Dynamic International Inc.
Dynamic is “Dynamic!”
Business View Magazine interviews Richard Layo, President of Dynamic International Inc., for our focus on Domestic Manufacturing in the Aluminum Industry.
Over 30-plus years, Dynamic International Inc. has grown from its native Wisconsin and Michigan roots to a national sales enterprise comprising a network of distributorships and a multi-million-dollar, international, corporate entity. Dynamic International provides state-of-the-art Die/Mold machine solutions for a broad base of discriminating North American companies and is dedicated to developing and maintaining long term relationships with its customers. Superior customer service and support is top of the agenda, and one of the many reasons why Dynamic is “Dynamic!”
Richard Layo, current President and Founder of Dynamic International Inc., established the company in 1986, selling, primarily, tool and die in the Wisconsin region. Then, in 1995, he started importing CNC milling machines and lathes and selling them throughout North America. According to Layo, “When we expanded to importing, we were servicing all kinds of industries: automotive, aerospace, medical, mining, construction equipment like Caterpillar, John Deere – anyone making parts for any of these big companies are potential customers of ours. Anybody that’s cutting metal falls into a category – whether it’s aluminum, or steel, or an alloy – and our computer-programmed machines are designing to mill, or turn in the case of the lathes, parts for any of the manufacturing industries. They’re very flexible machines, not dedicated to one part, only.”
Dynamic International imports the machinery from Japan, Korea, Taiwan, China, and a small amount from Italy, and sells in the U.S., Canada, and Mexico through distribution companies. Headquartered in Pewaukee, Wisconsin, the company has 38 employees and about 30 distributors across North America selling its products. “The machines are high tech,” says Layo, “so to be a distributor for us, they need to have technicians that know how to install the machine; technicians that can teach the end-user customer who bought it how to operate it. Our machines for manufacturing use a very similar computer to many of our competitors, but going through these multiple distributors is how we get our products to the end users. We have about $6.5 million of imported parts inventoried in our Wisconsin facility; we sell those parts to the distributor as well, and they manage the customer, completely.”
At the recent ALUMINUM USA show in Nashville, Tennessee, Dynamic International promoted a new machine with advanced technology for manufacturing aluminum because many manufacturers in North America – automotive, consumer construction, and renovation sectors – have gone to more aluminum components to make their products lighter. Presented in collaboration with The Aluminum Association (of which Dynamic International is a proud member), ALUMINUM USA is a weeklong leading industry event covering the entire value chain from upstream (mining, smelting) via midstream (casting, rolling, extrusions) to downstream (finishing, fabrication). Every two years, ALUMINUM USA Week offers a forum where leading suppliers and industry professionals come together for face-to-face meetings, exhibition, cutting-edge conference and educational programming, and technology-based networking opportunities.
Speaking to Dynamic’s competitive edge, Layo notes, “In the North American market, there are about 30 to 40 competitors throughout the countries I mentioned. And the biggest difference we’ve built over the years is having the high volume of inventory, guaranteeing customers 24-hour shipment on their parts. So, even when we start with a new line, most of our distributors and their customers have a comfort zone when doing business with Dynamic, because that’s the reputation we’ve built. If we’re bringing it in, they know we’re backing it up with parts and support. A lot of the other machine tool importers bring a product in and see how they do for a year before they put any parts in inventory. That, potentially, ends up hurting the new customers that invested in their machine.”
Also, because Layo has been in the business for 35 years, he recognizes the value of staying current. He travels to trade shows and industry events across Europe, and Asia, and North America, always on the lookout for more productive equipment to help manufacturing in North America. He reports, “If I see any machines that I know will add to manufacturing and increase our customers’ profits by investing in that piece, that gives us another advantage. A lot of our competitors are dealing with one manufacturer. They’re importing from Taiwan; so if that manufacturer doesn’t build it, they don’t have it. We import from four different manufacturers in Taiwan, two in Japan, two from China, so we have a good cross-section of different areas to bring in equipment from; and a very diverse product line, overall.”
In 2009, Dynamic International built an importing relationship with Samsung Machine Tools, offering horizontal turning lathes and vertical machining centers. In 2018, after seven years, and selling 2,700 machines, Dynamic International pursued the branding of its own machine tools under the Smart Machine Tool name. Layo predicts that Smart Machine Tool Korea (the U.S.-owned Dynamic International subsidiary) is perfectly poised for growth. He explains, “One of the biggest products we sell are CNC lathes for turning. And a year ago, I opened a factory in South Korea that I own 51 percent of, for manufacturing CNC lathes. That is a big advantage because rather than buying my lathes from a manufacturer and them exporting to me, I’m building it and importing it, myself, directly to North America. Since opening in April, we’re up to about 20 units per month in that factory, so it gives us over 200 machines at the end of our first year.”
Dynamic International records annual sales of between $80-$100 million. Of all the other major importers in the sector in North America, there are maybe six that are similar in size by sales figures, some with 150 employees or more, but no one has their own factory producing machines. Layo warns, “They’re all buying from existing factories in Taiwan or Asia, and the risk is if that company gets bought, you can lose your importing rights because the new company might want to change. That’s why I decided to start my own company. The Smart Machine Tool difference is the team’s knowledge of product design, engineering, and understanding what the market needs. We have developed CNC lathes ranging from 10-inch to 30-inch chucks with the end-users’ needs in mind, and we will be offering these machines through exclusive distributors to the North American market.”
For the future, Layo acknowledges, “My long-term plans put a big focus on my factory because I have complete control over it. I’d like to grow to about 100 units per month; today it’s 20. We deal with the bigger manufacturers because of the volume of business we do, and their main suppliers have already started building machines to meet our manufacturing needs for North America. So, even though they build and design the machines, we can now give them the specifications, and we’ve done that with a couple of models. These are large factories I’m buying from in Taiwan and China – they’re letting us have input into the manufacturing specifications that we want because we have a strong enough buying position. My goal is to increase that, substantially, over the next three to four years, which increases our buying power and profitability in North America.”
Currently, Dynamic International sells an average of 800 to 900 units per year and the percentage of their own manufacturing is low at 20 percent. In five years, the goal is to have that at 80 percent; increasing the number of units to 1,600 – 2,000, and at that point, hopefully, up to the 1,200 unit range (200 per month) that they’re building themselves.
Layo is pleased with his company’s business model, the success they’ve achieved and the unlimited growth potential. In summation, he states, “Of all the importers in North America today, there is nobody else manufacturing machines that owns a company outside of North America. We’re doing it, ourselves, in our Korean factory under the name Smart Machine Tool. I’m still the sole owner of Dynamic International; the business is family-owned, most of the other larger importers when they get to the $100 million in sales range have gone to multiple owners and investment groups, but I’m proud to say that we haven’t and we’re succeeding well. The key to success is knowledge and staying agile.”
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