Almost 30 years ago, when U.S. manufacturers were waking up to global competition, Rand McNally took a field trip to Japan. What he saw left a lasting impression.

Instead of using traditional assembly lines, with employees doing simple, repetitive tasks, construction equipment maker Mitsubishi broke its manufacturing process into "cells," where workers teamed up to learn a variety of skills. That created a more efficient, flexible system, and those practices were later adopted by McNally's bosses at Caterpillar Inc., which had a joint venture with Mitsubishi.

Today, McNally uses his own versions of those same concepts, coupled with an international scope, at Mequon-based HB Performance Systems Inc., which makes brake systems and other parts for motorcycles, bicycles, snowmobiles and other non-automotive uses.

McNally was hired six years ago as president and chief executive officer at HB Performance, which has since increased its annual revenue to $110 million from $50 million. The company recently moved a newly purchased operation to Milwaukee from Indiana, and it also has operations in Taiwan and mainland China to meet a growing demand from Asian customers.

HB Performance has joined the ranks of Wisconsin manufacturers that compete globally with a focus on efficiency and product innovation. The company, known as Hayes Brake until a 2005 management buyout and name change, expects to generate revenue of $120 million in 2006, McNally said.

The local work force today is around 350 employees at 5800 W. Donges Bay Road, where HB Performance keeps its main offices, assembly plant and research lab. That number is expected to reach about 375 employees after this month's move of the Sun Components Inc. division from Warsaw, Ind., to 6750 W. Florist Ave., Milwaukee.

Sun, purchased last July, makes wheels and rims for bicycles and is the first of what McNally expects to be several acquisitions for HB Performance.

"Our intent is to provide everything on the bicycle except the frame," McNally said, showing off a $3,000 mountain bike that includes his company's Hayes El Camino brand braking system.

The Hayes brand name is to cycling enthusiasts what Intel is to computer geeks, said Chris Kegel, owner of Wheel & Sprocket, which sells bicycles at six stores in the Milwaukee area, Appleton and Oshkosh. The Hayes brand is "absolutely top-notch," Kegel said.

The Sun bicycle wheel brand, however, was not marketed well by its previous owner, Kegel said. It will be a challenge, he said, to reposition that brand.

Brakes and other components for bicycles are among the four main segments of HB Performance's business. The other three sectors are motorcycle brakes; braking systems for farming and construction equipment; and brakes for power sports equipment, including all-terrain vehicles and snowmobiles. HB Performance counts among its customers Trek Bicycle Corp., Deere & Co. and Arctic Cat Inc.

McNally created four sectors just after coming to the company in 2000. At that time, about 50% of its sales were to motorcycle makers, led by Milwaukee's Harley-Davidson Inc. Motorcycle brakes now account for around 40% of HB Performance's revenue.

McNally's plan is to continue diversifying the business so that each of the four sectors accounts for around 25% of overall sales.

The company, founded in 1946 as H&H Products Co., has a long relationship with Harley-Davidson. It began selling brake systems to Harley in 1971, and the company grew as Harley's sales surged in the 1990s. "We were riding along," McNally said.

But the company, then known as Hayes Brake, had some problems, McNally said, including an unacceptably high level of product defects.

After his arrival, McNally, who previously held executive positions at Aqua-Chem Inc. in Milwaukee and the now-defunct Outboard Marine Corp. in Illinois, began making changes. Among them, he replaced a traditional assembly line with his own version of a cell manufacturing system.

McNally's "diamond cell" system puts a heavy value on a neat and orderly environment, and the Mequon factory, with its bright fixtures and lack of clutter, reflects his belief that cleanliness is "a level of discipline." "If you're disciplined, you have a much lower probability of making a mistake," he said.

McNally also beefed up research and development, and focused on Hayes Brake's hiring and training. "I expect all of our people, from senior to junior, to be enthusiasts," said McNally, who personally owns three Harley motorcycles and six all-terrain vehicles. "We walk and talk the business."

Lee Schultz, who supervises HB Performance's vehicle test center, could be Exhibit A for McNally's philosophy. Schultz, who owns a Harley Ultra Glide, was in his research center last week with about a dozen motorcycles, all destined for test tracks. The motorcycles are put through torturous paces, including sudden braking at high speeds to assess their performance.

Strapped to the back of the hogs are high-tech data gathering devices, including one that cost $75,000 to develop. "Crashing the bikes is not an option," said Schultz.

Of the company's local work force, just over 100 employees are salaried, and about 75% of them have technical backgrounds, McNally said. That gives HB Performance a high-tech aura that's reinforced by a tour of the Mequon plant.

Along with assembly workers, there are employees conducting tests on computers and working on developing products. The company owns 350 personal computers, McNally said, compared with 50 or 60 when he was hired. HB Performance also provides performance-based bonuses to its salaried and hourly employees. The latter are represented by the United Steelworkers of America Local 8149, which has praised the company for increasing local jobs even as it adds operations overseas.

The company has 150 employees in mainland China, as well as 400 contract workers in Taiwan. They focus on producing components for Trek and other bicycle makers that have assembly plants in China, McNally said.

McNally said HB Performance is striking a balance between producing some parts in Asia, where labor costs are much lower, while keeping a manufacturing presence in the United States, where there's a greater expertise for creating more sophisticated products.

"Will I ever move everything to China? No," McNally said.

Some of the company's Asian plants were inherited when HB Performance bought Sun Metal Products Inc. last July for an undisclosed price and renamed it Sun Component Systems.

That acquisition came one month after McNally and his senior management team, along with equity investor Nautic Partners, bought Hayes Brake from The Brenlin Group Inc., of Akron, Ohio. McNally and his partners renamed the company HB Performance Systems to reflect its expansion into products other than brakes.

HB Performance's goal is to "grow at a disciplined rate," with revenue increasing by 15% to 20% annually, not counting acquisitions, McNally said.

"We could take a lot more business right now," McNally said. "But I don't have the level of manufacturing to address the additional demand."