By Eric Peterson | Oct 12, 2021
North Logan, Utah
Industrial automation and consulting services
Humes was working as an engineer for a heavy fabrication company when he started Black Box Engineering.
The company was having issues, so Black Box provided a way to cut costs. "They could throttle how much they used me," says Humes.
While Humes' previous employer subsequently shut down, that start generated consulting work in engineering and strategic planning. "The people I worked with moved on to other companies, and they said, 'Hey, can you help us out with this?'" he says.
The consulting jobs led to a horizontal expansion into custom automation manufacturing. Automation clients are largely in food and beverage, medical device, and industrial manufacturing.
"Our customers just kept asking for more," says Humes. "I would just add to the team and keep trying to bring on people with better expertise in areas than I did."
Black Box's custom equipment includes data-gathering systems for operational improvement. "We do a lot helping them understand where bottlenecks are in their processes," says Humes.
The company also manufactures machines that produce medical-grade bags for use in vaccine and pharmaceutical manufacturing. That business has boomed by more than 500 percent during the COVID-19 pandemic. "We went from building five to eight machines per year for that kind of industry," says Humes. During COVID this year alone, we will have built close to 50 machines that automate that process."
The consulting work "is a broader and different mix," he adds, with most clients in the $2.5-billion-plus revenue range. "I help them with strategic planning and mergers and acquisitions."
In 2019, Black Box pivoted to an outsourcing model and shut down some in-house capabilities in favor of leveraging local partners like Falcon Sheet Metal and Mountain View Machine & Welding. In the process, the company scaled its space down from 30,000 square feet to 9,000 square feet and its staff from 30 employees to about a dozen.
"For a while, we had our own fabrication, our own machine shop, and our own powder coating," says Humes. "Here in Logan, the anomaly is there are maybe 42 machine shops within a 50-mile radius. For us, it was like, 'Are we just getting distracted with the machining of all this and we need to focus more on the design and the commissioning and the assembly?'"
In turn, the company's sales jumped by a heady 400 percent in 2021 -- or 170 percent if you don't include the medical bagging boom.
The move to outsourcing helped catalyze the growth, he adds. "It's hard for us to predict when a customer will need our type of equipment, because it's very specialized and niche," explains Humes. "So having staff for a machine shop and a fabrication shop and the rest of the overhead associated with it -- footprint, equipment, all that stuff -- was a pretty big challenge for us to keep it up to speed."
"We're much more focused than we were," continues Humes. "Now we're able to focus on what we do really well, and the rest of it, we find really good partners and rely on them."
Humes credits his staff and GM Taylor Wille, who runs Black Box's day-to-day operations. That frees Humes up for consulting work and his job as a full-time professor at Utah State University. "This is my third semester," says Humes. "My general manager, she's been running the company for about two years now."
Challenges: "Supply chain," says Humes. "Getting us what we need on time has been a challenge." With the dearth of microchips, programmable logic controllers (PLCs) have been notably difficult to source, he says.
Another is "uncertainty of the market," adds Humes. "It cannot continue to grow this fast everywhere. Just learning how to balance our growth with that uncertainty. IS next year going to be this strong or is it going to fall off?"
Opportunities: "Continued growth for us is probably going to be on a national level," says Humes. "There has been an uptick of companies needing similar equipment to what we do."
Needs: Black Box needs good employees, highlighting controls engineers as especially difficult hires. "People who demonstrate ownership are next to impossible for us to find," says Humes. "One, it's hard to find people. Two, I think [it's harder] finding people who are interested in sticking around and being part of the team and growing something. To me, it feels like everybody is very temporary-minded. They're just looking for a stepping stone onto the next thing."