Manufacturing in motion

Vancouver firm aims to make machines smarter

If manufacturing has lost its economic footing, you wouldn’t know it by asking Vancouver-based Delta Computer Systems Inc. CEO Steve Nylund.

Nylund and Peter Nachtwey, president of Delta, formed the company in 1982 when the Hazel Dell wood products company they worked for moved its operation to Corvallis, Ore.

"It happened by coincidence that we were doing a non-related side job and we decided to launch the company," said Nylund. "At the time I thought it would last six months, but I figured ‘I am out of a job anyway, so why not?’"

While the early company had no definitive plans, they new they wanted to develop systems and diversify through more than one industry.

An early example is a system developed for a food processing company that cut defects out of french fries. Delta produced 13 systems for the company that remain in use today and are still supported by Delta. Over the years, Delta shifted its focus from custom systems to developing its own products, which today account for 90 percent of the business. System support accounts for the remainder of sales.

Delta’s flagship product is its RMC 100 Series motion controller. The product, roughly a six-inch box, gives manufacturers precise control over the pressure and speed of their machines in the manufacturing process. Delta does not make machines; rather, it provides the brains for the machine’s motion control.

Delta serves customers from Woodland to across North America, Europe and New Zealand, and end-users of its customers’ products can be found throughout the world.

"We are focused on a market that is a good size for our company and doesn’t have a lot of competition in it," said Nylund, adding that the company ships about 30 units each month.

Delta knows its products are used in machines with life spans of years and even decades, and some of its products introduced in the mid 1980s are still in use today and are still sold by Delta. Nylund said the ability to continue to serve its longtime customers contributes to the company’s efforts to maintain a low turnover rate. He said length of employment averages about 10 years. Today, the company has 20 employees. Its 9,000-square-foot EastRidge location houses 18 employees in sales and marketing, product development and testing and administrative support. It recently added two sales managers in the Northeast and Southeast to be closer to its East Coast client base.

Nylund said Delta has not had difficulty finding qualified workers locally, but he fears the perception that all manufacturing is headed to China is a self-fulfilling prophecy for an industry that is stronger domestically than many believe. Fewer students will pursue employment in manufacturing if they believe there are no opportunities locally, and without qualified workers, manufacturing will go where it can be supported.

"When we have needed to recruit people we’ve been able to take advantage of people that live in Washington and commute to Oregon but would just love to not have to commute that far," said Nylund.

In an effort to address the need for a highly-educated workforce, Delta started working with Washington State University Vancouver to help shape programs to meet local needs. Under the direction of Hakan Gurocak, the university is expanding its engineering department, and Delta is working with the school on its mechatronics program.

While the company does very little of its business locally, Nylund said the proximity to the Portland International Airport and a favorable tax situation in Washington has made Clark County a desirable location.

"People talk about the Business and Occupation tax being a regressive tax, but for a company that is profitable, it is not a bad deal," said Nylund. "I like it because it is simple and creates a fairly level playing field."

The company markets its products through industry trade magazines and events to reach potential customers. Delta also works with distributors who have existing clients that could utilize Delta’s product.

Nylund said the company is focused on long-term growth. While Delta has experienced sales growth between 30 percent and 45 percent in the past couple years, he expects that growth to slow, as it reflects a rebound from single-digit declines resulting from the economic downturn in 2001.

"One of our goals from the very beginning was to operate very conservative from a financial point of view," said Nylund. "We are happier with long slow growth without the big declines."

Nylund would like to see the company remain responsive to its customers by growing at a pace needed to serve its customer base well.

"Where small companies offer an advantage is that we can adapt quickly to changes in the market place," he said, whether it be for one customer or to a change in Delta’s hardware.

Delta hopes to continue to capture market share in the industrial hydraulic control market in North America before pursuing other geographical growth and related product lines.

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