Diverse customer base buffers downturns at Alps Welding
Woodbridge, Ont.—Ask Dennis Dussin what helped his family’s company survive the recession, and he’ll point out flexible manufacturing and a focus on diversity.
Alps Welding Ltd., a metal fabrication company just north of Toronto, has doubled in size over the past 10 years, prompting a move to a larger plant in 2008. Key to the expanded location is a responsive shop floor.
“Our new state-of-the-art fabrication facility allows us to change our plant layout quickly to take on different kinds of projects,” says Dussin, president of Alps Welding and son of its founders.
Alps Welding, which opened its doors in 1974, has about 55 skilled employees, who are cross-trained to work on a range of products. The plant—measuring 55,000 square feet—produces various sizes of modules, piping systems, pressure vessels and related equipment.
“We try to stay flexible. With our skilled workforce, we can adapt to changes in the marketplace, and to certain sectors that are strong.”
Don’t forget softer markets
The strategy didn’t come without practice though, and a bit of a wake-up call when the recession hit.
“In the lead-up to 2008, we had become more and more dependent on the oil and gas industry. When the financial crisis hit that industry in 2008 and 2009, we realized we had lost some of the diversification that had made us successful in the past,” Dussin says.
“We survived and recovered from the recession by returning to our diversified customer base and restoring some of the relationships we had probably ignored.”
The strategy has paid off, with Alps Welding actively involved in upstream oil, steel mills, power generation, mining, chemicals and processing plant equipment, to name a few. It’s also winning contracts in the oil sands.
“In the oil sands industry, this kind of flexibility is important, because a lot of the equipment is unique.”
Though some manufacturers were wooed by the promise of wind turbine contracts a few years ago, Alps eschewed that market, as it would have comprised its flexibility.
“We looked at it and said, you know, we could start building the wind mill towers. But to do that, we’d have to be very specialized. We’d have to lay out our shop floor to build that one type of equipment.”
In retrospect, it was the right decision, as the wind turbine supply market hasn’t met initial expectations.
With a diversified customer base, Alps Welding has a measure of protection against cyclical downturns. His advice to other manufacturers looking to diversify? Don’t ignore softer industries.
“Maintain relationships with customers in all industry sectors in which you’re involved, even during times when those industry sectors might be going through a slump. This industry is based on relationships and when that industry starts to grow again, buyers will turn to suppliers that they know and trust.”
Referrals and references from other customers have also energized growth, Dussin says. The equipment Alps Welding provides is so specific and complex, buyers are highly unlikely to take a chance on an unknown supplier.
“Having that stamp of approval from a trusted source is important. When we’re able to show a potential customer that we are on the approved vendor list for similar companies or even competitors, or when we can put a prospective customer in contact with an existing customer, we can establish trust much more quickly.”
Of course, growth didn’t come without hitches. Along the way, Alps Welding undertook a lean production program, did some troubleshooting with a management consultant, and overhauled its project management workflow.
Always looking forward, the company is working through a succession plan, and scoping out manufacturing software systems for more efficiency and visibility.
It’s a busy shop floor but as Dussin has learned, time spent maintaining relationships in diverse markets really pays off over the long term.
This article is part of the new Manufacturing Growth & Innovation Centre—for small and mid-sized industrial companies on the move!