Job Shops - Ontario - Reinventing a business
- August 3, 2014
Turning a "financial lemon into lemonade"
J/E Bearing and Machine Ltd.
location: Tillsonburg, ON
size: 22,000 sq ft / 2,044 sq m
years in business: 31
key manufacturing processes: CNC milling, turning, EDM, general machining.
The recession of 2008 hurt businesses everywhere. Many fell, others hunkered down, and a few turned financial lemons into lemonade. J/E Bearing and Machine Ltd. was one of these. The Tillsonburg, ON, company had recently doubled the size of its facility, purchased new CNC equipment, and was looking forward to its role as a Tier-II military supplier. That's when the bottom fell out. "Our sales dropped by 50 per cent, literally overnight," says vice president of sales, Chuck Hendricks.
Since 1983, J/E Bearing had seen success as a distributor of bearing and power transmission components, gradually evolving into a full-service CNC machine shop and service provider for the agricultural and automotive industries. Faced with times this lean, they might have been tempted to throw in the towel. Instead, the company took a hard look in the mirror.
Instead of a "that's the way we've always done it" mentality, J/E Bearing set aside its historical business model. Hendricks and his colleagues started by exploring unfamiliar markets and territories, aggressively pursuing new business opportunities. They took on vendor-managed inventory, moved into OEM after-market parts and agreed to carry critical spares in stock. In spite of adverse economic conditions, the results have been positive.
It didn't happen overnight. Hendricks says it took a couple of years to gain traction. "Revenues were back to pre-recession levels by late 2012. Since then, we've been growing significantly. We're now very heavy in defense, transit, food and beverage, and with Toyota and GM plants half an hour from here, we're still involved in the automotive world."
Some of that growth has been a result of new technology. In early 2013, responding to increased demand from an after-market customer, J/E Bearing added significant machining capabilities by purchasing a twin-spindle, twin-turret Doosan TT2500SY lathe with Y axis and live tool capability. "Mill-turn was a first for us," says Hendricks.
They knew there would be challenges with learning how to operate the new equipment. Fortunately, J/E Bearing had some people on staff familiar with both milling and turning. "The transition was cautious but positive," Hendricks says. To ease its programming pains, the company upgraded its MasterCAM system to the latest version, and hired a full time programmer to generate code. "We went the whole nine yards. It was a big learning curve, no question about it, but it was obviously the future for us on the production side of things."
It took the shop the better part of six months to become proficient. Hendricks explains a twin-spindle mill-turn is like having four machines in one, all running simultaneously. "It was a far cry from plug and play." It's also the largest machine J/E Bearing has ever owned, with 76 mm) (3 in.) bar capacity a 390 mm (15 in. chuck).
With big capability comes big expense. Aside from an initial outlay of $400,000 for the machine itself, J/E Bearing had to purchase tooling for its twin spindles and 24 stations, many of them with live tools. To Hendricks, it was a little like having a new baby that needed to be fed and clothed.
Apparently he's a proud parent. Six months later, J/E Bearing purchased a DMG MORI DuoBlock 55, a four axis 600 mm horizontal machining centre with pallet changer, 45 tools, 12,000 rpm and Renishaw probing system.
Dropping the better part of a million dollars on unfamiliar technology is enough to give anyone a few sleepless nights. Hendricks is thankful for great customers willing to work with J/E Bearing on keeping the new equipment busy. Despite this, he admits it was a risk. "At some point, you have to sit down and say, 'Okay, we want to move the company forward. We want to grow and have the ability to take on opportunities that, without the new equipment, would have to be no-quoted.' I'm very happy to say it's worked out."
The new machine tools have had a profound effect on the way he and others think. For starters, multi-tasking machines change the way jobs are quoted: "When a new opportunity comes in, there's always the question: can we run it on the Doosan or the DMG MORI? If so, what does that do for us? It might be a complicated part that previously would have been done in three or four operations, but now it might make more sense to absorb a higher burden rate and run it on a machine where you can do it in one."
Keeping current on machinery isn't the only challenge faced by shops today. Hendricks points to higher customer expectations across the board—since the recession, he says, high quality, good price and very short lead-times are now the norm. "You used to be able to sell on quality. Now it's a given. And customers want parts now—more and more often you hear, 'Can you do it in a week?' or 'How about next Friday?'"
Fortunately for Hendricks, they chose the right equipment to meet these stringent requirements. The beauty of mill-turn machines is the ability to machine parts in a single handling—fixturing for secondary operations is often unnecessary. This reduces leadtime and assures better quality. And on the machining centre side of the shop, J/E Bearing relies on its probing system and pallet-changing capability to run lights-out.
"There's one part in particular where we remove 80 pounds of material from a 100 pound block," Hendricks says. "It's wear steel, so it takes close to three hours to machine. The probe keeps tabs on the tool wear and calls for an offset or replacement when needed. For the most part, we can load up the tombstones with billets and go home."
Of course, machines this sophisticated require highly skilled machinists, people that J/E Bearing, like the rest of the machining industry, struggles to find. "Not getting young people excited about manufacturing is one of the biggest areas where we in Ontario are failing. Kids come out of high school and all they can think about is business administration or an office job somewhere." The answer, he suggests, is bringing the trades back to high schools and restoring once-popular apprenticeship programs.
"I had three guys retire shortly after the recession. They took 130 years of machining experience with them out the door. How do you replace that? We're very pleased with some of the young talent we have on board right now, but you can't put an apprentice on the Doosan. You need someone with years of machining under their belt."
Times change, and Hendricks realizes the industry will never be what it once was. "You drive around town now and see all the buildings with padlocks on them. It's disheartening to know it's not coming back. So we have to be innovative, and find ways to be more efficient. Above all, companies like ours have to recognize that we're in this together, and do whatever we can to help each other. At the end of the day, that's how everyone will be successful." SMT