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West Goes East
Milgard Expands its Operations with Opening of Plant in Fredericksburg, Va
by Tara Taffera
We’re the nation’s largest vinyl window manufacturer you may have never heard of.” These are the words of John Stephenson, general manager of Milgard’s newest plant in Fredericksburg, Va.
What does he mean? Milgard had more than 500 million in sales in 2002? How could no one have ever heard of the company? Well, while the window and door manufacturer is a giant on the West Coast, with 12 plants servicing 13 states, in other parts of the country, the Milgard name means little to window retailers.
The company is attempting to change that as the opening of the Fredericksburg plant signals a company-wide effort to change its status from that of a regional manufacturer to a national one.
Expansion plans include opening new facilities north and south of Fredericksburg in the next three years. The first of those facilities will open in North Carolina sometime in 2004, followed by a facility in Pennsylvania or New Jersey.
“We’ve built for the future here,” said Stephenson. “We can serve dealers up and down the East Coast. We’re set up to be an $80 million dollar facility.”
So why Fredericksburg? Accor-ding to Lee Phillips, sales manager, the area is perfect because it
sits between Richmond, Va., and Washington, D.C., and is not far from Baltimore, Md. It’s also not too far from North Carolina. Additionally, the housing market in the area is growing phenomenally. In fact, according to a report released recently by the U.S. Census Bureau, three Virginia counties made the top of the list. Loudon County was number two, Stafford County (just a few miles from the Fredericksburg plant) was number nine and Spotsylvania county (the county in which the plant is located) was ranked number eleven.
“This plant is unique because it is so far from anywhere [Milgard is],” said Stephenson. “For example, when the Phoenix plant opened, it could draw on the other plants in the West for support. This new location doesn’t have that luxury.”
When company employees first started preparing the plant for its opening, there were several other luxuries absent as well. Milgard didn’t want to wait to open the facility for several years while it built a plant so it decided to lease an existing space—a decision that posed quite a few challenges and one that Stephenson said, “we hope no to do again.”
The building was rough in the beginning.
“We didn’t know what we’d find when we knocked walls down,” said Stephenson.
Lee Phillips, sales manager, said he can now laugh at the experience, but at the time it was difficult to picture a functional manufacturing operation in the dated facility.
“The manufacturing employees saw potential, such as equipment placement, etc.,” he said. “All I saw at the time was a dump full of mold and rubbage.”
Just some of the major renovations made to the building included knocking down a wall, painting the entire building, replacing the bay doors, installing 100 120,000 watt lights, as opposed to the previous 20,000 watt lights and installing an overhead crane.
“Now it looks like a Milgard plant,” said Phillips.
Despite the challenges, he added that everything has stayed on schedule. The facility, which began manufacturing windows in June, produces vinyl windows and doors, two different patio door lines and double-hung, casement and picture windows.
Set Up for Success
So, how did a location with such humble beginnings get off the ground? The company sent existing Milgard employees, including Phillips, Stephenson, Jeff Eder, plant manager, and Mark Medina, financial manager, to Virginia to run the plant.
According to Stephenson, it was important that experienced Milgard employees be involved in the initial setup.
“The hardest thing to duplicate is the Milgard culture,” he said.
Currently, the company has approximately 30 employees and has already started hiring individuals from the local area, fueling the local economy, and he said Milgard will probably add about two employees per week. In fact, by 2005, he said the location plans to have about 160 employees.
“They’ll catch the culture,” said Stephenson of the new employees. “It’s contagious.”
One of the people who is definitely immersed in the Milgard philosophy is Randy Buchanan, an employee for more than 20 years based in Marysville, Wash., who came to Fredericksburg for six months to help orchestrate the facility’s setup. Phillips said Buchanan was instrumental in getting the plant up and running.
Although there were major challenges, it wasn’t all bad. In fact, the Virginia location received perks not available to other Milgard start-ups. For example, all of the equipment is brand-new.
“He [Randy] said to give yourselves the best stuff,” said Phillips. “He didn’t want us to get hand-me-down equipment. That’s the first time this was ever done.”
Why was Fredericksburg so lucky?
“We’re so far from the other facilities that we can’t call another location if a piece of equipment goes down,” said Stephenson. “We have to support ourselves. If you’re going to climb Mount Everest you need the best equipment.”
“Milgard has a philosophy that we have to be set up for success,” added Eder. “We are a self-sustaining identity, but eventually we will be able to support others.”
New Facility, New Equipment
Eder was almost like the kid in the candy store when it came to ordering new machines.
“I was able to see all the possibilities and then I picked the pieces of equipment that I liked,” he said.
This includes GED’s Intercept spacer machine and Wegoma’s newest products, such as its four-point welders which can weld two products at a time on two different lines and its automated saws, which pull the extrusion through the line, according to Eder.
However, not everything is automated. For example, employees cut the glass by hand, as, according to Phillips, most facilities wait until they produce $60 million in volume before they use automatic cutting tables.
The facility also uses GED’s Smart Extruder, which includes a 84-inch washer and oven.
“This is the only Milgard location that uses GED’s stainless steel washer,” said Eder. “The machine uses reverse osmosis to keep the glass clean.”
He added that the machines use horizontal loading and unloading which results in a smooth process flow.
The plant also has a Fux hot air bender from Austria that is used for bending radius and shapes. Eder said the new product utilizes hot air to produce high-quality, ergonomic units.
Although the plant uses the newest technology, that doesn’t mean the products will be problem-free. For this reason, there is a maintenance repair shop right in the plant whose job it is to “stock parts and react quick,” according to Phillips.
Additionally, representatives from the equipment manufacturers were available if necessary. According to Eder, he really didn’t run into many problems, and most were related to “dialing in” the equipment. He added that, for the most part, GED and Wegoma were very helpful and sent out on-site support when needed. In fact, representatives from Wegoma were at the plant for a few weeks.
“It is absolutely essential for them to be here,” said Eder. “Response time is critical.”
Planning for the Future
This is especially true, since later the Fredericksburg plant will be the one supporting the other East Coast facilities. And, Phillips, for one, has big plans for the facility, saying the plant will eventually exceed Chicago in terms of production.
Currently, the Fredericksburg facility is running at one shift, five days per week, but Phillips added that manufacturing can be in-creased as needed to meet the demand of sales.
While the plant has only been manufacturing windows for a few months, the company does have concrete goals for the future.
“Next year, we plan to produce just under $10 million,” said Stephenson, who adds that the facility definitely has the space and capability to do so.
Milgard is leasing its current building, which has 82,000 square feet of space, for four years, but is already looking for land in the area on which it can erect a new building. The space will probably consist of 90,000 square feet, according to Phillips, but will be expandable to 180,000 square feet.
“You can build a lot of windows in that space,” he said. “In fact, we have made a lot of manufacturing improvements that enables manufacturing in smaller places.”
Efficient Work Flow
The Milgard plant definitely focuses on efficiency. It operates on a seven-day build cycle so products only stay in the warehouse for eight hours.
“You will never see a large inventory in the warehouse,” said Phillips, who is proud of the fact that everything at the Milgard plant is built to order.
“From the time a dealer calls to when the product shows up to the dealer is seven days,” he said. “Everything is designed around that.”
The way Milgard products “show up” at the dealer is somewhat unique.
According to Phillips, the company ships products on its own trucks with no packaging. Products are packed in such a way that it can’t be damaged. In fact, in an early instance where the plant did use packaging, the dealer said, “You’re taking that with you, right?” which the driver gladly did.
While the company’s packaging system is no frills, the plant’s quality control system is rather straight-forward.
“We do checks at each station before it starts the next station,” said Phillips. “If you wait until it gets to the end of the line, you’re playing the blame game.”
According to Phillips, all Milgard locations work based on the company’s management by objective system.
“There is no one working here that doesn’t have clear expectations/commitments/work objectives,” said Phillips. “We’re looking to get better everyday … we measure everything.”
Though Milgard does have a system of checks and balances, employees sometimes go even above and beyond what is required.
“Everyone here is so particular and so finicky,” said Eder. “They won’t allow any defects—even products that are acceptable to Milgard standards, or say AAMA standards, are not acceptable to them. They want better.”
Proving Itself to Dealers
While Milgard employees believe strongly in the quality of its products, it faces the sizable task of marketing itself and its windows to local dealers.
“From a market standpoint, we’re the new kids in school,” said Stephenson. “Everyone is checking us out.
He adds that after working out West where the Milgard name is almost as popular as McDonald’s, it’s difficult starting from scratch.
“We’re humbled by the experience,” he said. “We have the longest set of credentials, but it doesn’t mean anything if you’ve never heard of us.”
However, Phillips said that as soon the sales representative leaves the dealer, they will do some research and realize, “Wow, these guys are pretty big.”
“So, the second meeting is more valuable than that initial meeting when the dealers have no idea who we are,” said Stephenson.
Milgard is so invested in attracting dealers and serving their needs that the Fredericksburg plant includes a 1,100-square-foot showroom that dealers can use to showcase its products to potential customers.
“No window companies in the area have a window design center,” said Phillips.
He adds that while the company is also interested in establishing a relationship with builders, it is really the dealer who gets their focus.
“We communicate with homebuilders through the dealers,” said Stephenson. “We build trust with the builders but then we send them to the dealers. That’s unique.”
Although area dealers are unfamiliar with Milgard, there is tremendous potential, because, according to Phillips, they have never been marketed to before.
Beating the Odds
It helps that everyone, from the people doing the marketing to the individuals building the windows are totally invested in what they are doing.
“We’ve watched other Milgard startups,” said Stephenson, “and we were told to expect 100-percent turnover. Our goal was 50 percent. As of now, it is 0 percent.
Why has Fredericksburg beat the odds?
“We’re all in this together,” said Stephenson. “I never saw a group of people so engaged in what they are doing.”
From the clerk who, while shopping at Walmart, tells a store employee about the quality of Milgard windows, to Stephenson and Phillips, who with other plant employees, put in 14-hour days and helped build some windows, it really is a team effort.
Whoever has the best team usually wins so chances are Milgard is poised for success in its new
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