A company in transition
Going back a dozen years or so, Vernay had many strengths as a company, but it also recognized its shortcomings. It had a global presence but lacked a unifying approach to managing those diverse businesses. So it took steps to address those issues.
In the fall of 2009, Vernay recruited Ed Urquhart as its first outside CEO. The German-born Urquhart had moved all around the world during his youth, living in places as diverse as Japan, Libya, Morocco and Spain. In 1990 he earned a bachelor's degree in mechanical engineering, and then a master's degree in applied mechanics, before gaining an MBA in strategy and finance from Boston University in 2003.
He worked in companies that made printing presses and engine components, and oversaw businesses in Europe, before being recruited by Vernay. Though the country was in a recession at the time, and Vernay's balance sheet was fragile then, "that didn't bother me," he said. "The core of the company was strong. The people had their hearts in their jobs, and that was very important to me."
One of Urquhart's first actions was to move Vernay's headquarters to Atlanta, while maintaining its innovative roots in an R&D lab in Yellow Springs. Then in 2011, the company opened a plant in Suzhou, China—its fifth manufacturing facility.
He also set about bringing in talent with broad, global experience. In June 2010 he recruited Andy Woodward to be the firm's global vice president of sales and marketing. "I was hired," Woodward said recently, "because I had global experience. I had been managing director of a European company much larger than Vernay. So they wanted an 'outside of America' perspective to allow for that global initiative to work.
"When Ed started 11 years ago," Woodward said, "he was tasked with not only being the CEO, but with bringing the company's three regions of the world together and create global synergies between them all."
In April 2012 Ken Madden came to Vernay from Freudenberg-NOK, a much bigger firm, where he spent 15 years and was global head of technology. For his new firm he took on the role of vice president of global engineering.
The Canadian native said that when he joined Vernay, "We were a global company without a global launch process. Each of our plants had different equipment. We spent two years coming up with a launch process," which he dubbed SPP, for Small Platform Process.
"Now, no matter where you go (in Vernay), it's the exact same—one global launch process." The various sites all have the same presses, end-of-arm tooling, tool designs, mold frames, etc. With some 30 new-product development engineers globally, the company now can plug and play between plants around the world.
In 2017, the company hired another experienced executive, Christian Deschenes, to be its VP of global operations. Deschenes came to Vernay from rubber company Kraiburg TPE, where he had worked for more than 11 years, and had been director of operations.
The firm now has serious bench strength in its managerial team. Additionally, it has a huge well of experience among its work force. Stephanie Lute, Vernay's global director of human resources policy, has been with the company for 37 years, and still is not its longest-serving employee. That honor currently goes to Walt Etheridge, an operator in Griffin, who has been with the company for 40 years. Mitch Hardy, a tool maker in Milledgeville has 39 years of service. Carla Williamson, a production associate who works in quality in Griffin is a 38-year Vernay veteran. And Vanna Villata, managing director of Vernay Italia, has been with the firm for 35 years.
An ever-changing landscape
Still, like other businesses, Vernay Laboratories has to evolve constantly to keep pace with ever-changing customer demands and market dynamics.
"Both plastics and rubber molding are slow-moving industries in terms of technological change," Urquhart said, "but they are also often underestimated in terms of the amount of technology they involve. The landscape is competitive, and in order to survive you have to be good at what you do." In recent years, the industry has seen the adoption of a lot more automation, and companies taking a much more scientific approach to molding.
"When it comes to digitally interconnected Industry 4.0 protocols and the Industrial Internet of Things," declares the CEO, "I would say that we are way ahead of the curve. We have a very good connection to all of our equipment. We see every cycle on every machine, and it gets recorded. We call it our 'heartbeat system.' That's an area where I feel we excel. We have a very robust system" that gives management excellent real-time access to all types of operational information and key performance indicators, or KPIs.
Vernay is working to update its technology and equipment, step by step, he said. The company has been making some of the same legacy parts for 40 years or more, and some of those are manufactured on older equipment, using older techniques. But those machines run side-by-side with the most modern equipment using the very latest technology. The firm averages having 50 to 60 rubber molding presses in each of its manufacturing locations.
The aim is to transition the older machines to more modern molding technology while maintaining the necessary output levels and consistency.
That's a very capital intensive process, Urquhart said, and can't happen overnight—but it's been going on for the past 10 years, and will continue over the next 10 years.
So what allows Vernay today to stand apart from its competitors?
"First," explains Urquhart, "we are experts in material science. There's probably nobody on the planet who has better material expertise than we do. We develop our own custom recipes to meet the need at hand.
"The second area of expertise in Vernay is that we are very good at co-development with our customers. We get involved in the concept generation, and in developing the way in which fluids and gases flow within their application. We provide them with expert advice, and with design and development support.
"We're not a company that a customer comes to with a finished print, and says, 'Hey, can you make this for us?' Conservatively speaking, probably 95 percent of what we do within Vernay started out as an engineering development project. We employ a lot of good engineers, scientists and chemists in the company. I think that is born out of the original character of Vernay that Sergius started."
"The first word in my mind that describes Vernay is 'tenacious'," added Woodward. "We love to work on projects, and to dive into every detail of that project, and we love to be completely immersed till we find the perfect solution.
"Now," he notes, "we're driven by a global vision. Our global footprint is a key advantage we have over our competitors."
Vernay looks ahead
Bob Ferguson joined Vernay in Griffin, Ga., in 2006 as a new-product development engineer for medical applications. For more than a decade now he has served as the firm's vice president of global research and development. Ferguson sees many promising business opportunities ahead.
"I see medical as a continual growth opportunity. That's an area we're really focused on right now." He also points to ongoing developments related to clean energy and mobility, to include such things as electric vehicles and fuel cells. Many older technologies are evolving to become more efficient, more modular and smaller in size, making them more applicable to personal and residential use. And some complex technologies are transitioning into consumer markets such as coffee makers, appliances and the like.
Under Ferguson's leadership, Vernay's 17-person research department, is focusing on:
• Material development capabilities, and expanding into new processing technologies;
• New concept development, which Vernay calls "C2L", for Concept to Launch; and
• Functional performance testing, which involves developing the "fingerprint" or performance characteristics of products when they are exposed to different pressures and flow rates.
Calling Vernay "a research organization, as well," he said, "Our future will involve expansion and development of those three areas." Additionally, notes Woodward, the firm is focused on continuing to advance its operational excellence, to include more automation. "We expect to add more technicians than production workers to the payroll in the future," he said.
Pursuing medical device projects requires a level of patience that many companies simply don't have. Notes Woodward: "The average project length, from start to production, is very long for medical—typically about five years, while automotive projects typically take more like two to two-and-a-half years. We had one medical project that took more than eight years until it really took off commercially, but that is now one of our best customers."
It takes patience and persistence.
To this end, Vernay is investing to bolster its clean room manufacturing space in both Griffin, Ga., and in Asti, Italy, according to Tara Bryce, the company's global medical business unit manager. Following its streamlined, integrated methodology from concept to launch, Vernay takes responsibility for designing medical components for each customer's application. More than 85 percent of all components produced by Vernay, Bryce said, are custom parts designed specifically for each customer's need.
Deemed an "essential supplier" by the U.S. and Italian governments during the recent COVID-19 pandemic, Vernay provides critical components not only for ventilators and respirators, but for a vast array of devices, including those used in cancer tissue diagnosis, bio-reactors, minimally invasive surgeries, microfluidics, pediatric respiratory inhalers, anesthesia delivery, one-way valves and septums for bag systems, dialysis, negative wound pressure therapies and more.
"We're putting our money where our mouth is" when it comes to the health care sector, Woodward said. "Medical is where we're going. I hope to be able to add clean room capabilities in our Suzhou facility in a couple of years."
The development process for medical devices is essentially backward, contends Woodward. "Material and flow are our two areas of expertise. If you wait till the end of your development process to tackle these issues, you've made a mistake." Often, he said, a medical device OEM comes to Vernay with a problem. "They've been in bed with a plastic supplier, and it's not working, and they don't know what to do. We're really good at understanding the dynamics of flow. We fix problems through analysis and experience."
Engineering out the waste
For Madden, the firm's engineering vice president, the mission ahead is clear. "It's all about launching new products, and better processes," he said. The constant aim is to launch products with less engineered waste and with less labor, all while also boosting the overall quality.
"Less engineered waste means we save money because we use less material, but it also means we're throwing less in the garbage or the landfill," Madden says. "For me, engineered waste is really important. When I joined the company several years ago, the engineered waste of their parts was about 60 percent. That means for every part, we threw that out because we planned that into it. Right now we're averaging about 20-25 percent in all our new parts. It's hard to get better than 20 percent, which is pretty much world-class."
He also stressed "the performance of our parts relies on the characteristics of the rubber." Advances also are continuing in materials development, which allows device designers and parts makers to push the boundaries of performance. Take temperature, for example, he said: 20 years ago you could go to -20ºC, and have the part function; now you can go to -40º or -45ºC, and have the part still function.
The soul of Vernay
For all the advances in technology and the world, the core of Vernay remains largely unchanged after 75 years.
"Moral character and moral behavior is way more important here than it is at other companies I've been involved with," said Woodward. "It's focused on much more than just profit. It's more, 'Do the right thing first, protect the people, do the things that are morally sound rather than making money.' The moral character comes from the family.
"Vernay is a wonderful company," added Urquhart. "The shareholders can be proud to be part of it. Vernay started as a company that was built on innovation. Due to the success of its innovations, it ended up having to learn how to become an operating company, and manufacture things, which is completely different than just an innovative lab.
"We've grown into a very large operating company. But our core competencies were born out of what Sergius Vernet put in place."