An Interview with Ray Turner of Lenmak Exterior Innovations Inc.

Lenmak Exterior Innovations specializes in manufacturing light gauge metals for residential and commercial projects. Technological leaders, Lenmak uses an automated manufacturing process to create a custom trim, coil, flashing, architectural panels, cladding, insulated back panels, and roofing for partners both quickly and with attractive aesthetics. Founded in 1996 by Ray and Lori Turner, Ray’s career began in turf management, but he quickly discovered a new opportunity in exterior building products and began Lenmak. The company is now one of the province’s leading architectural panel manufacturers and suppliers with a fully automated production line in Edmonton.

In this interview, founder Ray Turner shares how he started the firm.

Tell me about the start of your business in 1996, what was the context of that start?

Okay, I’ll be brief, but it is an interesting story. As a kid, I was always able to fix stuff; mechanics just came easy to me, it was an easy thing to do. And so, when I had worked physically in a few jobs in my early years, I then ended up taking a two-year course in turf management, golf course, and a lot of equipment. Again, it came naturally to me, which was a nice experience and I learned a lot about how to handle people, try to motivate them, it was terrific. However, I left golf and got into home exterior products wholesale. There was a transition at the time in the window business from aluminum sliders and wood windows to vinyl windows. Vinyl siding was starting to make an inroad, so now we had a vinyl window, and we had vinyl siding, we had no maintenance, but we also didn’t have any look, any character either. The soffit had remained aluminum, so now there was painted aluminum that could be like a cladding around these windows and doors. I stumbled into producing a product that I thought would be an ideal accessory for my competitors, the other vinyl siding distributors. So I left vinyl siding distribution, bought sixty thousand dollars worth of used manufacturing equipment and started to make these products private label for these distributors. So that was the start.

So you were manufacturing aluminum casings, and that was a moment of realization for you, right?

Well, they hadn’t been invented. What had happened is that there was capping over wood windows, which had been in play for quite some time, but to make a window batten, as we call it, with the receiving channel for this siding, it just really hadn’t happened. There were vinyl manufacturers in the US that had a four-component system that that would do it, but that’s where I started to piece it all together. But these four components were expensive, they were limited in colour, and it didn’t fit with the with the other profile or the other texture of the soffit anyways, so it was much more natural. Now you’re not painting these items, so it just talked to me. I came home, and I said we could make that. What went with that is a lot of other things that we had to master. For instance, a curve like a rainbow because there are many half round windows, well somehow you have to clad that. We figured out how to do a bunch of that, and it was at that point I thought there’s got to be something out there. So, I went to a trade show. I spent three days at this trade show in the same booth, and I would ask people from Sweden, Kentucky, wherever, would you remortgage your house and buy a machine? And so the decision was easy to make because I already did my homework. We bought a machine, it came in the late part of 1997 and now this machine, instead of two operators, has only one operator. The machine is moving with the manipulator and operator moving apart, but we can make products now to within six one thousandth of an inch. So it’s very tight.

Is that the machine you bought for $60,000?

No, no we had low-end equipment for that. It was another hundred thousand dollar investment.

Okay, on top of the $60,000. What did you do with the prior equipment? 

We still have some of it today; other pieces were sold. I want to make a point so the audience can think longer term, we’re going to talk about automation, but I also want to make it very clear, automation is often a limitation. Just because you automate doesn’t mean that it paints a picture that you’re making everything easy from then on, you want to get there, but it has its limitations.

One question: you had $60,000 invested in the original equipment, right? Then you decided to invest another hundred thousand dollars in newer equipment? Was it more precise? Was it more automated?

Correct, it was a CNC machine (computer network controlled). It also required only one person, not two. The machine would move to a position much quicker than two people could themselves. It’s a full CNC machine. It’s moving to what the program tells it. A manual machine doesn’t have a program. In hindsight was an easy decision, but my kids were one and two and a half at the time –  it’s not that easy, you know?

To invest the money? 

Yes. So anyways what happened is this machine now had more gauge capability. Almost without asking, we are now buying prefinished steel sheets painted and we’re making trims for other industries, such as the agricultural panel business and some lumber yard sales, the flat roof roofing people needing what we call parapet caps. Ten months later, we bought another machine. One that had a little more gauge capability and the ability to what we call box and pan tooling. Now I could bend four sides of a panel and not crush two.

This is what I just got out of this: the original equipment allowed you to get into the business, manual equipment. The CNC machines allowed you to get into different markets, different products in different markets, right? And it was only through that investment, $100,000 and then another $100,000 ten months later. Did you know those markets existed before you bought the CNC machine?

Funny thing is no.

By getting the machine, you were exposed to new market potential?

Correct. And then did the lights go on! From there, of course, we took another machine not long after that. And there are several things that happen along the way. We took, early on, a cutting line. It was a second line of its size, nice and small, but meant for what we called architectural panels and architectural trim work, and it allowed me to cut my own sheet stock, which now I could take what I call semi-master coils – so coils around 4,000 pounds or less – and manipulate it with the forklift, and that we could actually cut our own sheet. I’ll explain: back then there was a lot of mini storage construction. While the Mini Storage channels were seven foot six so why buy an eight-foot sheet for something seven foot six? But it also allowed me the ability to cut longer. I didn’t have longer bending equipment at that time, but I had the first leg of that so I was beginning to get vertically integrated.

Give me the components of that vertical integration. 

Today, I have a saying, “I don’t melt aluminum or steel, and I don’t paint it. But we do everything else in between.”

Okay, so now we are at 2000. What was the level of vertical integration at that time?

When the original cutting line came in, that was where we were at that at that point. So now, we moved into our existing building, and it was screaming to me, “Buy a long folder?” We bought a 21-foot long folder because we could cut the sheet longer. So now the long folding could enhance things like commercial gutter that has a large size. They just hadn’t had access to any of this before. And another thing that it did is that it communicated to me that if I want to maximize dollars per address, I need to get into roll forming.

Sorry, what do dollars per address mean?  

Originally, if I have a contract for a commercial address, I could maybe make eight hundred dollars with the trim, while I leave the roof behind. So eight hundred dollars should be eight thousand or ten thousand dollars if I could do the roof as well. I had come up or read a term about dollars per address that just sort of sunk in with me, you know, where I can say, “Hmm I love the residential, we’re really good at that, but each house is limited to its size, nice orders, all of that going on, but if I want to keep expanding I need to go where the other guy isn’t” – like Wayne Gretzky used to say. And I could just find that if we could sell, the number one thing that we could sell, by having this vertical integration –  even that limited – we could sell the luxury of time. And the luxury of time allows that stucco applicator or someone to forget that they ordered something they needed in a rush and you can accommodate that.

Okay, explain that, the luxury of time, how do you accommodate that? 

Because I chose to buy equipment out in front of filling the need. Virtually every other place that I see, they work the other way, they work until they’re just busting, then they buy new equipment, and it couldn’t be more obsolete.

And so they do not invest in front of the technology curve, that’s what you’re saying?

Right. And just the sheer gut ability to say I’m going to fill that with something.

Okay, I think I know what you mean by “the luxury of time”: it’s because you have the equipment available, it’s cutting-edge technology, and you’re able to do it faster, and more of the value added to that piece of metal, that they did not have to wait eight weeks for something now, they could get it done in three or fewer days. So, you’re compressing the schedule, right?

Correct. They could continue to be a little disorganized or whatever and we could still facilitate. We have a fleet of 10 folding machines.

We are now in 2002, and you’ve invested in the original manual machines, and you also have 4 CNC machines. So now you are folding longer sheets, you are cutting all sorts of different designs,  you’re doing all these things, what else are you doing? 

Between 2002-03, we put a 14,000 square foot addition on our building; I needed the extra height the addition provided because I needed a crane. I needed a crane so that I could work with what we call large mill size coils. So now we have a crane, we have a full slitting line, and we can go to ten-thousand-pound master coils. It’s about as lean as I can get. So the natural progression is that roll formed roof that I spoke about because we can manipulate the coil to do that. So, 2004 was a big year; we introduced our roofing products. We move on; we continue to add folding skills. And one of the industries that come along is the commercial window business with the aluminum framing because they have components that they need to cut and bend under this anodized aluminum material. Well that industry, once I was able to accommodate them making my sheet and making these products, they’ve always needed a product called a spandrel panel. Simply put, it’s a cookie sheet type of panel with all four sides bent, and then filled with insulation. And so I had seen automated equipment through the years, and we had owned a router and a few other items to help us get along in that. But really to be a player in that, a full FMS line, a flexible manufacturing system, that’s the ultimate thing we would need. It needs to work from sheet. It can only work from sheet. We’ve just gone over; we can make our own sheet from coil. So now the verticalness that fit another market absolutely complements a new market I haven’t even gotten into – that’s what I want to stress, invest until it hurts. If it’s logical and you’re putting value in the product all the way along, go with logic. Put it out there.

Here’s the theme I’m seeing emerge here. Every time you brought in a new technology, or a new CNC machine, or more CNC machines, you were then able to do different things with the metal, right? So, when you did that, not only did new opportunities arise for you in other markets but you were also able to see new opportunities on the same building you were only doing part of before, right? You could then could perform more value-add to that same building you were already working onsite. But it strikes me that the reason you were able to see the opportunity is that you had the technology in place to do it and your mind was then able to make that connection, “I can do that,” and it just fused.

Right. The decisions get easier, not harder. Not that they don’t get more complex. You buy a full-on automation line, that’s a four million dollar line. But because of your experience when it was making logical decisions all along, it gets to where you say, “Why didn’t I do this two years earlier?” It gets to that. I kick myself and say, “Geez you could go out into that before.” And so, it’s probably a bad trait because you get into stuff and when you’re pioneering like that, wow what an adventure. One thing about CNC and automation that I want to make clear too is in the programming end. You’ll be told it’s easy. It’s better now than it was ten years ago. It will be better 10 years from now. But don’t think that it’s a cakewalk. Just don’t think that.

Now, Ray, you and I have known each other for a while now and what’s always struck me about you is that you have an extraordinary insight into opportunities. The opportunity doesn’t have to come walking in the door with a purchase order to you. Instead, you say “There’s an opportunity there, let’s build something to capture that opportunity. And then you go out and bring it in.” So I think you have a natural ability to see a new perspective on that building or even different marketplaces. But you were first a golf guy, and yet you are clearly very talented at the manufacturing lines. Tell me how you learned that.

I’m kind of am an engineer without a designation … well, I tried to explain that earlier. It just talks to you.

What talks to you?

The opportunity. It just presents itself so much. Another thing I want to point out is the power of trade shows. I go to those alone because when I’m alone, I’m working it. When I’m attending the shows, I’m working it, like I’m there to work. And when you’re alone, you’re also very agile. “Hey, do you want to do dinner tonight?” And you’re with people, and if you’re smart you keep your mouth shut and you listen. And what they’re talking about may not hit you then, it may take three weeks, it may not come at all. But the power of those trade shows, go alone, be available, continue a conversation, get invited to some dinner or something like that, work those shows.

What’s your primary purpose to go to those shows? Is it to absorb, like what you’re describing, or is it to network?

They go part and parcel. It’s not one thing or another. There’s often seminars attached to the shows so that you can go to that in the morning, it’s just so, so useful, and attend the show in the afternoon. And I just found them very, very good. Before our automation line, I had been to a show in Europe never knowing if I’d ever be using automation, but of course, it just talked to me. These people in this curtain wall/commercial window industry need these four-sided panels. I’m going to buy technology above everyone else and I’m going to adapt that technology to make that panel, and we are going to be a world leader and we are going to take something that is usually making subzero refrigerators, and use it to make exterior building products.

How close are your major customers integrated with your manufacturing process? Do they just order from you or are they collaborating with you as to what they need and then it’s a co-inventive process?

We’ll have to identify that a little bit. So, products that are linear, which means that they have bending and roll forming, but they’re linear, not all four sides, but they’re linear. These customers can take more ownership in the conversation earlier. When you get into the multiple-sided panels and the architectural multiple sided panels, they obviously need support that way. And we struggled. But, that’s where it started to tell me more and more there are tools out there. One of these tools is the ability to have your products designed in what we call these Revit families. So now Revit families of your products can populate Revit models which are well over 98 percent of what buildings are designed in now. So it’s been difficult, but it’s getting easier and easier. And now we can take that information, call it a cut list, and map it into our automated pricing. So, the whole service end of that started because you had equipment that, when programmed, will make a panel every 90 seconds with no human intervention to within an incredibly tight tolerance. Because you had that ability, you had to get out and make architects, building designers, work less hard to populate their elevations with your products. So it makes you work harder and you need that professionalization of an ERP system. You need all of those things because why have all of that throughput availability if you struggle so hard to input what’s going in there. So it really sets you up to do the other. Generally, you’ll push the bottleneck all the way along. In the pull system, I chose to have too much equipment before sales, too much capability before the technology on how to talk to that equipment, and then how to talk to those building designs, and then how to have things like these Revit families feed all of that. To my knowledge, there is no one that’s gone this far.

Let me just step back a little. So last time we left off in 2004. What would what would be the next major step forward for Lenmak?

I took one forward and I took one back, all within about the same amount of time. The step forward was making what we call standing seam roofing, so the roof panel that is more of a professional product. I also, though, in 2006, got into roll forming the very low-end commodity panels. Good panels, but you’d see them on a barn, a shed, or whatever like that. And here’s where I dropped the ball. It took industry-specific steel in every colour. So it was thinner, but with more tensile strength, it was harder to bend, but when it was bent, it had more strength. It wasn’t the worst decision, but where we had been so lean on inventory before that, we now had to commit to such big quantities. And it wasn’t our hunger; it wasn’t where we’re from. So about five years later, we knew the margins aren’t where we want them to be, a little bit of a mistake, need to wind stuff down, move out of that, get back to where we should be, and concentrate on the automation and go that route. There was there was a step in between and, yeah, we’re like anyone else you know, did we lose lots? No. Did we make lots? No. It was just one of those along the way things that can so easily happen when it seems that you’re really geared for it.

Now we’re all the way into 2017 and everything I see is that you have the potential for a fully integrated system with an architect, with a builder, and they can just sort of slip into the technology that you built. Create those cut sheets and put up the Revit drawings, all that kind of stuff. It strikes me that the majority of people in your business would not have that capability. 

Correct. You know what we are? We’re a near 21-year-old startup because we are at a true plateau. I believe we’re at a plateau because of the equipment commitment, but not fully utilized yet. It’s sitting there, I call it my racehorse. Just feed me, and I’ll send it out to you, quickly, accurately, and well-priced.

And full robotics. An amazing robotics system.

A fully integrated ERP with incredible amounts of customization, automated pricing, all those things, another piece of the plateau, moving that forward, the ability to help architects, building designers with our in-house project managers, be on their same level of expectation for support. A web portal with the ability to take the information that is generated from the Revit files or the curtain wall files mapped in on fillable forms through our web portal and priced back within hours. One thing, to have automated pricing when you’re on Amazon, and you go, and you put in a stapler, put in the online shopping cart. That’s one thing. Those are predictable items. The challenge that I find out there, that I don’t think many people have overcome, is customized pricing in real time. Like that’s exciting. With all these components out there, architects, they only get paid once at that address, the building owner doesn’t care how hard he or she works. So, if the building owner can have a vested interest early through our incredibly good website, then it can create that emotion, they’re halfway there. The architect now has that guidance. That architect now can figure out how to either send out for budget pricing through what we spoke about, or they can send out for a more detailed cut list that can be mapped in and go on. I’m excited for the millennials with us as well, because all of this fits right in with them. I mean, it just fits with them, it’s just exactly what they need, they thrive on the ability to make that technology speak to them. And they have the right skill set for that, and they get rewarded out of that.

Where’s Lenmak going to be in 20 years?

Well give me one year to tell you that because we’re at that plateau, yes, we’ve had our own issues with the Alberta economy and entire industries like the modular business, we used to do a lot in that, it just evaporated. We’ve had our challenges too and it’s not a cakewalk or a free ride. However, that plateau, platform, whatever you want to call it, that has to talk to us for a year. I’m excited for my future partners because I believe we will have a system that we can partner now with other businesses, making some of the products we make, and we could wrap our arm around them, bring in our ERP, professionalize them and see where they go.

You’ve used that word a few times, professionalize, what does that mean to you when it comes to your partners or your business? 

What I’m trying to say by that is that everyone shouldn’t have to work so hard. They should have those tools that let them knock it out of the park. And they’re just people. And it’s one or two or whatever, it might perfect one area of what they do, but that’s not duplicatable, it’s still not the best. Given those tool boxes, I call it professionalize, so they can take it and run.

What would be three things you would tell your 20-year-old self business-wise?

I’ll tell you this: I do believe in the support of a peer group. I never got involved in that, but those type things, EO, all of that, get involved with a peer group. That would be a terrific thing to do. What I would do as a 20-year-old, I would make myself uncomfortable and go to trade shows that I know nothing about. One that excites me of all things, and I’ve never been to one, but these waste management shows. There are so many things at these from grinding up pallets to you name it. That’s exciting. I would say, let’s go for something totally uncomfortable.

Outside of your industry, that’s what you’re saying? Because you can learn something from, you know, a technology that’s being used in completely different markets and industries.

Go where the other guy isn’t.

Give me one more.

Another thing that I would look at as a 20-year-old like that, maybe, have the ability sometimes to sit on your hands and observe where you are currently at before running in a new direction.

So sit on your hands means to you…?

Breathe.

So, pause, then really ask yourself what are you going to focus on.

Exactly.

 

Kurian Mathew Tharakan is the founder of sales and marketing strategy firm StrategyPeak Sales & Marketing Advisors, and a 27 year veteran of the sales and marketing industry. He has consulted for companies in numerous sectors, including Manufacturing, Distribution, High Technology, Software, Non-Profit, and the Life Sciences. In addition to his consulting practice, he is also an Executive in Residence at two business accelerators, NABI and TEC Edmonton, where he assists clients with their go to market strategies. Prior to StrategyPeak, Mr. Tharakan was vice-president sales & marketing for an enterprise class software firm where his team achieved notable wins with several members of the US Fortune 500. Previous to his software experience, Mr. Tharakan directed the sales and marketing programs for the Alberta practice of an international professional services firm.

Kurian Mathew Tharakan
Direct: 780 237-1572
Email: kurian@strategypeak.com