TPI Powered Metallurgy Market/Customer Diversification
TPI Powered Metallurgy (TPI), located in St. Charles, MI, has manufactured powder metal components since 1967. Sintered metal specialists in custom designed parts, TPI serves the automotive, hydraulic, appliance, hardware and lawn/garden industries. TPI designs tooling, fixtures and gauges used to manufacture custom designed parts to customer specifications, supplying products ranging from simple bushings and bearings to cams, gears (including helical gears) and complicated structural parts. Prototyping service is available through a precision machining division. A wide range of secondary services such as heat treating, plating and in-house production machining of parts is also available.
TPI’s goal was to expand and diversify its customer base so as not to be heavily reliant on any single industry. To that end, they participated in the January, 2007 MMTC Customer Diversification training program. MMTC provides 2 days of classroom training and 5 days of on-site consulting. The on-site consulting occurred from March 2007 to June 2007. Program content is designed to teach and demonstrate to small manufacturers, like TPI, how to find and retain new customers. Assistance is given to help the company identify who new customers might be, the content of the message to communicate to new customers and identification of channels to communicate to new customers. MMTC worked on-site with TPI staff to develop a list of keywords and a Value Statement which describes TPI’s competitive advantages in the design and manufacture of powder metal components. MMTC worked on-site with TPI staff to update the TPI website pages and create pay-per-click ads and press releases using their Value Statement and keyword list. The keyword “powder metal parts” was added to the TPI website pages. In early June 2007, a Tier 1 auto industry supplier discovered TPI through a Google search of “powder metal parts”. They were looking for suppliers to make a mounting bushing to position an accelerometer used for side air bag deployment. The Tier 1 supplier has a 3 year program with an automotive OEM starting in 2008. TPI was able to quote a per piece price of $0.15 using the powdered process vs. a price of $0.30 if the part were machined. Potential program sales for TPI were estimated to be $5M for 2008, $3M for 2009 and $2.5M for 2010. With the website upgrades, TPI is currently receiving approximately 2 RFQ’s per week from new customers that are a result of internet related activity, including search engines & Pay-Per-Click ads. TPI is currently producing 800 sample pieces for testing by the Tier 1 auto industry supplier. Testing of the pieces by the Tier 1 will be completed by January 2008. Once testing is completed by the Tier 1 supplier, their customer, the automotive OEM, will perform its own testing since the TPI quoted piece represents a process change from machined to powder metal components. TPI estimates project approval in June 2008.
Impacts Realized
• Increased web traffic by focusing website message
• Keyword searches and pay-per-click ads bringing 2 new RFQ’s per week
• Acquired new Tier One automotive supplier customer
• Potential new sales of $10 million over 3 years