Issue Nov Dec 16
After 30 years in business, Butch Isensee, CEO and owner of Valley Design, knows how to shift with his customers. “If you think it’s really good, just wait and it will change,” he says. “If you’re not willing to change and look past that you’ll be out of business.”
Valley Design started out in 1986 as a custom powder coater. From there it moved into metal fabrication. Eventually, Isensee’s background in the furniture business led it to manufacturing metal parts for the office furniture industry, primarily table bases.
Such diversification has allowed the company to thrive even during sudden market changes. Eight years ago, 65 percent of Valley Design’s business was custom powder coating. Since then, nearly all that business has gone to lower-cost providers in China and other Asian countries. Today, custom powder coating represents about 2 percent of the company’s business. The majority of Valley Design’s sales come from table bases, brackets, frames and other metal components.
CEO and owner Butch Isensee says the company has succeeded because of its ability to adapt ahead of change, as it did with the disappearing need for powder coating. “We saw that it was going to be coming and we made shifts ahead of that,” he explains. “It hurt but it didn’t hurt as bad.”
Valley Design’s primary customers are furniture manufacturers, and on a typical day the company produces as many as 500 table legs. The company also has manufactured metal components for the automotive and recreation markets, , such as electric trolling motor components.
Valley Design has long relied on repetitive orders for consistent business. A furniture company may need to manufacture 5,000 of the same table, each of which needs the same T or X base from Valley Design and every new production run of that item can result in another order.
But the company is also trying to branch out to other kinds OF customers, such as specialty products for OEMs. “We’re actively putting ourselves out in front of customers outside of the furniture industry – to figure out what they’re looking for and how we can help with their product needs,” Vice President of Sales Greg Luegers, says.
All of Valley Design’s manufacturing is done out of its 100,000-square-foot facility in Fountain, Minn. The building is equipped with multiple six-axis turbo lasers, CNC milling equipment and two powder-coating lines. Those capabilities continue to increase every year – the company has added on to the building about five times during the past three decades. With 35 acres of property on its current site, Isensee says Valley Design can continue to expand as the need arises.
Practically the entire plant layout has changed during the past five years as Valley Design works to become more efficient. “We keep looking at ways to really get the waste out of the manufacturing process,” Isensee says. “That really makes you more competitive with all of our competitors.”
Most of Valley Design’s raw steel is purchased from mills around the United States, with the exception of some high tolerance steel sourced from Switzerland. Once production begins, the steel moves through punch, welding and sanding operations to create the part. It is then painted and becomes a component of the finished product’s assembly.
Throughout the manufacturing process, Valley Design uses high-quality finishes and polishing to eliminate scratches, dents or pits in the material. “Our product has an above-standard look,” SENIOR Account Manager Shelly Topness says.
Styles change on a constant basis. What’s in fashion this month is outdated the next. To keep up with furniture makers, Valley Design must introduce new metal bases every year. “We look at the industry and our research findings are what drives the types of products and the look in our new product offerings,” Isensee says.
Adjustable-height furniture has driven the market for the past 15 years while trends in colors and materials are always changing. Understanding those shifts in trends helps Valley Design provide proprietary items for the largest furniture makers. “You have to stay on top of the trends and understand what your customers are looking for,” Topness says.
Finding a Niche
New standard products often evolve out of those proprietary components. Oftentimes, customers come to Valley Design with a cutting-edge product or idea. The company then produces that unique metal base or part for a few years until it catches on in the market.
Then, as more customers seek a similar component, Valley Design develops a standard product version of the item to commoditize. “The large manufacturers drive the design, then we take that look and drive it down into our general product line ,” Luegers says.
It is through the development of such proprietary items that Valley Design is finding its niche in the changing furniture industry. In recent years, most production has moved to Asian facilities where furniture makers can mass-produce items at a lower cost. But that kind of large-scale manufacturing is only economical once there is a similarly sized demand.
New product lines require a parts producer with more flexibility and the ability to support the launch cycle. Over the past year, Valley Design has worked to position itself as that manufacturer. “New client orders tend to come from larger manufacturers that don’t quite have the volume to take their products overseas,” Luegers says. “But what we pride ourselves on most at Valley Design is exceeding expectations on quality and service so that first-time orders turn into long-term partnerships.”
Valley Design’s advantage is in how it can help the customer develop a product, and then provide the support and customer care needed to make adjustments and create quality. “There isn’t a single customer out there that doesn’t care at times about things like responsiveness,” Topness says. “When they need it, they need it.
“I think we really put a strong focus on our customer service, our ability to respond quickly, solve problems and treat our customers as part of the family here because they are,” she adds.
Filling that role as a supplier for product launches means accepting the fact that once a product reaches higher volumes Valley Design could potentially lose that business to overseas suppliers. Although that creates some uncertainty, the company views it as a way to build an ongoing relationship because a satisfied manufacturer is likely to come back when launching its next new product. “We understand that the more willing we are to work with a customer to build a new product, the more likely we are to get their business on developing their next,” Luegers explains.
As finding new ways to compete with lower-cost overseas facilities continues to be difficult, Valley Design prides itself most on remaining an American manufacturer. In turn, the company strives to support other U.S. suppliers by buying domestically whenever possible. The goal is to retain American jobs, like those of its own employees. “There are 110 people who work here,” Isensee says. “They depend on us, we depend on them, and we will continue to do whatever we can to offer job security to all our employees.”
Fountain, Minn., has a population of 408 people, according to 2015 U.S. Census estimates, so if a large employer such as Valley Design closes down or moves, it could have a detrimental impact on the entire town and surrounding communities. The company wants to continue to be an integral part of its hometown, as it has since 1986. Its latest product guide, a list of the current line of standard items, and its push to become a solutions provider to OEMs will continue that success.
“We’re proud to say Valley Design celebrated its 30th anniversary this past September,” Isensee says. “And we’re planning on continuing to provide high-quality, American-made metal components to manufacturers for at least 30 years more.”