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Eleven years ago, Tom Manner, a former president of a metal fabricator in Marietta, Ga., and seven of his employees stepped into a rented building in nearby Cartersville. The floor was covered with power cords and speckled with machinery.
Manner had left a company with management troubles and an old-fashioned mindset. The old firm, no longer in existence, didn't promote free communication between the shop floor and management. Old equipment filled the shop, save the turret punches. Yet even that new equipment was worked withtraditional thinking. Workers sheared blanks to small sizes, then placed them separately onto the turret table, even though the turret could be programmed to punch larger sheets holding multiple part batches.
Eleven years ago, Manner and his team had different plans.
A DECADE OF GROWTH
The original eight formed a new job shop called Sheet Metal Components (SMC)—and within three years turned a profit. By the time Manner retired at the end of last year and handed the reigns over to company President Fred Latour and the management team, SMC had grown to 70 people and 60,000 square feet. This month the firm hopes to expand into another 7,500 square feet with its new welding shop. SMC's customers number in the hundreds, many in the tractor and off-road industries along with myriad others, from light fixture designers to auto makers.
How did the new firm go into the black so quickly? For one, it hit the ground running. The original team brought immense knowledge of metal fabrication. Yet to sustain the growth required a fair amount of autonomy; they realized ownership had to eventually stay only within the company. Learning from the mistakes of their previous employers, this company was designed to grow from within.
The goal of employee ownership did limit how managers could financially grow the business. "But on the other hand," says Latour, "it left us free from the decisions of others to pursue [new technologies.]"
For instance, Latour and his colleagues, while at the Marietta firm, were among the early local adopters of laser cutting. "We had the second laser in Georgia," he says. Although initially skeptical, the shop's first laser machine turned a profit within six months. "I couldn't believe you could turn a profit on something that expensive."
At the new company they knew they needed a laser—but where to turn for the six-figure financing? The banks offered little help without collateral.
So managers borrowed money from a venture capitalist and sold stock, though with highly specialized buy-back plans. "Within five years we could offer to buy back the stock," Latour says, "and within 10 years the stockholders had to sell."
Within seven years, the company was able to buy back all original stock offerings. Since that time all stock has been held within the company.
CUSTOMER RELATIONSHIPS
Looking at that power-cord-strewn floor in 1995, the founders thought about building SMC to about 25 employees, at most. Of course the company grew beyond that, and in remarkably short order. This, says Latour, came through creative thinking on the shop floor and simplified customer service.
One Customer, One Contact. "Here, no matter the question, the customer talks to one person," Latour says. Most of SMC's customers—now at more than 200—call the same sales rep, who quotes the job, orders materials and follows it through delivery. The sale does not stop with the order. "They more or less become friends," Latour says. This means they know their customers' operations and can predict future needs.
"Every customer has a different method of wanting to buy parts," Latour says. For instance, does the customer prefer to build or buy his own die? Or does he expect the shop to purchase or build the die in-house?
Success is measured not by how many jobs are brought in but the result of the order. The philosophy focuses on delivery, not simply closing the sale.
At SMC, the customer relationship rules. If a good customer's forecast suddenly changes an order, which forces SMC to produce parts and inventory them, "it's a gamble and we finish the job. We go out on a limb for our customers sometimes," he says. "I admit it's risky, but it has worked out for us thus far."
SMC quotes using a simple system developed in-house. When a job is awarded, it then gets entered into JobBoss, an online job-management tracking system. The package prints out the operations required, promised delivery date and any special requirements, then is subsequently attached to the part prints and other pertinent information; the packet, or "traveler," follows the job through the floor.
Bar codes on the traveler help track job status. Before an operation workers scan the sheet, sending a signal directly to the company's online database. This helps manage where each job stands and prevents flooding the floor with work. Beyond that, if a customer says he needs to push up delivery dates, managers know where the job is in relation to others and can immediately determine whether they can meet the customer's new demand, Latour says.
Common-Sense Design. Building such relationships with customers helps judge how receptive they are to design suggestions. One large customer has its purchasing department, manufacturing and quality engineers teleconferencing with SMC representatives before production begins.
"We go over every dimension, every tolerance and spec," Latour says, "and ask, what does this part do?" If a powder-coated part goes underneath a tractor, SMC asks, why not have it e-coated (electro-deposition coated)? "That process will save on per-part price."
SMC has gained especially large savings through innovative uses of the laser to reduce or eliminate welding. Years ago workers would build complex jigs and create parts with large weld fixtures. This doesn't happen often anymore. For many, the laser or form tools on the punch press can process parts that are "puzzle-pieced" together using tabs and slots.
"We're a job shop," Latour explains. "We don't officially do any engineering, but we often give ideas."
Sometimes ideas, both about design and general manufacturing practices, start at the floor. The operators, intimately familiar with the process, bring their thoughts to Ken Freeman, the plant manager and others in the front office. If the idea makes sense, and (if a design change is involved) the customer agrees, a change is made.
SMC's culture of open communication has been a keystone for the company's dramatic growth, Latour says. Among other things, it leads to smart equipment investment. For instance, during the past few years the shop upgraded a portion of its press brake line. It has two Amada 143-ton brakes that effectively reduced setup from one hour to five to 10 minutes. It allows one operation to use three different dies that, with the help of a seventh axis, can move in multiple of directions.
Another example: A part with four radiused edges was tediously processed through three-roller bending unit; operators rolled once, flattened, then rolled again, repeating the process three more times. By investing in a four-roller CNC unit, the operation can be completed in one setup.
Another part, a backhoe arm, uses material stock bought at certain length, limiting waste. It is cut flat, but then reaches a conundrum—it's too tall for typical press-brake tooling. So the company invested in a wiper die to form up both sides at the same time. After bending, the part is put into a jig and holes are laser cut to hold concentricity tolerance between the sides at less than 0.010 inch.
INTEGRATING CHIPMAKING
The shop operates amid industry's push toward just-in-time manufacturing. With customers pushing delivery demands, subcontracting machining became less practical. Shops SMC outsourced its bushings and other machined parts sometimes wouldn't deliver on time—not an option in a JIT world. That led SMC to expand their core competencies and invest in machining.
"We've got an assembly line we need to deliver these parts to, and you cannot stop it," Latour says.
The shop uses three CNC vertical mills and one CNC lathe. Running them are several operators and one CNC programmer (the shop also has two other programmers for its four laser-cutting systems and three turret cells).
"It's been a very steep learning curve," says Kerry Allen, company vice president and former CNC programmer.
The expansion and success of its chipmaking department came partially thanks to another company's misfortune. A local aerospace machine shop had recently closed, which left several highly skilled machinists unemployed. This allowed SMC to bring in that expertise and at least partially "flatten out" the learning curve.
The machining centers have opened the door for at least the potential of cross-training between metalworking and fabricating. One CNC programmer for the laser cutting systems, for instance, has expressed keen interest in learning his way around three-dimensional G- and M-code part programming for machining centers, Latour says. (In general, the company attempts as much cross-training as possible.)
About 80 percent of the company's milling and turning work is used to make bushings and other components. The remaining 20 percent consists of forming dies—and that in itself has led to immense efficiencies. By making its own tooling, SMC has found it can win more business and save customers money.
FABRICATING IN GEORGIA
As the Fabtech and American Welding Society trade show travels to Atlanta, Latour and his colleagues at SMC share a unique perspective. They know the significance of having the metal fabricating world fly to the Peach State at the end of the month.
When Latour started out in metal fabricating in the early 1990s, "there were only five or six large contract sheet-metal shops in the state," he says. The industry grew significantly, but like everywhere else the growth has been anything but steady. Many have since shut down or consolidated. Today, Latour says, the market consists of a small number of larger contract fabrication shops (including SMC) and a plethora of one- or two-person operations that specialize in work for a smaller customer base.
"That has not been our strategy," Latour says. The company owns the gamut of metal manufacturing equipment, from press brakes, shears, turret punch presses, laser-cutting machines and bending rolls to CNC mills, lathes, stamping presses, CMMs, even a laser scanner for inspection and reverse-engineering services. That bevy of equipment demands a large, diversified customer base.
Due to the company's rapid growth, different weld stations sit somewhat haphazardly throughout the floor. Managers hope to resolve that this month by moving most welding equipment—robotic, resistance and manual processes—into a new expansion of the building. (One robotic welding station will stay by the mills, which machine a large equipment part that subsequently must be welded.) The new facility will boast centralized gas and filtration systems, and racks for easy access to welding fixtures.
The company now stands at a critical point as managers question how large they really want to grow. Job-shop work can be fickle. During SMC's early years, one large customer demanded more laser-cut parts. So the company bought another laser-cutting system. Later, that same customer wanted still more capacity, but SMC managers stepped back from the frenzy. Knowing that customers come and go, they decided to rent a third machine—a smart move, since soon after the customer pulled its work.
The shop ultimately purchased a fourth laser, and all keep plenty busy. To suit demand, Latour has had thoughts of adding another, larger stamping press once the welding equipment is moved and organized. But beyond that lies a relatively blank slate. The shop may grow—but not too much.
"We'll have to wait to see what the next few years bring us. I don't want to get too big," Latour says. "If you keep growing and growing, you may hurt yourself by not delivering and having worker problems."
For now, managers are happy to be one of the leading job shops in the state. Most of SMC's customer base is local, and the company likes it that way.
"Customers come and go, some try going offshore, and some come back to us," Latour says. Dealing with, and receiving deliveries from, a Georgia-based shop can be a lot easier than shops in Mexico or China.
And so at present, SMC is happy to be near its customers, ready to meet the quality and delivery demands for Georgia manufacturing.
Editor's Note: Photos courtesy of Sheet Metal Components, www.sheetmetalcomponents.com. For more information about JobBoss, visit www.jobboss.com or write #900 on the Free Product Info card.
author: By Tim Heston