August 15, 2016

Precision Punch applies a human touch to its model

HBJ PHOTOs | Gregory Seay
HBJ PHOTOs | Gregory Seay
A machinist mans his workstation at Berlin's Precision Punch Corp.
Precision Punch Corp. President Kevin Gregoire with a sample case of metal punches of varying lengths and diameters.
Some of the smallest punches the company makes.
HBJ PHOTO | Gregory Seay
Engineer Tom Moore with an inventory of metal “blanks.’’

Just because tool, die and mold technology is old doesn't mean providers can't charge a premium for it.

That's the message Kevin Gregoire regularly delivers to his engineering, sales and marketing teams at Berlin's Precision Punch Corp., who in turn routinely embrace it when they call on U.S. customers.

"People are beating each other on price,'' said Gregoire, who is president of the 51-year-old privately held company. "So, Precision Punch is pursuing custom, high-margin products to match its capabilities to its customers' needs.''

Precision Punch operates in the rarefied space of manufacturing known as "capital equipment'' production, which means customers capitalize on its products to enhance their machinery for churning out products sold to commercial and residential end-users. The company makes specialized implements known as "punches,'' dies and other hardware that, in turn, other manufacturers use to make such familiar consumer goods as fishing line, acoustic ceiling tiles and bullets.

Precision Punch is among some 3,000 U.S. producers engaged in metal-stamping and fabrication, a manufacturing segment that alone generates an estimated $130 billion a year in sales, according to William Gaskins, president of the Precision Metalforming Association in Ohio, of which Precision is one of some 880 members.

The metalforming sector is coming off a period of "pretty good business'' the last five years, Gaskins said, driven largely by demand from automakers and U.S. petroleum drillers. However, falling oil prices have ratcheted down that demand of late, he said. Add to that the seasonal slowdown in the automotive industry, as they use the summer to convert tooling to produce 2017 models, "it's gotten to be a tight market,'' Gaskins said.

Nevertheless, Gregoire has cast his eyes on widening Precision's customer roster. Its latest acquisition, Eastern Industries, an affiliate that was already housed in a corner of Precision's facility at 304 Christian Lane, makes metal feeler gages for a number of customers, including in the aviation sector, where Precision is eager to plant its flag.

Eastern's other customers use its gages to measure gaps and other fine tolerances for production of wind-turbine motors, medical devices and guitars, Gregoire said. U.S. airframe maker Boeing Co. and Bloomfield Jake brake maker Jacobs Vehicle Systems are among its customers.

As part of his growth plan for Precision Punch, the president said that in the next six years his goal is to move the company from $10 million in annual sales to between $15 million and $16 million.

In the specific market Precision Punch serves, it counts between 12 to 13 "significant'' rivals, Gregoire said. Indeed, he claims that many of those rivals actually are customers, buying Precision's products, then repackaging and branding them as their own.

"We're good at small, difficult work. Tight tolerances. The other companies, not so much,'' he said.

However, Precision's greatest challenge in meeting that goal, he said, will be recruiting enough production and engineering talent to it and Eastern. The combined staff numbers 66 now, but aims to reach 72 by year end. But it will take 85-90 workers for Precision to reach its 2022 revenue goal. To build staff, both offer employees $250 bonuses for each hiring referral who lasts at least six months; they can claim another $250 if hires stay beyond one year.

During the Great Recession, Precision Punch avoided layoffs by cross-training workers to operate as many machines and perform as many machining tasks as possible, said Gregoire, who was a long-time vice president at Precision Punch. He was named president last year, following the death of Robert L. Peterson, who co-founded the company in 1965.

Executive pitch

With a commoditized product like punches, Precision Punch tries to make an impression with its service and direct contact with a customer's key leaders. Often, that means Gregoire himself personally will hit the road two or three days a month with his sales and engineering teams to call on first-time and regular customers. He takes clients to lunch or dinner and before he leaves will share his cellphone number with them.

"There are still people who want to be pampered, to be taken care of,'' he said.

When the president of a company like Precision shows up, "customers take notice,'' Gregoire said. If the company chief is willing to take the time to make a sales call, it sends a general message that Precision is committed to delivering what it promises, he said.

On Precision's shop floor, engineer Tom Moore points to a seemingly endless shelf inventory of "blanks'' or metal ready to be cut or ground into whatever configuration and specification customers demand. There, too, are metal roads of varying lengths that can be cut to length and shaped as "punches'' to clear machined parts or waste material generated during the production process.

Manned and unmanned milling/lathing stations dot the shop floor. The oldest equipment dates to the 1930s and requires a worker to feed them metal blanks and remove the finished product. Moore said nearly all the older machines have been refurbished.

Newer, unmanned milling machines and lathes are capable of churning out thousands of parts an hour, or performing more intricate cutting and grinding functions, Moore said.

One of Precision's Swiss-made Roll-O-Matic machines can be set up to mill one to three pieces an hour, depending on the number of features being "cut'' into the piece. Another, made in Germany, uses fine wire to cut a triangular opening into a tiny piece of metal for a customer making pull tabs for aluminum cans.

"We can set these up and go home for the weekend,'' he said, although that rarely happens.

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