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How Brass Key Opens Doors in Asia

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They manufacture porcelain dolls at six factories in China through a hands-on, transoceanic quality-control system. No, they’re not a multinational corporation. Just a smart family that knows how to cultivate—and motivate—people.

By Deanne Stone in Family Business Magazine

This past June, Judy and Bob Mullins of Brass Key Inc., a toy manufacturer in Federal Way, Washington, journeyed to Hong Kong to join their staff in marking the historic handover of the British colony to China. Judy is the company’s senior vice president and general manager; her husband, Bob, is in charge of operations for the United States and Asia. Together with their three children—Sarah, 21, Melissa, 16, and Tommy, 12—they hosted an elaborate dinner party for their employees. Following a Brass Key tradition of cultivating family-to-family relationships, they also invited their employees to bring along members of their extended families and friends.

For Judy, the party marked a milestone for the company she and her mother had founded in 1980. Started as an informal mom-and-daughter bed import business, Brass Key switched streams in 1993 to concentrate on manufacturing toys, primarily plush-toy animals and porcelain dolls. Today the company is a $20 million-a-year operation with offices in Washington State and Hong Kong that oversee production at six factories in China. Adding to its achievements, last year the company won the Target Stores’ Vendor Award of Excellence. Cited for its creative designs, overall quality, on-time deliveries, and excellence in customer service, Brass Key was hailed for setting a new standard for vendors supplying the huge Target Stores chain.

With a total of only 42 employees—half of them in Hong Kong and China—Brass Key is a remarkable story of a small family business that has been able to reach across an ocean to motivate people and monitor a far-flung manufacturing operation in a complex foreign culture. Judy Mullins and her younger sister, Mary Gustaff, who became her partner in 1983, are hands-on managers who have created a sophisticated and efficient quality- control system to maintain high standards in production and service. The key to the system’s success is the family’s cultivation of person-to-person contacts—a habit learned early on from their father, Bill Suiter, who was director of Asian imports for Weyerhaeuser for 34 years. The family often traveled with him, and for one year, in 1967, lived in Tokyo. Bill’s knowledge of Asian business customs and his longstanding contacts paved the way for Brass Key.

Judy and Mary learned from their father that the most important people in a company are not those with impressive titles but the ones who make the product. In accepting the Target award, they made sure that the entire company, as well as the factories they contract with in China, received credit for their contributions. Mary, the mother of a new baby, had to miss the festivities in Hong Kong. For Judy and Bob, the trip was a chance to express their appreciation in person to all those in Asia who played a part in Brass Key’s success. In a separate ceremony, they presented the company’s own version of the Target award to four outstanding vendors and, later, Judy and Bob walked line by line through the six factories to thank each of the workers.

SISTERS IN CONTROL

Ten years apart in age (there’s a brother in between), the two sisters are about as different in approach and talents as they are in appearance. Mary, casual and unadorned in dress, is more analytic and detail-oriented. She is the one who spent the most time in Asia over the past decade working hand-in-hand with the factory managers, testing products and detecting errors in production. By contrast, Judy is a conceptualizer. Artistic and creative, she likes vivid colors and a bit of flash. Her strengths are in generating ideas for products and marketing.

The sisters agree that it is their differences that make them a strong team. “We don’t look alike and we have different personalities,” says Judy. “And being so far apart in age, we never felt threatened by each other. When we started working together, we asked what each of us did best and what we could contribute to the team. We don’t have a boss in the usual sense. Each of us is boss of her own area.”

For a $20 million company, Brass Key operates with relatively few employees. The sisters attribute their efficiency to a tightly crafted quality control system that runs from Federal Way through Hong Kong to factory floors in China. Most import businesses hire trading companies to farm out design, production, and distribution functions to their sources. From the outset, Brass Key management has preferred to manage every aspect of the process themselves.

“We were convinced that by eliminating the middleman, we could produce superior products at extremely attractive prices,” Judy says. “And by not paying commissions to the middleman, we could pass on the savings to our clients and pay our employees bigger salaries and bonuses.”

The production process begins in the Federal Way headquarters where concepts are developed and products designed. Judy and Mary work closely with clients, custom-tailoring products to their needs. To control quality at a distance, in 1993 Brass Key set up its own management office in Hong Kong to oversee sourcing, production, and distribution. Its staff of seven monitor factory production and shipping operations from Hong Kong, but Brass Key learned that there is no substitute for having their own personnel on the factory floor.

The company subcontracts with six factories in China that have different functions in the production process. Rather than have the Hong Kong staff travel back and forth to China, Brass Key created a new position: quality control personnel. Brass Key rents apartment in each of the factories for the QC people who live and work there. To alleviate boredom and prevent complacency, the Hong Kong staff periodically rotates the QC personnel from factory to factory.

Besides walking the factory floor to ensure production standards are met, the QC people are responsible for meeting China’s strict customs laws, including having all the papers in order and keeping track of how many goods are coming and going. That task is complicated by the fact that production of porcelain dolls takes place in several factories and that the factories are located in provinces that have varying customs regulations. The raw materials for the dolls’ clothing, for example, are shipped to a factory that cuts and sews dresses. The finished outfits are then packed and trucked to an assembly factory that also receives parts—doll heads, bodies, wigs, and display boxes in which the dolls are sold—trucked in from other factories. By the time the dolls are shipped to the United States, they have passed through four customs stops in China.

By Chinese standards, QC personnel are paid handsomely—one measure of their value to the company. Whereas a top government official earns the equivalent of $100 U.S. a month, QC employees start out at $300 a month and, depending on their skills, may earn as much as $600 a month.

China’s communications infrastructure has developed unevenly, and transmitting information from many provinces can be slow and frustrating. Until recently, Brass Key’s Hong Kong office would receive reports from the factories written in Chinese, translate them by hand, and fax the reports to Federal Way. Aside from being time-consuming, the procedure led to errors, especially because of the difficulty in translating technical terms for fabrics and products.

Now, thanks to new translation software, reports can be sent over the Internet in two languages, speeding up communication and reducing errors. A bilingual employee in China, for example, inputs information on weekly production totals in Chinese and transmits the reports to two Chinese employees working in the Federal Way headquarters who translate them into English. The Federal Way employees, in turn, translate quality control forms and other reports into Chinese and transmit them to China.

Another software program, a production scheduler, has also facilitated doing business in two languages and at a distance. Developed especially for Brass Key, it allows Judy to track components of every order throughout the production process. Given the number of product lines, vendors, and factories involved in each order, timing is essential; materials must arrive on time and in the right sequences to maintain a steady flow of production.

With the production scheduler, Judy can call up a master list on the computer and get complete information about every order, including what step of the process it is in, whether in the United States, Hong Kong, or China. The same program allows her to e-mail overnight to Hong Kong and China lists of what materials are being delivered and when they will arrive. The software has increased the company’s efficiency, but it still requires five full-time employees to keep the information current.

“It would make things a lot easier if we could send this information via the Internet to our sources in China, too,” says Judy, “but many are mom-and-pop operations that are a long way from being online.”

This year Brass Key will produce a half-million porcelain dolls, 224,000 for Costco alone. That the company maintains a return rate of 0.3 to 0.5 percent, an exceptionally low figure in the mass merchandising field, is a tribute to its quality control system—and its relationships with its workers. Brass Key has gone the extra mile to build loyalty and trust with its associates in Asia.

Judy describes doing business in Asia as negotiating one’s way through a series of tight mini-networks. Without introductions, it is almost impossible for small and medium-sized foreign businesses to get their foot in the door. Brass Key had the door opened for them by Norman Chan, a family friend who has been vice president of the company’s Asia operations in Hong Kong since 1990. Chan introduced Judy and Mary to the woman everyone calls Auntie Au. Once a manager of a Mattel toy factory, she went on to develop her own factories and, later, to become a provincial governor. It was Auntie Au who introduced Judy and Mary to most of the factories with which they now do business.

The connections don’t stop there. Chan’s brother-in-law, Hing Lin, was Brass Key’s first QC employee. Today, Lin’s daughter, Karen, also works in quality control. Bilingual and knowledgeable about computers, she is a vital link in the company’s overseas communication. Another friend of Chan, Jeff Kwong, whom Bob refers to as a kingpin in Hong Kong, is Brass Key’s supervisor of the QC personnel. Bob says influential contacts like Chan, Auntie Au, and Kwong gave Brass Key credibility and enabled it to hire top- quality people.

Brass Key management cultivates relationships for the long-term, and that includes everyone from provincial officials to line managers in the factories. Although family life is central in Chinese society, wives are not usually included in business social functions. The sisters’ father, Bill, and mother, Margaret, broke that tradition in the 1960s when they invited the families of Bill’s Japanese employees to their home, and Judy and Mary have continued the practice.

“We carve out a lot of time for socializing in China,” says Judy. “We get to know the workers family-to-family, and we do all the social things that other foreign companies overlook or think are unimportant.” The family has attended many weddings of Chinese associates, including the marriage of Auntie Au’s daughter. Recently, Bob, the family member who now spends the most time in China and the only one who speaks “passable” Chinese, attended the wedding of a worker from the sewing factory. At the dinner, Bob was seated at the head of the table with the groom and the provincial governor.

Afterwards, it is traditional to light fireworks and Bob was honored again when the bride and groom chose him to start the festivities.

Bob felt embarrassed by the special attention, but the bride explained the honors bestowed on him as an expression of the village’s appreciation for what Brass Key has done for their community. Besides creating jobs, Brass Key has brought new technology and opportunities to the area. “We’ve raised working standards here,” says Bob, referring to the agreements forbidding violation of forced labor or child labor laws that all their suppliers and manufacturers must sign. The agreements are renewed annually, and Brass Key’s QC personnel make sure they are adhered to.

GETTING INTO BEDS

The groundwork for Brass Key’s current quality control system was laid in the company’s first incarnation as an importer of brass beds. Judy and her mother founded the company in 1980. Copying the Tupperware and Mary Kay Cosmetics’ marketing strategy, they sold the beds through parties they organized in people’s homes. Because the business depended on word-of-mouth advertising, the beds not only had to be attractive but structurally sound and easily assembled. Mary joined the team in 1983, and before long Brass Key was selling beds through 40 home-party hosts in three states.

In 1984, the business took a great leap forward when Judy met the furniture buyer from Costco at a party. His original order for 25 beds grew into the tens of thousands. Within five years, Brass Key was supplying beds to Costco’s 185 outlets. Delivering beds in large quantity to a mass merchandiser demanded rigorous oversight. An error in a large order could finish their young business. It was in Korea that Mary began Brass Key’s signature step-by-step analysis of how a product is put together—and what could go wrong in the process. Visiting factories in Korea, she insisted on assembling the beds herself. Sitting on a cold factory floor in winter fitting brass parts together, she sometimes had to remind herself why she was doing it.

“I wanted to be sure that anyone who bought a bed could put it together,” says Mary. “If I ran into trouble, then I could see where the problems were. The factory owners knew that I would check everything, and I didn’t miss a thing.”

Mary’s tinkering resulted in improved products. She devised new techniques for strengthening parts and simplified the assembly processes, including drawing new diagrams and writing easy-to-follow directions. Drawing from their father’s experiences of doing business in Asia, Judy and Mary took time to get to know the people in the factories. After work, they would often have dinner with them and, on weekends, the workers and their families would take Judy and Mary sightseeing. “Socializing is what makes this job fun,” says Mary. “It’s in the off-hours that bonds are forged.”

Through their experiences in importing brass beds, Judy and Mary developed a successful formula for manufacturing in Asia: Maintain tight control of production and distribution, use well-placed contacts as introductions to sources, and build long-term personal relationships with factory managers and workers. Those same ingredients were applied with even greater skill when Brass Key turned to manufacturing toys.

FROM BEDS TO BEARS

Brass Key is a relative newcomer to the toy industry. The company stumbled upon the idea in 1986 when Mary, visiting a brass parts manufacturer in Taiwan, was introduced to the owner’s brother, a toy manufacturer. Taken with the plush animals he produced, Mary brought samples back to the States. Judy took one look at them and said, “Let’s use them in a holiday promotion.” The sisters enlisted their mother, Margaret, to design an original Teddy Bear.

When a friend who sold sweaters to the Seattle-based Nordstrom saw Margaret’s bear, she suggested dressing it in her sweaters. Nordstrom featured the bears in sweaters for children in the department store’s holiday catalog. The concept proved so popular that the next year Nordstrom asked Brass Key to design another toy; Margaret’s big, floppy cow became the store’s best-selling plush toy. Brass Key’s success with Nordstrom was repeated on a larger scale in 1990, when Costco asked the company to produce a plush bunny. The bunny became Costco’s number one holiday seller and, by 1992, sales approached $250,000 a week.

Three years later, under almost identical circumstances to Mary’s discovery of plush animals, a brass parts vendor introduced her to a woman who had a doll showroom. When Mary learned the dolls were manufactured in China, she inquired about the woman’s sources. That encounter led to the next phase of Brass Key’s business: designing, producing, importing, and distributing reasonably priced, high-quality porcelain dolls.

While developing the toy business, Brass Key continued importing beds, progressing from brass, to enamel, to wood and, finally, to bunk beds. With toy sales soaring and demand for beds falling, however, the sisters saw the handwriting on the store walls. In 1993, Brass Key abandoned the bed business to concentrate on manufacturing plush animals and porcelain dolls.

“Everyone wants to collect something,” says Judy. “Just because they can’t afford to shop at expensive stores doesn’t mean they don’t have good taste. The secret of our success is that our dolls have the quality and appearance of collectors’ dolls that sell for five times the price.” Brass Key produces 31 distinctive dolls, each with its own custom- designed costume and hairdo. More than 100 fabrics are used in making the outfits, which range from Victorian dresses and coats to Hollywood-style ensemble gowns and wraps. It is the details that give the dolls a “collectable look.” Many costumes are accented with hand-sewn pearls and sequins, and others are trimmed with fake fur or lace copied from antique Italian designs. Amazingly, the dolls retail for only $19.95.

Few family businesses are as blessed as Brass Key with the complementary talents and expertise of its family participants. Margaret inspired her daughters’ love of dolls and collecting. When they were children, Margaret made their dolls and Teddy Bears, complete with their own wardrobes. It was these handmade toys, now passed on to the next generation, that were the forerunners of the porcelain dolls and plush animals that Brass Key manufactures today.

In 1987, Margaret’s health failed and she was forced to stop working. That same year, Bill retired from Weyerhaeuser. Tall and slim, the 76-year-old president of Brass Key is a valued adviser who still spends three days a week in the Federal Way offices. Judy’s husband, Bob, joined the company in 1995. Bob is a former operations manager for a merchandising computer consulting company and a general manager of a food brokerage company; he oversees all aspects of Brass Key’s sourcing, production, and distribution in Asia. Bob and Judy’s daughter, Sarah, has worked for the company over several summers. She will come on board full-time next June when she completes her degree in international business.

Today, Brass Key is among the fastest growing companies in the toy industry, selling to mass merchandisers such as Target, Costco, Sam’s Club, and Toys R Us. Competing against toy manufacturing giants like Mattel and Hasbro, it has maintained a 42 percent annual growth rate since 1986. At each step, the family has had a knack for being in the right place at the right time and the creativity and pluck to make the most of the opportunities presented to them. More recently, they have launched a new business separate from Brass Key Inc.—the Brass Key Trading Co.—which will share its expertise with companies interested in manufacturing products in Asia. It has already begun working with its first client.

“A lot of companies have good ideas,” says Bob Mullins, “but they don’t know how to find reliable sources or negotiate the cultural and language barriers. There’s no big secret to what we do—pay attention to details and time lines, have consistent follow-up, and care about our clients’ needs. It’s just that a lot of other trading companies drop the ball along the way, and we stay in control from beginning to end.” ▪

Deanne Stone is a business writer and freelance contributor to Family Business Magazine, who specializes in writing about family foundations and family businesses.

 

BRASS KEY INC.

Business: Designer, producer, and distributor of custom collectable toys, including porcelain dolls, plush toys, doll clothing, and furniture.

Founded: 1980 by Margaret Suiter and daughter Judith Mullins.

Revenues: $20 million.

Growth: 42 percent annual growth since 1986.

Employees: 20 in Washington, 15 in China, 7 in Hong Kong.

Ownership: S Corp., with sisters Judith Mullins and Mary Gustaff as principal owners.

Family managers: William Suiter, president; Judith Mullins, senior vice president and general manager; Mary Gustaff, vice president of pre-production and sourcing; Robert Mullins, vice president of operations for U.S. and Asia.

Claim to fame: Created a transoceanic quality-control system based on attention to details and personal relationships that has set a standard for the industry.

 

Source:  Family Business Magazine, Autumn 1997

Copyright © 1997. Family Business magazine. Subject to the provisions of the Terms and Conditions of the Family Business Web Site, subscribers to Family Business magazine may print and distribute copies of this article, electronically or otherwise, provided that (a) such printing and distribution is done only for your personal, informational, non-commercial purposes, and (b) you do not re-move or obscure the copyright notice or other notices. For other uses, including reprint permission for non-subscribers, contact Family Business magazine.

 

Deanne StoneLGAOperations