Hermann Kahle’s is a true rags-to-riches story. A highly respected rocket scientist, Kahle was recruited to work at Cape Canaveral but soon learned that the facility was shutting down. With a master’s degree in electrical engineering, a wife, two small children and no money, he accepted the Air Force’s offer of a 20% pay increase and a position in New Mexico. “All our worldly possessions were sold and [the money was] put into a little jewelry that we carried clasped in my wife’s hand because we weren’t allowed to bring anything else with us,” he says.
Over the next year, Kahle became an expert at computers and, when released from his government contract, relocated to Cleveland, taking a position as VP of Engineering with Jack & Heinz. In 1971 he resigned that position to become president of NESCO Inc. Kahle immediately took over NESCO’s engineering operation, expanding it from a half dozen offices to offices in 30 cities, by specializing in nuclear power generation plants during the height of that industry’s proliferation.
Kahle Finds a New Challenge
Kahle put his engineering, analytical and problem-solving abilities to good use in 1982, when he retired from NESCO at age 60. Nearly consumed by boredom after only three months, he wanted a new challenge. Placing an ad in the Wall Street Journal seeking businesses that needed a savior, Kahle evaluated over 200 companies. He finally bought VM Decal Co. and renamed it Visual Marking Systems (VMS). He had the vision to see that the decal industry had the potential to reach $5 billion annually. With the largest national decal company servicing only 1–2% of the market, the field was wide open.In 1983, Kahle, now chairman emeritus, made his second most pivotal business decision — recruiting his son Dolf, now CEO, away from his position as a mechanical engineer to join VMS and computerize the new enterprise. Dolf recalls, “Dad’s career in electrical engineering and mine in mechanical engineering created a unique synergy. From the ground up, everything I learned in terms of ethics and running a business, I learned from Dad. He taught me from childhood that if you’re going to take on a project, give it your best and shoot for goals.”
The father and son then combined their talents and quickly grew the company from 20 employees generating $1 million in annual billings to 58 employees and say the company will do $6 million this year. “The key to our success and growth was the switch to industrial accounts — companies that need reruns on products, guaranteeing us repeat business,” Dolf said.
In 1996 VMS won a $750,000 account to rename all the package drop boxes from Federal Express to the new FedEx logo — over 35,000 boxes worldwide. VMS created kits with up to 19 new labels and drop shipped them all over the world for installation by field personnel. From 1991 to 1996, VMS doubled its revenue with growth from major OEM accounts including Rockwell Automation, Invacare, Yale and Hyster forklifts, VitaMix blenders, Lincoln Electric welders, and Telxon wireless hand-held units. Today, the company’s largest competitor in the screen printing industry is $70 million a year with the nation’s 10th largest screen printing company making $25 million. Shooting for the stars, VMS is rapidly climbing from 88th in the screen printing industry five years ago with $5 million, aiming to be among the top 10 in the next five years.
Diversification Pays Off
To hasten the climb to the top, the Kahles diversified product offerings to become a one-stop shop for all their customers’ needs. Currently, VMS offers over 40 products and services including technical material advice, electronic graphic arts services, labels, overlays, nameplates, DOT markings, decorative trim, corporate identification programs, and promotional items. The VMS plant includes a full-service graphic art department.The printing department boasts a large-format 36-inch digital printer for point-of-purchase displays. In 1999, VMS added a four-color in-line screen printing press specifically designed for VMS and its durable product identification market requiring tight tolerance and high-quality printing. The plant runs nine screen-printing lines, all with UV-curing ink. The decision to use UV ink was made after Hermann Kahle evaluated waterborne, solventborne and UV inks. UV was chosen based on its durability, low toxicity and environmental benefits, improved employee health, and lower overall production costs.
The finishing department offers steel rule and thermal die cutting, laminating, and embossing, allowing VMS to handle most materials, including polyester, polycarbonate, plastic, paper, metals, and vinyl. The company accepts customer files by e-mail, modem or disc. This all-encompassing approach seems to be working — VMS services over 70 Fortune-500 companies, and has developed key partnerships with over 50 world-class OEMs.
The choice of UV ink has paid off for the company. In the 1980s, when the EPA cracked down on printing companies and limited the use of solvents, VMS was ahead of its competition and regarded as an expert in the fledging field. The company won a bevy of new clients eager to work with a company already comfortable with the new regulations. VMS passed both EPA and OSHA inspections with flying colors, and the Ohio EPA asked permission to bring other EPA personnel from Columbus to see what a model plant looks like.
Investing in People
Heightened visibility of the company led to more growth; but with growth comes more complex management issues. Hermann Kahle’s commitment to his employees and his management style seems to reflect the same blend of integrity, common sense and business savvy that made VMS a strong contender in an industry of heavyweights.“Our biggest competitors think we are their biggest competitor; yet, we are one-fifth their size,” Dolf says. “It’s our employees who make us so formidable. It’s been crucial for us to invest in managers who are experts and can tell us what we should do from their particular department’s perspective.”
True to form, the Kahles recently involved all 50 of its employees in the planning and development of the company’s new $2-million plant addition. “The architects interviewed each manager for hours and walked around the building talking with employees,” Hermann said. The new facility, completed in January 1999, was built to allow for expansion for the next 10–15 years. Since then, the building was increased from 20,000 to 50,000 square feet, and in 1999 the company grew by 16%.
The Future
Dolf Kahle reports that the future of the company is bright, due to its investment in technology, facility and its people. VMS has the latest equipment for creating high-quality, durable product identification for OEM accounts, electronic communications, electronic design, digital printing, multi-color screen printing presses, and high-quality finishing equipment. The company’s past success and future growth are based on setting up strategic partnerships with its customers through VMS’ company-direct sales staff. Kahle says, “We want them to think of VMS as a source to help design the best product in terms of material and graphic design, make it at the lowest economic cost, offer vendor-managed inventory programs, and add value to their product.”For more information on pressure-sensitive markings, contact Visual Marking Systems Inc., 2097 E. Aurora Road, Twinsburg, OH 44087-1979; phone 800/321.1496; fax 330/425.9371.
