Downsizing Leaves Holes in Innovation and Engineering Talent

A decade of downsizing has sent former food industry innovators to engineering firms -- where anybody can hire them.

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“You put product in a bottle, then you put the bottle in the case. We build the equipment in between,” says Mike Slattery, senior project manager for Stainless Specialists, Wausau, Wis., defining his place in the technology landscape. His company may be best known for its specialty conveying and unique pallet dispensing work, he says, especially where the lines are regularly washed with caustic cleaning agents. But much of its work is replacing manual roles on processing lines with mechanical solutions.

For most control and automation work, Stainless Specialists forms alliances with larger firms. Some partnerships are formed directly with processors and may even involve the development of patented technology. “(The processor) wanted control of the technology so competitors couldn’t employ it. We developed it. We share in the patent,” Slattery explains of one development. In another instance, his company shared a patent on a frozen pasta product.

“A lot of products in the food industry still are driven by food marketing people,” he continues. “They don’t ask if the company has the equipment to make the product or understand how it’s made. All they have is a prototype from a lab and, all of a sudden, they need someone to make it. That’s where we step in. They might need specialized equipment for folding or creasing a product or a special accumulation unit that won’t damage the product.”

Stainless Specialists operated out of a garage when the company was first formed in 1985. Working with local food manufacturers at first, it has extended its work to a number of Fortune 500 companies. Today it employs 120. Exposed to a lot of food industry problems, it now has the keys to a lot of solutions.

“As big companies have downsized their engineering groups or relocated, they remember the work we did for them and continue to hire us,” Slattery says. “That’s one of the ways we’ve grown.”

Custom standard

Some custom equipment companies decide that there is greater profit to be had selling standard, mainstream equipment.

Much equipment expertise from the food industry migrated into the ranks of machine builders. As machine builders specialized, their focused expertise grew enormously. Now, specialty machine builders, such as Machine Builders and Design, come up with labor-saving and efficient solutions in specific niches, such as cookie baking.

“The premise of our company was, ‘If you have a problem, we’ll sell you a solution,’” says Daryl Mims, who today heads Machine Builders and Design, the Shelby, N.C.-based company his father founded. “The business streamlined into bakery, then even more so into cookies, though we also continue to work with pretzels and chips.”

Though the company continues to do some custom work today, it largely reaches the biscuit (cookie) makers today with specialized equipment for laning, indexing, depositing and sandwiching. A unique capping machine may be its top seller.

“We can often take our standard equipment and customize it with a change part,” says Mims. “We make our equipment versatile. Instead of designing a dedicated machine, we take the custom order and create change parts to fit the cookie profile. And the customer can order change parts for a different cookie profile later. Some customers can run 10 to 12 products on the same machine, with only 15- to 30-minute changeovers.”

Co-packers are among the company’s best customers due to their need for versatile, reliable equipment. “We do a lot of work in line layout, building specialty conveyors with 90- and 180-degree turns,” says Mims. “We still get a lot of these specialty requests.”

The food industry’s realignment is far from over. It will continue to test new organizational and operational paradigms. Partnerships, alliances, and multi-company project teams will continue to replace the in-house development team working under a single roof.

Lost in the shuffle of realignment and frenetic drive to reduce costs is the question of how much processing technology is worth defending at all. Many argue that deployment of information systems and existing assets is the key to success in the industry today. But with so few new products derived from newly developed technology these days, one wonders if the prospect of gaining a competitive edge from processing technology is being tested at all.

Expect more carefully selected alliances to develop in the years ahead and engineering firms committed to food assembling more food-directed technological capability. The shakeout and realignment will continue.

And as for those tiny technology boutiques?

“I don’t know what the future will be for these small guys filling in the gap,” says Power Engineers’ Keough. “A lot of the little companies went away after 9/11, but some are still hanging on and doing well.”

In the meantime, the small entrepreneurial firms that have been filling in the design and fabrication gaps for food companies will continue to work, some faring well with successful partnerships, others eking out a living, still others becoming targets for acquisition.

All will be wondering where they will fit in the food industry months and years from now.

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