HIDDEN BENEFITS OF WORKING WITH A PRIVATELY HELD MANUFACTURING PARTNER

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There are times when more influence and input leads to better results. For example, a brainstorming session can leverage different mindsets to crack the code and reach the ideal outcome.

There are also times when less is more. Such is the case when working with a privately held manufacturing partner as opposed to a publicly held company.

This is often an overlooked factor that companies should consider when seeking new manufacturing partnerships. A privately held entity has more control over every aspect of the business including investment decisions, company culture, client-vendor relationships and much more. Such autonomy creates a number of significant benefits that favor the client as much as the company.

The Opportunity to Invest in Long-Term Relationships

At the end of the day, publicly held companies are responsible for providing sales and growth to stakeholders. This can limit their decision to invest in long-term relationships that can become very valuable over time. Even if upper-level management sees potential for a promising relationship, they are not always able or willing to pursue such opportunities. 

Privately held companies are not held to such tight constraints. While there are still stakeholders to answer to, they understand the risk-reward reality of long-term relationships. Having a more intimate group of stakeholders who are truly invested in the company gives management greater flexibility in investment decisions. This is a major advantage for clients because privately held partners can initiate relationships even if the first project might not have significant revenue or will have a long develop and launch curve. A privately held company that understands the value of building long-term relationships can embrace the very same opportunities that a publicly held company might need to avoid. 

Jean Horvath, the Vice President of Custom and Specialty Products at Vollrath® Manufacturing Services (VMS), elaborates further on this advantage:

“As a privately held and professionally managed company, we have the freedom to identify and pursue the opportunities that takes both the customer and the product into consideration. If we’re working with a client and we see that kind of long-term relationship potential, we’re going to make that decision to invest and truly focus on that customer.” 
JEAN HORVATH, VP OF CUSTOM AND SPECIALTY PRODUCTS AT VOLLRATH® MANUFACTURING SERVICES

The Ability to Foster a Collaborative Company Culture

Because privately held companies have flatter organizations, decision-makers are empowered and involved and they retain far more control over company culture. It is ultimately management who will set the scene and determine the level of collaboration and communication that will exist amongst the team. While not every privately owned company takes advantage of this opportunity, it is a key differentiator at VMS. As a family-owned company, VMS encourages collaboration at all levels and breaks down the political barriers that other companies build. As VMS President & CEO Paul Bartelt puts it, “We will bring in anyone to help solve a problem.”

 Horvath further explains the differences between a collaborative culture versus a competitive one:

“One of the biggest barriers to New Product Development (NPD) within an organization is internal competition. If that type of culture exists, people are more likely to guard or withhold valuable information rather than sharing it with the team. We don’t have those types of issues at VMS because it’s never political for us. Every day, our different departments are working together to try and determine the most strategic, cost-effective way to make a product. It’s all about finding the right solution as opposed to personal gain. And this undoubtedly impacts what we’re able to achieve for our customers.” 
JEAN HORVATH, VP OF CUSTOM AND SPECIALTY PRODUCTS AT VOLLRATH® MANUFACTURING SERVICES

The Flexibility to Bend Where Other Companies Break

No two engineering projects are ever entirely the same. In order to deliver the best possible results for the client, manufacturing partners must be flexible in their services and solutions. This ability to customize comes much more easily to privately held companies that aren’t on a tight leash. Management has far more control over the client-vendor relationship and therefore, can tailor the process to each individual project. Horvath highlights how increased transparency and flexibility benefits the client, saying:

“Being privately held and professionally managed really allows us to communicate with our clients without the added red tape. We are able to share how we can do something or explain why we can’t do this but we can do that instead. I would not underestimate this as a differentiator compared to other companies I’ve worked for where there’s littleto-no wiggle room and you need to fit into the cookie-cutter process that exists. VMS is all about tailoring the process to the unique product and customer.”
JEAN HORVATH, VP OF CUSTOM AND SPECIALTY PRODUCTS AT VOLLRATH® MANUFACTURING SERVICES

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