Silicon Mechanics weathering the economic storm

When disastrous floods hit Thailand last fall, Eva Cherry and her Silicon Mechanics crew had to rack their brains in order to complete their rackmount-servers orders. What happened a world away affected the Bothell company since the servers need hard drives, and Thailand is the place where nearly 45 percent of the world's devices are produced, according to an NPR report.

President and CEO of Bothell-based Silicon Mechanics

When disastrous floods hit Thailand last fall, Eva Cherry and her Silicon Mechanics crew had to rack their brains in order to complete their rackmount-servers orders.

What happened a world away affected the Bothell company since the servers need hard drives, and Thailand is the place where nearly 45 percent of the world’s devices are produced, according to an NPR report.

“The hard-drive-manufacturing capacity was reduced by almost 30 percent,” said Cherry, 46, a Kirkland resident and Silicon Mechanics president and chief executive officer. “We just got creative about how to fulfill our orders.”

With fewer hard drives available and prices for existing ones skyrocketing, Cherry ordered some devices at reasonable prices from Amazon’s Germany location and some from the United Kingdom. She had some hard drives delivered to her mother in her native Germany, and they were soon shipped to Bothell.

“It’s about building flexibility into your business, into the culture to feel, ‘Well, whatever comes our way, we’ll somehow find a way to deal with that and make it through,'” said Cherry of her company, which manufactures rackmount servers along with storage and high-performance computing clusters.

The Puget Sound Business Journal recently named Silicon Mechanics one of the Eastside’s 50 fastest-growing private companies. It made $30 million in 2011 and has been profitable for the last 27 months, said Cherry, adding that the company hopes to hit $35 million in revenues this year. Most of its business is generated in the U.S. and it has 80 to 90 percent repeat customers, from small businesses to larger firms.

“The atmosphere right now is extremely busy, which is great,” said Steve Wiechert, chief operating officer and chief financial officer. “I think key to our success, especially in this difficult economy, is our ability to work more efficiently than the other guy. We’ve put a lot of things in place that have ensured processes are followed; we’re doing better at documentation, we’re getting the right people on board.”

Cherry, originally from Zwickau in the former East Germany, received her master’s in business administration from Wits University in Johannesburg, South Africa, and has more than 20 years of executive management experience in technology and manufacturing, including 10 years as a management consultant in Deloitte’s Strategy & Operations and Enterprise Applications practices.

She joined Silicon Mechanics in 2008 and stepped into her current role a year later. The company has been located in Bothell since 2006 and presently has 50 employees, with more on the way, Cherry said.

Her journey from Germany to South Africa and beyond began after the Berlin Wall fell in 1989. She was in Berlin at the time, and soon a family friend from South Africa suggested she head to that country to Wits University.

“The world’s open all of a sudden,” Cherry said of the wall falling and her ensuing travels.

Cherry has found success along the way, but the struggling economy affected Silicon Mechanics a few years ago.

In order to weather the economic storm, Cherry, Wiechert and their staff pulled together, were up front with their customers about the firm’s financial situation and kept them on board, informing them that things would soon improve. That’s exactly what happened, and now profits are up, Silicon Mechanics and its valued customers are tighter than ever and Cherry’s employees are thriving under her leadership.

“Internally, I started ‘fireside chats’ and we talked about our financial performance, what the market was looking like and what our plans were,” said Cherry, who is married, has a German Shepherd and enjoys skiing, biking and golfing. “It’s neat to see how people have grown over the years, through the tough times,” she added.

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