Industry Profile Nov/Dec 2020: MCX, Inc.

Industry Profile: MCX, Inc.

Solid foundations are a precursor for success for any business. MCX, Inc. was built on the principles of efficient manufacturing and continues to build on that platform today. Pam Dutton, President of MCX, Inc., recently spoke with WHN about the history of the company and how recent enhancements have them poised for even more success.

The company was founded by Pam’s father, Arthur McCluskey Jr., in 1981, and was located in the Silicon Valley. “He had been doing consulting work in what we would call lean manufacturing nowadays,” Pam detailed. One of those consulting customers was a test equipment manufacturer who was building cable assemblies internally. Arthur was helping them build lean production lines and engineering practices to design products for manufacturability (DFM).  “Prior to the consulting business, he had a wire harness and board house that he sold because he wanted to get out of the PCB side for various reasons,” she noted. Because of his manufacturing expertise and prior experience as a harness supplier, the customer encouraged Arthur to start the business with the objective of moving the wire harnesses out of their domain.

The location in Silicon Valley was ideal for the new endeavor. As Pam explained, “Computers were hitting the ground running at that point, and there was a big need for internal wiring and related assemblies.” As electronics invaded all aspects of our lives, MCX, Inc. has expanded their customer base. “We went from building products for buttoned-up IBM, to making assemblies today for everything from advanced military assemblies to harnesses for Jell-O shot machines.”

By 1991 MCX, Inc was moved to Oregon at the request of their largest customer. After a lot of research, the town of Klamath Falls, Oregon seemed to offer many benefits. “It’s location 10 minutes inside Oregon puts us one day away from our California clients as well as our Oregon clients.” Their proximity to the Oregon Institute for Technology was another major plus for the company. It provides a major resource for technology advancement and is also a springboard for new markets.

One of the other major benefits of Klamath Falls is that it is in a HUB (Historically Underutilized Business) zone. “That means we have a higher unemployment rate than a normal community,” Pam explained. “Being in a HUB zone doesn’t help us with commercial work, but it does help in government or military work.”

MCX, Inc. had always been a family business. A few years back, Pam grew concerned there would be no third generation to eventually take over the business, and began to work on a long-term successor strategy. In 2016, she decided to partner with an investment firm with a specialized focus on businesses in underserved communities. The partnership allows Pam to run the business in relative autonomy. “We’ve been working together about four years now, and they are who they said they were,” she assured. “When you take on a partner you can lose control, but they are super hands-off.” The firm allows MCX, Inc. to do what they know best, build cable assemblies, while they bring welcome expertise in overall business planning to the table.

Currently, the number one market for MCX, Inc. is with assemblies for medical devices. “Right now, in the middle of COVID, our medical business has really picked up,” Pam noted. The electrical test equipment market continues to be a solid source of revenue for them as well. Government and military orders are becoming a bigger part of MCX Inc.’s business, and the company just received their AS9100 certification to help them penetrate further into that realm. Current military work includes harnesses in support of drones and personal safety equipment. The company also does a lot of work in the commercial arena.

While on the subject of COVID, Pam mentioned the pandemic has had a major effect on small fans for electronics coming from the hard-hit Malaysia and Singapore markets. “They are quoting 25-week lead times right now, and that has put some of our customers behind the eight ball,” she explained. “So, we’ve spent a lot of energy working with them to design in replacement fans that are readily available until the pipeline is refilled.”

When queried about what makes MCX an unmistakable supplier to their customers, Pam related an interesting story that helped formulate their business philosophy. “Years ago, a customer told us to never answer a question ‘no,’ but instead answer, ‘how much.’” MCX, Inc. had no-quoted an assembly the customer had submitted. “They said, ‘If I offered you a million dollars, could you do it?’ I said, ‘Sure’ and they said, ‘Then how much will it cost between zero and a million dollars?’”

That experience changed their whole way of thinking, and became the main business philosophy at MCX, Inc. “The customer has a need, and not meeting that need does neither one of us any good. So, the question becomes, how can I meet the need in the most cost effective manner.” She conceded that often times, the customer’s need may not justify the cost of building to the current print. That is where the spirit of DFM, baked into the original mold for MCX, Inc. takes over. “We try to work with them to figure out solutions and think outside-the-box so they can meet the needs of their end users.”

Another thing that makes MCX, Inc. an invaluable asset to their customer base is their dedicated quick-turn line. “We will never tell a customer we don’t have any labor available. We will find a way to make it happen. Often times you get a new customer because they have a problem, and problems can’t wait standard lead times,” Pam asserted.

Quality and Certifications

As mentioned earlier, MCX, Inc. is certified to AS9100, and manufacturers to IPC/WHMA A-620. They have certified A-620 trainers, and all of their 25 employees are certified specialists. “We’ve developed an extensive internal training program. We are in a lumber town and we can’t really hire anybody with experience,” Pam cited. “Our program allows employees to go from unskilled labor to what we call Accomplished Assembler in about 18 months.” It’s a combination of IPC and hands-on training and is documented throughout the system. At any time, they can see what jobs a particular employee is qualified to perform. “If you give me someone who has a work ethic, we can do the rest,” she informed. “At the end of 18 months, they are earning a living wage for our community, and that’s why turnover is really low.”

Pam elaborated on the importance of employment longevity at the company. Her key managers have all been with the company over a decade, and her trainers and quality people are all working on 5 plus years. “It’s super critical to us,” she emphasized, “our turnover is low and that helps us be more cost effective, and we know exactly what we can do.”

In addition to these quality standards, Pam is also leading the company in a cyber security certification called CMMC. “It’s going to be a requirement for all government contractors and subcontractors.  It’s cutting edge right now, they won’t even have the certifiers until the first quarter of 2021, but we are jumping on the train because we see the benefit of doing the work,” she detailed.

Marketing

MCX, Inc. has always had direct and commissioned sales staff. From the beginning, the main marketing strategy at MCX, Inc. is to become a stronger supplier so they can increase their footprint within existing customers. It’s served them well, and is the big reason they sought the AS9100 certification.

In addition to building a lean operation with an expert staff, MCX, Inc. has invested in automation to make them competitive with overseas producers. With this solid infrastructure in place, the partner company suggested boosting marketing efforts a couple years back. Along with a new website utilizing cutting-edge SEO, the company began to branch into a somewhat aggressive trade show marketing campaign. “We’ve done the Medical Design & Manufacturing show in Anaheim and a smaller show here in Oregon called NEDME,” Pam listed.  They have also done the Design-2-Part show for contract manufacturers in San Jose. “We were also registered for the AeroDef Show in Dallas last March, but that was cancelled.”

With trade shows off the table for the time being, the company has looked for new ways to fill the lead funnel including email marketing. They have also worked with the Small Business Administration through Southern Oregon University to get a list of leads for military and government opportunities. “Unfortunately, they didn’t have email addresses, so we’ve gone old-school and we’re doing post cards,” Pam explained. “I think it’s too fresh to determine the overall effectiveness, and it’s something we will likely do multiple times, but compared to the price of a trade show, it’s pretty cost effective.”

One of the most striking things about the conversation is how Pam and her father were well ahead of the power curve as far as facility and organizational planning. MCX, Inc. has made great decisions to meet both internal and external challenges, and they are definitely well-poised for growth.

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