Cable firm Koehlke Components growing, despite the market

Thursday, Mar 11, 2010

The recession has hit manufacturers especially hard. Production has plummeted and the industry is second only to construction in terms of job losses. But for one small Greater Cincinnati manufacturer, good communication and the ability to adapt to customers’ needs has helped it weather the recession.

Franklin-based Koehlke Components manufactures and distributes custom cables and electronic components for engineers and other manufacturers.

“Our customer is your inner engineer,” said President Thomas Koehlke. “Your job is to solve a problem. Our job is to be your go-to guy.”

It’s a job they do so well that Koehlke has recently received extended contracts from companies like the Harris Corp.

An equipment specialist at the Tobyhanna Army Depot in Tobyhanna, Pa., said that when he was looking for a cable assembly that was no longer in production, Koehlke was able to reproduce it with such quality that he extended Koehlke’s contract and the company became the depot’s exclusive supplier for that cable.

Although most American manufacturers have shed jobs during the recession, Koehlke recently hired four new employees and now has 35. The company purchased new commercial machinery in early February to increase its production capabilities. Though he declined to give specific figures, Koehlke said revenue has more than doubled since he started custom assembly in 1989. He plans to continue his aggressive growth strategy through 2010.

“They say flat is the new up, but through 2009 and on, up is the new up,” Koehlke said.

Koehlke’s strategy consists of what he does best – communicating with customers and building relationships. Koehlke said that while he’s always looking for new customers, his target is to increase business with existing customers. His philosophy is to be in constant communication to meet the needs of his customer, and to be open to things the company doesn’t already do. Much of the new machinery he recently purchased was to branch out into new areas in response to customer demands.

Koehlke was started in 1976 by Tom’s father Elmer, as a spare parts distributor exclusively serving the U.S. Department of Defense. During the next decade, Koehlke expanded its client base and Tom Koehlke joined after finishing his accounting degree at Indiana’s Manchester College in 1986.

In 1989, he realized the company was missing something, so he started custom assembly – modifying the components he distributed to meet customer needs.

In 1995, Elmer Koehlke retired and Tom took over. During the next eight years he saw his custom assembly business take over the distributing side, and it slowly changed into a problem-solver for engineers who needed custom parts.

Koehlke said it’s the communication, listening to the customer’s needs and working closely with their clients that allows the company to do a better job at a lower cost than other contractors.

­­­­­­“They’re very accommodating,” said Carmine Brancaccio, subcontracts manager for the Harris Corp., a communications company that provides equipment for the U.S. military. “We’ve given them some pretty difficult requirements to process, and they always exceed our expectations.”

Brancaccio said there were some growing pains at first. To meet the changing and often urgent demands of the defense industry, Harris needs to be lean and agile. Brancaccio said at first Koehlke’s business model was slow and clunky.

“We work to keep the country safe, so we need to meet stringent customer requirements,” Brancaccio said. “They’ve learned to be flexible and agile in response to our requirements, and because of them we’ve been able to meet stringent requests.”

The defense industry remains one of Koehlke’s biggest markets, which is something its president takes very seriously. The office section of Koehlke’s 30,000-square-foot headquarters is relatively small compared to the areas devoted to machining, manufacturing and inventory, but it is adorned with dozens of bald eagle statuettes.

The company also serves anyone in need of custom-engineered solutions, including the aerospace, automotive, broadcast, telecom and medical industries.

This diversity has also helped Koehlke weather the recession.

“It has been a very severe recession in manufacturing,” said Daniel Meckstroth, chief economist for the Manufacturers Alliance/MAPI, a public policy and economics research organization in Arlington, Va. “Physical production is 12 percent below what it was at its peak in December 2007.”

Another indicator of the severity of the recession is the decline in employment. The manufacturing industry lost 2.2 million jobs since 2007, and the only other major industry that has been hit harder is the construction industry, Meckstroth said.

However, Koehlke credits tight cost control and the diversity of his team’s expertise with helping his company grow while many other manufacturers withered. And he continues to expand his capabilities all the time.

“Instead of being extremely deep on a narrow focus, we’re wide and getting deeper,” Koehlke said.

Source: Business Courier