Rising To The Surface

Posted on Jul 1, 2011 :: Cover Story
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Posted by , Insight on Business Staff Writer

Photos by Shane VanBoxtel of Image Studios

While other businesses used the Great Recession as a time to hold tight and slash expenses, Surface Mount Technology Corp. did exactly the opposite. The company expanded its Grand Chute facility and used its strong financial position to go out and win new business.
The result?

SMT, founded by Appleton native Christopher Sumnicht 14 years ago, is poised for the big time and garnering attention from Fortune 50 companies.

“Our ability to say to customers that we had three shifts running in our manufacturing facility at a time when competitors were cutting back was huge for us. We were able to be flexible and meet clients’ needs,” says Christopher Sumnicht, president and CEO of SMT. “Some companies wait for business growth to physically expand, but the philosophy here is build it and then know we’ll fill it by working hard. That strategy has paid off for us.”

Being flexible and meeting clients’ needs have served SMT well since Sumnicht founded the contract electronic engineering and manufacturing company in 1997. Since then, SMT has posted a profit each year – despite the recent recession and economic slowdown following the 9/11 attacks. The company is looking at a 27 percent increase in sales for 2011, with some business units on target to increase 200 percent.

“I saw a niche,” Sumnicht says. “There were companies out there who had electronic engineering and manufacturing needs, but weren’t being served because they weren’t ‘big enough.’”
Sumnicht was spot on in recognizing the niche. He was also right in his assumption that companies are searching for a variety of services, including contract manufacturing and engineering services, rapid prototyping solutions and remanufacturing services, as well as the flexibility to separate those offerings out.

Today, SMT serves more than 100 customers, with no one customer making up more than 15 percent of the company’s business, providing plenty of balance and diversity.

“Right now, we’re seeing the fastest growth period in our company,” Sumnicht says. “We continue to invest in technology and equipment so we can continue to grow.”
So, what does SMT make? You won’t find the name on

any products. Rather, it plays an integral role in what’s happening inside various pieces of equipment, such as thermostats or ice machines.

For example, SMT has assisted the Kohler Co. with the development of its Custom Shower. SMT builds Kohler’s Custom Shower and ships it directly to distribution for end installation. It also works with Manitowoc Company, providing electronics in its ice machines.

While SMT Engineering’s staff may develop and design a product, the customer always retains its proprietary rights, says Greg Burneske, senior vice president of engineering for SMT Engineering. “The customer always owns whatever we develop,” he says.

And that list of customers – which SMT keeps mostly under wraps for contractual reasons – are industry leaders looking for assistance with developing and designing an electrical component to use in one of its products. (“Most products can be made better with the addition of electronics or a mini-computer,” Sumnicht says.)

Growth strategy

When Sumnicht started SMT, he pictured in his mind a wheel. Around that wheel, like different spokes, were a variety of services, such as engineering, manufacturing, prototyping and more that would complete a product’s lifecycle. He also knew the wheel would have to be built piece by piece – focusing on one area, such as contract manufacturing, and making it the best it could be before adding on an additional service.

After securing start-up funds from a small group of shareholders, Sumnicht launched SMT as an electrical assembly contractor in a facility on Nordale Drive in Appleton.

After initial success – Sumnicht proudly points out that since the initial cash investment from investors the company has been self-funded – SMT grew into new areas, such as engineering.  A self-described “business guy,” Sumnicht acquired a Manitowoc engineering firm and then later a Canadian engineering firm to create SMT Engineering LLC. Once the company’s engineering services were in place and doing well, SMT moved on to offering remanufacturing services, higher level assembly work, materials management and re-manufacturing services.

“We offer all of the services ala carte – a client can choose just our engineering services or use our manufacturing services or they can use them all,” says Paul Vander Maazen, SMT’s vice president of sales and marketing.

“We like it when they use them all,” laughs Sumnicht, who went to high school with Vander Maazen in Appleton.

About five years ago, SMT finally had in place all the spokes of its wheel and business took off, Sumnicht says. The company saw steady growth, adding clients while current clients began bringing more parts of their product’s lifecycle to SMT.

SMT’s leaders were thinking about expanding the facility in 2008 to handle increased capacity when the recession hit. While some companies put off such plans, SMT moved ahead and added 25,000 square feet of manufacturing space and renovated 6,000 square feet of space to better suit the needs of its engineering staff. The project also allowed SMT to more directly incorporate higher level assembly work right into the manufacturing process.

“We doubled our manufacturing capacity with the remodel,” Vander Maazen says.
Incidentally, this wasn’t the first time the company was faced with the decision of whether to build in economic uncertainty. SMT signed on to be the first tenant in the industrial park at the corner of County Highway BB and County Highway CB in Grand Chute not long before the Sept. 11 attacks and the recession that followed.

“We had committed before the attacks we were going to build here and then kept our word. We kept moving ahead, knowing that if we had the right facilities we would be able to drive more business,” Sumnicht says. “Business is sometimes a gamble. You take a chance and hope it works out. In our case, it did.”

Sumnicht credits the company’s success on its ability to be flexible and meet customers’ needs in a timely fashion.  Another boost to the company’s bottom line was becoming ITAR registered, which means it’s able to design and manufacture qualified military products (ITAR stands for International Traffic in Arms Regulations).

“Since other customers know we are ITAR registered and that we’ve met those strict guidelines, it creates a level of comfort for them that we will be able to handle their sensitive and proprietary needs as well,” Vander Maazen says.

SMT owns a total of 22 acres of land in the Grand Chute Southwest Industrial Park and Sumnicht envisions a day when SMT is double its current size.

“We put 90 percent of company profits back into the company to make it better and make it grow. It actually was 100 percent of the profits until a few years ago,” he says.

Finding a spark

SMT also works with the area’s budding inventors and entrepreneurs at Fox Valley Technical College’s FAB LAB. The FAB LAB – also known as a Fabrication Lab – is a unique learning center that enhances students’ classroom experiences and is also open to local entrepreneurs or inventors looking to bring their ideas to life. FVTC’s lab is part of the Massachusetts Institute of Technology Global Innovation Network.

Mark Payne, an adjunct instructor at FVTC and president of Cygnus Product Development Corp., says SMT is the first company called if someone in the FAB LAB is working on a project needing an electronic component.

“SMT has done a great job in providing design and building of a prototype for these smaller projects. The size of their organization is ideal to help these budding entrepreneurs,” he says. “SMT’s mission is to help create and get products to market and that fits perfectly with what we’re trying to do at the FAB LAB.”

By assisting these start-ups, SMT is helping grow the local economy, Payne says. “SMT works hard to help local entrepreneurs be successful,” he says.

Employees are another part of the growth strategy. When SMT constructed its original facility,  instead of building by the highway the company located the facility in the back corner of the lot to take advantage of the views of the nearby woods and wetlands.

“We want to create a pleasant environment for our employees,” Sumnicht says.
Creating a pleasant environment for employees is integral to SMT’s 98.89 percent retention rate, Vander Maazen says. He says the company is also constantly recruiting for additional workers, especially engineers.

“We’re definitely in a hiring mode,” he says. “The expansion definitely gives us a competitive advantage to better meet and exceed our customers’ expectations and requirements.”
“We’re doing a lot of high-tech things here. … We’re like another Silicon Valley,” Sumnicht says. “I can only see more growth ahead.”