| industry profile Changing
Technology for a Fast-Changing Industry |
| A lot has changed since 1985, when
Mike and Mary Anne Madden moved from Kansas City, MO, to Pompano Beach,
FL, and established Madden Mfg. Inc. New codes, new metals and new technologies
have dramatically altered Madden’s business over the years. What’s
more, if Madden’s judgement is correct, the coming years will see even
more significant new developments—both for his company and the industry
as a whole—including the introduction of a potentially revolutionary
new product. A FAMILY TRADITION To fully understand the scope of the changes Madden envisions, one must first understand the sweeping changes his company has already experienced, beginning with its founding in 1985. “I was district sales representative for Mastic Corp. when we moved here from Kansas City,” Madden recalls. “I was tired of the road and, based on information from my family, we decided mobile home roof-overs and hurricane protection were a big need in south Florida.” The decision to start the company was a logical choice, Madden recalls—in fact, it was something of a family tradition. “I was the third generation of my family to get into the building materials and distribution business,” Madden says. His new company opened in 1985 in a 5,000-square-foot building, with just one employee outside of himself and Mary Anne. “In my first year in business, I probably had the cleanest rolling mill in the market,” he jokes. “We sure didn’t roll very much, but considering what it cost, I was out polishing that thing every day. Then I generally would drive all night to deliver materials to somewhere in Florida the next morning, and return back and start all over again.” From that relatively modest beginning, the company has grown dramatically. Today Madden Mfg. sells millions of square feet of panels every year. And, in contrast to its early years when the company focused primarily on manufactured home roof-overs and patio covers, Madden today derives some 60 percent of its revenue from hurricane protection products—a growing trend that began during the milestone year of 1992. 1992: HURRICANE ANDREW RESHAPES THE INDUSTRY Although Hurricane Andrew’s path took it across the southern tip of Florida, the storm’s effects were felt throughout the state—and, in many respects, throughout the Atlantic and Gulf coasts. Property insurance companies revamped the way they did business—rewriting policies, petitioning for rate increases, and restructuring the ways in which deductibles were assessed. And code authorities studied the storm’s devastation with great interest, looking for lessons they could apply in rewriting building codes, especially the benchmark Miami-Dade code that influences code authorities in jurisdictions far removed from south Florida’s most populous county. “Initially, after Hurricane Andrew, about the only products that would comply with the new code were heavy metal panels such as .063 aluminum and 18- or 20-gauge steel,” Madden recalls. “They were tough to run, since 18-gauge steel panels weigh 3.6 pounds per square foot. So a 10-foot panel means you’re handling 36 pounds of metal.” Even .063 aluminum panels weigh 1.5 pounds per square foot, he notes. But everything started to change with the development of new alloys that enabled Madden to introduce a .050 aluminum panel that could pass the Miami-Dade protocol without “stitching” adjacent panels together. “We were the first to introduce a panel that did not need to be stitched,” Madden says. “That’s where we made our first inroad into the hurricane panel business.” The new, harder .050 aluminum panel was rated at H-32, which Madden says was “a revolutionary thing at the time. It was stronger, and you could roll-form it without cracking, but you were right on the edge of technology at the time. If you went to an H-34 hardness it would crack, so we were right at the very edge.” Other metallurgical advances soon followed, and the industry was reshaped. “Today we have aluminum products that are .024 in thickness all the way up to .063. And steel goes all the way from 28-gauge to 18-gauge. So the family of panels has expanded greatly.” Just as important, Madden can now offer several grades of products, using the building material industry’s familiar “good, better, best” model. “Let’s face it,” says Madden. “The storm panel business is a Timex business, not a Rolex business. Consumers want a product that will perform, but they want it for a low price. After all, it may go up only once every 10 years or so.” A UNIQUE BUSINESS MODEL Thanks to the new metals, the company eventually outgrew its facilities and expanded. In addition to its Florida facilities, it now operates a 10,000-squre-foot production and distribution center in Lake Ozark, MO. “That’s now a complete building materials distribution center, shipping all over the country, from Seattle to Florida,” Madden says. “There isn’t any state in the country where we haven’t shipped over the past 20 years.” In addition to fabricating metal roofing and patio covers, the facility is also an aluminum extrusion distributor, and carries a full range of siding and trim coil, as well as a line of building materials. And when it comes to hurricane panels, Madden now offers a broad selection of panel thicknesses—the widest range in the industry, he believes. While the new alloys played a key roll in Madden’s growth, an even greater factor may be the company’s unique business model. “Our company is unique among all the storm panel manufacturers in Florida, because we started out and we continue with the concept of tolling,” says Madden. “We take our customers metal, run it through our rolling mills, and give it back to them with added value, in terms of the engineering we do and the fact that they are assured it complies with all applicable building codes.” The result is a true win-win arrangement. “Our two largest customers together operate close to 50 distribution centers,” Madden says, noting that the distributors’ massive purchasing power helps reduce their cost of materials, while his company’s engineering and testing assures them of quality and performance. “The difference is the engineering,” Madden says. “We think we’ve got the best engineering out there. We own the engineering, and we do all the testing, and we tell them what works.” In addition to relieving Madden of the burden of carrying large inventories of raw materials and work-in-process, this direct-to-the-distributor model also means the company does not need to support a large sales force. “Everybody has my cell number, they can call me seven days a week no matter where I am,” Madden says. “I get calls from building officials, contractors and homeowners. When there’s a question, we answer it. I think being accessible has been another key factor in our strength.” As successful as its unique business model is, the company is not limiting itself. Madden Mfg. is increasingly active in the fast-growing do-it-yourself market, offering its patio and carport covers directly to consumers at its online e-commerce site, www.patiocovers diy.com. “Initially, we introduced this to benefit rural areas of the country that don’t have ready access to a large number of contractors, but we are finding it also benefits the D-I-Y market as well,” Madden says. In addition to the D-I-Y-focused site, Madden also maintains a corporate Web site at www.maddenmetals.com. 2004: ANOTHER INDUSTRY TURNING POINT While the immediate effect of the exceptional 2004 hurricane season was a surge in volume for the entire industry, Madden believes its long-term effect may be even more significant, because it gave him the opportunity to investigate and partner with a promising new product. The new product, the patent-pending Cat-5, was inspired by the wind tarps that cover the loads of large dump trucks to prevent debris from being blown off as the truck travels at high speeds all day long. Madden believed the same principle might be effective in hurricane protection. “What it does is it reduces the volume of air striking the product you’re protecting to acceptable levels, whether it’s a boat, an outdoor sign, or bushes, or an entire house and secures it from movement and impact” says Madden. Madden is co-developing the product with engineer Frank Bennardo P.E., to identify the most advantageous mesh size for the application, when Hurricane Jeanne came along and provided them the opportunity for a field test. “Just before Jeanne arrived we had a fabricator send us a set of nets,” Madden says. “And we rushed them up to Hutchinson Island, where my brother agreed to put them on his home.” The experiment required some quick thinking, he adds. “We didn’t have a clear set of instructions on how to put this up, so we attached it using several different methods. We started about 7 at night, and we finished at 2 in the morning. Then Jeanne came through with 130 mile-per-hour winds.” That gave us a rare opportunity to create an efficient and cost-effective fastening system. Before the storm had finished traversing the state, Madden made his way back onto the island to assess the results. “I grabbed a Jet-Ski while the storm was still going through Tampa and I skied across the Intracoastal so I was the first on the island,” he recalls. “It was like walking into a ghost town.” Camera in hand, Madden sought out his brother’s house and was delighted to see it had survived with virtually no damage—one of only three on the island to do so. “The velocity of wind was reduced so much that nothing was broken,” he said. “The only thing we hadn’t covered was the front screened porch, and that screening was the only thing that was blown away.” Convinced by his firsthand experience, Madden is now working with Bennardo to finish the engineering and test the product to impact standards. “We plan on introducing a product that can either replace or enhance existing storm panels, or it can be used to protect everything—the shingles or tiles, the boat, everything,” Madden says. “We found we could wrap the entire home so that we don’t lose roof tiles, roof trusses or susceptible walls and cladding. Furthermore, we don’t compromise windows or any other opening while maintaining egress, light in the home and fresh air.” Eventually, Madden envisions selling the tested and approved net in 10-foot-wide strips in retail stores, where homeowners could order it by the foot. “That is the next generation of hurricane protection,” he says. “It’s very affordable, it’s extremely user-friendly. It can be thrown into a duffel bag and tossed up into the attic for storage. It’s impervious to salt, bugs, or moisture. Of course, Madden notes, “everything is going to have to be tested and approved and we’re completing that process now, but I think the best test is what happened to us on Hutchinson Island.” The Cat-5 is not the only important change on the horizon for Madden Mfg. For example, the company is now approved to fabricate accordion-style shutters, which Madden says is “generally the next step for the consumer. That’s why we expanded into that market, because we felt we had to maintain and support our existing customer base.” Madden is optimistic about the ongoing evolution of his company, predicting continued growth for the foreseeable future. “Five years down the road I see our business at the very least doubling,” he says. What’s more, he is also optimistic about the future of the industry as a whole—provided the industry continues to do a good job of policing itself. “Obviously we’re in an up cycle,” he says. “I see a number of positive trends, especially with the International Hurricane Protection Association (IHPA). Within the IHPA we have an ethics committee, and we address issues that concern our members, which I happen to believe is very important.” For example, he notes, “One of the biggest concerns I have is window film being perceived as hurricane protection. That is a concern that the IHPA has addressed over the past three years, but you can still see ads in the newspapers claiming that UV film adds hurricane protection.” He also strongly advocates an increased emphasis on training for installers. “When failures do occur, it is generally the fasteners that fail, which means they were not installed properly,” he says. “All of us need to pay a little more attention to the training of the installers, and emphasize the fact that each fastener plays a key part in that storm panel assembly.” All in all, Madden concludes, the business has changed a lot from the days when he drove all night to deliver products himself. “I see a number of positive trends,” he concludes. “We’ve gone from a very thick, heavy product to a very user-friendly product. Service has changed; technology has changed. And we are constantly developing new and more consumer-friendly products. I’m very optimistic about the future of our company—and the industry as a whole.” |