Investing in improvements and sharpening focus on aerospace work fuel growth at TSI Plastics.
TSI Plastics, a Minneapolis-based manufacturer, is seeing business take off as orders for precision plastic components and demand from military and commercial aerospace customers reach new heights.
Not bad for a company that got its start in 1959 punching out simple plastic washers for Control Data Corp., among a number of computer makers.
Pat McCready, CEO and second-generation owner, has piloted the company’s transition over the last decade, to a point where aerospace work has climbed to 85 percent of TSI Plastics’ business.
No competitor, McCready said, can match the company’s range of capabilities, which include computer-controlled milling, injection and rotational molding, thermoforming, die cutting and mechanical assembly. TSI also offers finishing, decorating and subassembly, packaging and contract management services.
To drive change within the company, McCready made significant investments in people, processes and equipment, working with consultants to help the company sharpen its focus on serving aerospace customers such as Boeing, Rockwell Collins and Lockheed Martin and their vendors.
McCready got the effort rolling around 2010, as aerospace companies were stepping up their efforts to shift whatever manufacturing they could to domestic partners.
McCready then also happened to be completing a 10-year buyout of the company from his father, Gary McCready. The elder McCready, a TSI employee who bought the company in 1974 from its founder, serves on the company’s advisory board.
Under the younger McCready’s leadership, TSI Plastics has adopted a continuous improvement philosophy and attained aerospace and other industry certifications that have helped it create and support a Total Quality Management culture. The work has included documenting and digitizing production processes, formerly squirreled away among individual employees as carefully guarded “tribal knowledge,” McCready said.
Steps to improve accountability include creating the advisory board, establishing performance-based compensation rewards and using a locally developed online strategic planning and performance management program known as Tracking Action.
Tracking Action enables companies to monitor progress on cascading, aligned goals for the business, each department and individual employees. Ted Capistrant and Andy Wondra of Profit Builder Network, a consulting firm in North St. Paul, developed Tracking Action; Capistrant is a member of TSI Plastics’ advisory board.
The costs associated with the company’s overhaul led to some internal grumbling, McCready said, although he was confident the expense would pay off. It did, for example, when the company’s streamlined and documented processes made a winning impression on a contingent of seven Boeing executives.
“All those consultants’ fees were well over $100,000 over two years, and in one contract we got $3 million back in revenue, over three to five years,” McCready said. “We would have never gotten it if we hadn’t had all that in place.”
TSI Plastics has 40 employees, after making seven hires in the last 18 months, said McCready, who is planning a similar number of hires in the next year and a half.
The company is working to double sales to $12 million a year by 2018, McCready said, up from this year’s projected $6 million.
The growth will come from expanded work with existing customers in the tight-knit aerospace industry, both commercial and military, McCready said. He also expects to pick up new customers through other vendors and through possible acquisitions that could add new capabilities to TSI Plastics’ lineup.
TSI Plastics is unique because it’s a small company that is “always looking to do something different to provide a better service for their customer,” said Mark Greiter, director of procurement for the southwest region for aerospace electronics manufacturer Rockwell Collins.
A consolidation plan McCready suggested several years ago, with TSI Plastics replacing Rockwell Collins’ base of more than 100 plastic parts suppliers, has enabled Rockwell Collins to operate much more efficiently, including savings on internal costs and improvements in the quality of parts delivered, Greiter said.