Reprinted with permission of Rubber & Plastics News. Copyright Crain Communications Inc. 2015

October 19, 2015

Dayco CEO drivescompany towardstronger operation

By Mike McNultyRubber & Plastics News Staff

TROY, Mich.—When John T. Bohenicktook over as CEO of Dayco ProductsL.L.C. in September 2014, he had a goodworking knowledge of the company.

Over the years, he had built a relation-ship with the company as a customer,competitor and a supplier. He served aspresident of SKF Sealing Solutions forfour years and spent 20 years with GatesCorp. in a variety of leadership roles.

Prior to taking over his new post, Bo-henick had spent a considerable amount oftime with the firm’s board of directors andleadership team gaining greater insight intoDayco’s diverse operation, its current busi-ness objectives and strategic initiatives.

But he wanted to learn a lot more, andfast. So he hit the ground running at fullspeed when he came aboard.

In fact, five days after he took office, hewas on his way to South America for aboard meeting and the opportunity tolearn about the firm’s operations there.

Bohenick has continued moving at thatpace since.

In the last 12 months, he has learnedabout Dayco’s people, technology, products,manufacturing, customers, competitorsand strengths, he said. “My learning ishelping us define our strategic plan and di-rection for the future. I am excited aboutwhat I have found out and even more excit-ed about our future.”

Leaner operationBohenick also has been making moves

with a goal of creating a better and strongercompany. “The first major transformationwe initiated was our journey to lean,” hesaid. Demands from its customers and thefirm’s strong competitors dictated that typeof a change was needed, he said.

Dayco’s desire to run a tighter opera-tion was high as several members of itsleadership team had previous experi-ences driving lean businesses.

He said the company’s road map tochange is its Dayco Production System, “ourholistic approach to building a lean organi-zation focused on elimination of waste andcontinued improvement of quality.”

The company is deploying the system asits overall business model focused on con-tinuous improvement in all of its coreprocesses, including manufacturing; supplychain; research, development and engineer-ing; sales; and all support functions.

Dayco—which is celebrating its 110thanniversary, having been founded asDayton Rubber Manufacturing Co. in1905—has launched a number of otherinitiatives in the last year with Bohenick

at the helm. It opened a new 400,000-sq.-ft. central

U.S. distribution center in Memphis,Tenn.; selected Gordon Hensley as its se-nior vice president of research, develop-ment and engineering, and Phil Liu as itsgeneral manager of the firm’s aftermar-ket business in China; and unveiled nu-merous new products, such as two ser-pentine belts and a heavy duty belt forthe aftermarket along with an electricpower steering belt line for electronicallypowered steering systems.

Dayco’s distribution center will improveshipping times while increasing its fillrates, the company said. It will allow thefirm to expand its customer service capabil-ities and implement new supply chain sys-tems at the site.

“As a major transportation hub cen-trally located in the U.S., Memphis is thebest location for our distribution center,”Bohenick said. “The new location givesDayco the ability to provide a seamlessservice experience for our North Ameri-can customers, from manufacturing todelivery.”

Its new center employs nearly 200 andwill be used to distribute the company’sproducts—including belts, tensioners, pul-leys, harmonic balancers, hose, hydraulicscomponents and equipment, along with allrelated tools—in North America.

Driving growthDayco has a focused growth model built

on operational excellence, organic growth,geographic expansion and strategic acqui-sitions with a focus on the industrial sec-tor, according to Bohenick.

On the operational side, it has built asolid reputation as an innovator and itsdrive to create new products, and solutionsis one reason the company has greatgrowth potential, he said. “For example,the technology and manufacturing behindour timing belt-in-oil system is continuous-ly being recognized by our customers asthe best solution in the market.

“Dayco introduced the first timing belt-in-oil solution for automotive applica-tions, a technological breakthrough thatdirectly addressed customer focus on low-er emissions, increased fuel economy andreduced friction for the engine.”

Bohenick noted that the company is asingle source supplier for numerous cus-tomers because of its deep catalog and dis-tribution network. “Our future growth willresult from the best product range, excel-lent application and training, and thehighest level of service.”

He said the firm’s industrial operationis expanding steadily, and it continues to

A Dayco employee at the firm’s Springdale, Ark., plant works on some products.

Journeyto LEANER

Expansion, acquisitionpaying off for Dayco

By Mike McNultyRubber & Plastics News Staff

TROY, Mich.—Two aspects of DaycoProducts L.L.C.’s growth model, geo-graphic expansion and strategic acquisi-tions, are paying nice dividends.

Dayco wants to globalize its operation“in order to provide a seamless service ex-perience, from manufacturing to deliveryto technical support” for the firm’s cus-tomers, according to CEO John Bohenick.

While the company has focused pri-marily on internal growth and improve-ment over the last year, it has grown sig-nificantly by adding plants via acquisi-tions over the last few years.

During that period, it strengthened itsdamper, tensioner and idler pulley manu-facturing capabilities worldwide for bothits aftermarket and original equipmentbusinesses with the purchase of Metava-tion L.L.C. in Southfield, Mich.; PrecisionParts, located in Australia; and NytronGroup, a Brazilian-based manufacturer.

Dayco’s three acquisitions have ex-panded the firm’s global reach, increasedcapacity and bolstered the productionend of its operation in several regions, in-cluding North America, China and India.

It has focused on increasing its geo-graphic presence further with significantinvestments in new plants in China,Poland and Mexico, Bohenick said. Thefirm also improved and upgraded its Willis-ton, S.C., factory in 2013, turning it into itsaftermarket and original equipment beltcenter in North America.

“Today we have 50 facilities in 18 coun-tries,” he said. “We see continued growthin our traditional markets of North Ameri-ca and Europe, and are focused on acceler-ated growth in China, South America, In-dia, East and Central Europe, Russia, theMiddle East and Africa.”

The Tychy, Poland, plant was complet-ed in 2014. It produces pulleys anddampers for OEMs in Europe.

Its newest damper, idler and tensionermanufacturing plant in Suzhou, China,“will further our growth initiatives inthis market,” Bohenick said. The151,000-sq.-ft. factory handles manufac-turing, engineering and aftermarket dis-tribution functions in the country.

Its business outside of Western Europealso continues to grow, he said. “Since2013, we have experienced 20 percentgrowth in central and eastern Europe.”The firm has had more than a 35 percentgrowth spurt in Europe, Russia, the Mid-dle East and Africa, combined, since2013, he said.

“Frankly,” Bohenick said, “our brandrecognition exceeds our presence in theindustrial market. We are well positionedin the heavy truck segment and have hadsubstantial industrial original equipmentsuccess.

“Industrial general market distributorshave a preference for high qualitybrands, and that should always benefitDayco. We see opportunities to growthrough new products, new customersand potential acquisitions.”

A look at Dayco’s sales office and manufacturing plant in San Luis Potosi, Mexico.

win new business with major industrialand equipment manufacturers.

Dayco focuses on products and systemsthat directly address the auto-motive megatrends for enginedownsizing and up-powering,the executive said. He seescontinued growth in the com-pany’s timing belt-in-oil sys-tems, Start-Stop systems andbelt systems for electric powersteering—all aimed at improv-ing fuel economy.

“We are also working on anew product platform of de-coupler products (alternatorand crankshaft) with func-tion to significantly reduceNVH for engines and trans-missions,” Bohenick said.

It has been successful in winning con-tracts on global original equipment manu-facturers’ next generation engine pro-grams, which are expected to increase involume over the next several years. “Today,many of the engines worldwide move betterbecause of our Dayco products.”

Dayco’s aftermarket business is verystrong on a global basis, according to Bo-henick, “and we have the Nos. 1 or 2 posi-

tion in the major markets of Europe, NorthAmerica, South America and Australia.”And in a relatively short time, he added, it

has been able to build a goodfoundation to enable continuedgrowth in China.”

All employees at the firmare aware that Dayco’sgrowth and reputation de-pend on creating value for itscustomers, he said. “We seekgrowth by realizing the eco-nomic potential in improvinghow the world moves, everyday—specifically by creatingproducts, systems and cus-tomer relationships that en-dure.

In order to do that, he said,the company needs to contin-

ue expanding its product lines and cover-age for its customers; evaluate its distrib-utor base by geographic area to ensure ithas the ability to expand as the globalmarket grows; continue to manufactureinnovative products that last; “and devel-op and retain our most important re-source, the skills and intelligence of ourpeople.”

Bohenick