Know Where You're Going

Building a successful and competitive job shop business takes appropriate technology, applied well. This Swiss-type screw machine shop uses a solid strategic plan like a map to keep focused and make sound business and technology decisions.

Article From: 7/1/1997 Modern Machine Shop, ,

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Allison Specialty Components is a Swiss-type screw machine shop. As such, production of small, precise, shaft-type parts are the specialty of the house. They're located in Lakeville, Minnesota, just outside of Minneapolis.

Since 1983, when he started the business, president and founder Tom Allison has grown it from one "Brownie" single-spindle, set up in the back of a customer's warehouse, to a six-person operation in a 7,000-square-foot facility. The shop currently operates eight Swiss-type automatics, four with CNC. Yes, Mr. Allison still has the Brown & Sharpe.

Business wasn't always this good for Allison. In 1993, after ten years of being in business, orders dropped off and answers were not easy to identify. Mr. Allison found himself looking for solutions but not really grasping the problem.

With the help of business consultant Lynn Keefer of Sterling Designs (St. Paul, Minnesota), Mr. Allison revamped his approach to the business. Together they took Mr. Allison's vision of what he wanted the shop to become, and designed a strategic operating plan to turn the vision into reality.

Defining the plan has helped Mr. Allison redefine his role in the shop and rationalize his application of technology against a plan. That in turn has led him to an aggressive program of investment in new machine tool technology. Key to the plan is to match the appropriate level of Swiss machine technology to the right application and to the growth goals of the company.

Their work together has led to a business turnaround represented by four years of uninterrupted growth totaling 300 percent. It has also provided Mr. Allison a new set of skills to help successfully run his business in good economic times and bad.

Only Swiss

One of the first strategic decisions Mr. Allison made was to focus the shop's business on Swiss-type machining. "There is a temptation, especially when your core business slows down, to try and branch out beyond your traditional comfort zone," says Mr. Allison. "Sticking with what we do best has turned out to be the right decision. Swiss-type machining is what we know and what our customers expect."

To that end, Mr. Allison began looking at how the shop might become better at Swiss-type machining. They had already acquired a couple of Escomatic cam machines and were cranking out some nice high volume orders.

However, as more of Allison's customers began implementing JIT (just-in-time) delivery schedules, setup time on these Swiss-type manuals became a source of concern. Instead of running and shipping a year's worth of parts, many JIT programs require that an order be broken into multiple batches, subdividing the total run. Overall lot sizes were also getting smaller, reflecting general industry trends toward shorter product life cycles.

"Each of those batches was a setup and teardown on the manual machines [about a day for each order]," says Mr. Allison. "Before JIT inventory programs became common, we could make a single setup, run a year's worth of inventory, tear down and move on to another job. Now that same job involves multiple setups and teardowns yet the price we get per piece is the same. Labor costs for these changeovers were killing us."

Moving From Mechanicals

In an effort to get a handle on the escalating direct labor costs of setup, Mr. Allison purchased his first of three Star VNC 12 CNC Swiss-type machines with live tooling. These were used machines, mid-1980s vintage with 8-bit CNC controls.

"The inherent setup advantages of numerical control attracted me to this class of machine," says Mr. Allison. "Live tooling offered the potential to eliminate some secondary operations."

One big drawback to purchasing a used machine tool is that generally little or no training is available. That problem is compounded in machines as sophisticated as multi-axis Swiss-types. The training problem is compounded further when it's a shop's first foray from cam-actuated mechanicals to electromechanical actuation.

While the workhorse Escomatics made high volume part orders, Mr. Allison and his team went about the task of figuring out how to translate knowledge of mechanical actuation based on cams and levers into the relatively cryptic G-code and M-code necessary to run the CNC machines.

Compared to cam-actuated screw machines, these early CNCs were not up to speed when it came to cycle times. "There was too much think time with the 8-bit processor that was standard when these machines were new," says Mr. Allison. "Multitasking and simultaneous operations are beyond the capability of this vintage CNC."

Even so, Allison's experience with the Star machines confirmed the viability of applying CNC to Swiss-type screw machining. The next goal for the shop was to select and implement current CNC technology that would blend into the shop's strategic plan.

"That led us to IMTS 96," says Mr. Allison. "We went there to find a new CNC machine. What we found and bought was a Deco 2000, from Tornos-Bechler. We took delivery in January of this year. A second machine will be installed later this month.

"What attracted us to the machine was how its CNC programming emulated process sheets for cam actuation. Moreover, its cycle times were comparable to cams in part because of simultaneous cutting capability from up to four tool positions," says Mr. Allison. "Knowing how I wanted our shop to be structured, the addition of this new technology fit the plan."

Appropriate Technology

Allison has organized work flow through the shop to reflect its various levels of technology. It's arranged around three levels of machine tool technology.

Applications are quoted to run in the machining area that is the most efficient for the job. Selection is based on order quantity, complexity, material, size and required delivery. Run quantities at the shop typically range from a few pieces to lot quantities in the millions.

The mechanical department is built around the Escomatics. These workhorses are used for the longer runs and for small diameter work.

One of this machine's capabilities is running parts from coil stock. It's space efficient, and the machine can be set to run unattended on back-to-back shifts, if needed. Before the stock is fed into the collet, it goes through an automatic straightener. On one of the machines, a cross drillhas been retrofitted to increase the machine's flexibility.

The shop's CNC department is two-tiered. The Star machines have a one-half inch capacity so larger work gets channeled to them. They are the small- to medium-lot producers. First article runs and prototype work are routed across these machines too.

"A big advantage for us with these machines is that the response time is very good," says Mr. Allison. "That speed derives from the programmability of the control, and standard single-point tooling. We save significant time being able to bypass cam manufacture and form tool grinding. In some cases, turnaround can be as short as two hours. That would be impossible with a mechanical."

Allison's newest CNC department is built around the Deco 2000. "This machine has been very good for our efficiency and throughput," says Mr. Allison. "We've seen increases of up to 400 percent in throughput over the older CNC machines for some applications."

Those increases are from several process improvements that actually have an additive effect on throughput. For example, the off-line programming that is part of the package for the Deco machine allows a job to be running on the ma-chine while another part is programmed.

"We can use the off-line programming system to graphically simulate operation of all of the machine's axes," says Mr. Allison. "This allows us to optimize our program to eliminate any dead time in the workpiece cutting cycle."

Allison's machine has nine independent axes of motion. The eighth and ninth axes control endworking tools. "With the backworking and live tooling, these machines allow us to significantly reduce the need for secondary operations on many of our jobs," says Mr. Allison. "We pick up a lot of speed using the endworking capability of the eighth and ninth axes."

Organizing the shop by machine tool function allows Allison the processing flexibility to maximize machine tool assets. Putting the right job on the right machine by matching machine capabilities with application requirements keeps costs down and work flow up.

See The Future

The shop that Allison is today is not the shop it will be in five years—or even in one year. Mr. Allison plans to purchase two Deco machines each year for the foreseeable future. This aggressive plan will increase production capacity and allow the shop to participate in new markets precluded from all but the most efficient producers.

At some point, probably around the year 2000, Mr. Allison plans to build his own plant. "Seeing the future of the company, visualizing it, makes strategic planning relatively simple," says Mr. Allison. "While planning is key to the future, it's the vision of the company that directs the plan. I can see what my plant will look like step-by-step in one, five, ten years."

He's moving his shop on a line toward that vision. "Having a plan for the future simplifies day-to-day decision making," says Mr. Allison. "I ask myself, `Will this decision get me closer to my goal or not?' it's that simple. If the answer is, `Yes, this will move us forward,' the only question is when. Timing becomes the biggest decision-making problem."

Taking On A New Role

Like many machinists-turned-shop owners, Mr. Allison is strong on technical ability. He knows how to make cam-actuated Swiss-type screw machines crank out quality parts. It was understanding that there is a role change that comes with hiring people that took Mr. Allison some time to realize.

It's the difference between making a machine tool run and a machine shop run. "It took a business downturn to make me take the steps necessary to evaluate and understand my role in the company," says Mr. Allison. "Today, my role is one of facilitator for the members of my shop team. I make sure they have what they need when they need it."

According to Mr. Allison, too many machine shops think their business is just making parts for customers. That's only one aspect, though.

"There are three areas that drive a machine shop: sales, production and support," says Mr. Allison. "They are interdependent activities that require balance.

"Being out of balance in any one or more of the three impacts the others and ultimately the business as a whole. It's now my job to maintain balance through allocation of assets and resources among these three critical areas. When I started, my job was to run a machine and figure out how to profitably process our orders. Now, I must make decisions that keep the three distinct yet interwoven areas growing together. It's a change in attitude that took time to realize but is now working well for me and the company."

Allison is well on the road to becoming the organization that it wants to be, mostly because they know where they're going.

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The Vision Thing

"Shops can literally create the future they want," according to Lynn Keefer, president of Sterling Design (St. Paul, Minnesota). "It's a matter of focus and balance involving the alignment of a company's vision and values with its operational systems, including strategies, operations, shop environment and customers."

Many people think visioning is one of those soft, touchy-feely issues in business. "Most businesses start because someone had an idea," says Mr. Keefer. "From this idea they could see their life changing—a vision of the future. Often however, it remains merely a dream because there has been no strategic action plan developed. We help companies move from vision to reality.

"An organization's success has everything to do with applying knowledge and strategic thinking," says Mr. Keefer. "Good things happen when employees share the company vision, know what they're working toward, can tap into the company's strategic resources, and contribute their own energy and innovation. It's a powerful tool for shops of all sizes."

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