Switching gears

Over the past decade, Dorner Manufacturing Corp.’s traditional customers, such as American metal manufacturers and fabricators, increasingly were closing up their shops or shifting much of their work to China. To address that problem, the Hartland-based manufacturer of conveyor systems began branching out about two years ago into new markets.
That strategic diversification is starting to pay off, as the company is expecting double-digit revenue growth in 2005. The company now has 140 employees, 12 of whom were hired in 2004.
To counter-balance the loss of clients it had relied upon for many years, Dorner started selling its conveyors to manufacturers in the food, pharmaceutical and health care product markets about two years ago.
Dorner’s engineers made some modifications to the design of the company’s conveyors because the company’s new clients require a cleaner environment for processing and packaging their products than metal manufacturers.
So, instead of making aluminum conveyors that were bolted together, Dorner’s engineers designed new conveyors made of welded stainless steel.
"It’s been a huge investment in time and research and development," said Steve Stuff, manager of marketing and international sales for the company. "We’re buying some serious machine tools. But we believe that it will be a step that adds 10 to 20 percent to our business, at least."
The product diversification has enabled Dorner to grow its annual revenues by about 5 percent over the past several years, according to Gary Wemmert, the company’s marketing director.
The firm is projecting double-digit sales growth for its new markets, Wemmert said.
Wemmert declined to identify Dorner’s new customers, but he said they manufacture products ranging from chocolate, candy and gum to chickens, bratwursts, ham, syringes and prescription drugs.
That’s quite a change from the early 1970s, when brothers Horst, Wolfgang and Werner Dorner, who still own and operate the company today, needed a new conveyor belt for their firm’s tool and die shop in Butler. At that time, the existing makers of conveyors said they couldn’t make one to Dorner’s specifications.
So, the brothers started making their own conveyors.
Within a few years, conveyor systems and related products made up a majority of Dorner’s business, and the brothers’ own tool and die shop was eventually phased out.
Instead of making each conveyor from scratch as orders came in, the Dorner brothers developed a master set of parts that can be cut to order.
The method gives Dorner the ability to assemble custom units quickly. Dorner is able to ship most of its orders within four days, Wemmert said.
"It makes the manufacturing very efficient," Wemmert said. "We have no finished goods on-hand. It’s all built to order."
In April, Dorner will introduce a new product line of conveyors created just for one of its new markets.
The assembly area for the new line of conveyors is currently being developed inside Dorner’s manufacturing center. The company recently rearranged its manufacturing center to accommodate the new assembly line.
Wemmert described the new line as the "third generation" of stainless steel conveyors made specifically for the food, health care product and pharmaceutical markets.
He said each generation has offered more options, including belts covered in plastic or made of plastic chains, which improve sanitation.
"We looked at our competition and designed a superior product," Wemmert said.
"We’re bringing in the Dorner philosophy of being virtually customized but with standardized products," Stuff said. "(Customers) will get the product in weeks, and it will be welded instead of assembled."
To tap into its new markets, Dorner has been partnering with local distributors who sell machinery and other equipment to food companies, pharmaceutical manufacturers and medical suppliers.
Finding the right players in local markets has been one of the biggest challenges for Dorner, since it had only dealt with metal manufacturers, Stuff said.
"With the food and hygienic industries, we want to understand their needs. The government requirements are different," he said. "We have eight remote managers in different territories. They manage the local distribution base and get the distributors that will get us there."
Dorner Manufacturing Corporation
Location: 975 Cottonwood Ave., Hartland
product: conveyors for assembly and packaging
web site: www.dorner.com
employees: 140
February 18, 2005, Small Business Times, Milwaukee, WI