rss icon

Sunday, 18 January 2015 22:00

Kalamazoo tool shop benefits from partnerships, insurance after roof collapse

Written by 
Rate this item
(1 Vote)
MADE IN MICHIGAN: After losing $2.5 million in equipment and seven months of full production time because of a collapsed roof last winter, J.K. Machining Inc. rebuilt and recently restarted production of plastic injection molds at its Kalamazoo facility. To navigate the hardship, the company leaned on a coalition of tooling partners and its insurance provider for help. Primarily serving the automotive and medical device industry, J.K. plans to generate $3 million in sales in 2015, on par with its performance from past years. MADE IN MICHIGAN: After losing $2.5 million in equipment and seven months of full production time because of a collapsed roof last winter, J.K. Machining Inc. rebuilt and recently restarted production of plastic injection molds at its Kalamazoo facility. To navigate the hardship, the company leaned on a coalition of tooling partners and its insurance provider for help. Primarily serving the automotive and medical device industry, J.K. plans to generate $3 million in sales in 2015, on par with its performance from past years. COURTESY PHOTO

In the wake of a catastrophic accident, one Kalamazoo-based manufacturer of plastic injection molds turned to its industry partners and its insurance agency for help.

While “collaboration” is often little more than an industry buzzword, J.K. Machining Inc. took the concept to heart, leaning on its industry alliances after its roof collapsed from last winter’s heavy snow and caused $4 million in damages to the company’s plant and equipment.

By the time the dust settled from roof collapse, J.K. had a crane on the scene removing debris and machinery that night. Within the next month, the company was operating what equipment it could salvage at a temporary site. Throughout the rest of the year, the company ordered new equipment while it rebuilt its facility, where it ultimately restarted production in late December 2014.

The crucial element for the company’s rebuild: Strong industry alliances with competitors that helped pick up production and meet order deadlines, said President Henry Kalkman.

“Having alliances with other tool shops was key,” Kalkman said. “You’d like to call them your competition but they’re good competition to have. I had shop owners call me from greater West Michigan, Illinois and Indiana all wanting to help.”

During the rebuild, J.K. augmented the production from its temporary facility by working closely with its industry partners in the Southwestern Michigan Global Tooling and Technology Coalition (SMTC). The company moved a handful of its 16 employees into the Otsego-based Plas-Tech Mold & Design Inc. and Portage-based Liberty Molds Inc. to build a portion of its orders. J.K. also worked with Sturgis-based Johnson Precision Mold and Engineering Inc.

Members of the SMTC collaborate on a variety of levels, said Ron Bickings, president of the coalition and of Plainwell-based Travis Creek Tooling Inc. Individual members often pass excess work along to other members and send specific jobs to companies with more specialized capabilities.

“Years ago, tool shops did not work together because we were competitors, but the business climate has changed so much that in order to survive, we had to join forces,” Bickings said. “The coalition is just that — shops joining forces to provide better services for their customers.”

The SMTC was established in 2005 under the guidance of the Michigan Economic Development Corp. The coalition currently has 16 members but cannot accept any additional companies because of mandates from the state that dictate the size of the coalitions, Bickings told MiBiz.

Despite the disruption, J.K. Machining was able to find some good in a bad situation. The roof collapse allowed the company to replace its stable of machines with high-speed five-axis equipment — giving it more capacity for future production, Kalkman said. Another plus: The new equipment could allow the company to take on more business from the automotive and medical device industries, he said.

J.K. also rebuilt its facility with stronger structural components and invested an additional $300,000 in a 3,500-square-foot expansion — increasing the company’s total production space to 8,500 square feet. Despite the setbacks from the roof collapse, the company feels prepared for the winter ahead and plans to do approximately $3 million in sales in 2015, a performance on par with its previous year, Kalkman said.

Beyond establishing sound industry partnerships, Kalkman advocates for companies to purchase sound insurance policies large enough to accommodate substantial damage. J.K.’s policy allowed the company to recoup the cost of the rebuilding project — even with the stronger supports — and the cost to replace the machinery. The policy’s business interruption insurance also covered J.K.’s day-to-day operational budget, which allowed the company to avoid laying off any workers as it rebuilt.

“I’d like to say I’m a genius, but I’m not. I have a good insurance agent that I’ve had for 20-plus years,” Kalkman said. “He always made sure we were covered properly.”

The company has formed a long-term relationship with Kalamazoo-based Nulty Insurance since it moved to its current facility.

While the new machinery and upgraded production space will accommodate J.K.’s orders for the foreseeable future, Kalkman sees the company’s key challenge coming from sales and marketing. Since the company is operated by mostly family members — Kalkman doubles as the sales manager — there’s some hesitation to create a new sales position.

“Some shops work 24/7 where we work one and a half shifts. To keep a salesman fully occupied would be challenging,” Kalkman said. “The right sales guy could bury us in work.”

J.K. Machining was originally formed by Kalkman’s parents in 1980 after his father, John Kalkman, came out of an eight-month retirement to launch the company. The small shop was operated out of the family garage for a decade before moving to its current location, just north of Kalamazoo.

“We’re just a small business in Southwest Michigan trying to keep people employed,” Kalkman said.

 

Read 2850 times Last modified on Saturday, 17 January 2015 22:11
John Wiegand

Staff writer

jwiegand@mibiz.com

Breaking News

November 2017
S M T W T F S
29 30 31 1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 1 2

Follow MiBiz