Planning For A Promising New Year

We asked the principals from eight successful shops about what they see for business in 2007. Here is what they had to say.

A New Year is traditionally a time to reflect on what has passed and try to think about what will come. As we move into 2007, most everyone engaged in precision machined parts manufacturing can look back at 2006 with a warm feeling. It’s been by almost every metric a good year.

In the past few years, we have been able to feature many successful shops on the pages of Production Machining. That got us thinking about what some of these shops are thinking about as we move into the New Year, so we contacted some of them and asked. All of the shops we talked to have appeared in the magazine. It was nice to reconnect.

The eight shops we spoke with are only a small sample of the many manufacturers that have graced our pages over the past 7 years (the life of the magazine). However, as a sample, we believe they represent a cross section of our industry and reflect the bullish attitude of competitive businesses.

Moving Up And Out

Automatic Products (Kent, Washington) is a progressive single-spindle shop that has incorporated CNC technology into its line-up of Brown & Sharpe machines. Company President Joel Gregory works hard to find new ways to get the most out of his equipment and processes, and he encourages his employees to do the same. The result has been steady growth resulting in the need to move to larger facilities on what seems to be a regular basis.

The past year has been another good one for Automatic Products, and Joel has now made finding a new, larger facility a top priority. “Our current facility is completely full,” he says, “and we are looking to find 60 percent more capacity. That is my main objective right now.” Although not currently in the market for new equipment, once moved, the company will add machines as it needs them. Joel says, “When we do add more equipment, we would look at moving more towards turning with milling capabilities, whether with sliding headstock or a subspindle machine. That would be the only thing I’d consider buying anymore.”

Joel says the company had a great year in 2006, but he cannot project what the coming year will bring. He says, “I can’t stop doing what I’m doing, but the whole thing could go in the bucket tomorrow. There’s just no way to predict it. Nothing is forever.” He feels single-spindle shops pretty much across the board have remained busy and have plenty of work for now. Automatic Products has a strong backlog, and Joel doesn’t see things changing much, at least through 2007. However, he knows not to assume that. “We’ve proven in the past that it can all change within a matter of 6 months,” he says.

Cautious Optimism

In the spring of 2006, we spoke with Dave Tenny, vice president of Firstar Precision Corporation (Parma, Ohio) about how his company determines if a collet or chuck is the best workholding option for a specific job. At the time, Dave explained that his business is focused on fast turnaround and delivery of high-quality parts in an effort to handle jobs that won’t be lost to overseas competition.

When we visited Firstar, the business was doing well and Dave foresaw a strong finish to the year. However, he tells us that 2006 saw a lot of inconsistencies. Although business remains good and Dave is anticipating a somewhat strong year for 2007, the variability of 2006 has put Firstar in a reserved position for now, with capital purchases on hold until the company sees more stability with its customer base. Customer satisfaction, of course, will continue to be a top priority, but the conservative approach will remain in effect until the company has a better projection of what to expect for the coming year. Although Firstar is anticipating somewhere between 15- and 20-percent growth in 2007, the company is being cautious because it expects some loss of business to international sources such as China and Mexico, particularly in automotive.

Dave explains, “Some industries that were a little weak in 2006 should be stronger in 2007—primarily automotive. Some of our customers who are automotive driven were hit hard in 2006. We’ve gotten word from these companies that they have made a lot of adjustments to compensate, and now that they’ve gotten through that period of adjustment, things should start loosening up, and we should see more activity this year. We will not be backing off in the automotive industry, but rather, will go after it even harder. The automotive customers, though, have indicated that there will be more international activity than domestic activity.”

Hydraulics and the gas and oil industries were strong in 2006 for Firstar, and Dave anticipates that to strengthen for them this year. Dave expects other industries with which Firstar is involved, such as the food industry, to be status quo, with not much change. “The food industry has been consistent for at least 5 years now,” he says, “and we don’t foresee any significant changes for 2007.”

One industry that Dave sees as strongest for 2007 is aerospace. It was consistently strong throughout 2006 and forecasts indicate it will be even better in 2007. Firstar does not directly do a lot of work in this industry, though, because of the requirements attached to aerospace. They do a fair amount of second-tier aerospace work and blanking, but contracted through other companies who have the registers that qualify them for the jobs.

Management Focus

After a year or two of buying several machine tools to increase productivity, President Bob Coster of Nolte Precise Manufacturing (Cincinnati, Ohio) has decided to let up a bit on large equipment purchasing in 2007. Not only has the company recently purchased two mill/turn centers, but it also bought a 32-mm-capacity CNC Swiss lathe with live tooling and its first horizontal machining center in late 2006.

In Production Machining’s July 2006 article on Nolte Precise, we reported that as a result of the new mill/turn purchases, the company began producing parts 20 percent faster compared to its six-axis equipment it was previously using. In addition, the company is multitasking jobs that once were completed on three different machines, which has increased uptime for the shop.

Although purchasing large machines may be out of the question for 2007, Bob says there are some ancillary tools he may possibly invest in for the year, such as grinders and toolroom and gaging equipment that could help the company increase its business in those areas.

As a New Year’s resolution of sorts, Bob says this year he plans to focus on improving personnel management and holding employees accountable for their performance in the shop. “They will have to meet certain criteria, and if the company makes money, they make money,” he explains. “If we don’t make money, there won’t be automatic raises. Also, we are going to tie bonuses to productivity, quality and on-time delivery. Everyone has to be more accountable for things they do and not blame their faults on someone else.” He also hopes to execute the company’s teamwork aspect as well.

When asked about how he thinks his business flow will be this year, Bob says, “We are working on some new accounts, and they are looking very promising. If they come around, we should stay busy in 2007.”

If You Break It, They Make It

With around 40 percent of its business in the orthopedic parts-related field, Bell-Memphis has to be nimble. That flexibility is reflected in its CNC Swiss-type machines and automated programming system to speed production. We covered this Memphis, Tennessee, shop in the October 2006 issue in an article about how it successfully automated the programming function for its seven Swiss-type machine tools.

In 1997, the company hired Bob Latham as plant manager. Bob was able to convince the company owners to modernize manufacturing, and he was instrumental in helping Bell-Memphis transition from conventional screw machine technology to CNC. This technology transition helped the company successfully augment its aerospace business with work in the burgeoning medical parts manufacturing field.

As for 2007, Bob sees the company working internally to optimize the investments it has made in automation. The company’s manufacturing capacity is at a good place, so the goal for 2007 is to try to maximize the return of investments made over the past few years.

“Ongoing, we are trying to get more efficient,” Bob says. “Like any technology, the more it is used the more efficient the user becomes. We’ve found that on the shop floor with the machine tools and in the engineering office with the CAD/CAM programming system. It’s an ongoing effort to get as lean as possible.”

Rapid response to the market demands and better throughput in the shop are goals for Bell-Memphis as well. “We are focusing a lot of effort on engineering and pre-engineering,” Bob says. “The idea is to get our engineering group together to lay out a part and solicit input from all areas of the process. This is working well, and we plan to continue to refine the pre-engineering process ongoing.”

Bob sees business in 2007 as going up somewhat. “We have promises from some of our key customers that a lot of work is getting ready to be let,” he says. “In the mean time, we are tuning up our process infrastructure in anticipation.”

On A Tear

In April 2006, we published a story about TNS Machining (Muskego, Wisconsin). The gist of the piece was the shop’s search for a single coolant that would work on all of the shop’s different machining processes—kind of a one size fits all. The vendor that TNS worked with was able to formulate a synthetic coolant that did the job.

So how does TNS see things unfolding in 2007? To find out, we caught up with Scott Rowinski who is a vice president at the company. Typical TNS jobs range from prototype one-offs to high-volume, multimillion part runs. To better serve the company’s wide ranging markets—medical, food, bottling, beverage, hydraulic, transportation and electromagnetic—the shop’s management is willing to try new things.

An enthusiastic Scott says this about the upcoming year: “Things going into 2007 look very robust as far as everything looks right now. We’ve been on a tear for the last year, and that doesn’t look likely to end soon. Hydraulics, medical equipment, transportation and hardware look good for us in 2007. For us, the driver for this success has been newer technology both in capital equipment and automation accessories to enhance its performance. We’re investing in equipment and technology that gives higher throughput and better precision.”

Increased productivity and lower costs are additional benefits of this shop’s drive toward newer technology ideas. “Every shop is under pressure from energy and material costs,” Scott says. “It’s difficult to pass costs on to a customer, so if we can lower our costs through productivity increases, we can hold off or at worst, reduce the amount we must pass on to the customer. They appreciate the effort, and we’re generally making better parts.”

In addition to investing internally in the business, Scott’s company also looks beyond its four walls. “We, like most job shops, are dependent on skilled workers to make the business succeed,” Scott says. “We work a lot with vocational schools and high schools in the region. For the past 25 years, TNS has participated in a school-to-work co-op program. We work with the schools, influencing curriculum and providing students with real-world experience. I usually have ten to 12 part-time students in the shop who are learning about manufacturing.”

The shortage of skilled workers is a bane for most shops. TNS seems to have gotten a grip on the problem in its neck of the woods. Now, there’s a potential New Year’s resolution.

Still Cranking

No roundup of past articles would be complete without touching base with Otto Engineering (Carpentersville, Illinois) and John Lang. First featured in September 2004, John is the machine shop manager for Otto and was a driver of the shop’s investment in a CNC multi-spindle.

What made the story interesting was that this six-spindle machine was the shop’s first screw machine. Prior to installing the six-spindle multi, all of the shop’s work ran across single-spindle turning centers. John’s insight was to look at the multi-spindle as six single spindles on a single platform. With CNC and a quick change tooling strategy, there seemed to be no reason why this machine couldn’t be used to help produce the captive shop’s standard and custom switch bodies.

John says business is good for Otto. His plan of using the multi-spindle has worked out well. Currently, he runs more than 300 part numbers across the machine, making more than 150,000 parts per month with more than 70 changes per month.

As testimony, John says he’s going to add another multi-spindle to the shop. “Our concept is flawless,” John says. “We are looking at a new machine for both capacity and capability. Since we purchased our first multi-spindle, the need for additional backworking capability has become apparent in some of our workpieces. I’m looking at cycle times of 15 seconds that I’d like to get to 10 seconds complete. Backworking, which is available with current machine technology, can help us get where we need to be.”

In 2004, we wrote this story because of its unique approach to the application of multi-spindle technology. John and his company were thinking outside the box back then. It’s good to see their plan come together and work.

Getting Big With Small Parts

Our October 2006 cover story featured Barry Podmore, Inc. of Pittsfield, New Hampshire. This shop’s niche is making small parts with high precision and increasing complexity. “Some of our parts have a major diameter of 0.010 inch,” says president and owner, Barry Podmore.

The business is built on specializing in micro parts for the test and measurement and electronic device industries. The shop manufactures these parts on bar-fed CNC Swiss and CNC and cam-actuated coil-fed machines. In 2000, the shop moved into its current 17,000-square-foot facility.

Business is good for the company. The shop runs 24 hours per day with a lights-out “graveyard” shift from 10 p.m. to 5:50 a.m. “All of our machines are highly automated, and the jobs we run allow for continuous operations,” Barry says.

In 2007, Barry is looking at a possible expansion of the shop. “We don’t have floor space for another production machine, and if deliveries slip, we’ll need to add the capacity,” he explains.

The drawback that Barry sees to his expansion plans is the tight labor market. “We can expand the size of the building and acquire more equipment, but then it’s the help to go along with it,” Barry explains. “In the past, we trained many of the current employees internally and that may be the route we take with a new crop of potential workers.”

Barry keeps his business grounded in both cam and CNC. “As great as the CNC machines are, they’ll never replace the cams,” he says. “They are cost effective and the cycle times can’t be touched by CNC. Granted the CNC does more complex work, but for the right jobs (there are still many), cams have a place in our production mix.”

Looking down the road, Barry sees the company sticking to its position in its niche and getting even better at it. Space seems to be the limiting factor at this point, but it sounds like that may be remedied in 2007.

Amazing Growth

Gustav Bonse, COO for Surefire LLC (Fountain Valley California), is bullish on 2007. His captive machine shop makes 300 different part numbers for the company’s line of lighting products. The shop ships between 125,000 and 200,000 complete parts per week to its assembly plants.

“We have come off 5 years of tremendous growth,” Gustav says. “We see this continuing in 2007 at a rate of 20 to 30 percent, maybe more. We plan to buy at least four additional machines this year to help with production. These will be equipped with the capability to make parts complete in a single handling. Multiple sequences of operations are not acceptable anymore.”

Internally, the shop has implemented lean manufacturing techniques for some time, and Gustav feels the machine shop is as lean as it can get at this point. “We do see an opportunity to improve documentation using automation software, Gustav explains. “I want to upgrade our DNC from cable to wireless in 2007. This will help simplify program download and allow us more flexibility.”

New product development is a prime driver for Surefire’s growth plans. “I am very positive about 2007 and 2008,” Gustav says. “The only cloud on the horizon is proper skills training for potential employees. As good as our growth has been, and looks to be in 2007, we are still limited by a shortage of labor with the skills we need.”

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