Machining case study: Greater than the Sum of its Parts
- October 3, 2017
Three successful manufacturing companies merge, expand capabilities, and bring machining work back home
THE PROBLEM A labour dispute at west coast ports leads to shortages of internationally supplied machine parts
THE SOLUTION Purchase a new boring mill and make the parts in Canada
Like many companies, Addition Manufacturing Technologies has long been successful sending at least some of its work overseas. With facilities around the world, including one in China, and a globally diverse customer base, it only made sense for this capital equipment manufacturer to also source components globally. In the case of its Canadian facility in Brantford, ON, the parts bought from its Chinese supplier included a number of large weldments, used as bases for Addition’s various lines of muffler assembly equipment. Although the company would have preferred producing the parts domestically, there was not enough volume to justify it, nor did they think they could compete with the lower wages of the Chinese supplier. The supply chain remained intact.
That all began to change a few years ago. As international currency exchange rates fluctuated in the wake of the most recent recession, so too did profit margins. Additionally, the West Coast dock strike of 2015 severely delayed product shipments, crippling production here at home. Upper management assessed the situation, and ultimately decided to address its large part fabrication needs by increasing its own in-house machining capabilities. They reached out to SMS Machinery, the area’s Hyundai WIA distributor.
The company was not always known as Addition Manufacturing Technologies. The name did not become official until last year. However, if you bend tube for a living, you are sure to be familiar with at least one of this industry leader’s former companies–Eagle Precision Technologies, Eaton Leonard (and Tube Fixture), and AddisonMckee– which, through a series of acquisitions and mergers over the past decade, had gradually joined forces. In 2015, under the guidance of current owner, Albion Investors, the companies rebranded under one name, Addition Manufacturing Technologies.
Doug DeVouge, vice president and general manager of Addition Manufacturing Technologies Canada explains, “we are one of the company’s machining centres in North America, and responsible for production of muffler assembly equipment–the only Addition facility to make that kind of machinery–but the company overall produces a variety of tube bending and end forming machinery, tooling, and measurement solutions. About 60 per cent of our business is automotive, with another 25 per cent in aerospace and the rest spread across power generation, HVAC, healthcare–basically any industry that uses bent or end formed tubing.”
Addition’s seven global locations boast nearly 17,000 sq m (180,000 sq ft) of manufacturing space and employ more than 300 people. The Brantford facility accounts for 35 of those employees, and has a full complement of Hurco, Feeler, and Fortune machining centres and CNC lathes. Despite these capabilities, the parts that had previously been outsourced to China measured several meters across; due to their size, there was no way to machine them in Brantford or in any of the other Addition sites. When the dock strike began to impact deliveries, DeVouge was charged with finding a solution.
“We looked at several different brands and models of equipment, but we had good experiences with Hyundai WIA and SMS Machine Tools previously,” he says. “We were comfortable with both. We also felt the machine design appeared to be very advanced, with box guideways and heavy duty construction. Between that and reliable local support, the Hyundai WIA was a logical choice for us.”
One pleasant surprise during price negotiation was not having to wait months for delivery. Darryl McLellan, area manager at SMS Machine Tools, says Hyundai stocks these machines; in Addition’s case, the Hyundai WIA KBN-135C boring mill was already in the builder’s New York warehouse. “When people go shopping for a new machine, they generally want it now,” he says. “They don’t want to wait five to six months, so that was definitely one of the selling features here.”
Other features include linear scales in all axes, an advanced air assist hydrodynamic guideway system, table load capacity of 15,000 kg (33,069 lb), and a three speed, high torque spindle. “We also wanted a machine with large table travels,” DeVouge says. “The Hyundai has roughly a 4 meter cube we can work in, something that is very important on our bigger frames. Unfortunately, most of the machines we looked at in this size range were nearly twice the price.”
With the machine on the way, DeVouge and his team had to scramble for a place to put it. Complicating matters was the fact that the Addition Canada division was in the process of moving to a new facility. This, however, turned out to be a mixed blessing —Addition simply built the factory to suit the new machine, pouring a meter-deep concrete base and special sub floor to eliminate any movement or vibration. The company also mounted an overhead crane directly over the machine table to manage the heavy, bulky parts they would soon be producing.
Since this was their first machine of this type, Addition also had to make extensive tooling investments: large angle plates and spacer blocks, workholding clamps and fixture components, and an assortment of 50 taper spindle tooling, some designed specifically for boring mill work.
One thing the company did not need to scramble for was talent. Setting up and programming a boring mill is admittedly far different than the three axis machining centres machinists were used to, but DeVouge says Addition was lucky in that respect. “We were under a lot of pressure to get the Hyundai into production as soon as possible. Fortunately, we already had a number of skilled people on staff with boring mill experience, so we were pretty much able to hit the ground running. That gave us a big advantage.”
Boring into new territory
Addition leveraged that advantage to its fullest. Not only is the Canadian facility now producing all of its own previously outsourced work, it is also supporting operations in California, Ohio, and the United Kingdom. The company has also launched several new products. Together with expansions in Mexico and an upgrade of the UK facility, things are definitely looking up for what DeVouge says is now the largest tube bending equipment and service supplier in North America.
The only hiccup to this success story is what some might consider overly restrictive safety regulations by the province of Ontario. “What we learned was that, thanks to the Employment Standards Act (ESA), it doesn’t matter where the machine came from or whether it meets CE and OSHA standards, it will probably need some modifications to the safety interlocks and wiring,” DeVouge explains. “Granted, there was nothing major, but I think it’s important for companies to be aware of that and do their homework before bringing equipment into Ontario, to be sure it meets the electrical standards.”
Still, this story of Addition’s new boring mill has a happy, and perhaps somewhat surprising, ending: despite its higher labour rates, the company is matching and oftentimes beating the landed cost of goods once produced in China. Says DeVouge, “one of the first things most people think about with overseas work is shipping costs, which were actually pretty horrendous on parts this big, but you also have to factor in all the intangibles–things like flexibility, lead time, engineering changes, rework and scrap costs, and product obsolescence. All these costs add up, and you absolutely have to take them into consideration before deciding whether to outsource or do it in house. For us, the boring mill was a big part of that decision. Between our work here in Canada and our intercompany work, we’re running solid, we’re steady, and it was the right thing to do.” SMT