Gone are the days of the mainstay product. To turn a profit, companies must turn out new models and new features before the competition does. The rapid-fire launch of smartphones in the past decade is a good example.
According to a McKinsey survey, “more than 25 percent of total revenue and profits across industries comes from the launch of new products.” It’s no wonder that the latest and greatest phone from last year has already been replaced by a new model. The same holds true for cars, electronics and appliances – no matter how large or small the tweak, there is always something new for consumers to buy.
To respond to these ever-shrinking product life cycles, manufacturers must shift their operational approach from mass production to high-mix, low-volume work. John Baker, president of General A&E Mfg. Co. Inc., a precision sheet metal parts manufacturer, actually saw the writing on the wall years ago and began putting measures into place to address the impact these changes would have on his company.
“There was a time when our average order quantity was 300 or 400 parts,” Baker says. “Now, it’s closer to 40 or 50. When we foresaw high-mix, low-volume coming, we decided that attacking setup time as opposed to cycle time was the thing to do.”
This rule of thumb is what led Baker and General A&E to invest in an AMADA HRB 1003 ATC press brake. The high-precision, customizable machine was built in the company’s new manufacturing center in North Carolina with shop floor productivity in mind. The ATC – automatic tool changer – is what allows General A&E to radically reduce setup times, which is essential for high-mix, low-volume manufacturing.
“On the HRB brake, we go through the cycling of the bending process the same as on any other machine, but when it comes to the amount of time spent getting the order ready to be produced, that’s where we save,” he says. “In essence, we’re attacking the cost of setting up the parts to run rather than the time it takes to run them once the machine is set up.”
Building a business
General A&E has been in business for 65 years. Baker’s father, John Sr., started in a small 600-sq.-ft. Quonset hut after buying some machining equipment from a bankrupt company. He
worked tirelessly to build up the business into a well-respected, precision-oriented supplier for many of the biggest, high-tech electronics, aerospace and defense manufacturers in the United States at that time: Western Electric, Robinson Aviation, Curtis Electronics, Bendex, IBM and Raytheon, to name a few.
A few years after his father’s passing, Baker left the corporate world in Manhattan and came home to run the family business. Under his oversight, the company doubled in size. As it grew, he quickly recognized how difficult it was becoming to find skilled help.
“Having worked for public companies and seeing how they would deploy and redeploy their human assets in their factories to where they could find the lowest cost labor and barriers in terms of taxes and regulations, I kind of figured that approach would come to the small business model one day, too,” he recalls. “Therefore, I tried to find the type of equipment and personnel that would suit moderate quantity work where there were a lot of changes and where it was inconvenient to redeploy to less expensive countries or areas. And sure enough, here we are.”
Knowing early on that high-mix, low-volume parts production would eventually be the norm, Baker invested strategically in equipment. And he stayed loyal to AMADA, his equipment supplier. Not only did AMADA offer the quality and automated features he required, but it also provided the best service in the business. “They come here even if we don’t ask them to, to make sure things are going OK,” he quips.
In 2013, General A&E acquired an LC2012C1 CNC combo punch laser from AMADA that loads and unloads automatically, allowing for lights-out operation. The company also has an FO3015NT flat-bed laser from AMADA “with no setup time to speak of” as well as an AMADA EM2510 punching machine. The most recent addition, the AMADA HRB 1003 ATC press brake, further enhances the company’s equipment mix.
“When I go out on the shop floor, I notice there is always a brake operator at that machine,” Baker says. “It’s always being used because it’s so efficient. In terms of how it’s changed the workflow, it hasn’t necessarily affected how parts move from machine to machine, but it certainly allows us more flexibility of what to run and when.”
In a high-mix, low-volume job environment, setting up the brake is easily the most time-consuming part of the process. Putting the tooling in place is also one of the most physically taxing jobs in the shop. Baker says that the ATC literally and figuratively does all of the heaviest lifting robotically.
“Before the ATC, if one of our customers needed parts sooner than they thought, but we had a job in the press brake that was 500 four-bend parts, essentially 2,000 bends in total, it would be a couple of days before we could get to their job,” Baker says. “Now, and I’ve checked this, it takes 1 min. 32 sec. to change the dies and the program to go from one job to another. That includes everything related with setting up a job, including putting in all of the dies. All we have to do is run one part, take it to inspection, prove it and get it running.”
Obviously, customers appreciate the flexibility that the ATC delivers. And according to Baker, his employees appreciate it, as well.
“The operator loves the machine,” he says. “There is a better likelihood of employee retention if they’re working with automated equipment where they feel that they’re part of a modern manufacturing environment. My desire is to automate as much as possible. In addition to the ATC and the LC, which has the lights-out capability, we also have robotic welding capability. In the near future, we hope to automate the grinding of welds and inspection, as well. We have two full-time inspectors, and sometimes they need help.”
Baker adds the caveat that automated inspection equipment is still in its infancy, so he’s holding off on that investment for now.
Initially, General A&E’s work – mostly steel commercial work in fairly high quantity – was carried out by about half a dozen employees. Today, the company focuses mainly on aerospace
and higher end electronics with shorter product life cycles and smaller quantities.
By 1987, when the company was expanding its building, 63 employees were on staff. After the expansion with the addition of automated equipment and robotics, 30 people are able to handle the work, but at a much higher physical volume of parts “because we’re more capital intensive than labor intensive,” Baker says. Company growth is no longer measured by the number of employees on the shop floor.
“People used to say, ‘I’ve got 20 guys,’ but now they’re saying, ‘I’ve got three automated turret presses,’” he explains. “We’ve started to talk about equipment rather than the number of employees to discuss growth. Our company can run overnight without people here. That’s a big change. The ability to go from one type of work to another without missing a beat. That’s another big change.”
When asked what his father would say if he were able to tour General A&E today, Baker says that he would be astonished. “But then he’d say, ‘your mother spent good money on your education. Why aren’t you setting up an internet website to do retail like Jeff Bezos?’”
Baker inherited a business, but, clearly, he also inherited his father’s ability to always look to the future. The company’s early transition to a high-mix, low-volume factory exemplifies that forward-thinking vision. His father’s legacy is in good hands.