The contract manufacturer for rubber parts has added new equipment at its 70,000-sq.-ft. facility in Wayne, and is looking to expand in the next few years, said Jeff Leach, chairman and chief operating officer, during an interview at Rubber Roller Group’s general meeting in Cincinnati, held May 5-7.
Recently, the company purchased a new roll building line with “a fairly substantial investment,” Leach said. The roll building line increases Passaic’s capacity by about 30 percent, and is in the finishing stages of being installed.
“We have a lot of great things going on right now,” James Leach said.
Passaic’s shopping list isn’t complete, as it still has plans for several more major pieces of equipment, at least some of which will be acted on in the near future, Jeff Leach said. Adding more machines and capabilities likely means looking at building expansion.
“We definitely are in need of that at this point. Seventy thousand square feet is not enough production space for what we’re asking of it,” he said. “We’re jammed with what we’ve got, and we’re constantly manipulating and moving the jigsaw pieces around. Our problem is, where do we put our storage of raw materials, our inventory, our tooling and all that?”
Of the total building space, about 55,000 square feet is manufacturing space, with about 85 percent of that making up production space, James Leach said. The building sits on about seven acres of land, “so we have a lot of capacity to grow.”
To get the most out of its limited space, Passaic has been incorporating automation where possible in its processes, Jeff Leach said.
“Going back 20 years ago, we had over 100 people out on our factory floor,” he said. “We are so far outproducing that 100 people now because everything has been mechanized through computer controls and automation. … Now I have one person running four to five machines. And I think that’s the direction. We’re looking at automation. It’s sad, but we want to take the human error out of the production line and let the computer think for us as far as makes sense.”
Passaic also has started using a new enterprise resource planning system that’s the result of about two years of work, James Leach said.
“It’s been a little bit longer than we wanted to take, but the data that we’re getting out of it has really streamlined our business,” he said.
The ERP has given Passaic a more solid grasp on its cost basis for particular jobs, Jeff Leach said. While they had a good idea of how much jobs cost before, the ERP allows them to work projects out almost down to the penny.
“It really nails it down,” he said. “The whole business is changing and morphing into more computer-generated answers to those questions. When I went through college, that wasn’t there. James and the younger guys, they bring that to the table because it’s a new way of thinking.”
While that computer-generated data is always useful, it can be tough to take a closer look at some projects, James Leach said.
“Some of those pills are hard to swallow, because jobs that you thought you were making money on, you’re not as good as what you thought you were,” he said. “It brings up questions. ‘Do we need to revisit this or how we manufacture it? Is there a different way to manufacture this that’s maybe smarter?’ Or maybe it is the best approach, and we just weren’t costing it properly. We’re fully live with it now, and it’s a good asset to the business.”
As a contract manufacturer with its biggest product lines in the rubber roof membrane, sheet rubber and waterproofing markets, there’s never a time when Passaic doesn’t have at least five new projects on the drawing board, Jeff Leach said.
“We’ve got a pretty good reputation for solving those types of problems,” he said. “With so many of the things that we’re doing, you need special tooling, which we need to put someplace. We’ll move from job to job and then we’ll go back to it. But a lot of times, you can’t go out and buy a piece of equipment commercially that will do it.”
Passaic builds its own equipment, with James Leach designing or custom fitting existing equipment to fit a specific purpose, he said.
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As it continues to grow, the company is seeing significant expansion across most of its markets, such as calendering, roof expansion joints, subterranean and above-ground waterproofing, Jeff Leach said.
But the market with the most, and fast, growth is belting, James Leach said.
“We see a lot in the packaging industry,” he said. “Distribution is growing exponentially in the U.S. as is the supply chain network throughout the whole country. People need packaging, and a lot of belting is used in those sorts of applications, for FedEx and Amazon and a lot of those.”
While Passaic itself doesn’t have the pull to go directly to a business like Amazon, the company works through distributors to supply its products across the country, Jeff Leach said. Passaic uses different distribution approaches that fit the channel without stepping on toes. With rollers, Passaic has a sales force that goes out to sell to end users and original equipment manufacturers.
The company also has seen expansion through acquisition, such as its purchase of Pershing Roller Corp. in 2015. Passaic has made about four acquisitions in the last seven years, and has plans for more, Jeff Leach. Resources from those acquisitions are contributing to the continued puzzle of fitting everything into Passaic’s current facility.
“I would say we’re really fine-tuning what we’ve got. We’re out of space,” he said. “Back in 1968, when my father had built the building that we’re in right now, he felt that we could probably park everybody’s car inside the building as well as manufacture. And how quickly you outgrow what you think is going to be more than enough.”
Though New Jersey has been the company’s home and it has room to build on currently owned property, building an expansion there isn’t a done deal, Jeff Leach said.
“The state of New Jersey really kind of fights manufacturing and anyone who has anything to do with chemicals,” he said. “We no longer mix rubber on site. The parameters that the state EPA put on just became unfriendly.”
As Passaic continues to grow, so do the families that are guiding it, without any sign of looking to sell, Jeff Leach said.
“Business has been very good,” he said. “Truthfully, there’s not a week that goes by that somebody’s not calling to try and buy us. We’re prime pickings, but it’s definitely not in the cards. This is our 100th year. We’re five generations deep, and it won’t be my decision, as the fourth generation.”
Even with a sixth generation already having been born, Jeff Leach said he isn’t ready to step back yet.