Thriving in Texas: San Marcos Manufacturers Embrace Lean, Face Skills Challenges

The San Marcos, Texas, region has a great deal to offer startup, existing and transplant manufacturers: a good business climate, low taxes, skilled workers, and the educational facilities and programs to train new workers.

I recently took a press trip in the area, touring its manufacturing facilities. In a previous installment of this column I wrote about startups in the area, some linked to research at Texas State University.

But I also visited some traditional companies on the trip. Here’s a glimpse at what I took in:

Mensor

Mensor’s core competency is pressure sensor accuracy, which is a very niche market. The company was started in Houston in 1969. Its founder, Jerry Fruit, had an idea for designing and manufacturing precision pressure measuring and pressure calibration instruments and systems, which he developed with a small group of engineers from Texas Instruments. The company shipped their first product, a quartz manometer for the aerospace industry, in 1970. Back then, most of the business government contracts.

Jason Otto, Mensor president, says that “it is tricky to hire talent, so we have to hire from competitors, as well as engineering graduates.” Many engineering hires come from Texas State University, Texas A &M, and the University of Texas in San Antonio and Austin. The company also hires calibration lab technicians and people skilled in technical assembly, as well as machinists for its in-house machine shop. “We haven’t had any trouble hiring machinists,” Otto said.

Otto has been with the company for more than two decades, starting as an engineer, before moving up the management chain as product manager, director of sales and other positions.
The company relocated to San Marcos in 1978, but in 1981, its building caught fire and burned to the ground. It kept going with the help of vendors and customers during the five months it took to build a new 26,000 square foot building. The employees kept their jobs by actually helping construct the new building.

Mensor acquired its control line of products and introduced new controller products in 1983, 1992 and 1997. The company introduced a Quartz Pressure Calibrator in 2001, and the modern CPC6000 Automated Pressure Calibrator in 2004.

In 2006, WIKA Group, a global manufacturer of pressure, temperature and level measurement technology, acquired Mensor. After the acquisition, Mensor employees began lean training.

“We currently have two Lean Six Sigma Black Belts, who do about six to eight kaizen events per year,” said Otto.” We practice 5S and use QCSD boards for visual management of teams. We put together cross functional teams, use cellular assembly, and have a vendor qualification program.”

Although Mensor has customers in China and Malaysia, it has not outsourced any of its manufacturing overseas, said Otto. “We use the WIKA global sales team, but use manufacturers reps to sell into Mexico and maquilas [U.S. owned plants in Mexico] because it is a long sales cycle.”
Mensor represents about 6% of WIKA’s business, Otto said.

Altra Couplings
John Malik, general manager of mechanical power transmission components manufacturer Altra Couplings, grew up working in his dad’s auto parts store. He has been with the company since graduating from college with an engineering degree, and has survived three sets of company owners. In 2007, the San Marcos plant, which was owned by TB Woods at the time, was acquired by Altra.

Currently, Altra has about 120 employees in San Marcos. According to Malik, Altra products control and transmit power and torque in virtually any industrial application involving movement and are sold in more than 70 countries—in industries including energy, general industrial, material handling, metals, mining, specialty machinery, transportation, and turf and garden. Its product portfolio includes clutches, brakes and couplings, as well as gearing and power transmission components (but not for the auto industry). “

Altra has taken a value stream approach to its products, said Malik. “We go narrow and deep in an area and develop it, and then move on to another area.”

A team of employees have helped the company become lean, including with lean accounting. “I spent a lot of time with engineers to understand the true costs," said Malik. "We have some good decision rules for the ‘make or buy’ decision process. Our biggest promoter is our CFO, but our lean program goes all the way to the top.”

Altra’s biggest problem, said Malik, is finding new employees. “This is an area that doesn’t have a long tradition in manufacturing,” he said. “People don’t know what manufacturing looks like, and the mindset for years has been getting a college degree rather than vocational training.

“There are never enough trained applicants, so we train our own workers. We now have second- and third-generation workers. It is a lot about how we treat people and the opportunities for growth.”

The company makes many of its own castings in its Chambersburg, Pennsylvania, plant and buys the forgings it needs. It has three U.S. manufacturing facilities, and many others around the world.

“[Altra] bought a company in Germany and have a plant in China,” said Malik. “That plant makes some parts for us, and we make some parts for them. We also have a small facility in Brazil in order to have local content and avoid the high tariffs.”

CFAN
On my last day in San Marcos, we visited CFAN, which was formed in 1993 as a 50/50 Joint Venture between GE Aviation and French aviation company Safran (SNECMA). The partnership was created to introduce composite fan blades in a GE90 engine that powers the Boeing 777. CFAN has leveraged the success of this product to introduce additional fan blades on the GEnx engines that power the Boeing 787 and Boeing 747-8.

Mo Mattocks, CFAN’s president and plant manager, is responsible for all plant operations, including over 500 employees executing product delivery, quality, productivity, plant financial results and personnel safety. Originally from New York, he graduated from the University of Michigan and Georgia Tech. A 21-year veteran of General Electric, he previous worked at GE Aviation in Kansas City and Atlanta.”

CFAN successfully transferred the composite fan blade manufacturing process from the laboratory to the shop floor, delivering the first production GE90-94B fan blade in September 1994, Mattocks said.

“At first, the quality level was only about 80%, so there were a lot of rejects,” he added. But they kept improving their process using Six-Sigma methodology focusing on eliminating defects and reducing variation—and now the scrap rate is down to only about 1%.

The plant has doubled its volume since 2009, increased its floor space from 160,000 to 275,000 square feet and produced more than 20,000 composite fan blades. That’s about 165 per week, with each blade taking about 340 hours to manufacture. The plant is temperature-controlled to keep the composite material from curing on hot days.

Having once been a sales rep for a composite parts company in Post Falls, Idaho, I am familiar with the painstaking production methods used for pre-preg layup composite parts. When we walked the plant floor to see the production cycle from start to finish, I could see how meticulous the hand layup process is for these very critically dimensioned fan blades. It would be too tedious to describe the whole process, but the number of steps it takes to produce a finished fan blade was mind-boggling.

RSI Inc.
Located in Kyle, Texas, RSI began as a distributor of military-standard electromechanical parts but over the years has also become a value-added manufacturer. The company’s manufacturing clients include Department of Defense contractors including BAE, Lockheed, Raytheon and Aerojet. It is a silver-certified Boeing supplier and also does work for companies in the energy, industrial, transportation and oil and gas industries.
Harish Malkani, RSI president, founded RSI in 1983. Originally from India, he earned a B.S. in chemistry from the University of Poona and a chemical engineering degree and a graduate degree in marketing from the University of California at Berkeley. He was employed with Raychem Corp. from 1969 to 1983.

While type of technology RSI manufactures is confidential due to its military applications, when we toured the shop floor, I could see that the company has the manufacturing, assembly, and test equipment to produce custom assemblies and systems for a variety of applications.

“Our biggest problem is getting qualified workers,” Malkani noted. “I have hired from Texas State University, but I need more help in finding people with technical skills who are not engineers. We are going to train some teachers at the local high school in our technology.”

Finding and training skilled workers was critical for all the companies on the tour. Dr. Hector Aguilar, executive dean of the continuing education division at Austin Community College, said that ACC is partnering with local companies to tailor a custom learning curriculum they can deliver to employees on site. With seven campuses, ACC specializes in the semiconductor, aeronautical and sensor industries.

Ashley Gossen, vice president of marketing and communications for the Greater San Marcos Partnership, says that underemployment is high in the region—a selling point for companies looking for talent. The greater San Marcos region has more than 5,400 workers with bachelor or graduate degrees working in jobs that don’t require them, she said.