Volume 9, Issue 8 - September 2008

House of Precision

Winkhaus
Fine-Tunes
Its Entry into North America

Two words that simply but accurately define the character and culture of Winkhaus are in a promise made to customers long ago: always precise. Precision in its products, service to customers, goals and strategies and precision in opening new markets have propelled this family-owned and operated company into a global corporation with 16 facilities in 12 countries. In keeping with a goal to explore new frontiers, the company set its sights on the highly competitive North American door market.

Five Generations
Hardware products have always been part of the Winkhaus history, all the way back to 1854 when August Winkhaus first began selling various types in Halver, Germany. A move to a neighboring city eight years later gave him access to better transportation connections and options for expansion. Although Winkhaus did not realize it at the time, his decision to distribute padlocks manufactured by another company in Dusseldorf set the stage for a new path. When the padlock supplier ceased production a few years later, Winkhaus decided to manufacture his own, and the small company experienced substantial growth. Under the direction of August’s son, Rudolph, the company pursued markets outside of Germany successfully in places as far away as China, India, Syria, Egypt and the Far East. The beginning of the nineteenth century marked an expansion that included special window hinges for export. Efficiency in manufacturing and higher volume were achieved with special machinery, considered very advanced for the time.

As the business continued to flourish and to support its expanding facility in Munster, another site in neighboring Telgte was selected for the production of locks and eventually brackets for doors, windows and gates. By 1935, there were more than 400 employees at the two plants and the Telgte location became the new headquarters and primary production facility. Once again, the company experienced strong growth as many new products were introduced that were designed to be easy to use, easy to install and economical to produce. By the mid-1950s, there were 800 employees who spent the next four decades working on product innovation. An emphasis was placed on security, tilt-and-turn window hardware, programmable access control systems and locking systems with microchips. Efficiencies in manufacturing were achieved through a higher level of automation. In 2003, Sofie Winkhaus, the fifth generation of the family, became managing director of Winkhaus Holding. Today, the company employs more than 2,400 people worldwide with sales of approximately $460 million.

Opportunities in North America
Expansion into North America began in the 1980s as Winkhaus provided private-label products to the North American market. Due to customer demand during the 1990s Winkhaus opened a distribution center on the East Coast in 1998. According to Rudy Kessler, president of Winkhaus North America Inc. the facility was to be used strictly for distribution, with manufacturing support from Germany. While Kessler viewed this as a vital first step in gaining a foothold in North America, he recognized that some changes were necessary to serve the market better. A change in location was one of them.

Kessler selected the Midwest and by 2005, the operation moved to Whitewater, Wis.

Locating in the Midwest made the most sense, he said, and because it was central to both Coasts, there was a large concentration of manufacturers in the area and there was room for expansion.

“We’re using 20,000 square feet today, but based on our projections for growth, we will expand to 34,000 square feet in the near future,” he says.

Another change that Kessler made had to do with the way door locks are assembled. He explains that in the East Coast facility, components arrived fully assembled for shipment to customers. While this arrangement appeared to be practical, compared to direct shipments from Germany prior to 1998, Kessler observed that this model lacked the flexibility to better serve customers and manage proper inventory.

“We were customizing every multi-point locking system. The options were so numerous that it was virtually impossible to maintain an inventory to cover every size of every part and as a result, we were always waiting for additional parts from Germany,” he says.

With the move to the new facility in Wisconsin, the company implemented new assembly operations. “This important change allows us to be flexible and react quickly to our customers’ needs. It has proven to be a win-win situation for our customers and us. Since we implemented it, we’ve seen significant improvement in our turnaround time,” adds Kessler.

Responsiveness is also reflected in customer service.

“Our customers expect us to be very responsive, whether we’re talking about the status of an order, a confirmation or a question about a product,” says Becki Sell, customer service manager.

Jim Roberts, director of sales, points out that supplying manufacturers with locking systems is but one part of an overall process that begins with the customer’s door, rather than the hardware.

“We must understand the door manufacturer’s product first and show them how we can enhance it, based on our expertise, with a customized locking system,” he says.

Visits to a customer’s facility, especially those of a new customer, are often essential to learn about the door and where it will be used. The only way to create a winwin situation is when the customers are successful with their products, he adds.

“We consult with our customers on the design of their doors and based on our experience we make recommendations that will help prevent problems in the field,” says Michael Pusch, technical sales manager - West, who worked for a door and window manufacturer previously.

Roberts also points out that it is not unusual for a customer to send its door to the Wisconsin facility for proper fitting of the hardware. “We can look at the door objectively when making our recommendations. Additionally we support our customers through the testing process and provide training for their production people,” he says.

Kessler points out, in retrospect, that the company has learned a lot about the North American market since the East Coast facility was opened. The company discovered that the strong recognition of the name Winkhaus in Europe was almost non-existent in North America and much had to be done to tell the company’s history and its long-standing reputation for precision, innovation and technology.

The current downturn in the housing market actually has worked to the company’s advantage in gaining new business. “In busy times, manufacturers are not interested in changing their processes,” says Kessler. “Their concern is output. In market downturns, manufacturers that are trying to gain market share are open to new ideas if they can improve their competitive edge.”

He adds that the appeal of Winkhaus has been not limited to one type of door manufacturer. The customer base is diverse in terms of size and segment of the market served.

Regardless of the customer, one of the biggest challenges the North American operation faces has to do with its own manufacturing. As Kessler describes the automation and sophistication of the plants in Germany, he recognizes that the key to serving his customer has much to do with communication as it does with capabilities.

“The plants in Germany have a lot of expertise in serving markets worldwide, but we have to provide very detailed specifications about our customer’s product. We must work as closely with our team in Germany as we do with our customer so that everyone has the same expectations,” says Kessler.

He says success in this market also depends on another critical factor: knowing what drives the demand. That means learning about the buying habits of the consumer, which includes talking to focus groups. Another way is to observe demonstrations of locking systems at industry trade shows.

“We see people struggle with the locks and that tells us what we need to do,” says Kessler. “The American consumer is different from the European consumer. [American consumers] want convenience.”

Looking to the future, providing innovative multipoint locking systems is merely the first stage in serving the North American market, and of course, continuing to be “always precise.”

 


DWM

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