The Revolution In A Box

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The man who started this revolution is a beefy football jock who dropped out of college because he didn't think he was learning enough. Kirila grew up working the family farm in the shadow of the struggling steel mills of Pennsylvania's Shenango Valley, 60 miles north of Pittsburgh. He was as fascinated by manufacturing as some teenagers are by cars. In high school he was devising weight machines for his football teammates. An injury sidelined him in 1984, and he dropped out of Youngstown State University to get into the fitness-machine business. With a $500 deposit from a customer, he and a friend started Pyramid Fitness Machines in a barn. By 1993 it was a $44 million company.

Kirila, 35, is the kind of guy who sleeps only because he's dog tired, and then he's likely to bolt out of bed and down to the office with a new idea about moving molecules. On business trips to Tokyo (Japanese firms were his biggest customers), he would get his distributor to arrange access for him to factories. He spent two nights prowling the catwalks above a Nissan Maxima assembly line, studying every human and robotic move below. Obsessed? He dragged his wife on a factory tour of China and Japan during their honeymoon.

In 1993, Kirila sold his company to fitness giant Cybex and started Pyramid Operating Systems. That's when he and his engineering chief, Bob McCollum, devised a software program to control each step in the manufacturing process. A company offered them a lucrative contract to build storm drains, but Pyramid didn't have the $2 million needed to fashion or tool the proper steel mold to shape the pipe. That's when McCollum came up with a startlingly simple--and cheap--idea. Instead of a metal mold, why not fashion two pieces of composite in the shape of the product, inject the resin into the cell and brace the flimsy mold with pressurized water?

It took months of hair-pulling setbacks, but they figured out how to digitally control the chemicals, water pressure and the mold itself, and began fabricating larger and larger products, from pipe to custom boat hulls. The average cost to tool a mold: a mere $25,000, nearly a 99% cost reduction. "Once we had the floating mold," says McCollum, recalling their excitement, "we wanted a whole factory in a box."

Pittsburgh venture capitalists wanted nothing to do with it. Despite Kirila's charisma and his successful start-up, they saw in him a college dropout from a depressed steel valley. He faced an age-old paradox: his idea was too big to get funded, but he couldn't prove its worth unless he had the millions to start building stuff.

Enter Irwin Jacobs, the Minneapolis-based financier whose takeover antics in the 1980s struck fear into the hearts of companies like ITT and Disney. Jacobs, a reformed predator, now runs Genmar Holdings, a remnant of his buccaneering days and a company whose principal business is building pleasure boats. Boatbuilding is messy, environmentally hazardous and so unpleasant a job that Genmar has a hard time getting workers to do it. Pyramid built a few test hulls for Genmar, but Kirila's system wasn't refined enough for Jacobs' engineers. "They were 90% there, and we needed 100%," says Jacobs. "So it represented a multimillion-dollar leap of faith."