Mayville Engineering Company Grows with Industry Leaders

View This Article in BOSS Magazine

Partnerships with leading OEMs have cemented Mayville Engineering Company as a manufacturing and supply chain leader.

The United States is a relatively young country compared to the rest of the world, and its companies much younger. But every once in a while, we come across a company with the fortitude to survive being founded the year World War II began.

Cousins Leo and Ted Bachhuber founded Mayville Engineering Company (MEC) in 1945. Its 70-plus years of history have resulted in MEC becoming a leader in its many fields of focus, including prototyping, metal fabrication, tube bending, tanks and tube welding, coating, and value-added assembly services. The company has 16 facilities located close to customers’ assembly lines as well as the company’s supplier base.

“Many years of successfully working with big OEMs (original equipment manufacturer) in the motorcycle, trucking, agriculture, and UTV/ATV markets has given us the experience that has shaped our successful growth, supply chain base, and the manufacturing processes of today,” said Assy Okanin.

He’s the Director of Materials Management for Mayville Engineering Company and has been in the field for much of his career. Okanin credits the company’s long-term success to two key things: employee buy-in and its long-term partnership business approach.

“The reason we’re able to operate lean and still scale up production quickly stands to our team.  Their motivation drives it all. Let’s put it this way: everyone kind of sees themselves as the CEO of the company—they care about what they are doing like the CEO, they care about the company, and they care about the customer. They want the customer to be successful.”

Okanin explained this level of buy-in from MEC’s employees is possible in large part because the company is 100-percent owned by the employees.

“The future of the company depends on them. When you know it’s your company, you’re more aware of how your performance can impact operational and financial results. They know that as they do better, the company gets better, and the employee can gain more in terms of bonuses, higher 401Ks and ESOP contributions, and more.”

Long-Term Vital Partnerships

The company’s continuing relationships with leading OEMs also contribute to MEC’s success today. Mayville Engineering Company has worked with and built relationships with its customers in the motorcycle industry for over 30 years.

“We’ve developed a good relationship not only with customer management, but also the supply chain base groups and the design and quality groups that work with the brand. It’s a lot of ongoing communication and weekly check-ins.”

Similar strength in partnership can be found through the company’s other customers.

“We started working with a customer 25 years ago by making motorcycles welded components. We’ve developed this relationship for the last decade to establish MEC as a one of their major Tier 1 suppliers. The same growth happened with other important OEM players in the agriculture, trucking, construction and various other markets.”

Supply Chain Transformation

For a company that manufactures so many different products for a variety of OEMs, it’s incredibly important for Mayville Engineering Company to be able to keep up-to-date on the proceedings. It is this reason, then, that its supply chain base has recently undergone a transformation.

“One of our biggest changes was better use of the MRP part in the ERP system,” Okanin said. “Last year when a customer upgraded their ordering system, we finally could use effectively EDI transmission and get into a position that aligned our systems to easily talk to one another. It cuts costs as potential late orders are identified earlier. Drop-in and drop-out orders are reduced. Material purchasing and planning becomes more efficient. Down time/lost time is reduced and inventory levels are much more reliable.

“It all comes together to better planning and ordering as well as inventory accuracy.”

Before the system improvements, MEC’s Performance Structures division saw a significant volume in past due orders. By restructuring its internal systems and internal procedures, the company has been able to reduce this metric by 95 percent. Its expedite cost, too, has decreased 90 percent with these improvements as well.

Accurate systems at MEC have increased inventory turns, as well.

“We have nearly doubled our inventory turn rate after implementing this new system. This means we are keeping track of inventory better, moving it faster, and now have more cashflow to put into other parts of the business.”

The improved use of the MRP system means a better focus on the customer’s demand and a level of automation MEC hadn’t used before.

“We can automate some of the processes with suppliers by creating automated weekly releases and clear delivery expectations. We provide automated schedules for the production managers and their supervisors in all of our facilities, making their manufacturing duties easier.

“Since we have so many departments that all support one another and are dependent on each other, automated schedules are essential to increase efficiency and productivity.”

Where’s the Market Heading Next?

Continuous improvements will play a key part in MEC’s strategy, especially if what Okanin sees in the future of the industry holds true.

“Just like in any industry, only the best that continue to improve and develop stay successful.  At MEC we believe that we’ll continue to succeed by improving technologies and our quality culture, reducing waste, and staying tuned to our customer’s needs. We’ll strive to continue to improve our efficiency in production lines and our deliveries scorecard.

“End user customers will continue to ask for better long-life vehicles, challenging the OEMs to compete for lower cost. This means we’ll continue to see companies looking for low-cost materials and manufacturing that can meet the quality and performance standards. More efforts will be spent on building structural components from light materials created by innovative technologies. The competition between the domestic fabrication industry and the overseas suppliers, which continue to push cost and margins down, will play a bigger role in this market.

“In this dynamic and competitive environment, some Tier 1 and Tier 2 suppliers won’t survive. It’s a tough industry, and everyone is fighting for getting his piece in new projects in reasonable margins.

“At MEC, we believe in our team’s capabilities and collaboration to stay one of the industry leaders for the long run. We are proud of our past and are looking forward to continuing the company’s legacy in the future.”