In a world of pure imagination, all things are possible, and if Ken Keuchel had an alter ego, it would probably be Willy Wonka.
Keuchel’s 27,000-square-foot manufacturing area at Spunfab Ltd. in Cuyahoga Falls is as awesome as the fictional character’s chocolate factory. But instead of a bizarre Wonkavator that churns out Everlasting Gobstoppers, Keuchel’s extraordinary gadgetry produces a specialty product called a hot-melt adhesive web, which supplies unlimited markets.
The process starts with fine polymer pellets, ground and melted in an unusual, two-story extrusion apparatus. The hot, liquefied substance is squeezed through a series of holes in an extruder, which sprays the filaments onto a conveyer system.
These molten fibers fuse to form a sheer, web-like fabric. After being stretched to a specific thickness and cut to various widths, this nonwoven dry adhesive web is supplied in a roll, tape or sheet form.
Now imagine the markets. Spunfab’s lightweight webs can bond materials such as textiles, foams, wood, metal, glass and plastics. Manufacturers at home and abroad (primarily European markets including the United Kingdom, Germany, France, Italy and the Benelux region) use them to bond and laminate everything from the foam rubber in ballistic tank covers to the reinforcement panels in Victoria’s Secret bras.
Shoemakers use Spunfab webs in hiking boots and sport shoes. Garment manufacturers apply the bonding and antifray capabilities in garment construction, such as belt loops, trim and appliqu. Automotive uses range from bonded seat components to door panels. Spunfab’s webs are used for bonding fabric and leather to foam and felt, aluminum to vinyl, backing scrims to fabric, wood, veneer and cork — the possibilities are infinite.
With limitless choices in his unlimited market, Keuchel is like a kid in a candy store. But as president of Spunfab, his greatest challenge lies in a systematic approach to securing these markets, while controlling his growth.
“It’s easy to grow when you’re small, but every business evolves, and when you get to a certain size, you need larger growth opportunities to continue at the same percentage growth,” says Keuchel, 38.
Since starting Spunfab in 1987, Keuchel has had to constantly rethink his growth strategy.
“You can become overwhelmed and grow too fast by approaching things wildly, and it’s hard to restrain yourself from going after all the possible sales,” he says. “But you really have to take control and find a systematic approach to growth, or things get out of hand.”
Let’s go fly a kite
Imagination is the highest kite you can fly, and Keuchel says that if not for his father, Spunfab wouldn’t be a high-flying firm.
Herb Keuchel, a Spunfab consultant, has been playing the polymer game since the early ’60s, having previously owned a successful polymer engineering and research consultancy. After selling his company in 1979, he independently developed a patented engineering process for nonwoven fabrics.
In 1987, several customers in the industry prodded him to get back into business to service their technical and product development needs.
“Dad told them he wasn’t interested in manufacturing, but he might know somebody who was,” says Keuchel, who was at that time finishing his graduate studies in polymer engineering at the University of Akron.
“That’s when my father called me and said, ‘I’ve got a new process you can use to make adhesive, nonwoven fabrics,'” Keuchel recalls. “He said he’d help me transition the process, try it on a few customers he had lined up, and if it worked out, we’d take it to the next phase and I’d have myself a manufacturing company.”
There was one snag. The graduate student had already accepted a position at General Electric Co. in New York.
“When I called them to quit a month before I started, they wished me well, sent my name plate to me and said they’d re-extend the job offer if I ever wanted it,” Keuchel says. “I kept the name plate and put it on my door here.”
Keuchel’s connections with the University of Akron benefited Spunfab’s early launch and ongoing research and development endeavors. Today, he continues to rely on the university’s Applied Research Facility in the Polymer Science Building for analyses and other needs. But like Willy Wonka, he has his own fancy technology, fascinating to Spunfab visitors.
“People who come here are fascinated by the breadth of application in our lab. We’re doing an intimate apparel application next to a carbon fiber composite application, a medical application next to a ballistic tank cover, and so on. The range of processes and products blows them away,” Keuchel says.
Considering Spunfab’s 10 different markets and its international dynamic, one might assume the company boasts several hundred million dollars in sales. Keuchel won’t reveal his revenue but does say he captures one-third share of the markets he serves. The challenge is in choosing which markets to target and managing the overwhelming response resulting from product releases and trade show exhibits.
One week, Keuchel will exhibit at a nonwovens conference, and three weeks later at a textiles conference. The following month, he’s exhibiting at an automotive trade show. There are cloth and fabric trade shows, composites shows, filters shows. With so much ground to cover, a strategic focus is crucial.
“We have to approach each of these markets systematically and cover them, but we can’t just grab every application out there,'” he says.
When contemplating requests to supply certain markets, Keuchel consults his checklist: Why should we consider that market? Can we readily produce that product? If not, what technology must we invest in, and what’s the cost to get into that market? Do we have the in-house expertise to develop that process? What about competition? Would the margins be there? Can we actually fulfill this market need?
“We could enter several markets that might literally double our business just by approaching them, but if we hooked a big fish and lost that one customer after acquiring debt to accommodate it, we could possibly lose our entire business,” he says. “It might look like a good growth opportunity, but sometimes we just have to forego it.”
Keuchel’s philosophy resulted from hard lessons learned. Initially, he targeted traditional markets for his adhesive webs, such as garment and automotive industries. As his trade show activities increased, so did the opportunities he saw. Textiles. Filters. Industrial applications. Medical markets. Even wet suits. Excited, he reached for the brass ring — and fell flat on his face.
At Keuchel’s first composite show exhibit, he was hammered about making composites for compounded bicycles, carbon fiber-reinforced airplane parts and the like. He admits he was completely unprepared for the composites industry, lacking an understanding of its applicable technology.
At his first filters show, similar demands involved FDA-approved products, for which he was unprepared.
“We had to scramble to look at our existing product line and determine if we could actually develop products for the filters market. That wasn’t very smart, and we learned from that,” he says.
If only he had thoroughly surveyed the filters market and understood it better, he says he would have proactively obtained FDA approval for certain products, and could have closed on sales at the show.
“Now I firmly believe in walking a show first for a couple of years to understand the market and be prepared for that industry,” he says. “It’s a matter of selecting the right trade show and knowing that once I exhibit in that market, I’ll have to deal with the response from that particular industry.
“If I can’t, I’ve excited potential customers who will just find someone else to fill their needs.”
Fine-tuning and forecasting
Some entrepreneurs take big risks by “shotgunning” a new product. Keuchel says that tactic backfires.
“What happens if you introduce a new product and it turns out you can’t really produce it yet? You lose your reputation, that’s what,” he says.
That’s why Keuchel takes on one customer, with one application, watching the product “go through the system” for three or four production runs.
“We may do that for six months, fine-tuning our process, getting experience with several runs before we decide to turn it over for standard production and target a broader customer base,” he says. “This also makes you more confident in your ability to make it on a larger scale.”
The practice resulted from a lesson learned in Spunfab’s development of an electrometric fabric for the wet suit industry. Customers literally wanted to stretch the fabric beyond its structural capacity, and Keuchel was swamped with orders to revamp the product.
“We got a couple of black eyes in the wet suit and orthopedic markets, because when you’re the only producer of that product and a customer invested in equipment for you to try and make it, you have a bad reputation at that point with that customer if you can’t do it,” he says. “We’ve since perfected that product, but it took us two or three years to do so.”
Keuchel also learned it’s crucial to forecast — not just product cycles, but capacity. He painfully recalls when Spunfab ran out of capacity five years ago. In moving to his current facility, he discovered he hadn’t planned well enough. The new building wasn’t completed on time, but because he had already sold his former building, he had to vacate.
“In the process of shutting down the machines there and starting them up here, our business increased by 25 percent, but we couldn’t supply those new customers because we had a hard time supplying our existing ones,” he says. “It hurts to think of all the business we lost during that time.”
Consequently, Spunfab operated hand-to-mouth for about a year.
“Now I constantly analyze to make sure we have excess capacity, so I’ll never be out of capacity again,” he says.
Keuchel says he currently sits on expansion plans that will enable him to expand by 50 percent in a four-to five-month period, and obtain the necessary machinery within two months.
“All these lessons were important because the whole point is that if you excite a market but cannot supply it, that opens up opportunities for competitors,” Keuchel counsels. “Even though you’ve done the legwork and you’ve laid it out, if all of a sudden you land a big fish but can’t supply them, you’re sunk.”
“As your company matures and grows to a certain size, you have two choices: You can either hire a professional manager or you can make yourself into a professional manager,” Keuchel says.
It takes a wise man to admit his weaknesses, and as Spunfab matured, so did he.
“We were experiencing tremendous growth and I recognized a gap in trying to be a scientist and a businessperson,” he says. “I understood the products and the processes, but I lacked business ability.”
To meet his own needs, Keuchel completed the owner/president management program at Harvard University, spending three weeks a year there between 1995 and 1997. The payoff came in ’97, when Keuchel earned the Governor’s Excellence in Exporting Award for a five-year revenue growth in exports. And in 1999, Spunfab won a Cascade Development Corp. award for revenue growth over five years.
“Back then, we were averaging about 26 percent growth per year. We’ve slowed our growth since then, so averaged over the last five years, it would be about 14 percent per year,” he says.
All along, Keuchel’s quest has been to secure myriad markets while controlling his growth. Now, with polished processes, a firm market foothold and 58 employees, he doesn’t have to pull the lever on unrestrained growth.
With a chuckle, Keuchel admits, “Given the economy of 2001, that’s controlling the growth for us!” How to reach: Spunfab Ltd. (330) 945-9455; www.spunfab.com
Victoria Reynolds is a contributing editor for SBN Magazine.