Stay small to get big

The development of access hardware probably dates back to the invention of the door itself, and manufacturer Southco Inc. has been in business since 1899. CEO Brian McNeill explains how his company keeps products fresh and customers happy.

First, please define “access hardware.”

In simple terms, we make locks, latches, hinges, engineered fasteners, and some really cutting-edge mechanisms. But the emotional essence of what we do is differentiating human touch points. We work with our customers to figure out where their customers touch their products, and how we can make that experience better from a design, function, aesthetic, quality, and performance standpoint.

What differentiates Southco from others in this business?

This industry is predominantly made up of companies that serve one or two markets, in one or two countries, with a handful of products. One thing that makes us unique is we serve a wide variety of markets, and we do this globally with sales and engineering offices in more than 30 countries. We also stress operational excellence at our manufacturing centers around the world to ensure we’re high-quality, low-cost producers. Our challenge is to leverage our size, but at the same time intimately know the nuances of every market we serve. We need to “stay small to get big.”

How important is engineering?

Innovation is critical. We invest about 5% of our sales into developing new products and technologies, which is significantly more than the industry average. We employ highly skilled engineers at seven design centers around the world and provide them with best-in-class design tools and test facilities. We launch, on average, 1.5 new products per day, and we apply for an average of 25 new patents per year. Our intellectual property is extremely important, and we protect it around the world.

But technical expertise isn’t enough. We view a laptop, truck, or boat differently from most. Our engineers look at every possible touch point and must have a passion to create extraordinary value for the person who interacts with that product. For example, it’s a losing proposition if the potential buyer of a $50,000 automobile perceives the glove-box latch to be inferior when compared to the overall quality of the vehicle.

So your customers value these capabilities?

Absolutely. Most of our customers run very lean, in particular after the recent global recession. As a result, even the largest global leaders rarely dedicate the technical resources to develop the subsystem expertise that many component suppliers like Southco bring to the table. Customers appreciate our passion, integrity and unmatched depth of engineering and operational expertise around designing and producing access mechanisms.  In addition, they also place a premium and peace of mind on our ability to offer global program management from start to finish. We welcome the opportunity and challenge of being an extension of our customers’ engineering and design teams.

Any important trends?

The general trend is toward smaller and lighter components that don’t sacrifice performance; and a cleaner appearance that hides the latch or hinge. Electronic access hardware — marrying electronics with mechanical components — is very important new technology for our industry and an area of tremendous growth. For instance, one megatrend involves vending equipment. You already see it in retail and industrial settings. Now, shipping and delivery companies are creating pick-up and drop-off centers — essentially lockers — where consumers use access codes to get packages when convenient. Such secure enclosures are also critically important at data centers.

How about challenges?

One concern is attracting enough young people into engineering and technology fields. Many of today’s technical experts will retire in the next 20 years so there is an enormous opportunity to mentor the next generation of engineers and to encourage young students to pursue careers in the engineering, math and technical disciplines. We work with and support several STEM schools, led by our director of global engineering and technology. We’re certainly encouraged by the talent and quality of these young people — there’s just not enough of them.

Perhaps an even bigger concern involves the continued decline of the trades. Today, many parents don’t encourage their children to go into manufacturing, even though toolmakers and machine operators are so important. Most companies have a bubble of workers in their 50s and 60s with an unbelievable depth of experience. It is essential to encourage young people to explore the trades so we can effectively transfer and build upon the existing knowledge base. To help in this process, we have established certified apprentice programs with trade schools in the U. S. and Europe. Students get an education while gaining hands-on job experience.