Colorado success stories: Vforge
Innovative
manufacturing process spurs consistent growth
By David P. Mead
Editor's note: This is
another in the 2012 series of Colorado company success stories as told by
CEOs and business owners. Vforge was recognized as a 2012 Colorado Company to Watch.
Tucked just off 6th Avenue and Sheridan in Lakewood is
an innovative company in the aluminum semi-solid manufacturing business. Vforge
uses a process that enables the manufacture of high precision aluminum parts
for a variety of industries. While their products may not be widely known since
they are components in other companies’ products, you may have seen their
components on popular motorcycles, snowmobiles, wheelchairs, and robotic arms
for surgery. Vforge capabilities are in high demand and the company has been
growing at 15% per year, year after year, with only low-key sales or marketing
efforts.
I met recently with Ken Young (CEO) and Jon Young (VP and General
Manager), the father and son who own and manage Vforge which has grown to 110
employees.
Mead: What is
Viscous Forged Semi Solid Manufacturing (SSM)?
Ken Young: Typically, aluminum parts require significant amounts of
machining. Aluminum is forged into billets which then are machined into the end
shapes. Semi Solid Manufacturing (SSM) makes parts that are near to the final
desired form without machining – resulting in dramatically improved shapes with
high precision, high performance, but at lower manufacturing cost.
Mead: How was
this process developed?
Ken Young: I worked, along with several others, on the development of the
technology at MIT in the 1970’s. MIT owned the patents until the 1990’s and
everyone was precluded from entry other than the large companies (mostly in
automotive) that had licensed the technology.
When the patents expired we wanted to broaden the applications. We
learned how to take existing manufacturing equipment and modify it to run the SSM
process and decided in the mid-1990’s to locate in Colorado. We had lived in
Colorado in the late 1980’s and so it was an easy choice to start the company
here – it was a decision based on life style.
We are fortunate that Chris Rice, our VP Engineering and Technology and also
an MIT alum, shares our love of Colorado and joined Vforge shortly after we
opened.
Mead: How do you compete?
Jon Young: We have the equipment and process know-how that makes SSM viable.
SSM makes designs possible that would be impossible or cost prohibitive by
other manufacturing processes. Many product designers and engineers are unaware
of the capabilities of SSM. So we work to captivate engineers and designers to
imagine new ideas and how to use the technology. While the process works well
with large volume components, it also makes sense even at some low volumes. Once
an engineering or design group has worked with us, they understand the unique
capabilities of the technology and continue to design components that require
SSM.
Mead: Has the
growth always been smooth?
Ken Young: There were two big bumps in the road. We were doing huge business
with a mountain bike manufacturer that went through bankruptcy in 2003, sticking
us with over $700,000 in receivables. In one day we went from 48 employees to
17. Our bankers at Citywide Bank were extremely helpful in working with us to
restructure so that we could survive. Then,
during the 2008-9 downturn, we were dependent on raw materials exclusively from
Europe. When the exchange rate for the Euro went from $0.90 to $1.40, our costs
went through the roof at a time when we also had just lost approximately 20% of
our revenue. We launched our own raw material production – again with the help
from our bankers. Today we are much more
in control of our own destiny.
Mead: How would you describe your culture?
Ken Young: We are a very
customer-responsive supplier, very agile. It’s a family-style organization with
a commitment to promote from within and develop our team.
Mead: What are
the factors influencing your growth?
Jon Young: Most companies grow by succeeding in marketing and sales. We’re
very fortunate to be growing with minimal sales effort. Our issue however is meeting our blue-chip
client’s expectations to deliver Six Sigma excellence with today’s production staff.
We have an ongoing problem maintaining a
workforce interested in working in manufacturing as a career. Most of our jobs
do not require specialty skills or training, but our wages and benefits are
considerably better than industry average.
Developing staff remains a continuing challenge – even at today’s
unemployment rates.
Other challenges are in managing the growth. This is a
capital-intensive business with each SSM workstation costing $1 -1.5 Million.
So we want to be cautious about how we grow.
We also need to continue to develop a middle
management group so that Ken and I can transition out of the day-to-day
management of operations. This is an ongoing issue as Colorado is not a center
of metal manufacturing and finding the emerging middle managers has been a
challenge. We are developing these managers internally and are always looking
from a young engineer or person with technical background with a good work
ethic who wants to develop a manufacturing career.
Mead: Comment on the climate for
business in Colorado. Would you build your business here again?
Ken Young: We love Colorado – the
climate, the outdoors, the mountains. Jon just completed the Triple Bypass Bike
race last weekend. Even with all of the trials and tribulations, we’re glad
we’re here. We would like to see if
there are some incremental resources that might help us with some of our
staffing issues. Since Colorado is not yet known as a metalworking state, it is
a daily challenge!
