By GREGORY ZELLER //
Every business owner understands the supply-and-demand principle. The successful ones understand supply is a demand of its own.
It’s a common concern for major manufacturers, according to Michael Caton, vice president of operations at Bellport-based M3 Technology: The bigger they are, the harder it is to keep supply lines moving.
“Boeing and Lockheed Martin are very good at what they do – large-scale production, running assembly lines,” Caton said. “But they’re not very good at managing supply chains, because of the scales involved.”
Enter M3 Technology, which “at our base” is a buyer and seller of aircraft parts, Caton noted, primarily for the U.S. government and friends – but at its heart is a preeminent supply-chain manager for federal and commercial sky kings.
“Inside a 787, there are a thousand different parts from a thousand different contractors,” Caton noted. “It’s a massive investment in personnel and resources for manufacturers to track all that.”
Launched in 1998 as J&K Electronics by founder and President Janine Massa, M3 Technology is a cost-effective option in the Vendor-Managed Inventory mold – referencing business models in which suppliers assume full inventory responsibility in buyers’ stores or factories.
“If a manufacturer needs a part, we’ll go find out who has it, find the best price, address all the quality concerns and get it to its point of use,” Caton said. “Or, we can manage their entire stock. We can go onto their manufacturing floor and set up an entire bin system.”
Caton said M3 Technology has done its homework on the latest software solutions, working primarily with Pentagon 2000, a New York City-based software provider for aerospace, electronics, defense and other hi-tech industries. Pentagon 2000’s total-solution packages make inventory control easy with iOS apps and barcodes, according to Caton, and easily outpace rival “bolt-on” software packages, which require à la carte add-ons for different functions.
But the VP, who started with M3 Technology in 2007 and moved from sales to exporting to quality control before heading up operations in 2013, said customization is the company’s greatest tool.
“We don’t like to tell our customers no,” he told Innovate LI. “When they come up with an idea or have a new program or a need, we’ll find a way to make it happen. There are a thousand people who sell the same products we do, but not all of them have the same flexibility.
“Customization is a key part of why we’re successful.”
Other national distributors might offer the same parts, for instance, but will be locked into a one-size-fits-all distribution system. And there are smaller companies offering numerous buying and selling options, Caton noted, but they’re not likely to assume control of an international-scale production inventory.
“We find out exactly what the customer needs, then sit around the conference table and figure out how to get it done,” Caton said. “Each product type we handle is different, from electronics to chemicals, so you almost have to start from scratch every time and figure out the best fit.”
One new-era innovation influencing that old-school customer service involves evolved thinking about supply lines. Because the technology to micromanage supplies now exists, manufacturers are prioritizing inventory control, creating a completely new corporate view of the well-stocked warehouse.
“Years ago, one sign of a company’s health was the amount of inventory it had,” Caton noted. “Now a ton of inventory is a sign of poor management.
“We try to keep two months of inventory on their shelves, ready to use,” he added. “This way, they have what they need when a job comes up, but they’re not tying up their cash in nuts, bolts, resistors or whatever.”
Also changing is M3 Technology’s customer base, which traditionally has been 80 percent military-based. The company has slowly and steadily built up its commercial base, with Caton now estimating a 60-40 split between government and private-sector clients.
While “military spending is not what it once was,” the shift was as inevitable as it is wise, according to the VP.
“Whether or not there was a (government) downturn, we probably would have made these same moves, just to diversify,” he noted. “Anytime 80 percent of your business comes from one source, there’s a chance for disaster.”
Since 2013, the company has “greatly expanded our efforts on the commercial side,” Caton added, working primarily with Long Island and Connecticut machine shops supporting Sikorsky Aircraft operations. In addition to keeping the company busy during times of uncertain government spending, the shift has helped further the VMI concept among private-sector aerospace subcontractors.
“They have one buyer today and need five tomorrow,” Caton said. “They need a manager to run those five, and another accounting person to manage all that. They’re paying someone to ship the parts, to receive them and count them, and they’re paying a quality-control inspector to make sure they’re the right parts – and all that before anyone starts production.
“All of that is built into the work we do,” he added. “We tell our customers they can eliminate all those positions and expand and increase with no additional costs.”
M3 Technology, which moved from Middle Island to Yaphank before settling into its 27,000-square-foot Bellport space, sees plenty of expansion opportunities for itself, too. Caton referenced significant growth projected in the commercial air industry, with Pratt & Whitney boasting “a 15-year backlog for engines” and stalwarts like Boeing and Airbus gearing up to replace aging fleets.
The goal is to essentially split the customer base equally between government and private-sector customers, Caton said, “with the expectation that there will be occasional surges on either side.” But as long as M3 Technology, which now boasts 27 full-time employees, can continue to “listen to the customer, understand what they need and have a solution ready almost before they’re done speaking,” growth will take care of itself, according to the operations chief.
“It’s not about some new cutting-edge technology or some machine that revolutionizes how quickly we can turn out a bolt,” he said. “More than anything, our contribution to the industry is service.
“We can expand to as many as 100 people inside this same facility, and down the line, we eventually will,” Caton added. “Substantial growth is definitely the plan.”