Ohio's DTR contributes strongly to Tokai's success

BLUFFTON, Ohio—Tokai Rubber Industries Ltd. wants to grow. As long as its U.S. subsidiary, DTR Group, continues to do its part, that will happen.

With $552.3 million in total sales, the DTR Group accounts for approximately 25 percent of Tokai's total sales. Around a third of that comes from DTR Industries Inc. in Bluffton—Tokai's first manufacturing presence in the U.S.

Tokai said it hopes to achieve $10 billion in sales by the early 2020s. Its 2012 sales were $2.64 billion and the company projects its 2013 sales will reach $3.65 billion.

In order to help Tokai reach $10 billion, DTR just has to keep doing what it's doing.

“I don't think it necessarily needs to be big growth, as long as its continual growth,” said Bill Yokas, senior vice president of manufacturing at the Bluffton operation. “The demographics point to that type of growth.”

Since it was established in 1988, the Bluffton plant has expanded 13 times and grown from 88,000 square feet to 340,000, its current size. It started with 17 associates and now employs 670, which the firm said makes it the largest employer in Bluffton and the second largest in Allen County.

“We truly owe our success to our associates,” Yokas said, “(And) to our customers for their trust and confidence in our ability to provide quality product, our parent company Tokai and the communities in which we work and live for providing the necessary services to support our growth.”

Tokai was founded in 1929 and joined the Sumitomo Rubber Group in 1937. It started the production of automotive parts in 1954. The firm said that one vehicle out of every two in the world contains a Tokai product.

The group made its first overseas investment when it started the Bluffton plant as a joint venture with Duramax Corp. Tokai assumed total control of the venture in 2002, and it remains its largest investment outside of Japan.

DTR said it relies on Tokai for the design and development of its product and processes. The parent company sets the long-term vision for the firm, but gives DTR the autonomy to achieve those goals.

Tokai has expanded its manufacturing footprint through four major acquisitions—Avis Group, Dytech, Produflex M.G. and ITTC. Its supply system now consists of 102 sites among five economic regions. Tokai extended its manufacturing footprint to 74 sites in 24 countries, up from 43 sites in 11.

The DTR Group consists of five facilities: manufacturing plants in Bluffton; Midway and Tazewell, Tenn.; and in Chihuahua, Mexico. It also has a technical center in Novi, Mich.

DTR fits into Tokai's long-term vision by continuing to grow its customer base in the U.S., either through additional business with the Detroit Three or other non-Japanese manufacturers, Yokas said. DTR is operating about 68 percent ahead of what was planned for its 2013 total sales.

DTR focuses mainly on anti-vibration rubber products ranging from hydraulic and conventional engine mounts, body mounts, engine drivelines, exhaust isolation mountings and body products. It also manufactures hose products: rubber and plastic high pressure fuel hoses and vapor hoses.

Its customers include Honda, Toyota, Mazda, Mitsubishi, Subaru, Nissan and Ford among others.

Each plant in the DTR Group focuses on a different set of products. Bluffton focuses on engine and body mounts. The plants in Midway and Chihuahua are the only ones making hose products. Mexico almost exclusively manufactures plastic tube fuel assemblies, which was displaced from the Bluffton plant in 2009.

The plants may overlap in producing the same family of parts, but Yokas said there is no duplication of products throughout the organization.

Bluffton takes care of a number of needs itself. Yokas said it mixes its own rubber, stamps its own metal and casts its own aluminum. The facility utilizes automatic welding units to weld components into the brackets needed, injection molds rubber and plastic, and utilizes a number of automated assembly machines.

“We cannot meet all of our in-house needs with our in-house processes,” Yokas said. “We still require outside purchases with other suppliers. But this gives us the knowledge and experience to better negotiate prices and gives us better control over the quality and the cost so we can stay competitive in the automotive industry.”

One of the biggest reasons DTR has been so successful for nearly three decades is its ability to adapt.

“There have been a lot of factors that have contributed to our success,” Yokas said. “We have never turned our eyes away from an opportunity to learn and develop.”

One way is its utilization of customer support programs, such as those sponsored by Toyota and Honda. Yokas served as president of the Bluegrass Automotive Manufacturers Association, a program for Toyota's supply base. Steve Unterbrink, vice president of manufacturing, served as president of the Honda Lean Network.

“Organizations like that provide us a lot of education and support,” Yokas said. “As a company who supplies Honda and Toyota, it would be absolutely foolish not to join and meet up with members of those organizations because it pays tremendous dividends.”

Unterbrink said the Honda Lean Network provides monthly workshops on a variety of topics. He'll send employees, specifically team leaders, to the ones he feels cater to their developmental needs.

Both Honda and Toyota involve human resources and quality in their supplier support programs. Kathy Ervin, vice president of human resources, said both customers will feature workshops highlighting changes in the law and other related topics.

Like most organizations, quality is a high priority. Tracy Kehres, vice president of quality, said DTR gets involved before parts are in production, and that the firm's excellent quality comes from building it into its process. Supplier support networks with Toyota and Honda help make that possible.

“Having that close relationship with them is so important in meeting their requirements,” she said. “We're not employing a team of inspectors to inspect quality at the end; we're building it in.”

DTR started with a number of Japanese dispatchers when it first launched, but since then the proportion of its employment population is heavily stacked toward locally grown talent. Yokas estimates that about 80 percent of professional opportunities come from within.

“We haven't recruited an awful lot in terms of what a company might expect with the growth history that we've had. In doing so, it's certainly helped our turnover,” he said.

Ervin said the firm spends a considerable amount of time improving its new hire orientation. The logic is the more associates become comfortable with the company, the more it will help retention. Bluffton utilizes a five-day process going over philosophies and procedures.

Yokas said while Bluffton's retention rate is about on par with a typical company, once an associate completes one year, the rate rises dramatically. Benefits also are a big focus.

“We have a tremendously generous benefit package,” Ervin said. “Our participation in the 401(k) plan is 95-96 percent, which is unusual, especially in a manufacturing environment.”

The company focuses on wellness. Ervin said it has installed an on-site clinic where associates and family members can get medical care and prescriptions at no cost. It also has an occupational wellness center to help with day-to-day issues, such as monitoring blood pressures and dealing with headaches, among others.

The firm also provides incentives tied to employee premiums. Ervin said 95 percent pay zero because they will take advantage of all the incentives, such as visiting a primary care official and completing a wellness assessment.

All of these programs help keep turnover down and experience up. “We're not constantly retraining, so we don't have to invest in the cost associated with that because they stay so long,” Ervin said.

Unterbrink said one of the top priorities is communication. Once a month, President Akira Kikuta sits in on associate meetings and goes over sales, reject status and safety status among other metrics. About seven of these are held throughout that day to ensure associates on all shifts are included.

Group leaders conduct meetings every week, and issues are communicated to the executive staff. Yokas said associate committees are organized for just about everything, ranging from writing the handbook to uniforms.

One group saved the company a substantial investment in a new rubber mixer, at least for a few years. The company was considering investing in a new one until a team of four devised a way to increase the existing mixer's productivity significantly, which Yokas said delayed a multi-million dollar investment for three years.

Employees also serve on a community involvement committee. Ervin said the committee raises money for various civic events and charities.

The firm will provide activities ranging from simple sponsorships of downtown flower plants and Christmas celebrations, to larger commitments to schools, scholarships, libraries, civic improvements and participation in the chamber of commerce.

It invited the community to celebrate DTR's 25th anniversary last year by opening the plant for tours.

Unterbrink said community involvement also extends to sponsoring its employees' efforts to get involved in the community, such as those who volunteer as firefighters and coaches. And employees can bring new ideas to management at any time.

“From the president throughout our management staff, we're all very highly visible on the floor,” Kehres said. “We're all very accessible and have an open-door policy. Our president sits right out in the office with the rest of us.”