MERGERS AND ACQUISITIONS have been a major trend in American business — with mixed results.
Sometimes in announcing the acquisition, the CEO of the acquiring company mutters something about synergies and how well the newly acquired company fits into the grand scheme of things. Frequently the two companies then go their separate ways, conducting business as if nothing ever happened.
But Maintainer Corporation of Iowa and Link Manufacturing are showing that two companies — two very different companies — can help each other grow and prosper.
At first glance, the two companies seem to have little in common beyond the fact that the same family owns them both. Although they share the same home state (Iowa), they are in separate towns that are far enough apart to make it inconvenient to travel between locations. Their products are different, their markets are different, and the ways they manufacture are almost total opposites.
It's easy to write off possible synergies when two companies have virtually no family resemblance. For decades, the two companies operated in total autonomy and had virtually nothing to say to one another. But president Dennis Michels heard the silence.
During the past year or two, Michels has been urging Maintainer and Link to, uh, link up and work together. Once lines of communication opened, Maintainer and Link have shown that companies without a lot in common can work together for fun and profit.
It's hard to imagine two companies with more disparate approaches to manufacturing. Maintainer Corp manufactures custom truck bodies, along with cranes and completed trucks for use as lube or maintenance vehicles. They are produced one at a time, usually with extensive lead times.
By contrast, Link Manufacturing produces standardized products with lengthy production runs. Like Maintainer, Link produces products for trucks, but they are high-volume products such as suspensions, loading ramps, and cab suspensions that usually are sold directly to truck manufacturers.
The cooperative effort has provided both companies a range of benefits, including purchasing, engineering, manufacturing efficiencies, information technology, and improved communication with chassis manufacturers. The ties have been especially helpful as steel has become more expensive and difficult to obtain.
“Our products are different, but some of our vendors and sales opportunities are the same,” says Tom Wibben, sales and service manager for Maintainer. “By working together, we are looking into opportunities to maximize our buying power with these shared vendors to help control costs and minimize price increases. These shared synergies have also given us the opportunity to sell Link's Liftable axle and Ultra Ride suspensions on some of our lube units.”
Improved cooperation had been a long-term management goal, but some early successes got the entire company behind the idea.
“When Maintainer and Link really began working together, Link had already started working on lean manufacturing, visual manufacturing, and its ERP (enterprise resource planning) system,” says Ken Vande Brake, chief engineer. “We began looking at what we do and how we do it. We realized that many of the basic processes the two companies do are the same. We also found that some of the things that we have wanted to do at Maintainer that were impossible for us to do manually could be done easily with software that Link already had.”
ERP and scheduling were some of the early successes of the program. Much of the companies' early progress centered around computers and software.
“Any software that comes out of a box must be adapted to the needs of individual companies,” Vande Brake says. “Maintainer and Link have learned a lot from each other to really get the most of the software we have. And the timing was good, as we worked together with our ERP system at a time when steel prices began to escalate.”
Synergistic software
A corporate information management systems manager has responsibility for both companies, but Maintainer and Link also have benefited from monthly meetings and daily phone conversations in which they share ways to make their software more effective.
The engineering departments of the two companies are now assisting one another regularly, says Vande Brake, who came over to Maintainer after serving in a similar capacity at Link.
“Finite element analysis used to be a black art that required a PhD,” Vande Brake says. “The software is user friendly now, but the interpretation of the results remains critical. By having the engineers of our two companies working together, we have been able to learn from one another to get more out of the results of our finite element analysis.”
The two engineering departments working together produce a relatively large resource pool. Maintainer has seven people in engineering, with a nine-member engineering department at Link. Both groups consist of a blend of graduate engineers (degreed engineers) and engineering technicians who attended two-year programs.
“We are very committed to doing good upfront work,” Vande Brake says. “We don't want the customer to do the testing for us.”
That is particularly true at Link, where computerized road simulators are used to test suspensions and other truck components. The simulators are driven by actual load data recorded during truck operation. Sensors measure the loads to which various components are being subjected and then transmit the data for recording. The data can then be played back for use in programming the road simulators to duplicate those conditions in a compressed timeframe.
“Link has a lot of load, ride, and acceleration data that we can use to evaluate conditions at a particular moment. We can look at several sensors simultaneously and see how complete systems work together. We also can see how these loads and their effect on truck components change over time,” Vande Brake says. “Link does a lot of durability testing, and this data has helped Maintainer design the trucks it produces. Meanwhile Maintainer's experience with mobile hydraulics has helped Link produce the test fixtures it uses.”
Two software packages play key roles at the two companies. Pro/Engineer is the choice for designing products, and ANSYS is used for finite element analysis.
“Link tends to model at the component level, and Maintainer models at the truck (or large assembly) level,” Vande Brake says. “But the software works well for both applications.”
To get the most from the software, the two engineering departments keep current with the latest from the software publishers. With their locations in a rural section of northwest Iowa, that is not always easy.
“It's valuable to participate in user groups, but it isn't convenient — we always have to travel,” Vande Brake says. “Pro/Engineer has user groups in Omaha and Minneapolis-St Paul that we attend, but ANSYS does not. For ANSYS — and for Pro/E, we get a lot of support by buying from value-added resellers.”
Started in the mid-1970s, servicing Midwest Ag focused customers with a basic flatbed service truck with crane and has expanded into the Maintainer today, which specializes in designing and producing crane and service bodies, lube trucks, and other custom applications for construction and equipment dealers, railroads, utilities, municipalities, emergency, rescue, and other industries.
“Maintainer offers a turnkey solution for what the customer wants and needs to do a specific job,” Wibben says. “It is a complete process that usually starts when one of our dealers contacts the customer. We follow through the entire process — quote, design, manufacturing, testing, and customer service. Regardless of whether the customer buys a standard or custom product, the process is the same. This has kept us growing. Sales have grown more than 250% in the last 10 years, and we expect growth of 40% this year alone.”
Better truck ride
Link Manufacturing was founded in 1980 by a local truck driver who wanted a better ride from his truck. The company produces a variety of products designed to improve truck ride — including cab suspensions, chassis air-ride suspensions, and lift axles.
“With a lot of hard work, Link has become a ISO9001/QS9000 certified company and supplies more cab suspensions to more OEMs than anyone else in the world,” says Pat Coghlan, national sales director.
Link distributes the majority of its products to the heavy duty trucking industry, including original equipment manufacturers and their 2000 plus dealers. Link supplies all heavy truck manufacturers and many equipment OEMs. The remaining business goes to the independent aftermarket and export markets.
The two companies clearly are not twin sisters. But they have discovered value in being part of the family.