Above and beyond: Inspection Efficiency

The decision to bring traditionally outsourced services in-house can be an expensive and scary proposition—one with the potential to either transform a company or send it into bankruptcy.

Yet that’s exactly what many manufacturing companies do, and often they are pleased with the results. That proved true for the four companies profiled in the following pages.

Painting booths are often equipped with robots. This makes easy work of what is otherwise a dull, repetitive task. Image courtesy Miller Welding.

Machining in Depew

QMC Technologies Inc. is a second–generation, family-owned machine shop in Depew, N.Y. The company took its first step into providing value-added services beyond machining parts 5 years ago, when it purchased a laser engraver and put the company’s manufacturing coordinator, Rachael Serafin, in charge of the new department.

“One of our customers requested that every product be marked with the company logo and a part description,” Serafin said. “We started by subcontracting the work to a laser house, but it was killing our lead time. It got to the point where we were falling short on delivery promises, which in turn affected our competitiveness. Bringing the work inside was absolutely the right decision.”

Batches of freshly ground carbide endmills are ready for cleaning and subsequent PVD coating. Image courtesy Fullerton Tool.

Because of concerns about corrosion, that same customer required that all stainless steel parts be passivated. QMC management applied the same let’s-keep-it-here logic and invested in a passivation tank, a move that not only reduced product costs and lead times, but attracted other customers as well. Because of its success, QMC has also implemented hydraulic crimping, custom bagging and packaging, and ultrasonic sanitization services, all of which were prompted by customer requirements.

Aside from the convenience and control that comes with keeping these value-added services in-house, it also reduces risk. “Anytime you send something out, there’s a chance it will get damaged during shipment,” Serafin said. “For example, we’ve had boxes of fittings worth several thousand dollars split open while in transit. The shipper scooped the parts off the loading dock, tossed them back in the box and taped it shut. So not only were the threads scratched and dinged, but we ended up with missing parts. It’s not worth the hassle.”

Powder Coating in Pennsylvania

Miller Welding & Machine Co. has a similar story, albeit on a larger scale. A supplier of machined and fabricated parts, weldments and mechanical assemblies to OEMs in the construction, mining and agriculture industries, MWM has 500,000 sq. ft. of manufacturing space across its Sandy Lick, Maplevale and Homer City, Pa., facilities. MWM Sales and Marketing Vice President Eric Miller said much of the company’s success can be attributed to one thing: His father’s decision in the late 1990s to invest in powder coating and painting equipment.

The motivation was simple: The manufacturer’s customers demanded that products arrive at their plants ready for assembly. “For whatever reason, the market shifted,” Miller said. “The big OEMs were no longer interested in buying machined or fabricated parts. They wanted products that were coated and ready to go. We looked at outsourcing, but then you run into timing and quality issues, something that’s a big concern when you offer just-in-time delivery.

“The ironic part is, if they’d asked us to install a bigger machine tool, we never would have questioned it, but at that time we were very uncomfortable with the whole idea of powder-coat and paint. In the end, it came down to one thing—get on board or lose the business to someone else.”

Typically used for finishing aluminum parts, anodizing is also used for color coding of titanium surgical implants. Image courtesy PKG Equipment.

It was a bold move. The projected cost was $11 million, at a time when annual sales were less than $29 million. Worse, the economy dropped sharply after the installation, so MWM didn’t profit from the purchase until 2004. After that, however, the return on investment was extreme.

“By 2008, our sales volume increased to $118 million and our employee count went to 500, more than double that of a few years earlier,” Miller said. “None of that would have happened without the value-added services we’ve been able to offer our customers.”