3 Simple Rules for Job-Shop Success
By Jim Destefani
Contract manufacturers in the United States and many other countries have had a rough time of it recently. We've all heard the stories of machine shops that have been around for decades going out of business in the face of rising global competition and customer demands for lower prices and faster turnarounds.
Yet many shops that remain in business find themselves in a stronger competitive position than a few years ago. Each of these companies is different, but they share a set of management principles that give them the best opportunity to succeed. Three of these are:
- Find your niche.
- Focus on customers.
- Use technology wisely.
Here are stories of half a dozen shops that serve to illustrate each of these points.
"We believe there will always be a need for domestic moldmakers, but we needed to understand what would cause a customer to contract with a domestic moldmaker," says Bob Mandeville, president of Elite Mold & Engineering (Sterling Heights, MI).
The growing trend to offshore production of tooling to lower-cost suppliers in Asia and elsewhere worried Mandeville, and he began looking for a different way to compete. "We looked at reducing the labor on the shop floor and figuring out new processes that would provide us with a competitive advantage," he recalls. "Then I had a revelation: our best opportunity would be to concentrate on jobs that didn't allow the time for manufacturing outside the country."
Founded in 1982 as a supplier of prototype tooling for automotive, appliance, and aftermarket customers, Elite developed a market niche that supported company growth. "We decided that delivery time would be our edge, and we developed processes that allowed us to turn jobs around quickly," Mandeville says.
Elite's philosophy begins with the types of jobs it will bid on. Having figured out a ratio of machine to labor time at which they could be very competitive, managers bid only on jobs that meet this ratio. "We look for jobs that are 70% machine time and 30% labor," Mandeville explains. "We hope the labor is computer-related. If the job requires a lot of labor on the shop floor, we're not going to be that competitive. We target the right jobs and quote appropriately."
The company reduced programming costs, which carry a higher hourly rate than machining time, by upgrading software and computers. On the machine side, Elite invested in vertical machining centers from Fadal Machining Centers LLC (Chatsworth, CA). The machines run at 200 - 250 ipm (5.1 - 6.4 m/min) at 10,000 RPM, producing good surface finishes and holding tolerances of 0.0002" (5 µm).
According to shop supervisor Ed Howell, Elite tries to reduce overall cycle times by machining mold halves in a single setup. "Raw blocks are squared up, ejector systems are completed, and part shapes are machined complete," Howell explains. "On larger jobs, pairing up the VMCs allows us to cut a cavity on one machine and a core on the other."
Mandeville puts the machining improvements into an overall operating perspective. "This is not all about how fast the machines run," he says. "It's about door-to-door time, putting the stock in and getting a finished part. We have reduced benching and spotting by 60%, and we've decreased door-to-door time by 50%." The improved productivity of the VMCs has also allowed Elite to reduce the number of machines on its floor from 14 to 7, effectively giving the company room to grow in its current facility, he adds.
Offshoring is not a concern only for US manufacturers, either. Companies in other countries with high labor costs have also seen machined parts business migrate to overseas suppliers. But, some shops are fighting to win back jobs using business savvy and technology.
A case in point is medical device manufacturer CM Instrumente (Tuttlingen, Germany). The company is the production arm of Dimeda, a manufacturer of instruments and surgical tools and components.
"We used to buy forgings and subcontract the machining out of Germany, but we wanted to pull it back in-house because of issues concerning quality and process control," explains managing director Thomas Bacher. "If we were going to achieve the kind of quality required to win market share in countries such as the US, we were going to have to take control, particularly regarding our cardiovascular range."
With at least two machine-tool builders headquartered nearby, CM could have easily selected German equipment. But, based on price, responses to a questionnaire, and previous experience, the company purchased machines from Haas Automation (Oxnard, CA). "Some of our customers also employed Haas machines, and it seemed that everyone was speaking of them in high regard, particularly on a price-versus-performance basis," Bacher recalls.
The company uses Haas VF-1 and VF-2 vertical machining centers with fourth-axis capability and 10,000-rpm spindles. Jobs include special medical devices such as "mosquito clamps," which are used to clamp veins behind the heart during bypass surgery.
Tolerances on the parts are ±0.02 mm. A single operator, who will soon also oversee a third Haas machine, operates both of the VMCs. This person is also responsible for programming and scheduling of the machines to produce batch sizes up to 1500 pieces.
"We no longer rely on external contract manufacturers," Bacher says. "We also have total flexibility to produce a wide range of different components and products. We've been able to bring manufacturing back to Germany because we were able to buy good quality, reasonably priced machine tools," he concludes.
Captive machine shops can also benefit from a rethinking of management practices and appropriate use of technology. Illustrating this point is the machining operation of Signicast Inc., a Milwaukee-based supplier of investment castings.
In the early 1990s, management's desire for lean production led to development of continuous flow manufacturing, a concept that quickly proved itself at Signicast's new Hartford, WI plant. The cornerstone of continuous flow manufacturing is automation.
Expansion of Signicast's machining capabilities began with tooling, which had been mainly outsourced. In 1999, the company purchased two Mori Seiki machining centers, an SH-500/40 horizontal and SV-500/40 vertical, for use in the toolroom. Soon all tooling, which previously was 90% outsourced, was produced in-house.
Success in the toolroom led to development of a new module dedicated to part finishing, and Mori Seiki was again the machine-tool vendor of choice. The company currently owns eight Mori machines, including three turning centers and a new NH5000 HMC.
According to machining manager Jim Okonek, the machines are a good fit with Signicast's lean philosophy. "We bank on eliminating half of the direct labor on a part, and like to have it down around 30%," Okonek explains. "The more a machine can do with the doors closed, the more direct labor you're taking out of a part, and it's now possible to take a lot of jobs that used to require four or five operations and turn them into one-operation jobs."
Despite Signicast's focus on automation to reduce labor input per part, the company hasn't laid off any workers. Annual sales have grown between 20% and 30% each of the last three years, and the rapid growth has actually resulted in a net increase in employment.
Another shop that's found its niche is G&H Tool and Die (Union City, TN). In business for nearly 20 years, the company's bread and butter is manufacturing replacement parts for automotive stamping dies, small die sets, and special machine parts.
According to owner Bill Hutchinson, G&H focuses on making quality parts fast. "Customers need parts turned around quickly," he says. "Sometimes, you're making a part that goes directly to the manufacturer. Other times, you're making a part that goes to another shop for additional operations. Either way, you're a vital part of the lean supply chain, and customers don't appreciate weak links. It's one thing to turn over parts quickly, but it's another to turn over good parts quickly. Quality control takes extra effort, but it's what keeps customers."
G&H is committed to providing fast turnarounds of small and medium production runs, and Hutchinson chose the shop's machine technology accordingly. The company operates VM2 and VMX42 vertical machining centers as well as a TM10 CNC turning center from Hurco Cos. Inc. (Indianapolis).
One of the big benefits of these machines for G&H is programming flexibility. Hutchinson says they can be programmed offline using CAM software, or by operators on the shop floor using Hurco's conversational control. "The accuracy of the control and machines nearly eliminates the need for trial runs, and cycle times are fast," he adds.
Machining of complex, precision parts is a growing market area for shops that can handle geometric complexity and tight tolerances. One such outfit is High-Tech Turning Co. (Watertown, MA), a small job shop serving a base of more than 50 medical device, instrument, and industrial component manufacturers.
Originally started with one Swiss-style turning machine, the company now operates 10 Swiss machines and five vertical machining centers, the latest of which is a VC Nexus 410A from Mazak Corp. (Florence, KY).
Like other shops, High-Tech Turning is subject to price, quality, and delivery pressures from customers. "Cost is more and more of an issue," says president Paul Heanue. "No one wants to carry inventory, so everyone wants immediate, make-to-order delivery. We have to have the quality and the competitive price no matter what."
Faced with an 8% across-the-board price cut demand by a major customer, the company turned to its newest machine acquisition, the VC Nexus 410A VMC. "It's not always the job, it's how fast you can get it on and off the machine that makes the difference," Heanue explains.
As an example, he cites a program running on a competitive mill that was loaded onto the Mazak VMC. With no changes, the machine cut 45 seconds out of a four-minute cycle time--a nearly 20% reduction. Other medical parts run on the Nexus machine achieved nearly 50% reduction in cycle time, and an ABS component for a cough-assist machine run on the Nexus could not run on High-Tech's other machining centers.
"We always have to look at how we can cut cycle time out of a part," Heanue says. "If you can't get the job out of the shop quickly, you don't get the job. With this machine, we feel we have the technology to address our customers' concerns and still maintain a profit."
Because their shop is located in a rural area, Alan and Debbie Marten realized right away that they would have to differentiate Marten Machining (Stevens Point, WI) from other contract manufacturers.
Founded in 1984, Marten Machining built its reputation as a supplier of experimental and prototype parts--a task OEMs are reluctant to outsource to overseas suppliers. The company has since attracted medium-volume production jobs for automotive and medical components.
Marten Machining has always been quick to adopt technology, which owners Al and Deb Marten believe can help them add value for customers. The company's machining operation is built around three, four, and five-axis machining centers supplied by Hermle Machine Co. (Franklin, WI).
Marten uses the machines to turn out a wide variety of prototypes and repeat parts, although Al Marten says only about 20% of the shop's business is based on repeat orders. Work materials range from plastics and tungsten to stainless steel and aluminum, and many of the parts have complex geometry.
The company's most recent machine acquisition is a Hermle C 30 U universal machining center with automated parts handling. The machine produces a family of parts in a lights-out operation. "As part designs have increased in complexity, we've found that five-axis is the only way to go," Al Marten explains. "Setup time is shorter, and less special tooling is required."
This article was first published in the June 2005 edition of Manufacturing Engineering magazine.