Job Shops - Saskatchewan - A pragmatic attitude
- August 4, 2014
location: Saskatoon, SK
size: 16,000 sq ft/1,486 sq m
years in business: 25
key manufacturing processes: CNC machining
Amachine shop has to decide from the get-go how it will differentiate itself from competitors and, more importantly, it must understand that "you can't be all things to all customers and sometimes no matter what process improvements you make, you'll lose a customer," says the pragmatic owner of Nu-Tech Industries, Duane Olsen.
Since forming his business in 1989, it has become "increasingly tougher" running a machine shop in Saskatchewan.
"Everyone seems to be embracing lean so instead of ordering 2000 parts and storing some on shelves, they're ordering smaller volumes. We've had some customers ordering 10 parts every two days and then they change up the order. Most customers won't commit to long runs and it's a challenge to maintain low operating costs and offer competitive pricing to the customer. In fact, a lot of customers want pricing cheaper now than ten years ago."
He says the only way a machine shop can address this is by staying current with machinery and improving processes continually.
"We're a Haas shop and all of our machining centres and turning machines are from Haas. Most of the newer ones have live tooling and I won't buy any machines without it now. We have a Y axis on the turning machines so we an do milling and drilling; multi-functional machines with live tooling help give us more versatility to do more work faster and better."
Olsen adds that having the same machines with the same controls allows machinists to move to different machines and still be able to operate them. "This flexibility in the shop helps us because we can respond faster to customers' needs."
A trained machinist, Olsen got his start in a Saskatoon machine shop running manual lathes. The shop purchased CNC lathes and Olsen learned how to operate them. Olsen became the sole machinist on the CNCs but the production type work he was doing on the CNCs didn't fit the shop's main business, mining repair and rebuild work, "so we made a deal and I ended up buying the machine and took the customers that needed work on this type of machine and moved into a bay to run the business. At first I worked with the shop but then I formed my own business focusing on CNC work."
Today, Nu-Tech operates 17 CNC machines with a focus on the agricultural, oil and gas, and mining industries with runs ranging from 100 to 1000.
Like many shops, Nu-Tech Industries saw business leave the country as customers chose to go offshore, but in recent years, he has seen several return.
"Long lead times and not having control over the manufacturing processes has lead to a lot of problems. And if there is a problem with a part, they're not going to send it back offshore but try to get it fixed here. Sometimes the correction cost is more than the part is worth. Now, with more people getting into lean manufacturing, offshore work doesn't fit the model and we've seen some work come back."
The skilled trades shortage hasn't had a big impact on Nu-Tech.
"With the recent slowdown in the mining sector, we've had a lot of resumes from welders and machinists. We have some very good people in the shop and we have a very low turnover; most employees have been with us for ten to 12 years and I think it's because we treat people well."
Asked about his vision for the future, he says he's been too busy to give it much thought, but he does have two sons who may be interested in one day taking over.
"My oldest is starting to work here and he just finished high school. I'm not sure if he'll want the business so another possible option is a buy out from a larger company." SMT