State of the Industry 2011: An Interview with Christopher Coxon, Vice President, GS Engineering Inc.

What is your primary industry of focus for 2012, and why?

Overall moving into 2012, GS Engineering’s primary focus will be transitioning the organization from supporting our core military programs to application of progressive skill sets and technologies developed under these efforts to emerging commercial markets. With the similarities between off-highway design programs and our wheeled and tracked vehicle markets, we are able to add significant value to commercially focused organizations that have been forced to lean down their internal engineering teams.

We primarily are focusing on wheeled vehicle markets (mining, earth moving, material handling and aerial platform) because of our established in-house expertise in these particular areas, combined with our extensive knowledge base and reputation in defense industry markets. By leveraging our employee’s skill sets concurrently with developing technologies and processes from our support of military programs, we are able to provide value added engineering and testing services across a diversified customer base.

Which would you consider to be your strongest market?

Since the foundation of our business is mechanical design supported by finite element analysis (FEA), our strongest markets are those that have been forced to undergo significant internal workforce reductions in these areas. GS Engineering also has significant experience in weight savings initiatives and lightweight technologies that we have developed in recent years. The unique design and analysis skill sets we offer, as well as proficiency in a variety of fabrication, manufacturing, and assembly technologies, contribute to efficient use of materials in a strong, yet lightweight, fashion. With this specialized experience, significant cost reductions can be achieved not only in raw material utilization, but incorporating DFM (design for manufacturing) into the initial conceptual design.

Our targeted growth industries must react to changing market needs by supporting and investing in new product development. By utilizing an outsourced labor business model, a manufacturing company can delay significant long-term investment into their internal labor force, as well as related infrastructure (technology costs) until confidence fully returns to their particular market. By interjecting a legacy employee from the manufacturer who has the required tribal knowledge of key design parameters, our team effectively becomes a force multiplier to support the internal engineering team of that particular organization. When fully utilized, the cost savings realized by outsourcing engineering services is significant, in that the manufacturer is able to manage their direct costs effectively at an individual program level while delaying long-term investments until the cash flow from new product is fully realized.

Where have you expanded internationally? Future plans? Which emerging markets are you keeping your eye on for future growth potential?

GS Engineering has seen international demands for off-highway products driving our customer’s actions, through the need to modify current products for a specialty requirement, or just the overall demand in the particular geographic area / industry. Particularly, South American and Asian market rebounds have driven product demand, requiring additional engineering resources. We also have seen a trend by manufacturers to differentiate their product during final negotiations, and sales staff have had to provide additional options or features found on competitive products to secure a sale. The integration of these additional features is often not considered in the advertised delivery time, therefore requiring engineering teams to fulfill the final specification of the particular product in the historical lead-time. Often, current product lines do not have the electrical or mechanical infrastructure to support the additional features, again requiring engineering time to maintain the brand reputation by mitigating risks of a last minute design change.