Dayco leans on CEO for stronger operation

TROY, Mich.—When John T. Bohenick took over as CEO of Dayco Products L.L.C. in September 2014, he had a good working knowledge of the company.

Over the years, he had built a relationship with the company as a customer, competitor and a supplier. He served as president of SKF Sealing Solutions for four years and spent 20 years with Gates Corp. in a variety of leadership roles.

Prior to taking over his new post, Bohenick had spent a considerable amount of time with the firm's board of directors and leadership team gaining greater insight into Dayco's diverse operation, its current business objectives and strategic initiatives.

But he wanted to learn a lot more, and fast. So he hit the ground running at full speed when he came aboard.

In fact, five days after he took office, he was on his way to South America for a board meeting and the opportunity to learn about the firm's operations there.

Bohenick has continued moving at that pace since.

In the last 12 months, he has learned about Dayco's people, technology, products, manufacturing, customers, competitors and strengths, he said. “My learning is helping us define our strategic plan and direction for the future. I am excited about what I have found out and even more excited about our future.”

Bohenick also has been making moves with a goal of creating a better and stronger company. “The first major transformation we initiated was our journey to lean,” he said. Demands from its customers and the firm's strong competitors dictated that type of a change was needed, he said.

Dayco's desire to run a tighter operation was high as several members of its leadership team had previous experiences driving lean businesses.

He said the company's road map to change is its Dayco Production System, “our holistic approach to building a lean organization focused on elimination of waste and continued improvement of quality.”

The company is deploying the system as its overall business model focused on continuous improvement in all of its core processes, including manufacturing; supply chain; research, development and engineering; sales; and all support functions.

Dayco—which is celebrating its 110th anniversary, having been founded as Dayton Rubber Manufacturing Co. in 1905—has launched a number of other initiatives in the last year with Bohenick at the helm.

It opened a new 400,000-sq.-ft. central U.S. distribution center in Memphis, Tenn.; selected Gordon Hensley as its senior vice president of research, development and engineering, and Phil Liu as its general manager of the firm's aftermarket business in China; and unveiled numerous new products, such as two serpentine belts and a heavy duty belt for the aftermarket along with an electric power steering belt line for electronically powered steering systems.

Dayco's distribution center will improve shipping times while increasing its fill rates, the company said. It will allow the firm to expand its customer service capabilities and implement new supply chain systems at the site.

“As a major transportation hub centrally located in the U.S., Memphis is the best location for our distribution center,” Bohenick said. “The new location gives Dayco the ability to provide a seamless service experience for our North American customers, from manufacturing to delivery.”

Its new center employs nearly 200 and will be used to distribute the company's products—including belts, tensioners, pulleys, harmonic balancers, hose, hydraulics components and equipment, along with all related tools—in North America.

Dayco has a focused growth model built on operational excellence, organic growth, geographic expansion and strategic acquisitions with a focus on the industrial sector, according to Bohenick.

On the operational side, it has built a solid reputation as an innovator and its drive to create new products, and solutions is one reason the company has great growth potential, he said. “For example, the technology and manufacturing behind our timing belt-in-oil system is continuously being recognized by our customers as the best solution in the market.

“Dayco introduced the first timing belt-in-oil solution for automotive applications, a technological breakthrough that directly addressed customer focus on lower emissions, increased fuel economy and reduced friction for the engine.”

Bohenick noted that the company is a single source supplier for numerous customers because of its deep catalog and distribution network. “Our future growth will result from the best product range, excellent application and training, and the highest level of service.”

He said the firm's industrial operation is expanding steadily, and it continues to win new business with major industrial and equipment manufacturers.

Dayco focuses on products and systems that directly address the automotive megatrends for engine downsizing and up-powering, the executive said. He sees continued growth in the company's timing belt-in-oil systems, Start-Stop systems and belt systems for electric power steering—all aimed at improving fuel economy.

“We are also working on a new product platform of decoupler products (alternator and crankshaft) with function to significantly reduce NVH for engines and transmissions,” Bohenick said.

It has been successful in winning contracts on global original equipment manufacturers' next generation engine programs, which are expected to increase in volume over the next several years. “Today, many of the engines worldwide move better because of our Dayco products.”

Dayco's aftermarket business is very strong on a global basis, according to Bohenick, “and we have the Nos. 1 or 2 position in the major markets of Europe, North America, South America and Australia.” And in a relatively short time, he added, it has been able to build a good foundation to enable continued growth in China.”

All employees at the firm are aware that Dayco's growth and reputation depend on creating value for its customers, he said. “We seek growth by realizing the economic potential in improving how the world moves, every day—specifically by creating products, systems and customer relationships that endure.

In order to do that, he said, the company needs to continue expanding its product lines and coverage for its customers; evaluate its distributor base by geographic area to ensure it has the ability to expand as the global market grows; continue to manufacture innovative products that last; “and develop and retain our most important resource, the skills and intelligence of our people.”