Minnesota company is 'well-kept secret' in $150B sensor technology industry

The sensor looks like a hockey puck — but it saves McDonald's and other companies a whole lot of money.

This Banner Engineering sensor hides beneath the drive-through lanes and feeds McDonald's the number of cars that go through the line and how fast it takes for each driver to receive their food.

Call it the Internet of Things for industry. The invisible gadget lets the fast-food giant quickly know when it needs faster fryers or more employees on the clock.

A slow, long line "kills drive-through restaurants," said Ty Fayfield, who last March took over from his father as CEO of Banner Engineering Corp., the 52-year-old Plymouth-based manufacturer that is a leader in sensor technology in the U.S.

The company works with other retailers as well, the Minnesota Department of Transportation, the Big 3 auto companies, online giants and many industrial companies that must track where components are at a given time. From machine cameras and specialized lights to bar code readers and motion, temperature and vibration detectors, Banner has 40,000 "smart manufacturing" products on the market and has grown dramatically in recent years.

"We're in a growth mode," Fayfield said.

Global employment jumped from 800 to 1,500 in the last decade as the company catered to increasingly automated car factories, the state and consumer packaging firms plus online shopping and shipping giants. Demand has been so steep, that Banner will increase its 500-member Minnesota workforce to 725 by 2021. The global headquarters in Plymouth just added a fourth building — a $15 million engineering center that opened in September. It was built by Kraus-Anderson Construction.

The flurry of activity comes after Banner added a fifth manufacturing plant in 2016 in Mexico and a new office in China around the same time. Banner now operates in 13 countries. Global revenue exceeds $250 million a year.

That heft, which reaches from California, Minnesota and South Dakota to China, Brazil, India and Europe, helps Banner successfully compete with the industry's giants — Rockwell Automation's Allen-Bradley, Keyence America Laser Sensors, German-based Sick Vertriebs-GmbH and Japan-based Omron Industrial Automation.

The global "smart manufacturing" market was worth $152 billion in 2017 and is poised to reach $479 billion by 2023, according to Zion Market Research.

Fayfield has not taken his family business for granted. After graduating from Carleton College as a physics major and earning a Ph.D. in electrical engineering at the University of Minnesota, he worked for several companies and then started his own in 2000.

Sensonix, which designs integrated circuits and makes wireless readers, served customers from Honeywell and BF Goodrich to Banner, which his father, Robert, founded in 1966.

Sensonix still acts as a supplier to Banner and is still solely owned by Fayfield. But his duties have expanded.

Fayfield joined the much larger Banner full-time six years ago — first as head of wireless internet products, and then as vice president, before assuming his chief executive role last year.

Those who know Fayfield point to a 1991 car crash that broke his neck and left him with several fused vertebrae and a joy at walking again. Surviving and thriving after that crash may be the pivotal factor in Fayfield's giddy determination to succeed both in life and business, they say.

Fayfield downplays the crash, but insists he is determined to find an increasing array of customized solutions for his industrial customers. He admits his to-do list is quite long.

"We have been a well-kept secret here in the Twin Cities," Fayfield said. "But we'd like to up the profile a bit. We want to grow at a sustainable pace of about 10 percent a year."

Demand for sensor technology in factories has swelled so much that it caused production backlogs across the country in 2017 and early 2018, said Pat McGibbon, vice president of strategic analytics for the Association of Manufacturing Technology. He added that there is so much demand for factory machine data that sensor makers like Banner are well poised for growth.

The potential for companies "is in the hundreds of billions of dollars and growing very rapidly," McGibbon said. He noted that Banner is "very big in vision sensors," which is one of the more rapidly growing areas of the industry.

Factories put sensors on machinery, in tools, inside electrical control boxes and "anything else that will allow them to judge any unusual vibrations, unusual heat or any torque or twist in metal" that might cause a tool or machine to break, McGibbon said. Preventing a machine break saves "oodles and oodles of hours and money in the manufacturing process."

Fayfield recently visited Banner's circuit-board factory in Plymouth. There workers garbed in blue lab coats peered through microscopes, tweezed tiny components into circuits, and operated "pick and place" robots that soldered microchips and other parts at lightning speed.

"This is a new product," Fayfield said pulling a freshly assembled circuit board from plant manager Tanner Bauman's tray. It's a new laser distance-measuring sensor aimed at auto factories that need to track components on the assembly line. Banner made the new sensor to solve a hairy problem for one specific customer. Now Banner's making hundreds of the specialty product.

"We are now making more customized products," Fayfield said. "Because Amazon and their ilk are not going anywhere, companies have to keep up their material handling [abilities]. So we are here to help."

The Banner plant uses its own products, including in the rumbling mechanical room that sits deep inside the circuit-board factory.

"We call this the angry room," Fayfield joked while crossing to a large whirling ventilation fan. Reaching way over his head, he pointed out a tiny circuitry-laden device the size of an avocado.

The innocuous-looking gadget — plus a nearby a flashlight-sized light tower — silently tracked the condition of the giant fan and the refrigerator-like compressor unit controlling airflow for the plant. The two Banner wireless devices convey data about tiny changes in vibration or airflow to managers via laptops and smartphones.

Just like with its customers, the "angry room" sensors alert Banner's managers of any issue before it gets big enough to cause a headache, Fayfield said.

Like with the McDonald's drive-through device, Fayfield said one goal is to build systems that take information from sensors and other devices and build it into "operational intelligence." These systems would allow companies to stitch together information from locations from around the world.

That way, companies can have real-time information to help boost plant efficiency and reduce machine wear — which saves money in the long run.

Industry experts said Banner's path is part of a trend.

In a recent research report, Prem Shanmugam, senior consultant of measurement and instrumentation for the California research firm Frost & Sullivan, said that "automation companies are increasingly repositioning themselves as service providers, while sensorization and predictive analytics have enabled vendors to develop innovative business models."

As Fayfield said: "You can't hover in stasis in this kind of industry."

Dee DePass • 612-673-7725