The Elusive Transfer Niche
It’s hard for me to believe that almost 24 years has past since Hermann Dohl and I co-founded TPS (Tooling and Production Systems) in 1981. I was 27 and TPS corporate headquarters was a bare bones 12' × 12" den with a single-line phone in Richfield, Wisconsin. Hermann and I worked in the Machine Tool Division of Custom Products Corporation where Hermann headed the North American sales and service of the German-made Variomatic rotary transfer machine. Sales and service at that time meant that it would not be unusual to find yourself in a shirt and tie in Warren, Michigan on Tuesday and crawling around the inside of an oily machine in Dayton, Ohio on Thursday. I was fortunate to have connected with both a mentor and friend.
Although there were many U.S. companies that built transfer machines at that time, many were still one-of-a-kind machines that did not process parts from bar or coil. The Hahn and Kolb Variomatic and the Mikron Multifactor were compact, standard series, mechanical cam transfer machines that could produce parts from bar, coil or blanks at screw machine speeds. They’d been sold and proven effective in Europe for decades. The target market was clearly the high-volume parts that screw machine shops could not drop off complete because of their limited back-working capability. That was a very big market in the 1970s and 1980s. What made the German and Swiss machines stand alone was the ability of the part clamping fixture (usually a 100-mm two-jaw chuck) to index about its own axis during a table index. That feature enabled our customers to complete a part that required multi-side machining, in one clamping and one cycle from bar material. Fixture indexes were generally done in 45-, 90- and 180-degree increments and our customers found that they could quickly justify their purchases.
Business was good, and we found a niche. Variomatic and Mikron owned the market until the Swiss Hydromat was introduced by the R.L. Pohlman Company in St. Charles, Missouri. Those from the mechanical cam school were quick to dismiss Hydromat’s hydraulic quill feed units, yet the company had many more features to tout. At that time, its standard part clamping collets were less expensive than hardened and ground jaws, and its unique inverting unit (used with or without a stepped sleeve) offered new clamping and process options. The company’s standard design also started to erode the dedicated machine stigma that transfer equipment carried for many years.
Although there was still a good market for cam machine solutions, and other hydraulic transfer machines were already being sold in Europe, Hydromat was first in the market, its campaign was effective, and the employees believed in what they were doing. Pohlman added instant credibility because its primary business was contract machining. The company could simply point to its own success using the equipment. The “complete from bar” transfer concept never looked back. Users of machines such as Rismatic, Buffoli, Wirth Gruffat and Eubama all found niches in capability that Hydromat didn’t need to counter at the time. Multi-spindle facilities and job shops found that owning these machines put them in a niche that separated them from competitors.
When the calendar is flipped to 2005, we realize some things do not change. Technology advances and customers are telling us that sheer market saturation has now moved some transfer machine models into commodity machine status. That means more job shops with the same machines are competing for a shrinking piece of the pie. With the China challenge capable of wiping out a growing portion of what was once made here, customers are stepping up their efforts to find the capability and value-added services that will once again provide them with the advantage of a market niche. For some, that means looking for business in growing markets like the medical industry. For others, it means staying in the industry they serve but investing in new equipment that produces the complex parts that command the higher price.
The fact that we’re selling equipment valued more than $1.5 million to small job shops speaks volumes for the survival paradigm shift that is occurring in so many industries nationwide. In most cases, completing the part from bar material will be a must, but don’t rule out lower-cost options if new investment is impossible. You could consider using your existing lathe assets to blank the part and remove your secondary bottleneck with a high speed, flexible dial that operates as one automated system. The luxury of multi year, multi-million piece contracts are evaporating as fast as price tags are rising. If you can invest, make sure the equipment is flexible, fast, and above all, technically capable of separating your company from the rest of the pack.
To contact Dean Bentzien at TPS International Inc. call (262) 246-6110 ext. 104.