Building on Its Foundation
OMG Expands Its Base While Spreading Its Unique Culture
Tom Wagner says he certainly knows his way around the Itasca, Ill. Best Western.
By his count, he’s spent 25 to 30 nights at the hotel, just a few minutes away from Chicago’s O’Hare airport, while helping to orchestrate the assimilation of Illinois Tool Works (ITW) Buildex’s roofing business segment into OMG, the Agawam-based manufacturer of fasteners and building products that he serves as senior vice president.
And he’s certainly not the only one.
Indeed, many company officials, including President Hugh McGovern and Human Resources Director Sarah Corrigan, have logged significant air miles over the past six months to successfully complete the acquisition and subsequent creation of what is now known as OMG Midwest.
The $26 million acquisition provides OMG with added measures of diversity, expertise, and geographic reach, said McGovern, noting that the Illinois plant manufactures a number of products that will be new to the OMG catalog. These include such items as the AccuTrac automated insulation and seam attachment system, the polymer batten strip for membrane attachment, the eyehook seam plate, and reel-fast collated seam plates.
Those names mean little to those not in the commercial roofing business, but they’re well-known to anyone who is, said McGovern, adding that the acquisition makes OMG more of a one-stop shop for those in that multi-billion-dollar industry, and a more convenient stop as well.
“This acquisition will give us a Midwest presence, which will enable us to better serve customers in that region,” he explained. “When customers place orders, they expect to get those products tomorrow — they may even have a roof open and exposed to the elements. Now, we can serve those customers.”
When asked about the process of folding the Itasca, Ill. plant into the OMG operation, Wagner joked, “it’s like flipping a light switch,” meaning that it was anything but, and involved quite a bit more than replacing the ITW Buildex sign with the bright red OMG name and logo. There’s also the matter of imparting the OMG culture on the acquired facility.
And this is a company that does things … well, differently.
Take, for example, OMG Idol. That’s the name given to a talent contest, based on the wildly popular television show American Idol, that was just one of many events and programs the Agawam facility staged last year to build camaraderie and a sense of family at the seemingly ever-expanding plant. (For the record, the big winner of the singing contest was Alfredo Navarro, who works in the plant’s E-Coat Department, and won $300 for his efforts.
Other OMG culture-related initiatives include everything from traditional summer picnics to hot-dog-eating contests. Participants have applied some techniques learned from watching professional events on ESPN, from fork truck rodeos to races in Santa Claus suits on the OMG grounds — in August!
“A lot of companies will say they promote a family-like atmosphere,” said Corrigan. “We don’t just say it, we do it, and all those things we do, from the rodeos to the Frisbee-throwing competitions, have helped us attract and retain employees, and that has played a big role in our growth.”
In this issue, BusinessWest looks at OMG’s acquisition of the Illinois plant, and how it represents only the latest in a series of efforts to create growth opportunities for a company that has certainly built on its original foundation.
Fasten Your Seatbelts
“Tougher than nails.”
That’s a phrase you hear often these days, but usually in the context of middle linebackers and undersized shortstops. But it can also be applied to many OMG-distributed products — in a very literal sense.
Actually, the phrase Wagner used was “faster, easier, and stronger” than nails, and he applied it to several components of the company’s FastenMaster brand of products, launched in 2001. That line includes products like the LedgerLok ledger board fastener, which represents a significant improvement from the nail, he said.
“The typical way you attach a ledger board to a residence is to pre-drill and then crank in a lag bolt,” he explained. “It’s very labor-intensive for the contractor; this new product is saving that contractor time and money, and that’s just one example of how these products work. In an application where someone might have to put in six nails, they can now use two screws.”
Growth of the FastenMaster line, which now accounts for roughly 25% of OMG’s total sales (that number was slightly higher before the ITW acquisition) is just one of many developments that have shaped dramatic growth at OMG over the past several years, said McGovern, noting that acquisition of the Illinois facility was simply the latest of these steps.
Others include the ongoing introduction of lean manufacturing processes in both the Agawam and Itasca plants; investments in new equipment, including a $3 million coating facility; a sharp focus on safety that has led to the current run of nearly 600 days (1 million or so hours when one considers all the company’s facilities) without a work-stoppage accident; and the continued introduction of new products in both the roofing and FastenMaster lines, including something called the IQ Hidden Deck Fastener System.
Launched just a few weeks ago, the IQ system allows deck builders to quickly and easily install boards of various materials, thicknesses, and widths from above the deck, ensuring that no fasteners will be visible on the completed surface. The IQ system helps builders create finished decks that showcase the natural beauty of the wood, without interrupting the surface with visible fasteners, said Wagner, adding that continued new product development, in both business divisions, has been at the heart of the company’s growth in sales — from $60 million in 1999 to the projected $140 million for 2007.
“The key to our whole program is that we spend a lot of time talking to the end users of our products,” he explained. “I think that’s what sets us apart from other fastener suppliers.”
Taking the many recent developments and putting them together, McGovern spoke with authority when he said of OMG, “this is not just a screw company anymore.”
That is how things started, though, in 1981. That’s when the company, created by Art Jacobson and known then as Olympic Manufacturing (the International Olympic Committee forced a name change; it’s the only entity that can legally use that word, and it enforced its will a few years ago), distributed screws made for roof installation.
The company eventually started manufacturing such parts at a factory/warehouse built on the site of the old Bowles Airport in Agawam, and in both its roofing FastenMaster lines has moved well beyond manufacturing and distribution of what might be considered commodities (common screws).
“We’re trying to bring products to market that are innovative and driven by end-user needs,” said McGovern. “We’re constantly looking for ways to improve the application of our products.”
The original plant has been expanded several times over the past quarter-century, including a 128,000-square-foot addition completed in 2005, physical growth that effectively mirrors OMG’s drive to diversify the company.
But growth is visible well beyond Agawam.
Not the Usual Drill
McGovern said OMG has long understood the need for a Midwest presence, and has for some time considered the possible acquisition of ITW Buildex’s roofing division — a competitor across many product lines. The talk turned to action last year, when ITW made clear its intention to exit the commercial roofing business and put the company on the market.
OMG stepped forward to acquire the plant, thus providing a solid future for a workforce that wasn’t sure it had one, said Corrigan, adding that there were fears among workers that the plant might be closed. Instead, there is simply a new sign on the door and new culture being imparted — hence all those trips to Itasca.
“This was a great move for us, and it adds a lot to our business,” she explained. “But for the people in Illinois … because ITW was moving out of that area, it wasn’t investing a lot of time and energy in that business unit. Now, those people are pumped, because we’ve come in, and we’re not just continuing operations — we’re talking about growing that facility.”
The acquisition helps OMG on a number of levels, said McGovern, starting with market share (now roughly 65% of a roughly $200 million market, up from 45%), as well as new product lines, expertise, and that valued Midwest presence, which opens up new markets for the company.
The assimilation process is carried out on a number of levels, he explained, including integration of manufacturing processes, creation of a new, OMG-operated warehouse (the company has been using a third-party facility), a mountain of office functions, computer systems, even employee badges and building signage.
And then, there’s the cultural change.
“We did a lot of hand-holding that these employees simply weren’t used to,” said Corrigan. “ITW had a much more traditional corporate structure and operating philosophy. We have a distinct culture, and I’m not quite sure the people there know what to make of it yet, but they’re certainly having fun.”
When asked what’s next for OMG, now that the assimilation process is, by his estimate, more than 80% complete, Wagner laughed and said “a deep breath.”
But the company isn’t showing any signs of taking one. Instead, it is moving forward aggressively with its lean manufacturing efforts, which are already showing some very tangible results.
Roughly translated, lean means process improvements that lead to savings of time and money, said McGovern, adding that such efforts are being undertaken in all components of the business, not just the factory and warehouse floors. But that’s where most of the effort is being concentrated.
The company recently conducted a Kaizen event (the Japanese process of continued improvement) for its cellular manufacturing processes, he explained, and has another planned for late May in the packing and finishing departments.
“There will be 12 to 14 Kaizens over the course of the year, touching all sorts of different areas of the company,” he said. “And they’ll be just a part of a continuous improvement drive.”
And as the weather turns warmer, there will be more of those camaraderie-building activities that are creating a stronger essence of team, while maybe drawing some strange looks from other tenants of the Agawam Industrial Park.
“We’re not sure what some of our neighbors think,” said Corrigan, noting that some of the events are unusual, while others come at strange hours — the plants runs three shifts, and events accommodate all of them. “But we’re having fun.”
Many of the extra-curricular activities are scheduled to coincide with the most stressful sales periods of the year, and the corresponding mandatory overtime often required to meet demand generated by those sales, she said, adding that the various events give employees a chance to release some stress, and the company more and different ways to say ‘thank you.’
There is no word yet on whether an ‘OMG Midwest Idol’ event will be staged anytime soon. But one is likely.
That’s because this is a company that does things differently — and can cite many kinds of accomplishments of note.
George O’Brien can be reached at[email protected]