Made Here: Going global with U.S. innovation & quality

Michelle Di Gangi
Posted by Michelle Di Gangi
Small Business Banking

Manufacturing in America is alive and well. In our “Made Here” series, we talk to some of our manufacturing business clients and learn how they’ve flourished in spite of tough odds in recent years.

Nancy Mercolino of Ceilings Plus in her shop, working with an employee.The sky may be the limit for Ceilings Plus. The designer and manufacturer of innovative ceilings and wall panels for commercial projects, such as airports and museums, has been growing rapidly domestically and overseas in recent years.

The company also received the Small Business Exporter of the Year Award in 2012 from the Export-Import Bank of the United States.

Ceilings Plus President Nancy Mercolino places high priority on innovation, as you’ll see in the Q&A below. And I think her perspective on “fit, form, and function” could be a useful framework for other business owners to consider.

Q: Given the hurdles of being a U.S. manufacturer, how have you been able to succeed and grow? A: Quality and innovation. We’re constantly searching to evolve all aspects of our manufacturing, including the engineering process with new software development. We’re able to do more — design 30% more interesting, progressive, and parametric designs now, and still be 30% faster doing it. Manufacturing really consists of making the product as well as engineering the product.

The engineering front is extremely innovative, utilizing advanced software programs. For instance, we have seven architects on staff here from SCI-Arc, which is a highly acclaimed architectural school in California for its advanced software design work using things like Rhino (3D computer graphics and computer-aided design software) and Grasshopper (a graphical algorithm editor).

When you’re hiring, you must be looking for certain skills — computer and computer design-related skills — that may be in short supply. Is it hard to hire for your company?

Being in Southern California, we are rich with universities that have the young, creative minds and the know-how to work with software programs that are emerging. Being located near universities is extremely important for our innovation.

If someone were just thinking of starting a manufacturing business in the United States today, what tips would you give?

Every employee should be part of the “fit, form, and function” process. What I mean is every person in your organization — or as many as possible, with exception for roles like accountants — should be a direct part of the product that you make. We are not a management-heavy organization, and that’s served us well.

You’ve expanded rapidly on an international basis. Can you talk about that experience?

Our very first job in the Middle East was more than double our annual sales. And it grew to be a $55 million contract. The world that I’ve seen is so ready for American innovation and quality. There is a place for small business internationally, without any question. I would encourage manufacturers to put together a growth plan placing 30-40% of their work in an international context.

The more I travel and do some of the projects we’re working on — like Muscat Airport in Oman — I think we’re the only American manufacturer that I’ve seen in this arena. It’s amazing. If you have quality and innovation — you have to have both — the budgets should pay for it.

Are there financial products that have been invaluable for you as a manufacturer in growing your business?

The Export-Import Bank was very helpful. Without it we would not have been able to obtain the performance bond to secure our first international contract. We had to have a performance bond, which was 10% of the contract value. The U.S. government (e.g., The Export-Import Bank) believes so much in small businesses that it will often help with these types of loans and back them. And that allowed Bank of West to help us finance* the equipment we needed. With that equipment now paid off, we’re able to handle the next level of volume, including international volume, and it’s a game-changer.

*Bank of the West financing is subject to credit approval. Certain conditions and restrictions apply.

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