A custom injection molder and assembly contractor, Vital Plastics is a unique company that in many ways is a throwback to the early days of the plastics industry when people assembled parts at home to make extra money.
It all started when the company was founded in 1994 by Joe Ahlm, an executive with ITW, the big maker of fasteners. ITW was looking to outsource some work, and Ahlm started a small assembly shop on the side. When his father, who ran the company day to day, passed away a few years later, Ahlm came in to run Vital. He was joined by Terry Townsend, who he worked with at ITW. They also had a silent partner.
By 1996, the three men owned Vital Plastics. The assembly operation was doing well, so they began injection molding. After 10 years of steady expansions, the silent partner got out. George Hauser, a local banker, helped refinance the company, for ownership by Townsend and Ahlm.
From the start, the founders used garages of home-based businesses for assembly operations.
"It is this garage-shop style logic that has allowed Vital Plastics to serve a previously underserved portion of the automotive market," the company wrote in its award submission.
Sales should add up to about $18 million by the time everything is counted for 2018, a record year, Chief Financial Officer Matthew Fish said. Vital Plastics employs more than 300 people, including about 140 in-house and anywhere from 150-170 homeworkers. The company runs 57 injection molding presses, ranging in clamping force from 33-400 tons, at two molding and assembly facilities, totaling 70,000 square feet.
Markets include automotive, appliance, office, consumer goods, construction, industrial and medical. Automotive accounts for about three-fourths of total sales, and officials want to continue diversifying the business.
In the early days, Hauser said, Vital had placed machinery in garages of its employees. But the company has since consolidated machinery at its factory. Today, homeworkers do hand-assembly, sometimes using jigs and fixtures.
Fish said that sometimes Vital has homeworkers to do hand-assembly while the company sets up automated systems and end-of-arm tooling to later bring the job in-house.
Ahlm died of pancreatic cancer in 2011, at age 54. Hauser once again refinanced the acquisition, through his estate. Then Hauser joined the company as its current president. Townsend still owns Vital Plastics.
Hauser hired Fish, an accountant, as chief financial officer and administrative services manager. Fish had experience setting up an IQMS ERP system for Phillips Plastics Corp. for several plants of the big Wisconsin-based custom molder, and he did the same at Vital Plastics.
Hauser and Fish have maintained the company's conservative fiscal practices, even as sales have grown, rebounding after the Great Recession. Decisions are data-driven. IQMS covers many functions, such as payroll, tooling maintenance schedules and work orders.
After years of growth, management takes some time to absorb the new business before tackling more growth, Hauser said. That means the company carries little debt and has a strong balance sheet. Management also focuses on cost containment, reducing scrap and increasing throughput.
Vital Plastics scored high in customer relations. On-time delivery is 98 percent, as the company shipped 745 million parts in 2017. Lead times are short.
Customers, who were contacted by the judges, praised the company. A longtime customer that has visited Vital Plastics' operations many times says the company is professional and handles any problems quickly.
"In general, my experience with Vital has been very, very good," he said.
For another customer, the molder helped it launch a new product, offering high quality and delivery. Customers said communication is good.
In the technology category, Vital Plastics has spent more than $4 million over the past four years in new injection molding machines and auxiliary equipment, such as robots, grinders and dryers. The company used operating money to pay for three-quarters of the investment, with just $1 million going to new long-term debt.
The company runs Toyo and Sumitomo injection molding machines but in recent years has standardized on all-electric Toshibas.
Vital Plastics was nominated for Processor of the Year by five people: Henry Yi, president of HS Mold Ltd.; Mike Brusseau, owner or Link Supply Chain Solutions; Wayne Langer, vice president of Harrington Langer & Associates; Ian Anderson, senior supply chain analyst at Anderson Corp.; and Kelli Caldwell, president of Simply Staffing.
Employee relations is where Vital Plastics really shines, with both in-house staff and homeworkers.
Vital Plastics likes to promote from within. Its award submission included a chart showing individual employees who have advanced at the company.
All shop-floor people must take Paulson training. State education grants have helped pay for RJG training, resulting in one Master Molder and several other people who have gone through various stages of RJG.
Vital added two quality engineers in 2018, hiring individuals experienced in plastics.
The company tries hard to maintain good communication with employees. A seven-member employee advisory committee, called Vital Force, acts as a liaison between employees and management. Supervisors and managers are required to do quarterly check-in meetings with every employee, and they have annual performance reviews.
Vital Plastics has become self-insured. The molder is joining with two other local companies and a school district to build a health care clinic, expected to open in July.
The company also offers a profit-sharing bonus.
The attention to detail has paid off with longevity: 54 people have worked at Vital Plastics more than five years, 33 for 10 to 20 years, and 12 for more than 20 years.
The home-based employees set Vital Plastics apart. Although they are paid on a piecework basis, Hauser said they are employees — the company pays withholding taxes, its portion of Social Security and, if necessary, adjusts their pay to reflect minimum wage. They don't get benefits.
Home assembly workers must visit Vital Plastics once a week. They go through a drive-through door to drop off assembled parts and pick up new jobs. Typically, they are stay-at-home parents, college students, the elderly, people with disabilities and people who want to supplement their other full-time income.
Even the Amish. "We actually had a horse and buggy go through," Fish said.
Some drive up to 100 miles to make their weekly deliveries. Vital has been operating a drive-through for more than 20 years.
Hauser explains how it works: "We've got a schedule and a drive-through. They pull in. It's enclosed, and we shut the garage door. They open up their trunk, put the parts on a cart. We have inspectors do a quick check. At the same time, somebody has prepared pre-staged travel ticket for next week's work."
As Vital Plastics wrote in the award submission: "This innovative approach to tap a workforce that is typically unavailable has helped Vital Plastics serve a niche in the plastics injection molding industry for clients who need injection molding assembly operations for parts that do not justify large investments in automation equipment."
Fish said the ERP system schedules home assembly employees and generates individual work orders and assembly instructions. It's an unconventional workforce of people who might have trouble finding work outside of the home.
"We think we've actually done the community a service," Fish said.