April 20, 2016

4 Min Read
Insourcing for Small Manufacturers
Jim Lenihan, president, Gemco Valve Co.

The White House and many of today’s industrial and manufacturing leaders are big proponents of insourcing, which is often understood as bringing jobs once outsourced to overseas companies, back home. Insourcing also means bringing in specialists to fill temporary needs or training existing personnel to perform tasks that would otherwise have been outsourced. The question is how do small manufacturers who may not have the infrastructure, systems, staff expertise, processes, materials, and equipment needed to bring a job in-house, get on the insourcing bandwagon?
Despite the current renaissance, it is unlikely that manufacturing will return to the economic bulwark status it held in the 1960s and 1970s. However, insourcing could be a means to broaden the economy, and help reclaim opportunities—and skills—that were outsourced decades ago. This process isn’t an easy undertaking for any business entity, but for huge companies like GE, Whirlpool, and Otis Elevator, insourcing becomes part of well-planned corporate strategy plotted out over years and with millions of dollars. On the other hand, small manufacturers, who could also benefit from insourcing, might find delegating jobs from within to fill a specialized need, or becoming their own subcontractor a far more challenging undertaking.  
Long a proponent of strategic alliances, Gemco Valve has established relationships with insourcing partners, two of which are Viser Manufacturing of North Bergen, NJ and All Aces Construction LLC, of Edison, NJ.
Gemco and Viser made a decision to jointly purchase the Wardjet, a high-pressure water jet (60,000 psi) cutting machine that resides in the Viser facility and is operated by Viser personnel. The Wardjet contains abrasive powder that with water accelerated up to twice the speed of sound, can cut through inches of the hardest metals in seconds. The advantages of water-jet cutting are: the absence of thermal distortion; noncontact during cutting, which eliminates tool wear and contact force; omnidirectional cutting, allowing the cutting of complex shapes and contours, make it an essential component in the engineering and manufacturing of Gemco valves and now a process that is no longer outsourced, but cooperatively insourced.  
All Aces Construction is an industrial and commercial general contractor. Several of Gemco’s projects call for additional onsite construction at a client’s facility once a valve has been manufactured. Gemco produced a 16-in. reactor valve for the Exxon Mobil Chemical plant in Edison, and worked with All Aces Construction for the installation. The company has union-affiliated, factory-trained fitters and mechanics. Gemco provided engineering and logistical support and All Aces installed and commissioned the reactor valve in timely and professional way.  
The success of the Exxon Mobil installation resulted in Gemco’s decision to collaborate with All Aces again on a new project for Pfizer Pharmaceutical/Pfizer Pearl River (NY), which produces and packages the Centrum family of dietary supplements, as well as Advil. In order to compensate for the difference in clearance height under two mixers, Gemco custom designed and manufactured a discharge valve that eliminated interference between the IBC and charging units. All Aces and Gemco installed and commissioned the new Pfizer valve during a scheduled operations maintenance shutdown. The insourcing partnership with All Aces allows Gemco to offer world class installation and repair services to customers.
The manufacturing sector is continuing to show signs of growth. According to a recent U.S. Census Bureau Report on Durable Goods, new orders for manufactured durable goods in decreased slightly but still are at $229.4 billion compared to $207.0 billion three years ago. For small manufacturers, creative insourcing like Gemco Valve’s initiatives with Viser and All Aces is a good way to try and sustain that growth. Manufacturing gains are modest but much improved and working smarter and cooperatively can be a controllable way to keep productivity up, costs down, and to continue to increase the value of a small domestic business.
Jim Lenihan has been president of Gemco Valve Co. since 1997. He has worked in the valve and seal industries since receiving his Engineering degree from UL (University of Limerick, Ireland) in 1983. Throughout his career, he has held positions in manufacturing, material management, engineering, product management, sales, and marketing. As a result of Gemco Valve's recent lunar project for NASA, Lenihan has added "extraterrestrial" to his valve solution travel itinerary.

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