Adapting to Changes Helps McPhillips Prosper
This 86-year-old millwork company has stayed flexible through the years, adapting its product line to meet evolving market needs.
By Jo-Ann Kaiser
J. Manning McPhillips, chairman of McPhillips Manufacturing Co. Inc., recently assembled his employees to give them a heads-up. The reason for the alert? The company his grandfather, H. Manning McPhillips Sr., founded in Mobile, AL, in 1919 will be celebrating its centennial anniversary in 2019, and "I told them, 'We have 14 years until our 100th anniversary party. Let's get things done right, and let's have a good time doing it," McPhillips says.
With its 86-year history, the architectural millwork business has been a fixture in Mobile, surviving and thriving through a Depression, two World Wars and fierce competition from within the United States as well as offshore. If all that were not enough, the business, located just blocks from the picturesque Mobile Bay, has withstood some 80 hurricanes, most recently Ivan and Katrina.
The company began as a regional manufacturer of architectural millwork, serving the southeastern United States. It has grown and evolved over the years. Resiliency and good planning have been a hallmark of the company and helped it keep pace with the market and demand.
"We believe in being flexible," says McPhillips.
The company also believes in having management owners, in order to reward and recognize key members of senior management. McPhillips runs the business with his brother, F. Maury McPhillips, who is president. The McPhillips' father, H. Manning McPhillips Jr., is still active in senior management decisions. The company is closely held, with James David McPhillips (H.M.'s brother) and Madeleine McPhillips (H.M.'s wife) being the other major owners. In addition, Mark Rikard, VP of operations, and Brad Roberts, VP of finance, each hold a minority position of ownership.
The ability to change and meet new challenges is what drives the company's leaders, McPhillips says. "For example, we switched from a rather narrow range of products that included bifold, panel, louver and French doors as our main focus, to a custom design-build program in addition to the traditional stock millwork we have always produced and sold."
The design-build doors are made from a variety of species, including mahogany, Spanish cedar, cypress, antique cypress, soft maple, northern red oak and heart pine. In addition, the company produces its core products in Radiata pine and hem/fir.
The company had a good start with the vision of its founder. "My grandfather's basic view boiled down to what he called 'the Four E formula' - enterprise, energy, economy and efficiency," McPhillips says.
The company employs 135, including the sales staff, with approximately 100 employees working in the manufacturing area. McPhillips says the current workforce reflects another of their philosophies in action - flexibility on the shop floor.
"We began an aggressive program to hire employees who are multi-task oriented," he says. "We have trimmed the workforce by 30 percent over the last three years while increasing productivity. Our year-to-year gains are in the range of 10 percent.
"The secret to our success has been technology, mixed with an emphasis on finding people who can handle multiple job assignments. We have a great crew," he adds.
Adapting to Market Changes
Flexibility and the "work smart" ethic have served the company well as the door industry has been faced with dramatic changes over the last decade. "The growth in offshore pine panel and French door production changed this industry dramatically, beginning in 1996," explains McPhillips. "In 2000, it exploded because of the capital investment offshore, raw material availability and low costs."
Two of the company's basic product lines and mainstays had been six panel doors and French doors. "Today, we buy 90 percent of those products offshore," he says. "There are door plants in South Africa, Chile, Brazil, the Philippines and Canada. We face the same problems as the furniture industry. Offshore production has all but wiped out domestic panel door production in the United States."
McPhillips feels they would not be in business if not for a change in direction to get more involved in specialty and custom work. "Our offshore competition can't get one door through the market. From our vantage point, when we became world competitors in the late '90s, we had to develop strategies where you know what you can do well and what you can't," he says. "There weren't very many of us in the door industry to begin with, and now there are a whole lot less."
The company is located in a series of buildings that span an area equivalent to two city blocks in Mobile and cover 175,000 square feet, including the office and headquarters. The manufacturing area includes buildings devoted to raw material and lumber storage, a rough mill, manufacturing and assembly, glazing, door units and a large distribution warehouse.
Technology plays a big part in the success of the company. McPhillips says the technology starts in the office with the order entry system, production control, accounting and engineering, and continues into the plant.
"We have a three-man engineering team that uses AutoCAD 2004. They interact with the manufacturing managers and CNC supervisors in matching the customer's requirements with our system capabilities," he says. "We use a lot of computer-controlled equipment in gluing, machining, assembly and warehousing."
Products travel from the rough mill area to machining, then to assembly, sanding and on to inspection, glazing and door unit assembly or to the distribution warehouse. "It's a good flow system," McPhillips says. "We don't process much lumber here."
While the company once had an on-site dry kiln operation, it now focuses on bringing in components, like engineered stiles and rails. "We bore holes and profile them for our needs and then assemble the doors and units, rather than building up the element itself from lumber," McPhillips says.
The company used to own Continental Woods Products Inc, in Jackson, MS. That facility processed 1.5 million board feet per month and produced cutstock and engineered parts from raw lumber. The division was purchased by the Brightwood Corp of Madras, OR, in 1998 and today, the bulk of McPhillips products incorporate items produced by Brightwood.
"We have a long background in understanding the entire production process from a rough mill perspective, and this helps us in a working relationship with our component vendors," McPhillips says. The company works with just a few select vendors it has developed strong ties with over the years, he adds. "We typically have dealt with the same people for an average of 20-plus years. They keep us competitive and up-to-date with processes and technology."
The production area includes a variety of machines, including four ripsaws and a small cutting area, four Weinig moulders and several Challoner double-end tenoners, half of them CNC. It also has an RF gluing system by L & L Machinery for custom batch runs, a continuous-flow Mann-Russell high-production edge gluer with a CNC-programmable flying cutoff saw, and a Pro-Tech PT-4 radius HF gluer for arch and radius top doors, transoms and custom door units.
The machining area includes three Challoner Model 623 automatic rail boring and profiling systems, plus a Koch CNC boring machine and a Record 220 CNC multi-tool overhead router from SCM Group USA. Another specialty router is on order. In the assembly area, there are six sidelight and louver clamps and four hydraulic panel and French door clamps capable of assembling doors up to 23?16-inch-thick and 4-by-10. Once assembled, each door is sanded on a top and bottom three-head Cemco sanding system, complete with automatic trimsaw infeed.
McPhillips sells its products through millwork distributors nationwide east of the Rocky Mountains. In the Southeast and Southwest, the majority of its distributors deal direct with builders. In the midwest and Atlantic coast areas, the company works with more traditional two-step distribution networks. It also has a Web site, www.mcphillipsmfg.com.
A Long, Rich History
Tracing the history of the business over the years offers an interesting look at manufacturing in the United States. H.M. McPhillips Sr. founded the architectural millwork company in a small building on South Royal Street in 1919. As the firm prospered, he expanded in 1926 to the present location.
From its founding the firm thrived, growing from a total of eight employees in the first year to 60 by 1930. The Depression years were tough on McPhillips Manufacturing as well as most businesses of the day, but the company survived and even was able to expand by 1938. It entered the ship joinery market, furnishing joinery work to area shipyards. By 1940, the company employed more than 100 people.
Shipping proved to be a good market. In the 1940s, the U.S. Maritime Commission launched an extensive program for the expansion of ship production, and McPhillips was commissioned to furnish and install ship joinery for 13 Liberty Ships, which led to further government shipbuilding contracts.
"We learned a lot during our shipbuilding days," says McPhillips. "The first Liberty Ship was built in 79 days with a total of 12,691 manhours. But we cut our time dramatically so that by the last Liberty Ship, our production time was nine days and 5,308 hours." McPhillips also participated in building a variety of other war ships, such as hospital ships, troop transports and even a couple of yachts for the Alabama State Docks.
In the Post-War years, ship production was gradually phased out in favor of millwork and building materials. "After World War II, we went back to our basic niche market where we were a manufacturing jobber, selling to the small dealer network," McPhillips says. "We developed a full-blown marketing program and opened a kitchen cabinet division."
By the 1960s, the company had expanded further, opening distribution divisions in Mobile and New Orleans. It had switched its focus to producing stock millwork, making windows, screen doors, louvered doors and glass products, mainly in stock sizes. In 1965, the company sold its distribution business to the Huttig Sash and Door Co. and embarked on stock millwork production to service a growing distribution network nationwide.
The company has owned and operated various manufacturing plants over the years, including a Texas-based louver shutter and bifold door plant it sold in 1978 and a window and screen door company in Montgomery, which was closed after an arsonist set fire to the plant. In 1983, the company used the insurance proceeds from the fire to open the Continental Wood Products plant to supply the main door plant with components. "Today, we focus all our energies on doors," McPhillips says.
The Effects of Hurricanes
H. Manning McPhillips Sr. built his new plant on property that was the site of the old Mobile Country Club. The hurricane of 1906 had washed away all the ground level structures that were part of the country club.
"My grandfather's plan was to build to the right floor level to avoid water damage from hurricane storm surges," McPhillips says. "He built the structures to 18 feet."
The floors of the original and present facilities are all raised buildings, some 18 feet above sea level. That proved to be a good number - when Katrina barreled through this year, Mobile was hit with a 14-foot storm surge. One of McPhillips' neighbors is built at a 12-foot elevation and, "They had two feet of water in their plant and were still shut down in late September," McPhillips says.
His company lost power from Katrina, but back-up generators kept the office running. "Our generator system lets us fire up all the computers so we can still take orders and do all our paperwork," he says. "When you think of having a factory shut for two to three days with no order intake or communications with the outside world, you really have a tiger by the tail. After the storm hit, we were up and running with our computer system within 24 hours.
"Hurricanes can make you a little batty," he adds. "You know they are coming, and you have to get ready for them. You have to learn to live with them."
Hurricanes also have affected the company's product line; it introduced a variety of impact glass and panel doors incorporated into door units, which have been engineered and tested under various protocols, such as AAMA, ANSI, NWWDA, ASTM and Miami-Dade.
"The coastal codes for impact products are changing rapidly, and that is becoming a much bigger issue," McPhillips says. "We have anticipated market needs and worked to develop impact products that are ready before the building codes have even been changed for some areas.
"Building codes have been changing all along the coastal counties in Texas, the barrier islands of Alabama, all of Florida, Georgia, South Carolina and North Carolina," he continues. "We also expect changes in Virginia. We live with hurricanes and storms and we understand them. There is real potential for us in our own backyard, and we will capitalize on that."
McPhillips says that one fun part of the job is impact-testing the doors. This involves putting products under development through a variety of tests in-house before they are tested by independent labs to earn ratings. The process is challenging, in that the goal is to stress the product at higher design pressures and then re-engineer them to survive the next level. He believes that the company's aggressive program to develop impact products and its willingness to innovate is a valid strategy for new product development.
"An example of one project leading to another is the panel door impact testing to Miami-Dade protocols, which calls for an engineered raised panel," McPhillips says. "This is a common element for a 20-minute fire-rated door. So we are now developing a design-build 20-minute fire-rated door available in all species, just like the impact series.
"We are constantly testing our products," he adds. A week before CWB visited the plant, the engineering staff had tested panel doors at a velocity of 34 miles an hour in a large missile impact test, and the doors successfully withstood the 2x4 hit.
"Our physical testing isolates us from a small custom company," McPhillips says. "While they might build three to four doors a day, we typically build 150 custom units a week and 2,500 slab doors, using 10,000 lights of glass a month and close to 1 million board feet of lumber from 10 different species. We don't think a small shop can go to the expense and trouble of doing the work you have to do to develop rated products."
In addition to designing the doors and testing them in-house, the company must send its products for testing at a certified test lab and have results verified by third-party validation. "When we do get certification, it's a great tool to be able to show people the entire process," McPhillips says. "We make that part of our marketing program and show clients a video and book about the process."
Another source of pride for the company is that it is a family-owned firm and filled with second- and third-generation employees. "We have sons and brothers and daughters of craftsmen who worked here in the early days," McPhillips says.
Rikard, vice president of operations, is one example. He has been with McPhillips for 25 years, and his father, Jimmy Rikard, had been with the company for 30 years.
Rikard says he and other employees are "nuts" about doors. "When we decided to include custom work, we changed our way of thinking," he says. "While we used to make 500 doors of the same size and type, today we might build 10 or 15 at a time, but still end up with 500 doors at the end of the shift. We are constantly delighted by the variety of designs our clients want. We don't tell anyone we can't do it, when it comes to a design need. We like a challenge."
McPhillips concurs. "What inspires us is a new design," he says. "We make thousands of designs each year. We can't keep up with our Web site updates fast enough. We are a market-driven company. We deal with everyone from the architects to direct with homeowners. Through those levels we try to find out what we need to do to broaden our appeal.
"We will build nearly anything a client wants, and we stand behind it and give them our best technology. Inspiration comes from all over," he adds.
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