongsville-based medical device division, said automotive suppliers are used to making small profit margins when shipping 500,000 units to their customers. Companies like his have much larger profit margins, but they only make a few hundred or a few thousand devices.
"We're low volume, high complexity," Webb said. "It's a great market, but it's not a volume market. A lot of suppliers have a tough time dealing with that."
Bob Hostetler, supply chain leader for Parker-Hannifin's aerospace systems business in Elyria, said aerospace companies and their contractors are extremely picky in choosing partners.
Aerospace contractors want their suppliers to have healthy finances, succession plans and growth strategies, Hostetler said. He added that contracts can last decades, so companies want to be sure they're signing up to do business with people who are going to be around for a long time.
"Our supplier turnover is very low," Hostetler said. He added, though, that the company is gearing up to take on new work, so it expects to have opportunities to take on new suppliers in the new future.
Dawson, the Wire-Net board member, said companies should have no illusions that getting into these new markets will be easy. But he added that the economic pain over the past few years has convinced many manufacturers that they need to diversify.
"We need to take informed risks," Dawson said. "That's what I'm looking for. Where do I start my search before I take that big risk?"