N.E.W. offers a complete array of services tailored to the individual O.E.M. customer.

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As nerve-wracking and unpredictable as the current economic climate might be, N.E.W. Industries President and CEO Chris Moore is prepared, considering he and his company have already been through it once.

After a year of retirement, Moore purchased N.E.W. from its founder in 2000, and he and his wife moved to Sturgeon Bay, Wis., from Milwaukee to operate their new business.

However, in 2001, the U.S. manufacturing industry experienced a downturn as numerous companies outsourced operations overseas. At this point, Moore found himself struggling to keep his new pet project alive while learning the ins and outs of the contract manufacturing business.

“I call 2001 a compressed learning experience,” Moore says. “We were learning and becoming aggressive and expanding and had everything on the line.”

N.E.W. Industries emerged from that trying situation stronger than ever. By expanding its capabilities and client base – supported by financing from a very understanding local lending institution – the company began to grow in spite of the downfall, jumping from $5.7 million in annual sales to $35 million in six years.

Staying Aggressive
One of the major factors that led to N.E.W.’s struggles in 2001 was the fact that, as a small contract manufacturing operation, too much of its revenue depended on a single client, according to Moore. Moore – a veteran marketing executive with experience working at Miller Brewing Co. and Philip Morris – understood that despite the difficult situation, N.E.W. would have to diversify its capabilities, as well as its client base in order to survive.

“Even when I bought the company, I saw that strategic weakness,” Moore says. “A single customer was far too big of a piece of the business.”

With that in mind, N.E.W. took on an aggressive expansion strategy in 2001 that, despite the overall downturn in the manufacturing industry, grew the company’s revenues by almost 50 percent outside of the sales generated by its main client. The plan included expansion into sectors outside of construction, including defense, energy and agriculture.

“On one hand – given my background – we were aggressive right away in our sales efforts to diversify the customer base, not just by more and larger customers, but also cultivating work in different segments,” Moore says. “This was strategically important over the long term.”

Because he had limited experience in the industry, Moore says he leaned heavily on veteran employees – including its founder, who agreed to stay on board for two years as part of his sale of the business – as well as its key technical and sales staffs, most of whom had been with the company many years. 

“I trusted them to help me through my initial learning curve,” Moore says. “Thank goodness for the quality of these people, especially given such a sudden and challenging downturn in the business.”
Moore says Baylake Bank – a local Sturgeon Bay lender – also played a pivotal role in N.E.W. Industries’ survival. Baylake provided financing for N.E.W. Industries’ expansion and diversification efforts despite the bleak economic outlook for the company and manufacturing as a whole.

“This was tenuous enough where some banks probably would have said, ‘Wait,’” Moore says. “But they never flinched, and the support never stopped.”

Today’s Challenges
In 2009, N.E.W. encounters similar economic situations in the overall manufacturing industry, but with Moore’s strategies for diversification in place and strong management and technical teams, the company remains profitable. While other contract manufacturers are in a holding pattern, bracing for the worst situations that could possibly come, N.E.W. Industries continues to grow.

“We’re doing the same thing most companies are, and that is doing as much homework as possible to set up ‘what if’ plans,” Moore says. “But right now, amazingly to me, we probably have more new business than at any point during my time here.”

Moore credits this to the diverse customer base. He says N.E.W. has established customers that have decreased their orders while others remain stable, and an influx of sales from new clients continues to flow in as OEMs take a new look at their supply chains to cut their own costs.

“OEMs continue to outsource various parts of their machining,” Moore says. “In the media, outsourcing almost always means offshore. But it doesn’t just mean offshore. It just means the OEM doesn’t want to do that anymore.

“This continuing trend turned out to be very key for how we’ve been able to grow our business,” Moore adds. “OEMs want to deal with fewer suppliers that can do more, which generally equals lower costs.”

In reaction to this trend, N.E.W. Industries invests in machinery that provides as much flexibility as possible to ensure it can meet any client’s value-added needs. “We try to build as much flexibility as possible and carry the cellular approach right to the machine level,” Moore says.

“The concept is, every time a door opens on a machine, a complete part is coming out,” he adds. “This has been successful, and we will continue to go in that direction.”

Moore expects the growth to continue despite the economic struggles as more OEMs bring value-added processes back from overseas. There are many reasons this work is coming back – including lack of quality control and transportation and logistic headaches – and that work is now being outsourced domestically to companies like N.E.W. Industries.

Meanwhile, N.E.W. Industries pursues the strategy of diversity in its products and service, as well. It processes a surprising array of materials and configurations – capabilities that Moore indicates “have proven very challenging to develop, but have become a key competency.”

Likewise, N.E.W. offers an array of services always tailored to the individual OEM customer. Moore believes that N.E.W.’s core competitive advantage is that “we simply take care of the customer. I know it sounds basic, but it just works.”