The Art of Manufacturing
A year and a half ago, Sanders Marvin may have wished he were touring some vineyard in New Zealand—the type of thing he did back in his old life. Instead, the former wine importer was looking at a brand-new, $2 million piece of automated machining equipment sitting idle in his family’s manufacturing shop in Northeast Minneapolis.
Marvin succeeded his father as CEO of Mid-Continent Engineering in 2006. He spent the next few years reorganizing the 60-year-old company, hiring people who’d help him turn it into a lean manufacturer of equipment parts for the military, health care, and aerospace industries.
Then the recession, along with fears about the impact of federal health insurance legislation, erased much of Mid-Continent’s health care business. Marvin was forced to let go many of his new hires.
But Mid-Continent has emerged from the downturn stronger than when it went in. It’s a result of winning new contracts from clients that are consolidating their supply chains during the recession.
Mid-Continent appears to be among a growing handful of Minnesota companies picking up work that just a few years ago might have gone overseas. Since spring, Mid-Continent has won four major contracts worth a combined $3.5 million. Two of them were for work previously being done in Europe.
For Marvin, it’s a welcome bookend to a decade that started with a family crisis that pulled him back home from his arty lifestyle in Manhattan’s East Village.
Mid-Continent was founded in 1949. Chuck Marvin, Sanders’ father, bought the company in 1977. In 2001, health issues forced Chuck Marvin to resign his day-to-day duties. “It was a family crisis and also a business crisis, because there was no successor,” says Sanders Marvin, who moved back to Minnesota.
It was a transition, to say the least, but Marvin found satisfaction in the creative aspects of manufacturing, from the problem solving to the sheer wonder of the process.
For example, the company makes a frame for a commercial airline’s seats. A metal casting wouldn’t be strong enough to support the required weight, so the 18-pound parts are cut out of a 200-pound block of solid metal—“like a block of granite if you were in a sculptor’s studio,” Marvin notes.
During his first five years with the company, Marvin focused on lean manufacturing strategies; in 2006, he became Mid-Continent’s president and CEO. One of his first decisions as CEO was a big one: walking away from unprofitable work with Boeing.
But while revenue was down after the Boeing decision, profits for that and the following year were among the best in Mid-Continent’s history. The big slump hit, but the company is bouncing back nicely from that as well: Marvin expects revenue to climb about 20 percent this year, to around $15 million.
Airline work remains cyclical, but military orders have been steady. This summer, the company was working on an assortment of heavy-duty cabinets and other military components. Health care has once again been a growth area.
GE Healthcare awarded Mid-Continent two significant contracts this year. The first was for manufacturing of a critical assembly for GE’s ultrasound product, a job previously done in Norway. The second was for design and manufacturing work related to GE’s X-ray patient barriers, which were previously made in Spain.
Marvin doesn’t think it’s a coincidence that GE Healthcare, which is based in Milwaukee, would look for a partner in the Midwest: “When their engineers have issues, they hop in their car and drive six hours to Northeast Minneapolis.”
Bob Kill, president and CEO of Enterprise Minnesota, a Minneapolis-based trade group supporting the state’s manufacturers, calls this trend “near-sourcing.” Data are still elusive, but Kill has been hearing favorable anecdotal evidence since the year’s beginning.
He says original equipment manufacturers are deciding they don’t want to keep inventories anymore, so they need suppliers who can quickly deliver low-volume orders—and quickly solve problems. “Every time you build something, you will have an issue,” Kill says. “The OEMs are starting to realize that if they can solve it in a day’s drive, it saves everyone and really keeps the line going.”