This article originally appeared in IMPO's June print issue.
Founded by two university professors and their wives, Daktronics has been making dynamic communication systems since 1968. It is a global industry leader in designing and manufacturing electronic scoreboards, programmable display systems and large screen video displays. The company has made scoreboards and display systems for some of the biggest teams in professional and collegiate sports.
The company has a 1 million square-foot manufacturing facility in Brookings, South Dakota, a small town just outside of Sioux Falls, with another smaller facility located in Sioux Falls itself. It has also started to create a global footprint, with sales and service offices around the world. Daktronics employees 2,300 people worldwide, with 1,800 of them in Brookings. Of those workers, 1,000 of them work directly in manufacturing.
On the plant floor, Daktronics has been moving towards more integrated automation systems since the early 1990s. Prior to that, the company was much smaller and much less automated. To improve scalability, the company has also been working on improving its Lean techniques for about eight years. Previously, they operated on a typical batch and queue production style, which was effective, but couldn’t keep up with company growth. Today, about 90 percent of production is made to order.
Daktronics doesn’t just build the display boards — it also designs the entire system that runs them. About half of the product development budget for the company is spent in software design. Daktronics team members work with clients through ordering, design, installation and any ongoing service the display may need.
And when it comes to the displays, they keep getting bigger. “Some of the sports competition really does come through in the boards that teams are purchasing,” says Sheila Anderson, CFO and Treasurer of Daktronics. “Everyone wants the biggest and the best.”
One of the driving factors keeping such a huge company in South Dakota? The pipeline of engineers they recruit and train from South Dakota State University (SDSU), which is located just down the street.
“I think SDSU is a really good source of talent,” says Anderson. “We have internship programs that help utilize the talents from SDSU as well as the other universities in the area.” Many of the engineers on staff are graduates of SDSU, which is a great competitive advantage for the company, especially in a state with almost problematically-low unemployment.
“If there’s a gap in terms of the talent pipeline, it’s into some of our more professional positions,” adds Matt Kurtenbach, Vice President of Manufacturing at Daktronics. “If we have a midlevel position open, for whatever reason, a new grad isn’t necessarily the best candidate for that, so that can be a challenge.” Kurtenbach says. He adds that with aging populations and retirements, it’s getting harder and harder to find quality replacements simply because the unemployment rate in the area is so low.
“We certainly train unskilled folks on manufacturing methods, but when you get into some of the more skilled positions, manufacturers in the area are having a hard time finding welders and machinists. We find ourselves doing a lot more training than we’d like to,” Kurtenbach says.
In spite of the low unemployment rate, Anderson explains that there are a lot of economic benefits to doing business in the Sioux Falls area. Aside from being so close to several universities, South Dakota also has low corporate tax rates that make doing business more affordable. “Coupled with a great quality of life, it is cost beneficial for us to be here compared to other locations,” she says.