Market responsiveness Featured

9:47am EDT July 22, 2002

DLH Industries Inc. is one of Stark County’s most interesting success stories in the exploding polymers industry.

But as with any business planning continued prosperity in the 21st century, it is facing some large issues. The global marketplace has radically changed the way growing companies do business, and DLH Industries must adapt, but a history of steady growth should help it maintain its good fortune.

“My brother, Doug Houck, started the business in 1975, and I joined in 1976,” says Vernon Houck, executive vice president of DLH Industries.

The company operates six plants, five in the Canton vicinity, including Perry Township and East Canton, and the newest plant in Carrollton. Genex Mold, a division of DLH Industries, manufactures custom molds and tooling with full design support. With 525 employees, DLH’s annual sales are about $25 million.

DLH manufactures and supplies thermoplastic custom-extruded and injection-molded products to many major automobile manufacturers. These tubing products are used in air suspension, emission, cruise control and windshield-washer fluid systems, among others. Approximately 90 percent of its business is based on these specialized items.

This concentration on polymer products for the automobile industry has caused headaches for DLH Industries’ executives and employees. In the 1990s, many automobile manufacturers began relocating operations to other countries, specifically Mexico, in pursuit of cheap labor. The obvious “victims” were the assembly-line workers, but manufacturers, including DLH Industries, were affected.

The company now faces two major challenges: global competition and cost reduction.

“Our key efforts are in cost reduction,” says Houck. “We’re the middle guy in automobile manufacturing and it’s getting more expensive to do business. The cost of raw materials, labor, insurance, workers’ compensation and state-of-the-art equipment is going up, but the automobile manufacturers are bluntly telling us that we have to reduce the prices of our products or they will take their business elsewhere.

“Manufacturers are starting to cater to developing nations. We are now in competition with Mexican, European and Asian manufacturers. You have to be creative in order to survive in the modern marketplace. This is the day-to-day way of doing business now. Adjustments must be made rather quickly.”

Diversification is key. DLH is starting to focus on the development of polymers applicable to the manufacture of lawn and garden products such as lawn mowers, snowblowers and leaf blowers, but this is not the first time it has been forced to re-channel its energies. In the late 1970s, the company manufactured a variety of parts for General Electric television sets. Houck says that by 1981, GE had shifted its television manufacturing overseas, and as a result, DLH began pursuing customers in the auto industry.

The “science” of the polymers industry is not really a huge concern at DLH. (“We’re not a manufacturer of raw materials,” Houck says.) Instead, the applications of polymers and developing new products are important.

Bret Adams is a Canton-based free-lance writer.