Sinters America purchased DCM Group in December 2015 so as to better control its supply chain in response to demand for such coming from OEMs.
Sinters America recently acquired DCM Group. What were the reasons behind the acquisition?
The objective of the acquisition is an integral one and one that is difficult to accomplish: we needed a stronger base in order to win confidence from the OEMs and Tier 1 suppliers. In response to the OEM’s demands to deal with fewer suppliers, SMEs need to consolidate. OEMs want to deal with partners so SMEs need to become bigger while maintaining their agility. We therefore decided we needed to exert more control over our supply chain so we chose to grow vertically and horizontally.
Could you summarize the main activities of the newly formed DCM Group?
Our areas of expertise are spread out amongst our three sites in the metropolitan area of Montréal; Boucherville, Blainville and Boisbriand. We manufacture ground support equipment in our Boucherville facility as well the electrical and engineering testing. Our Blainville facility handles components repair, welding, surface and special treatments. Finally, at our Boisbriand facility we manufacture new parts, aerospace tubing and aerostructures and pre-assemble smaller parts for the final assembly lines of Bombardier.
As the industry consolidates, how can companies such as DCM Group ensure they remain competitive?
Consolidation has gripped the industry and this trend will continue in the next few years. However, in 10 or 20 years’ time the industry will realize that some of these moves towards consolidation are not very efficient and therefore some mergers will be dismantled in the constant chase of excellence.
The key element that differentiates us is our people; their culture, training, and mentality. When a company gets bigger it starts to document, publish, and implement procedures to maintain the same degree of control, thus limiting and restricting its agility and creativity. Therefore, we need to constantly remind our employees that despite the restrictions and precise guidelines, we are open to creativity and suggestions and out-of-the-box thinking.
Demand has been relatively flat in the last two years. Do you expect this to continue?
Although demand has been restrained in recent years, the overall trend is still positive and demand will continue to grow in the future. Demand will show a steady line over 25 years, albeit with peaks and troughs along the way due to unpredictable world macro-economic events.
When we met in 2015, Sinters America was investing 10% of its revenues into R&D. Could you elaborate on the importance of R&D going forward under the new brand?
R&D is a very important priority for DCM Group and the company will maintain this level of investment every year going forward. We partner with universities and organizations such as CRIAQ, CARIC and Aéro-Montréal on different initiatives. These partnerships will help DCM Group to de-leverage some of the risk arising from investing in R&D projects where the return on investment can take a long time to be realized. To properly grow, companies need to continually develop their intellectual property.
DCM Group is working on a long-term project to develop an Air Data Computer (ADC) for an unmanned helicopter being developed by Laflamme Aero Inc. This project, partly funded by CARIQ and supported by Polytechnique Montréal and ÉTS, is going extremely well and our ADC is already being used in drones. Additionally, the aircraft seat-tester we launched a few years ago is also doing very well and we will continue to invest in its development.
What are DCM Group’s main goals over the next five years?
DCM Group is not a Tier 1 supplier but our goal is to become a bigger, integrated supplier and a one-stop-shop for OEMs. Now, our main challenge is the execution of the merger and to do this we must focus on integration and communication with our employees, suppliers and customers. Whilst we will benefit from becoming a bigger company, we will also focus on maintaining the agility that allowed us to exist and survive to begin with.
Exporting has always been a key goal of the entity and it is now a special priority to develop our presence in Asia and Europe. As the DCM brand was already known in these regions, we have chosen to name our company DCM.