Molding a More Versatile Pattern
October 6, 2006 - The Business Journal of Milwaukee
Terry Moon ... "The word 'pattern' had become limiting. Some customers saw us only as a pattern shop."
After expanding from manufacturing industrial patterns, which are used to form and mold metal, to other production tooling and molds used by major manufacturers to produce parts, Terry Moon, owner of Pattern Technologies decided a corporate name change was in order. In September, the 12-year-old Hartland company, which counts local companies such as Briggs & Stratton, Grede Foundries and Bombardier Recreational Products among its customers, changed its name to Versevo. The moniker that is a combination of the words "versatility" and "evolution."
"The word 'pattern' had become limiting," Moon said. "Some customers saw us only as a pattern shop."
Versevo designs and manufactures complex three-dimensional molds, dies and patterns used by the casting and injection molding industries. The company specializes in producing tools used for sand cast, lost foam, permanent mold and high-pressure die casting as well as injection molding. Versevo's customers include original equipment manufacturers and suppliers to OEMs, such as Wauwatosa-based Grede's Reedsburg plant; Wauwatosa-based Briggs & Stratton; Bombardier in Sturtevant; Intermet in Troy Michigan, and Allied Die Casting in McHenry Illinois. In the case of Briggs & Stratton, Versevo manufactures die-cast dies used in manufacturing cylinder heads, blocks, rods and sumps for small engines. The company also offers product design and engineering services. Rapid prototyping is available through a separate company, Prototype Technologies, that Moon also owns. The company has equipment capable of quickly creating prototypes in any shape and color.
"Versevo has taken a new approach by partnering with customers and global suppliers to find new and better solutions to complex manufacturing problems. Over the past five years, the company has doubled its work force, focusing on hiring employees with strong technical skills so that the business could expand into product engineering design" Moon said.
More than one-third of Versevo's 60-employee work force are engineers. "We'll always have a manufacturing component to our business, but our strength going forward will be in engineering and design capabilities," Moon said.
It's essential for companies like Versevo, which face increasing global competition, to become involved in "intimate collaborations" with customers at the product design level, said Daniel Twarog, president of the North American Die Casting Association, a Wheeling Illinois trade organization. Die-cast production in the United States has been on the rise but the number of die-cast manufacturers has continued to shrink, Twarog said. "Those that have survived have taken measures to increase productivity and efficiency and have expanded to relationships with customers to include product design services", Moon said. "The industry is very much challenged by the globalization of manufacturing," he said. "The good companies will suggest ways to make a part better and cheaper." Collaborations with customers can lead to more effective and efficient use of materials, which is crucial given rising commodities costs, Twarog said.
Moon began his career as a toolmaker, working at now-defunct Nelson Pattern in Cudahy Wisconsin. He held jobs ranging from journeyman wood pattern maker and sales engineer from 1986 through 1994, at which time he started his own business. "I always felt I had an entrepreneurial spirit in me," Moon said.
He used the equity in his house to fund the startup and didn't pay himself a salary for the company's first six months in operation. Versevo moved in May 2000 from a 5,000-square-foot leased building in Waukesha to a 30,000-square-foot leased facility at 1055 Cottonwood Avenue in Hartland Wisconsin. The company runs two shifts, six days a week. At the time of the move, Versevo had 30 employees and $3.5 million in revenue. For 2006, Versevo projects sales of about $9.5 million, which would be an increase of about 20 percent over 2005, Moon said.
The company's growth has involved overcoming some obstacles. In 2002, Moon decided to open a plant in Alabama where wheel molds were made for a customer in that region. The operation closed within a year due to a lack of "customer relationships," he said. "Any successful business is riddled with bullet holes and failures," he said. Despite the challenges, Moon expects the company's sales to grow to about $20 million within five years.
Production is being expanded into an unused portion of the building. Overhead cranes and new equipment, including a large machining center are being added. In addition, the company is investing in cutting-edge computer-aided design software and hardware for the company's engineers. The capital improvement project, which will have a cost of about $1.5 million, will accommodate current and future growth, Moon said. "The project is being financed with bank debt and lease agreements for the new equipment", he said. "The company eventually hopes to take over the entire building, which totals about 50,000 square feet."
A substantial amount of the growth is expected from an expansion of Versevo's international business, which accounts for about 10 percent of sales. Moon anticipates that the level could reach 25 percent within five years. Versevo serves customers in Eastern Europe, China and Mexico, through partnerships with low-cost foreign manufacturers, he said. Although the Hartland site remains Versevo's lone plant, the company is serving customers on an international level through partnerships like the one it has with a mold and die-cast manufacturer in Ningbo, China, Milwaukee's sister city. "Versevo has entered into such partnerships for customers such as Briggs & Stratton, which operates its own plants in China", Moon said. Versevo may eventually set up its own plants in low-cost countries, such as China, the Czech Republic or Brazil, he said. "We aren't relying just on domestic business any more," Moon said. "We're helping our U.S.-based customers succeed in those parts of the world."
- Versevo Inc.
- Address: 1055 Cottonwood Ave. Hartland, WI 53029
- Founded: 1994
- Website: www.versevo.com
- President: Terry Moon
- Annual Sales: $9.5 million
- Employees: 60
- Business Plan: Manufactures production tooling and molds and performs product design and engineering and rapid prototyping.
- Growth Plan: Continue investing in new technology and expand international business.
WHAT HAS BEEN YOUR BEST BUSINESS DECISION? "Moving to Hartland, which provided us with space to attract more valuable employees."
WHAT HAS BEEN YOUR WORST BUSINESS DECISION? "Opening a second plant in Alabama in 2002 that closed within a year."
WHAT'S THE BIGGEST RISK YOU'VE TAKEN SO FAR? "Starting the business was a great risk to me personally. The first three years were very tenuous."
WHAT'S YOUR BUSINESS PHILOSOPHY? "To field the best team and have the best resources and always remember that the customer is the boss."
WHAT IS YOUR FIVE-YEAR VISION? "To reach $20 million in sales and have international business account for 25 percent of overall sales."
WHAT WOULD BE YOUR FIRST MOVE WITH A CAPITAL WINDFALL? "I'd reinvest some in the company and salt some away. I'd buy another manufacturing facility, maybe offshore."