Few companies see themselves through transformations in their bread and butter operations, especially not when the changes affect virtually everything the company does. Yet this is what Wagner Tool & Engineering (Norfolk, Nebraska) has done. Founded in 1988 as a tool and die shop, Wagner began buying CNC equipment in the early 1990s. It kept its machine tools humming profitably on 1,000-piece orders for agricultural equipment, pumps and hydraulic components. For decades, farmers in the northern and western Great Plains constantly innovated and modernized. But in recent years, these farmers and businesses have struggled with rising costs for energy, irrigation and just about everything else, while crop and livestock prices have spiraled downward.
"That market crashed in 1998, so we regrouped," explains Steve Wagner, president. "It was very difficult because everything about the way the business was run had to be rethought and changed. Now we are in a niche market for high precision, low volume components and assemblies. Looking back, there is no more of what was "gravy' work."
The changes in Wagner Tool's operations run deep. A few years ago virtually all of its work was milling and drilling—especially drilling—in iron and steel. Today at any one time the shop may be cutting aluminum and engineered plastics, steel, nonferrous metals and cast iron.
Where Wagner Tool formerly produced components for sale to agricultural distributors and manufacturers, it now builds complete products itself. It has transformed itself into a contract manufacturer and a growing player in the business of outsourcing. The company still has customers in the hydraulics and agriculture industries demanding special valve bodies and manifolds, but the growth is in electrical, medical and scientific products. "One of our newest jobs is high precision components for a delicate DNA scanning instrument," Mr. Wagner says.
"The difficulty is not tight tolerances and complicated configurations," Mr. Wagner continues. "We always had the machine tools and processes to handle those. The difficulty is the constant stream of new part introductions. And that's where EdgeCAM software really helps us." EdgeCAM 5 from Planit Solutions (Southfield, Michigan) was installed the spring of 2000—just in time for a surge in business that proved out the software's capabilities.
Wagner Tool still gets an occasional order for 1,000 pieces, but the norm is 100 to 200 parts. Since those jobs run a day or two at most, how quickly they get into production is the biggest variable affecting profit margins. This reversed the emphasis in operations, which used to be getting through a job's last cut as quickly as possible. Now it is getting the first cut started as soon as possible.
With EdgeCAM and a whole new arsenal of design and engineering capabilities, Wagner Tool now makes money on orders as small as five. This speed and flexibility could never have been achieved with the company's previous CAM software, a low-cost 2D package optimized for drilling.
"That package was very limited," says Scott Volk, manufacturing manager and lead CAM programmer. "I was forced to do a lot of the detail work of programming in longhand with word processing software and a hand calculator. Since we had to do most of the math with a calculator anyway, it was quicker to just do the whole thing in longhand. We could not even get the software to specify where to start a milling cut," he adds.
"On a typical part, EdgeCAM saves me 1 to 2 hours of programming time," says Mr. Volk. That's a huge time savings since he can sometimes average two to three part programs a day in addition to shop management duties. "Out on the shop floor it saves us another 15 minutes to 2 hours per part program," he adds.
"Now it's often just a matter of a few minutes from part print to completed CAM program," Mr. Volk says. "I have virtually no editing to do after EdgeCAM has created the program. With the old system and all the manual programming, it was very easy to make a mistake. Editing was a continuous chore to fix things like negative numbers where there should have been a positive number, misplaced decimal points, or a missing X, Y or Z in front of a number. Those all added up to time lost on the floor," he points out. "Now, we don't have to worry about any of those things like starting in the right spot or going to the right depth."
Mr. Wagner says, "EdgeCAM has virtually eliminated programming errors and what you could call ‘unforeseen obstacles' in the setups and tooling. This is very important because getting into production quickly is now the name of the game for us. Debugging programs is much faster because we can see everything so much more clearly. On many of these jobs," he points out, "setup time equals run time."
The speed and flexibility of Wagner Tool's programming also provide direct benefits to customers. Some of the sharp drop in job lot size "is actually our doing," says Mr. Wagner. "We tell customers they are better off ordering in smaller quantities and letting us worry about the efficiency than they are buying large quantities and holding inventory for, say, 6 months. We can afford to do this now because we can set up, tool and program a job so quickly."
Since inventory carrying costs traditionally are 30 percent of the part's value per year (not counting the risk of obsolescence), EdgeCAM lets Wagner Tool do better by its customers. "EdgeCAM's file transfer capability and our ability to program quickly and accurately with it are very effective tools for us," Mr. Wagner adds.
Wagner Tool's philosophy is to do business in partnership with its customers. "We want to work with companies that recognize the value of our support and not just the lowest possible dollar price per part," Mr. Wagner concludes. EdgeCAM helps span the gap between philosophy and everyday business reality.