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Low-volume, high-tech work is good match for MSI's strengths

by Anne Straub
Brevard Technical Journal

Pursuing the military niche, MSI targeted businesses that do a lot of work for the government. The resulting contracts include Data Voice, Science Horizons and NetTalon Security Systems Inc. in Fredericksburg, Virginia. Photo by Craig Rubadoux, © 2004.

When Jim Witherspoon Jr. was deciding on a subcontractor for a major piece of business for his company, he narrowed his choices to two. One was the company that had performed the work for the past five years as part of its much larger roster of contracts. The other was MSI of Central Florida, a small contract manufacturer on the rebound from some tough times.

MSI was hungry for work, and it showed. "They were leaning forward in their chairs," Witherspoon recalls of his meeting with company executives. Representatives of the other contender were leaning back.

He chose MSI. "Motivation was the key factor," said Witherspoon, president of Data Voice Inc. in Melbourne. MSI's part of the contract to build the Memory Loader Verifier for the Navy should total about $2 million over two years.

"Being a customer, you want to do business with a subcontractor/supplier who is highly motivated to keep your business," Witherspoon said.

 

Martha Turner does a final QC inspection on a circuit board at the MSI of Central Florida Inc. plant in Melbourne. Photo by Craig Rubadoux, © 2004.

MSI of Central Florida's smaller customer list means Data Voice ranks as a high priority. MSI's brush with hard times also should make it more customer-friendly, said Witherspoon, himself a small-business owner who almost saw his dream slip away when the market changed.

"You rip your pants climbing a fence yesterday, you're going to be more conscientious about climbing the fence tomorrow versus the guy who did it five years ago," Witherspoon said.

MSI definitely remembers its pants-ripping experience.

The Melbourne company got its start in the early 1990s and grew to employ about 60 people. The contract manufacturer enjoyed a high volume of commercial circuit board work. Then it got hit with a double punch: The telecommunications industry took a dive, and terrorists attacked on Sept. 11, 2001.

The commercial work dried up. Key managers took pay cuts and gave up their vacations to keep the company afloat. "For a long time, we were in nothing more than a survival mode," said Herb Tate, who worked part-time for MSI in business development during that time of struggle.

MSI's current owner had purchased the company just before Sept. 11, when business was still good. By last year, the owner was ready to sell the company. No one made an offer.

Instead, talk changed to salvaging the company. Tate, who had served as general manager for larger shops in the past, was brought on full-time as president in January. "We had a long ways to go to figure out where we wanted to go with MSI," he said.

Commercial business seemed to hold little promise of success. Even if MSI could win the cutthroat competition for jobs, it risked having contracts yanked because a competitor could make the widget for a penny less. And then there's the exodus of large-volume business to cheaper contractors overseas.

Military seemed to be the way to go. MSI had done military work before, but not in large quantities. It began targeting companies that do a lot of work for the government. The results:

• Data Voice chose MSI to make the Memory Loader Verifier.
• NetTalon Security Systems Inc. in Fredericksburg, Va., awarded MSI a multiyear manufacturing contract for an emergency management system that could have homeland security applications.
• Science Horizons in Melbourne chose MSI to work on a seismic monitoring system. Science Horizons deals in monitoring nuclear test bans.

 

Faith Collins adjusts the feeder on the surface mount replacement machine at the MSI of Central Florida Inc. Melbourne plant. Photo by Craig Rubadoux, © 2004.

Managers are back up to full salary. MSI now employs 20 people and is looking to hire six people based on the awards it has won. At about 40 percent capacity, MSI is tightly controlling its growth.

"We haven't even scratched the surface of our potential," said Robert Pierce, business development manager.

Pursuing government contracts makes sense for a mid-size company like MSI, he said. Low-volume, high-tech work is a good match for the company's strengths and should prove lucrative. Look at the $2 million price tag on the Data Voice contract, Pierce pointed out. That's for 97 units. "We would have to run 100,000 circuit boards at $1.50 each" to come close, he said. And that would tie up the company so it couldn't do anything else.

The company's size allows it to work closely with its customers and draw up a manufacturing teaming agreement with each one. Rather than just take the purchase order and go, MSI aims to help its customers improve their product and save money, Pierce said. "We've saved countless tens of thousands of dollars to companies in suggestions we've made," he said.

Tate's goal is to have 10 to 12 solid customers of the size and caliber of Data Voice. Pierce estimates the company is more than halfway there.

MSI also values current customers that predate its new direction. "We are going to always work with those people, too," Tate said. "They have stayed with us."

The company's size allows it to work closely with its customers and draw up a manufacturing teaming agreement with each one. Rather than just take the purchase order and go, MSI aims to help its customers improve their product and save money, Pierce said. "We've saved countless tens of thousands of dollars to companies in suggestions we've made," he said.

Tate's goal is to have 10 to 12 solid customers of the size and caliber of Data Voice. Pierce estimates the company is more than halfway there.

MSI also values current customers that predate its new direction. "We are going to always work with those people, too," Tate said. "They have stayed with us."