A 4U enclosure assembly, fully fabricated in-house by Continental Industries. The company laser cuts, punches, and forms the individual panels, which go through a powder coat and silkscreen process to add graphics and lettering. Continental then does a full mechanical assembly. (Image courtesy Continental Industries)

Fabricator Expands Capacity Amid Surging Demand for Data Storage Racks, Chassis, Enclosures

A range of new equipment has enabled Continental Industries to increase efficiencies and speed while maintaining high quality.

By Mark Shortt

At a time when many companies are experiencing significant slowdowns in business, a full-service sheet metal fabrication company in Anaheim, California, is thriving.

Continental Industries has, over the past three decades, built strong capabilities in sheet metal fabrication, including high-speed laser cutting, turret punching, and press brake bending. The company complements these capabilities with engineering and design support, as well as welding, assembly, and hardware installation. As a contract manufacturer, Continental serves markets ranging from electronics to aerospace and defense, data communications, medical, automotive, and lighting.

“In the past five years, we’ve grown so much, especially locally, focusing on the electronics side,” said Continental Industries Director of Sales Mike Moss, in an interview with D2P. “And it’s now expanded into the IT, data center, and other sectors that are related to the electronics.”

In 2020, Continental expanded its punching, bending, and welding departments, bringing in new machinery to help meet exploding demand for sheet metal enclosures, chassis, and racks used in data centers and other sectors. Moss said the expansions reflect a longtime commitment by Continental Industries President Jeff Hayden to increase the company’s manufacturing capacities, efficiencies, and technology-enabled capabilities.

“We’ve pretty much refurbished the shop, and I don’t know that we have any of the same manufacturing equipment that we had, going back just five, six, maybe seven years. Everything’s been updated—it’s state of the art equipment. What we have on the floor now has really positioned us to be much more competitive—it’s contributing tremendously to our growth.”

Continental brought in two new turret punch presses—an Amada EMK 3610 and a Vipros 358—that are paired with Amada MP 1530 robotic load/unload systems to enable unmanned, lights-out operation. The EMK 3610 is a servo-hydraulic 58-station press with PC-based control. “It’s super flexible and superfast,” Moss said. The Vipros 358 is a hydraulic machine, with the same 58-station capacity as the EMK 3610. For both machines, the MP 1530 automatically loads and unloads sheet material measuring up to 5 feet by 10 feet.

“These machines can be loaded for high volume, long run productions, or a high mix of assorted, different parts, and they can be run in the flat, overnight, on an unmanned third shift,” Moss said.

The company also added two new Amada HG 1303, 10-foot press brakes to its bending division. Both are 130-ton machines with PC-based, offline control, allowing tooling and programming to be done in the office with limited operator interaction. “All of that is done in house by the engineers, so we can have as much efficiency as possible,” Moss said. Both machines also have 7- and 8-axis capability, making them far more versatile than standard 3-axis press brake back gauges.

By adding capacity in its weld department, Continental freed up a bottleneck in assembly and welding. “We doubled capacity there, and we’re pumping these parts out much faster,” Moss said. “We’ve also increased our certification there, so we’re now an AWS certified weld fabrication company.”

Moss said that with the capabilities that Continental currently has on the floor, it’s equipped to handle most any manufacturing challenge with relative ease.

“We’ve got our flat part inspection, our Amada FabriVision, which can take the first run flat part and compare it to the customer’s CAD print,” Moss told D2P. “So, we can know right away that our first article off the machine matches the customer’s design tolerances.”

As a part moves from one department to the next, the operator who is handling the job in each department logs in and out of the job using Continental’s ERP (enterprise resource planning) system. Each time an operator logs in and out, an inspection process is performed on the part. The process allows Continental to  track the quality of the part as it passes from a flat part process to a bending process to a welding process.

“We, of course, have a history of that setup as the operator bends the part,” Moss said. “Before it goes to the next job, we’re able to check and verify that the part has been formed correctly. And that includes all the hole locations, the edge quality, and all the tolerancing involved in whatever the customer wants to have. We’ve got machines in here that do surface finishing, that round sharp edges through holes, and we also have folks who do hand finishing. So, keeping all those things within tolerances is fairly easy to meet at this point.”

Continental employs just over 50 people, three of whom are engineers, at its 25,000-square-foot facility in Anaheim. The company is currently  running two full shifts, with capacity for a third if needed, Moss said.

“We’re definitely competing with folks that are much, much bigger than us, and we’re taking a lot of that business,” Moss said. “A lot of that comes from our ability to automate, to turn around quotes and pricing in a fair amount of time. Our quality is there, our pricing is fair.”

Mike Moss spoke with D2P recently, opening up about Continental Industries’ capabilities and some of the factors behind the company’s recent growth. A transcript of our conversation, edited for length and clarity, follows.

Design-2-Part: What led Continental to invest in this machinery? Were you experiencing a lot more demand recently, or were you looking toward the future, or was it both?

Mike Moss: It was both. There were probably three things that did it.

We were looking towards the future because we knew where we were having bottlenecks, and what technologies we wanted to address on the floor. We needed to upgrade the punching, the bending, and, because we had more work on the floor, we needed to upgrade the weld department.

We didn’t experience so much of a slowdown with the COVID shutdowns last year. There were some tentative business pullbacks when companies shut down, but we didn’t experience a great loss of business. So, in keeping busy, we also found that, in general, the market was slow, which lowered the price of the machines. They were going to prices that we hadn’t seen before, one third of the price.

There were companies that were, unfortunately, succumbing to the economy and closing—companies that had machines that were out there only for a year, that were now selling for well below 50 percent, that were still considered new and under warranty. So, this was a good opportunity for us to take advantage of some of this available equipment, and we did.

This 2U enclosure for a customer in the industrial machinery market is also fully fabricated in house by Continental Industries. (Image courtesy Continental Industries)

D2P: How were you able to avoid the slowdown that many other companies experienced during the COVID shutdown?

 MM: It was clear that once the COVID shutdowns occurred, many companies across sectors were sending people home to work. That created a demand. There was in-home schooling, there were Zoom meetings at home, and people were streaming for entertainment purposes, and that put a demand on the internet infrastructure. There was almost an immediate need to increase capacity, and that stimulated business from the server rack companies, the big IT companies, all the people supplying and supporting the internet infrastructure.

We had increases in demand for rack storage, server data storage, aisle containment systems, chassis—anything that was supporting that industry, and it was really a good shot in the arm. The shutdown exposed a flaw in the system:  There wasn’t enough capacity, and we needed more data centers to support that. The contractors went out and did what they had to do [building more data centers] to increase capacity, but as far as the actual physical parts, we had to build those up quickly for them.

D2P: Can you give a few examples of the types of sheet metal parts that you produce?

 MM: As far as the electronics goes, we do a lot of the data storage racks. We do many of the chassis and enclosures that are 4U, 2U, 3U, and we do them for just about any industry, not just data storage. We’re doing them for movie and cinema, we’re doing them for defense, we’re doing them for electronic test and measurement, for electronic components. All of these industries are using this type of technology.

We’re heavily into medical, we’re into automotive, and we’re [working with] electronics companies that are doing X-ray equipment for medical purposes, and industrial X-ray equipment for fabricated products, like Kevlar for defense and military purposes. With national security being an issue, this is also a hot commodity.

D2P: There have been calls for more reshoring of technology hardware—the types of things you mentioned, like the server racks and networking equipment—during the pandemic. It sounds like there were a couple of different factors that were creating demand.

MM: Absolutely—folks working from home, their Zoom meetings, the home schooling, and people who were streaming movies and games for entertainment purposes while they were home. That put the strain on the system. People were complaining that they couldn’t stream their movies, or their Zoom meetings were getting cut short. So, they had to increase capacity to meet the demand, and we’re still experiencing that growth.

D2P: Do you expect the growth to continue for the foreseeable future?

MM: Coincidentally, yes. This is still ongoing, and it’s not just in that sector now—everything is coming on strong. A lot of our core customers are extremely busy, and that’s across all markets.

Looking at how the year planned out, we exceeded our projected goals, but it wasn’t through the traditional ways. When we forecasted each quarter for an end-of-the-year growth, we had this big gap that came through with the COVID shutdown. We didn’t know where business was going—we knew everything was just out the window. We had no way to measure what we were going to be able to do. Our fourth quarter was so strong, and we’re actually on pace at the beginning of 2021 to experience record growth, and it could be our strongest year ever.

D2P: Does your location, in California, lend itself to more potential business around tech hardware?

 MM: It does. The California marketplace is broken up into maybe three major sectors.

We’ve got Northern California, that’s really big on the tech side of it, where all the big companies are—the Googles and the Facebooks and the major tech companies. In Southern California, we’re more of the commercial side of the business. We have a lot of medical and a lot of aerospace, so we do commercial electronics. Down in San Diego, in the south part, it’s heavy in defense and aerospace, with all the Navy bases and defense companies that are down there.

So, each one of those regions in California has a control of that market. We’re flexible, in that we’re a job shop. We have companies that are coming from Northern California, down to Southern California, saying, ‘We’re looking for people who actually have capacity; people who have better shop rates; people who have access to materials that are coming in from offshore, to Long Beach, where we can do assemblies, and we can have things go back out, as we need to.’

And we’ll be seeing business come from San Diego, north into Los Angeles and the central part of the state here, for that same reason. Everything is focused on aerospace and defense, and we’re seeing people come up with medical and law enforcement related products, defense related products, that are coming into this area because the market—and what we support—is broader. It’s not so focused on tech, or so focused on defense. So, we’re really capitalizing on that, and location has a lot to do with it.

 D2P: Have you seen OEMs starting to take steps, before or during the pandemic, to try to shorten their supply chains by doing more business in the U.S.?

 MM: Actually, the COVID shutdown had a huge impact on that. The ports were shut down for a while, the dock workers weren’t working. Companies couldn’t have access to the parts that were sitting in the containers. They couldn’t get them in.

There were two things that happened. Number one, some of them said, ‘We need to have a certain percentage of our manufacturing done in California, so we have an alternative supply chain.’ So, we saw increased business from that.

But other parts—some of the electronic parts, for example—couldn’t be helped. There are automotive fabricators who’ve already had Department of Transportation approved sources for lights and other products that have to go onto a car. It’s very difficult for them just to flip a switch and say, ‘I’m going to  pull it from current sources and go to another source.’ All of these things have to be approved, and it’s got to go through all of the certifications.

So, for those reasons, some of them couldn’t pull in, and they just had to experience a lack in their supply chain. We couldn’t just step in and say, ‘We’ve got to do this.’ We’d have to have certifications and approvals and get ourselves lined up to capitalize on that business. And by the time we did that, they loosened up the doors at the ports, and people were getting their parts back.

Some of the folks who can fabricate parts and can bring them onshore are doing that, and some of the others are going to have to have approvals and certifications with local sources before they’re able to make changes in their supply chain.

D2P: What advantages do you offer as an alternative to sourcing overseas?

MM: There are a couple of things. We’re able to fabricate at the level of a lot of the shops overseas. Generally, when companies go offshore, there’s a minimum purchase quantity for it to make sense. Companies in China want them to have X number of parts—10,000 or 15,000, whatever it is—or a container load, before they can send that back through here. If we’re talking about that kind of volume, generally, we can offer very aggressive pricing to our customers. And right now, with our automated systems, we’re able to fabricate at a quicker rate.

The fact that material markets are volatile right now is having a positive effect in that area. If customers want to capitalize on a part-to-price consistency, it’s to their advantage to lock in pricing here, locally, domestically. Our raw material prices are changing day to day. So, we can say to someone, ‘We  can offer you a volume price. Let’s get the blanket order set up with our materials supplier.’ That is fixed. Now, we can just deliver to them in the same way that if it were coming in from offshore, at a volume of 500, or 5,000, or whatever number of parts that they need per month.

So, we’ve secured that business for a year’s term, or six-month term, or three-month term, depending on how they want to issue their contract. We’ve locked in material pricing, and they’ve locked in a local source.

 D2P: For companies that source domestically, does having a shorter distance between design and manufacturing offer advantages, not just in lead time, but in ability to innovate?

MM: Oh, sure, absolutely. When a company that’s manufacturing a product decides to go offshore with it, and they create a design, send it out there, and it’s approved for manufacturing, there’s absolutely no way for them to quality check, or do on-site inspection for processes to prove things out.

Here, we can have that much shorter distance, much more intimate relationship with our customer, where their design and our manufacturing can get together, and we can collaborate. We can go out to their facility and see what they’re trying to actually do, whether they’re building a product from scratch, redesigning, or whatever they’re trying to achieve. We can see what their final objective is, and we can give them input from a manufacturing standpoint for design for manufacturability, or to re-engineer to reduce cost.

We can also bring them back here and show them our processes. Their ability to see the facility and our capabilities gives them a clear idea of what they can design back. There are advantages on both sides in that way. As far as innovation, we can look at them and say, ‘We can do something similar to this and make it out of one piece,’ when they may have the design in three pieces.

And lead time, of course, is an advantage, with us being able to fabricate a prototype for them, and they can test it. That’s something that’s very challenging to do in any kind of reasonable timeframe when they’re going offshore.

D2P: You sound pretty optimistic about Continental’s future.

MM: I think we’re on pace to probably have our best year ever. We’re starting off with a record January after a huge fourth quarter. We have, in a lot of cases, business booked through mid-year already, through May-June. And right now, there’s really no evidence of that slowing down. I’m optimistic to say that it could be a huge growth year, if not the best year the company has seen.

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