TWINSBURG, Ohio—Quality Synthetic Rubber Inc. has been around for 45 years but may be one of the best kept secrets in the rubber industry.
Tucked away in an industrial stretch of Twinsburg, about halfway between Akron and Cleveland, the molded goods firm doesn't try to be everything to everyone, said Randy Ross, QSR president and CEO since February 2010.
Instead, QSR focuses on what it does best and tries to find ways to differentiate it from the competition, he said. Its core product lines are silicone electric connector seals—particularly cable, multi-wire and perimeter/ring seals—and fuel and emission seals made from a variety of fluoroelastomers.
The firm's 113,000-sq.-ft. factory houses 104 transfer presses, 26 fully automatic cold-runner liquid injection molding presses, a new low-volume department, a wide range of design and laboratory capabilities, fully automated vision inspection capabilities, and in-house tooling design and production capabilities.
It also is home to the company's Medical Elastomer Development Inc. subsidiary. Combined, QSR employs about 320 in Twinsburg.
About two-thirds of the main QSR business is automotive and the rest industrial, Ross said. The Twinsburg facility supplies transfer molded components made of gum-based silicone to the North American market and sells LIM products globally. A subsidiary in China supplies Asian and European customers with the firm's full line of gum-based silicone products but does not have LIM capability.
“Our reputation is to deliver the highest quality with a really excellent delivery rating,” Ross said. “We make sure we focus on continuing to deliver to the customer exactly what they want.”
Its pinpoint focus means that 20 customers make up roughly 80 percent of revenues, which the CEO said are projected to hit a record $65 million in 2011. “One thing I've learned in business is that people are always chasing the next great thing and tend to forget about how they got there,” he said. “So we really try to make sure we take care of our core customers that have been there for the last 45 years.”
That's not to say that QSR doesn't look to develop in new areas, both in terms of materials and products. Ross said he makes sure the company balances what he calls the inside part of the business (making and delivering products) with the outside part (working on new developments).
On the development side, he said QSR's engineering staff works closely with customers to discuss future technology needs and market trends, so his company can be at the leading edge of market needs.
Founder with vision
QSR was founded in August 1966, and Phil Smith was the company's CEO for more than 20 years. Ross said that Smith had a number of foresights that put the firm ahead of its time. He spearheaded such moves as moving QSR into medical goods, adding LIM capability and setting up an operation in China.
“To a certain extent we benefit today from the vision Phil had to create a company that was diversified and well-positioned globally,” Ross said.
Cleveland-based private equity firm Blue Point Capital Partners bought out the original founders in 2007, and Ross was brought on board about three years later. He had 24 years of rubber industry experience, the first half at Dana Corp. followed by a long tenure at Freudenberg-NOK G.P.
He was drawn to the position at QSR for several reasons. First, he wanted some diversification after a career devoted to automotive, so the MED Inc. business was appealing. Next, he felt it was important for his personal development to have direct responsibility for an overseas enterprise, and the QSR China business fits the ticket there.
Finally, he wanted the chance to work closely with a private equity firm. After initially having a negative impression of some private equity investors' roles in the automotive arena, he said the experience with Blue Point has been extremely positive.
It's evident of what type of company Blue Point is in that it stuck with QSR through the deep economic recession, continuing to invest in such things as new tooling.
“Now, if you look at sales, we're at an all-time high, yet vehicle production rates are nowhere near historic highs or norms in North America,” Ross said. “I think that's a testament to both the employees here at QSR and also the Blue Point guys who continued to invest in the future. Now we're getting the benefit of that on the upturn.”
Trends and differentiators
There are numerous automotive electronic advancements that will increase the number of electrical connectors in vehicles over the next two decades, all of which will benefit QSR, according to its CEO. Increases in such things as GPS, Bluetooth and telematics usage, along with the ongoing integration of advanced safety systems and the utilization of vehicle electronics to achieve higher fuel economy requirements all have the potential to bring new business QSR's way.
In addition, electric and hybrid vehicles incorporate about five times as many electrical connectors as standard automobiles. But QSR won't have to wait for those alternative vehicle types to gain business, he said, because much of the new technology will be adapted for use in internal combustion engines.
QSR also does much to set itself aside from the competition. First, it can offer either LIM or transfer technology to determine which process is best for a particular application, he said.
And while many LIM competitors focus on high-volume runs where customers need millions of pieces—a market QSR also serves—the Twinsburg firm recently carved out a portion of its factory dedicated to low-volume production. “We scale down rather than scale up the production process so we can handle smaller volume, early-life entry products or end-of-life products, and do it in the right environment,” Ross said.
The area is set up as a complete turnkey room, handling the orders from material ordering through production and shipping. It can change tooling quickly, allow for prototyping and help QSR develop products for new markets such as aerospace, he said.
“The business development side of things is kind of the future lifeblood of the company, and you want to make sure you're taking care of that aspect of the business,” Ross said.
Given that the Twinsburg facility is landlocked with no room for expansion, Ross and his team have worked hard to do such things as revamp the workflow at the plant with a system that makes more sense. They also want to take advantage of the experience of the work force to help make the improvements.
Ross hired Dana Wooters—a former colleague at Freudenberg-NOK—as director of operations to put the new processes in place and eventually conduct more formal lean management and kaizen programs.
“It all ties together,” Wooters said. “How do I service my customers better so they're going to be assured of getting a quality product? If you've done a better job upfront, it reduces lead times, you do a better job delivering on time and have a lower cost to serve.”
He said he's been very gratified at how the employees have taken to the changes thus far, particularly compared to other places he's seen. “I get a little bit of a pushback in the form of, 'I need to understand that,' ” Wooters said. “But once there's a grasping of the concept, people take it and run with it.”
When Ross was hired, he was told by Blue Capital Partners that the equity firm wanted to take the company to $100 million in sales. He was asked if QSR could grow to $75 million organically and Ross said he believed that is possible. Much of that organic growth is expected through the medical and Chinese businesses.
The other $25 million, he said, likely will be through a bolt-on acquisition, but only one that fits with the QSR culture. “It has to bring something that we need here and we have to bring something that they need,” Ross said.