Becoming the No. 1 shop in the 2018 Products Finishing Top Shops Benchmarking Survey was no easy feat for Hixson Metal Finishing of Newport Beach, California.
The journey that began more than 18 years ago was rocky and difficult. New ownership and management turned around a broken shop with an innovative business philosophy designed to help it become relevant and profitable in the ever-changing and challenging aerospace business. The last seven or eight years have been particularly challenging, as governmental regulators and environmental/political activists have tried their hardest to run the company out of its idyllic seaside community.
Hixson President Douglas Greene says the battle that began two decades ago to turn a near-bankrupt plating shop into one of the premier finishers in North America was won with the proverbial blood, sweat and tears.
“It was very bad when I arrived,” he says. “We had just lost about 60 percent of our business, and we had lost approvals from Boeing and Parker. It was dire.”
Greene says the former owner had lost focus after reaping benefits from the rise of the Southern California aerospace industry during the 1970s and ‘80s. Porsches and Ferraris were being leased, and the Newport Beach high-end lifestyle became the norm, but not much was being done to maintain the flagship shop operations. The aerospace recession of the early 1990s took an extreme financial toll on the company and its owner.
Refocusing the Company
“Things were out of control, and they were bleeding money,” Greene says. “It needed a complete rebuild of the management team and a rebuild of the employee focus.”
In fact, most of the employees on staff when Greene came aboard as president in 2000 are still with the company, proving both that change is possible and new leadership can be the driver.
Of course, it wasn’t quick and easy for Hixson and its new management team to get business back to the bustling days of the 1970s and 1980s. Rather, it was a gradual process, and it took most of the first three years of Greene’s leadership just to get the focus back for his employees.
“We really had to ask the question repeatedly of ‘why are we here?’ It wasn’t just for paychecks, but rather, for the customer who paid us,” he says. “We needed to get that realignment of everyone’s focus where it should be, and then go after the aerospace production process approvals that were lost, and petition the prime contractors for new approvals as well.”
And 18 years after Greene’s arrival, things came to fruition when Hixson scored best among all shops that took the Products Finishing Top Shops Benchmarking Survey, a management measurement tool that gauges more than 40 aspects of a shop’s production operations and business strategies.
Hixson scored amongst the top shops in almost all categories in the benchmarking survey related to quality and delivery, finishing with a 99.5 percent rate for on-time delivery (averaging 5.6 days) and 99.25 percent first-quality-pass rate for more than 10 million parts processed in 2017.“To be recognized in our industry like this is simply amazing,” Greene says. “We are proud and humbled by it. But it has been a lot of hard work over the years.”
Specializing in Aerospace and Defense
Hixson considers itself a full-service provider with more than 80 finishing, testing and inspection processes, and numerous qualifications, including Nadcap, Federal Aviation Administration, AS9100 and AS9110. It has more than 140 employees and about 850 active customers, including a who’s who in aerospace and defense: Boeing, Lockheed Martin, Parker Hannifin, Senior Aerospace and Triumph Group, among many others.
Hixson runs a brand-new, state-of-the-art, 4,000-square-foot anodizing production facility that performs Type I, II and III finishing in a rack-and-run system and a specialized masking operation. It also offers both Type I and II with the option of Class 1A or 3 chemical conversion coatings.
On the plating side, Hixson has created a niche focus on vacuum cadmium, one of the few metal finishers who offer this process. The shop also plates cadmium Type I, II and III; low-embrittlement cadmium and nickel-cadmium; electroless, bright and sulfamate nickel; tin and tin-lead; copper and silver; black oxide; passivation; and zinc and manganese phosphate coatings.
And because it is heavily involved and invested in aerospace and defense, Hixson also specializes in liquid painting and coating applications, including primers, topcoats, dry film lubricants, adhesive bond primers, fuel tank and teflon coatings, and sol gel. The company’s non-destructive testing group strives to evaluate the properties of a material, component or assembly without causing damage. This is done with a pair of two in-house ASNT Level III inspectors supported by a team of Level II inspectors specializing in magnetic particle, liquid penetrant, hardness and conductivity testing.
Lean and Management Focuses
One of the ways Hixson turned things around was by joining the Supplier Excellence Alliance (SEA), an aerospace and defense non-profit group founded by prime and Tier-One companies and led by sub-tier suppliers who are committed to accelerating supply chain performance. SEA does this by providing a lean management system and a voluntary supplier certification program for its members. Hixson says it took full advantage of that program and saw measurable results from its active involvement with that group. It started the lean program in 2008, and eventually Greene became chairman of the supplier advisory board.
Greene says Hixson’s lean journey began with a shift in the mind-set of senior and middle managers, who began focusing more on leadership and culture by streamlining and formalizing priorities through a series of collective strategic planning sessions.
“We were able to work together for common goals instead of fighting each other for resources,” he says. “By expressing appreciation for the contributions of the workforce and seeking frontline input and buy-in on the company’s direction, we encouraged the valued employees of Hixson—the experts in the trenches—to own the processes they manage every day.”
The “tone” of the workplace began to quickly change and became more optimistic with employees’ increased sense of empowerment and the structured progress, Greene says. The shop parlayed this energy into operational excellence, workforce development and standard work practices.
For example, the shop increased the planning department’s throughput velocity by more than 25 percent, reorganized the anodize and general plating departments to optimize workflow, and instituted a “standard of appearance” throughout the organization.
The results were dramatic, Greene says, as sales increased close to 60 percent over the next six years, despite an economic downturn and a manufacturing slowdown. Hixson also saw a 30 percent increase in revenue per employee during that time, although it had been maintaining the same pricing structure since 2005 and increased the workforce more than 30 percent to accommodate the growth in sales.
Teams Focused on the Customer
In 2017, as part of Its continuous improvement efforts, two Hixson middle management teams went through certified Lean Six Sigma Yellow Belt training, engaging in projects dedicated to further improving quality and on-time delivery.
Greene says the secret to his company’s success are “team cells” that work together on various customer projects. This gives more attention to individual customers and gets team members on board to bring in new business and manage all the day-to-day activities, he says.
“Using team cells gives that customer the royal treatment,” Greene says. “We all know we are in a service industry, and that is what we work very hard on for our customers: delivering great service to them.”
This attitude refects a mantra that Greene says he and his managers use all the time: “Quality is king, and delivery is queen.” Quality and delivery are mutually married, and you can’t have one without the other, he explains.
“Even though all of our customers will tell us they want the best quality, they also want a 10-day job done in two days,” he says. “But when push comes to shove, we always push for quality.”
Environmental stewardship also continues to be a top priority for Hixson. In 2011, the South Coast Air Quality Management District (SCAQMD) in Southern California began monitoring for hexavalent chromium in neighborhoods surrounding the shop, and higher-than-average levels were detected. Hixson says it immediately began partnering with agency staff to determine the source of the emissions. Although Hixson’s facility was not the only source of these emissions, the SCAQMD conducted 46 inspections at the shop and installed numerous monitoring stations. Greene says the accumulated data, measured in less than one part-per-billion, allowed Hixson to better understand the sources of the emissions, and it began upgrading some equipment and modifying processing procedures. Over the next three years, as changes to Hixson’s facility were made, the levels stabilized, but in 2014 they again increased, drawing a warning notice and bringing five more monitoring stations to the neighborhood around Hixson’s facility.
As residents and politicians in the Newport Beach community began to get more involved in the matter, the SCAQMD ordered Hixson to prepare a Health Risk Assessment (HRA) and a Risk Reduction Plan (RRP). The shop again immediately sprung to action, working to educate them about the plating industry, and to pinpoint and reduce emissions indefinitely through a variety of solutions. In 2014 alone, SCAQMD conducted an additional 120 facility inspections at Hixson.
The following year, Hixson decided to embark on the largest and most aggressive construction project in company history. With plans already in the works to build a new anodize line with the latest technology, the company added on with plans to upgrade the plating department, expand and relocate the paint department, make electrical infrastructure upgrades and replace fire-suppression equipment. Such a big project also required capital expenditures to update all building codes to current standards, including meeting earthquake safety, chemical storage and Americans with Disabilities Act compliance The expansion plans also resulted in adding a sixth building to the Hixson campus on Production Place.
$9 Million Environmental Stewardship
Throughout 2016 and most of 2017, Greene says the shop was doing everything it could to be transparent with the governmental agencies, customers and the community about the on-going projects and improvements. That included spending more than $9 million on overall production and facility upgrades, and expansions such as state-of-the-art pollution control equipment throughout all of Hixson’s facilities, including:
- Best Available Control Technology (BACT) air control for environmental protection.
- Scrubbing and filtration systems that are all multi-stage units providing ultra -low penetration air (ULPA) filtration with more than 99.999 percent efficiency.
- Negative-pressure rooms sealed off from the rest of the facility.
- ULPA-filtered downdraft tables for de-masking of parts after painting, as well as ULPA sanding and scuffing booths.
While an expensive and tumultuous time, Greene says it led to Hixson exceeding all air quality standards. This journey for the company has become the blueprint for future environmental regulations and guidelines that various regulatory agencyes intend to implement on the industry over the next few years, he says.
“We strive to be the best supplier in the industry, and have worked tirelessly to maintain and expand our corporate social responsibility initiatives,” he says. “We have made every effort to build solid relationships with all environmental and regulatory agencies that oversee our processes and operations.”
Chris Grapsas, Hixson’s business development manager,adds: “Our goal: to be the cleanest and most environmentally friendly metal finishing company in the world. We want to remain five years ahead of the regulations and the rest of the industry.”
Building on Civic Responsibility
Hixson has worked hard to enhance its civic reputation and build on its industry accolades. Grapsas says he is having success in selling the company’s capabilities and upgraded facilities as a one-stop shop for suppliers and manufacturers.
“Especially for the newer programs that are more complex and require multiple processes, we want to be that one-stop shop for them,” he says. “We can do most all they need in house, with the right industry approvals, so the benefit for them is issuing one purchase order and being done with it. Of course, this comes with great quality, lead times and pricing, too.”
Grapsas and Greene acknowledge that the Southern California area is heavily competitive in aerospace and defense metal finishing, and that quality will always prevail.
“We aim to win on quality, delivery and price, all while having excellent customer service, and that is what makes us successful,” Grapsas says. “We try to get into more long-term agreements and truly build partnerships. Having great relationships with our customers is paramount and means working harder for them when they are in a bind. It all comes back to working with them on levels that other shops may not be able to deliver on.”
For more information on Hixson Metal Finishing, please visit hmfgroup.com.