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The Die Is Cast PDF Print E-mail

If anyone can speak to the changes that Ryobi Die Casting has seen in its 20 years in business, it’s Tom Johnson, president and COO. He helped start the company in 1985 and stayed until parent company Ryobi offered him the opportunity to get another site going in Northern Ireland in 1990.


Johnson eventually returned to the US, and then, in 2000, to Shelbyville, IN, to lead a very different Ryobi Die Casting. In the 10 years he was away, Ryobi Die Casting grew from being a “big supplier” to Ford and General Motors, to being a Tier One supplier to Ford, two additional divisions of GM, and Toyota. Today the company employs nearly 650 people, who work together to produce 100,000,000 pounds of cast aluminum parts annually ($179 million in annual sales). Total production space has grown from 130,000 square feet to more than 560,000 square feet across three plants—two dedicated to casting and one dedicated to machining.


With such growth and success, however, come tremendous challenges, and in the time he’s been back, Johnson has been helping Ryobi Die Casting face them head on. “Anybody that is Tier One right now has to think about how to balance customer base,” he explained. “We’ve spent plenty of resources in the last three years to expand our customer base with the likes of Toyota, Nissan, and Honda. Ford and GM are great, large customers that need parts for a lot of vehicles, and no one is walking away from them, but we need to think a little differently now about them than we did when we began 20 years ago.”


Finding a balance between long-time customers and new customers has been slightly easier for Ryobi Die Casting because its parent company is based in Japan. “It’s a challenge to get business with those Japanese, Korean, and European companies if you don’t have the contacts in their home country,” Johnson explained. “This gives us a slight edge over other Tier One suppliers with the Japanese automakers.”


However, the expanding competition in the auto industry brings operational challenges to suppliers, mainly in the area of costs. “With more players, costs have to be more competitive, so they’re looking for year-over-year price reductions,” Johnson said. “It’s a challenge when you want to give your employees a three to four percent increase every year and give your customers a three, to four, to five percent price reduction.”


This equation gets even more complex when considering that Ryobi Die Casting has its own supplier base. “The goal is to reduce prices to customers, resist or minimize price increases from your suppliers, and still make a profit for your company,” he continued. Additionally, customers require Tier One suppliers to be working lean and delivering products with zero defects just in time. “We have many more SKUs than we’ve ever had,” Johnson said. “GM, Ford, and Chrysler used to own 75 percent of the North American market. Now they own 55 to 57 percent. We’ve added four or five big players, so instead of making castings for three companies, we’re making them for five or six.


The vehicle lineups have tripled. Every car company has a standard brand and a luxury brand. Consumers demand to have choices, so we need to be good at making small quantities of everything.

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