Isola Executive Vice Chairman and Acting CEO Travis Kelly on the Upcoming Year


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Matties: In terms of the new facility, what’s the expectation for having this online?

Kelly: It’s going to be in different stages. As we look from a manufacturing standpoint, including the treating of the material and pressing, it will all be done over the next several months. The headquarter move should happen later—around mid-summer of this year—so we’ll move the headquarters, and then start building the R&D lab. The idea is by the first quarter of 2020, we should have the majority of our operations within the new facility.

Matties: That would be great. That makes a big difference.

Kelly: Having everyone under one roof is important.

Matties: As a global company, how is the Asian market for you and how do your strategies play globally there?

Kelly: If you look at the Isola global footprint, it is very strategic. We have operations in Taiwan and China, and then we have an R&D facility in Singapore. We have the right global footprint. Obviously, we’re keeping our eye on tariffs and the trade environment between the U.S. and China. But in terms of our overall globalized footprint, we’re set up for success. Now, we have to capitalize by looking at conversion costs and our manufacturing efficiencies and improvement opportunities.

Matties: When you look at the marketplace, the American economy is healthy according to many people at IPC APEX EXPO. What do you look at for a future economy? What drives you?

Kelly: Realistically, it’s good to hear. I know there’s more capital expenditure spending. You see capital equipment spending and investments happening. However, there are also warning signs from a macroeconomic standpoint, showing that the economy is slowing down. It’s not just the trade environment that’s happening, but if you look at some of the key economic indicators, you can see some of it shrinking. If a slowdown is ultimately the case, we need to ensure that we are agile, which goes back to our new facility. If there should be a shrinking of the market for a period of time, we will be positioned to respond and react quickly.

Matties: And not be so heavy that it impacts you negatively.

Kelly: Right.

Matties: One of the big drives and transitions that we’re seeing is smart factories. It’s a big area, and there are a lot of definitions of smart factories, but a true smart factory has to plug into its supply base. What sort of communication or interest do your customers have now, and what are you doing regarding smart factories?

Kelly: That’s a great question. If you look at the value chain, you start from your vendors. Our supply chain is all the way to the customer. We look at different Lean events, and we will do value stream mapping across the supply chain and work on certain kaizens to eliminate waste from the system. Waste elimination can be WIP inventory management, or it can be reducing your cost of labor inside every single product that you ship. As you mentioned, the term “smart factories” means different things to different companies.

We look at it holistically when we think about what we can do to be more efficient. That can be on the procurement side, on the manufacturing side from a vendor standpoint, as well as the freight costs into our facilities. We constantly focus on what we can control inside our four walls to become more efficient across the entire value chain.

Matties: When you look at a total smart factory, it’s the ability for your customers to plug into your computer system—whatever that system happens to be—check inventory, place an order, and have it expedited and done through their computer system; it’s about optimizing their workflow. Are you seeing any requests for that sort of access yet?

Kelly: We are slowly. If you look at the automotive industry, everything is done via EDI transactions where the OEM can see their supplier’s inventory. Everything is just-in-time or Kanban systems for inventory control, and that’s where we need to get to as well.

Matties: It’s a leading thought.

Kelly: Exactly. It helps the customer, and you become a better business partner to your customers. You also become better business partners to your vendors, so in theory, everyone wins. However, it’s a big investment, and it takes time to implement. First and foremost, you can’t just put a system in place or implement EDI if you don’t have good inventory control, so there are a lot of phases to ensure we are rolling it out correctly and effectively.

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