Getting the 'Drop' on success
A young entrepreneur has proved that a “nimble” approach to production and delivery can bring success to a manufacturing company, even with its factory tucked away in the Kootenays.
Now in its fifth year of manufacturing sprockets, couplings, bushings, drums and hubs in South Slocan at the Playmor junction, Drop Designs is planning another plant expansion as its sales continue to rise.
Since 2009, sales have grown 30-35 percent a year.
“We’ll always have logistical problems here,” says CEO Anders Malpass, 31, the brains behind Drop. “But we are a fast and nimble company. You have to have much more advanced systems to beat logistics.”
Malpass knew he would have to make use of advanced technologies and systems when he moved his company here from Prince George in 2009. Now, with 50 percent of his sales abroad, 40 percent Canadian and 10 percent elsewhere, Drop can handle everything from mechanical ferry failures to special orders to another part of the world that can be out the door within one to ten hours.
“That’s how we meet demand,” he says. “We can produce and deliver the order days before the competition can.”
And that’s what puts him ahead of the pack in the resource sector:Oil and gas in Alberta, potash and farming in Saskatchewan, forestry and mining in BC. Locally Drop serves Teck Cominco, Celgar and Canfor.
“Although we make over 10,000 sprockets per year, the majority of our business today is Industrial Component Manufacturing. As an example, it could be a shear pin, pinion gear, cylinder rod, shaft assembly and other high quality machined parts for the industrial sectors,” says Malpass.
But Malpass has figured out a few more things, says his business coach Don Freschi with the Kootenay Association for Science and Technology’s (KAST) venture acceleration program.
“His success is due to the engineering component. He can deliver a finished product from pre-design to manufacturing to engineering. He’s got a one stop shop.
“And he can tailor it to the need of his clients. You really need to solve that pain for them and ask for feedback. Everybody should be doing this,” said Freschi, a former manufacturer of components for infra-red systems in Trail.
Malpass explains: “We as a company are solution driven and many times new customers come to us with a problem with a part of which has failed in their application for one reason or another, some of which are external factors, meaning that the part may have been designed 25 years ago with a different intent. However the industry changed around the part and it can’t meet the needs of the production environment of today.
“Drop solves these problems through our ability to understand industrial applications, engineering, manufacturing and production supply.”
Malpass was also savvy enough to buy out his competitors during the economic downturn. “We grew through the downturn. Our competition was dying so we bought them.”
When his current 35 employees are not working, the machines take over at night. With innovative technology such as state of the art equipment that can cut steel with water for absolute accuracy, Malpass and his team have built the company to become the third largest sprocket manufacturer in North America.
“It’s an old school industry,” he says in a promotion video. “Adaptation of technology keeps labour costs down and efficiencies up.”
By spring Drop will add another 7000 square feet to house materials, shipping and receiving at the factory. “It’s all about the flow,” says Malpass.
And this will bring the need for more jobs. Malpass expects to hire 6-12 workers over the next year. If possible, these employees will be local folks, committed to living in the area “for the long term” who will receive on the job training.
“Technical training is good, but what these people will need is an aptitude,” says Malpass, a graduate of BCIT’s mechanical manufacturing engineering school.
He grew up in Nelson and sees the importance of quality of life for himself and his employees.
“We’re not all here to work,” he says as he shows off the company’s recently built $75,000 gym.
As before, he’ll add a few more square feet to the expansion to make space available for other entrepreneurs, like Bryan Beaudry and Minn Benedict’s Crossfit training gym that will open in March. Beaudry and Benedict will offer new and traditional training for individuals, families and schools and see their location at the junction as a real “convenience to commuters.”
Drop’s success bodes well for economic development in the Kootenays says Freschi. As vice chair on the KAST board, Malpass brings his manufacturing expertise to the 12 member board.
Says Freschi: “He’s given us a nice business model to draw from.”
And for those of you wondering if Malpass opens each day with the Sprocket Dance (“Now ees the time on Sprocket ven ve dance!”) from Mike Meyer’s engineering spoof on Saturday Night Live, the nimble entrepreneur claims he’s a lousy dancer. “I most likely looked like this back in the day when attempting to improve my skill in dancing.”