The President/CEO of Excel Foundry and Machine, Inc. and CEO of FLSmidth Excel LLC, formerly known as Excel Crusher Technologies, Doug Parsons understands what it takes to succeed in today’s global economy. Since taking over as President of Excel Foundry and Machine in 1998, he has watched sales soar from about $9 million to over $50 million this year. Parsons founded Excel Crusher Technologies in 2004, selling both of the Pekin-based companies to FLSmidth two years later. He continues to oversee both companies, as well as participating in merger and acquisition activities for FLSmidth.
Parsons sits on the Illinois Workforce Investment Board and the Advisory Board for Morton Community Bank. He is Worship Director at Riverside Community Church and a Director of All God’s Children International, an orphan care/adoption agency. He won the 40 Leaders Under Forty award in 1999, and has been written up in the New York Times and Inc. magazine. He lives in Peoria with his wife, Jennifer, and three children: Merrill, 13; Jessica, 10; and Jack, 6.
Tell about your background, schools attended, etc.
I attended high school at Peoria Christian School when it was located on Tripp Street and had nothing more than a small basement building and a few trailers for classrooms. It is amazing to me to see what a first-rate education facility it has become today. After high school I headed south to Waco, Texas, to attend Baylor University, where I graduated with my business degree. Since Baylor, I have had the opportunity to further my education through programs at Bradley University and Harvard University’s Kennedy School of Government, as well as General Electric’s renowned Crotonville executive training center—I’ve always been a huge Jack Welch fan!
Explain the origins of Excel Foundry and what it produces today. How has that changed from the original business?
Excel’s roots go all the way back to 1929. However, my father did not get involved in the business until 1966 when Excel was a distressed company and nearly bankrupt. At that time Excel had just a few employees and even fewer customers and was two years behind on its SBA loan. Although my father had absolutely no background in the foundry business, he took a risk and accepted the offer to move to Pekin to run the struggling business. The risk paid off as he was able to get the company turned around and profitable in under a year. Inspired with a vision of what Excel was capable of doing, my father later took yet another risk, acquiring the company outright in 1976.
Over the years, my father forged a uniquely customer-driven culture at Excel and established the company as a leading supplier of bronze bushings. One of the most significant developments for Excel came during the mining boom of the ‘70s. At that time, many mining companies were unable to get parts support for their equipment from the original equipment manufacturers (due primarily to their being overburdened with new equipment orders) and were forced to look for alternative suppliers in order to keep their mission-critical equipment operational. Mines were so desperate for parts that we actually began receiving blank (fill-in-the-price) purchase orders. Because Excel did not have the manufacturing specifications for the needed parts, we sent our machinists out to the mine sites to measure the housings where the bushings were installed and developed the manufacturing specifications through a reverse-engineering process. It didn’t take long for word to spread throughout the industry that Excel was willing and capable of providing aftermarket bushings for the large mining equipment. The mining companies were delighted with the quality and service they received from Excel, and business began to grow rapidly. Because my father was a pilot and loved flying, he would often put parts in the back of his plane and fly them right to the mine site. No one in the industry had ever seen service like this before. It was through this kind of passion and dedication to customer service that Excel’s culture was birthed. That passion and commitment is in the DNA of all our people…we are a team focused on “WOWing” our customers.
Although the focus on unmatched quality and service has not changed over the past 30 years, the breadth of the product line certainly has. Excel has grown its product offerings from a limited range of bronze bushings to literally every commonly needed replacement part—from gear sets to motors to complete undercarriage assemblies on dozens of makes and models of equipment used in the mining and aggregate industries. We have millions of dollars invested in inventory in numerous locations throughout the world in order to quickly get our customers the parts they need to keep their equipment running.
With the knowledge we gained over the years regarding the strengths and weaknesses of the various designs from numerous manufacturers, coupled with the market demand for new alternative suppliers of certain equipment, it became clear to us that it was time to venture into the design and manufacturing of our own line of capital equipment. Although this seemed to be a natural step forward for Excel, we realized it was going to require us to bring in skills we did not have at the time. To be successful, we needed to ensure that this new venture maintained absolute focus and was not diluted by the challenges and day-today activities at Excel Foundry and Machine. So in early 2003, I began pitching my vision to three specific individuals who I felt represented the very best talent and experience in the industry and with whom I felt certain we could begin building a great company. Those three individuals are now my president, chief engineer and general manager. In 2003 Excel Crusher Technologies, LLC was launched and we set out to build our first machine—which became known as the Raptor XL-400 cone crusher.
After early success in the U.S. with our first machines, we quickly expanded our line to include a smaller-sized machine, the XL-300, aimed at the portable plant market. By this time we were beginning to attract industry attention, especially from other equipment manufacturers. In 2005 we were approached by FLSmidth, a leader in the global supply of process equipment to the mining and cement industries, who expressed strong interest in our cone crushing technology. It was evident that Excel Crusher Technologies’ business strategy was a perfect fit with what they needed to fill a gap in their product offering. In 2005 I agreed to sell half the interest in Excel Crusher Technologies to FLSmidth, and we immediately began a rapid development program for the world’s largest cone crusher—the Raptor XL-1100. In May of 2006, by combining Excel’s technology with FLSmidth’s global presence, we were able to win the single largest cone crusher order ever placed for installation in a massive new iron ore project in Australia. In just three years Excel Crusher Technologies went from an absolute startup to having an order log of over $30 million.
Excel is a family business. When did you first become involved in the business?
Actually, Excel is no longer a family-owned business—as of July of last year my brother and I made the strategic decision to sell the remaining shares of both companies to FLSmidth. With a full year of running the company since the acquisition, I can say with absolute conviction that it was a great long-term decision for all of Excel’s employees, the FLSmidth organization and its goals, and for my brother and me and our families.
After graduating from Baylor University, I moved to Dallas and went to work for a developer/homebuilder. A couple years later I received a phone call from my father who was in the middle of a crisis situation here at Excel. He asked if I would consider coming back to Pekin to help manage the company. Although I had never planned to come back to Pekin, I did not hesitate in responding to my father’s request for help. In July of 1992 I brought my wife, who had never known anything but Texas, to the great Midwestern town of Pekin to start a new career.
As a manufacturer of replacement parts for mining equipment, do you have facilities in other parts of the world where mining equipment is also manufactured?
For clarification, there are two separate companies under the Excel name; Excel Foundry and Machine, which manufactures and sells a line of aftermarket parts, and FLSmidth-Excel (formerly Excel Crusher Technologies), which designs and manufactures rock crushing equipment and provides full-service repair and rebuild for all makes and model of crushers.
As a part of the FLSmidth global group of companies, we have access to manufacturing facilities all over the world—including FLSmidth operations in China, India, South Africa and Australia. We are currently utilizing one of the Australian facilities to do the assembly and test work on the Raptor XL1100 cone crusher.
How have operations and/or business philosophy changed since the sale of the companies to FLSmidth?
If there had been any doubts in my mind regarding FLSmidth’s desire and commitment to maintain and support Excel’s business philosophy and corporate culture, there would have never been a sale. In fact, according to FLSmidth, one of the most attractive aspects of Excel was its dynamic customer-focused culture. They have looked to Excel to help them improve their approach to aftermarket support on their installed equipment around the world in order to increase their market share on the highly profitable aftermarket replacement parts.
You market the high level of customer service and support by Excel. How has this training and philosophy enhanced your companies’ growth?
I have a firm conviction in the belief that the success of a company is not so much about its products or services as it is about the passion and dedication of its people. Great products and services are simply a “byproduct” of a highly energized and tightly aligned team of people. Excel’s culture insists that you have a passion for excellence and a deep commitment to serving our customers better than anyone else on the planet. There is absolutely no doubt that our culture of customer service has been a huge factor in Excel’s success.
How do you compete with lower-cost manufacturers overseas? What are your thoughts on offshoring and the ability of the American workforce to compete globally?
My philosophy with regard to manufacturing in the U.S. is that if what you are providing does not translate into added value for your end-customer (relative to other suppliers), you should not be the one manufacturing it. If this is the case, you are simply an inefficiency in the supply chain, which ultimately translates into a higher-cost end-product.
The trap in which far too many manufacturers get caught is the belief that because they have the capability to produce something and have historically manufactured a product or supplied a service, they should somehow have the right to expect that they will forever be the one to provide that product or service. The reality is that if what you are doing has, over time, been relegated to a commodity that could be produced anywhere in the world, it likely does not make economic sense to manufacture it here in the U.S.
What percentage of your business derives from overseas markets? Has this changed at all since the sale of the company?
Excel has been exporting since the late 1970s. Over the past 10 years, international sales have accounted for roughly one-third of all of our business. I believe that over the next few years export sales will exceed our domestic sales. With our parent company’s global footprint, we believe we will see exponential growth in our international sales, making our U.S. sales—even with strong growth—a smaller percentage of our overall business.
Is it difficult to compete in the state of Illinois because of our business regulations?
I don’t think I am alone in expressing that the governor’s proposed GRT (gross receipts tax) would be one of the worst things to ever happen to Illinois businesses. Clearly it would create an unlevel playing field for Illinois companies of all types—not just manufacturing. The proposal alone is going to keep prospective businesses from looking at Illinois for future expansions.
On the other hand, Excel has actually seen some assistance from the state over the past several years with our expansion projects. Through IDFA and other programs, we were able to get some reduction to the cost of financing new buildings and equipment. These programs were helpful and worked as intended, as we have added over 100 high-paying, manufacturing-related jobs with those expansions.
How do you view the future of manufacturing in the United States?
I believe the United States still holds the ability to manufacture products with the highest level of quality in the world. We need to continue to invest in manufacturing technologies that give us unique capabilities. But the reality of globalization is that U.S. manufacturing companies must be knowledgeable, alert and sensitive to what areas of manufacturing they remain relevant. There is absolutely no allegiance to buying U.S.-made goods if there is no distinguishable difference in cost, quality or lead time. China and other low-cost countries are continuing to improve their quality levels, while at the same time the logistics of getting foreign-produced goods to the U.S. is becoming more and more efficient. As U.S. manufacturers, we must focus on adding value in order to be relevant in the long term. There may be times we have to bust old paradigms and partner with foreign manufacturers while leveraging our product knowledge, logistics and inventorying capabilities, quality control or end-customer relationships. We must either make ourselves a necessary part of the equation or get out and refocus our capabilities and capacity on something that delivers definitive value to our customers.
What are your thoughts on the rise of China in the global marketplace?
Overall, I believe China has had a positive impact on the economy— not only in the U.S., but around the world. Most economies have experienced a time of tremendous growth without the sting of inflation. Much of this can be attributed to the low cost of goods from China. However, one thing that must be addressed at some point is China’s reluctance in allowing their currency to truly float with other world currencies. With China now being a part of the WTO, I believe they will be forced to do this at some point, and, because of the world’s dependence on their low-cost goods, the impact will undoubtedly create some degree of global inflation.
What words of advice would you offer other family businesses?
To recognize that the “family business” has the potential to bring enormous blessings, but that it has equal potential to become an enormous curse. I have seen far too many families torn apart because of poor planning and mismanagement with regard to the business. In my opinion, it gets exponentially more complicated and difficult to effectively manage, grow and lead family businesses as they move into the third and fourth generations. This is simply because of the number of siblings involved, as well as a lack of understanding and appreciation for the things that went into making a company successful. Often times, family businesses do not provide room for great non-family talent to come into leadership. With complete reliance on the family gene pool, many companies fall far short of their potential, or worse, fail to survive due to an insistence on family having full control of the direction and leadership of the company.
Tell about your relationship with Bradley University.
Our strongest relationship with Bradley University has been with their International Trade Center, NAFTA Opportunity Center. Dr. Jim Foley has been a great friend and partner to me as Excel expanded its export business. Over the years he has not only been responsive in providing answers to technical trade questions, but has also brought a broad base of knowledge with which to guide Excel’s long-term export strategy. I cannot say enough good things about Jim and his team there at Bradley.
You serve on several community boards. What is your philosophy of volunteerism?
To whom much is given, much is required.
Secondly, I believe that no matter how much you contribute to a board, committee or organization, by volunteering to serve, you always come away rewarded with far more than you put in.
What would you like our readers to know that hasn’t been asked?
With the risk of sounding absolutely cliché, I have to be completely honest and give credit where credit is due and recognize that all the success that Excel has been blessed with and the core of our powerful culture comes from the hand of God and the commitment to honoring Jesus Christ in how we operate this company. I am so thankful for how God has guided and directed our path and provided such a clear and exciting vision for Excel to follow. It is a tremendous honor to lead the men and women of Excel and I am grateful for their commitment to delivering excellence in everything we do. IBI
