Insatiable innovators
Published on 01/16/2012 in Success Stories,
Watching Vice President Tim Smith make his presentation to the standing-room-only crowd at the recent DMG / Mori Seiki USA Innovation Days event, it’s clear that he is excited about sharing the “Smiths Machine Philosophy.” No wonder: Smiths has experienced explosive growth during what has been a challenging time in manufacturing.
The “best practices” design of the company’s new facility in Cottondale, Ala., has proven so efficient, even Tim is somewhat surprised by Smiths’ ability to finish orders in record time— much to the enthusiasm of its customers.
Today, Smiths Machine LLC employs more than 100 highly skilled workers at its two plants, serving customers in the defense, aerospace, energy, automotive and commercial industries. The woman-owned, nonunion company is ISO 9001:2008 and AS 9100 certified. In 2010, Smiths Machine made the Inc. Magazine 5000 list of fastest-growing private companies in America.
According to Tim, it’s because Smiths has been willing to invest in the best machines, the best processes and the best people.
“You must be innovative to survive,” he says. “There is no complacency—you’re either growing or you’re dying.”
The Smiths Timeline
Smiths Machine got its start in 1974 as a part- time side business for Tim’s father, Woody, whose management job didn’t give him enough opportunity to work with his hands. Tim and his brother, Robert, grew up in the business and—along with their mother, Judy, who serves as the president, and colleague Rudolf Haustein—form the core management team. In June 2011, Rudolf was named CEO and has brought an even higher level of rigor and control to the company’s operations.
In 1990, the company went full-time, adding a single employee. The addition of Smiths’ first CNC machine— and along with it, a two-man second shift—came in 1992. From 1990 to 2000, the company grew at 30 percent to 40 percent per year; it had approximately 50 employees and a turnover of about $4 million to $5 million a year by 2000. That’s when Smiths began thinking strategically about future growth.
“We chose CNC machining as our focus,” says Tim. “We feel this is what we do best. We decided to move away from commodity-style machines and buy a machine that would last, and in 2000, we bought our first DMG machine, a DMG 100V. Obviously our cost strategy worked; our first DMG is still competitive, it’s still very accurate, it performs just like a new machine. It was a good decision.”
In 2008, a customer in the defense industry approached the company with the kind of order that can either make or break a machine shop.
“It was a great opportunity to really grow the company at a fast pace, and we chose it,” Tim says.
The company acquired its second plant in the summer of 2009.
“We decided, right from the start, to go ‘best practice’—we purchased only the best: workstations, PCs, brand-new chip hoppers,” says Tim. “We sat down and planned the best floor layout, the best air system ... everything. Then we tested it.
“It was a huge investment,” he continues. “If we had failed, people would have said, ‘Why on earth did you purchase the best of everything when you could have gotten by for less?’ We expected the best results and that is what we achieved. From that, we get a very good expected efficiency. For us, it’s also about longevity. If we’re buying machines that last a long time, why would we sustain them with poor support systems?”
Tim says the first DMG machine changed the company’s mindset about what machines could do and how they could drive a company’s growth.
“When I purchased our first DMG in 2000, my strategy was to select a partner rather than a vendor. I also wanted to consolidate; we didn’t need to buy from five different companies,” he says. “From 2000 to 2003, we really learned about DMG and its products, and in 2003, we bought a Twin 65 with Siemens controls and a very complicated process.
“In 2004, we went from basic machines to twin-spindle machines integrated with an ABB robot and a four-axis DMG mill. That was a quantum leap for us—going from a three-axis to a robotic twin-spindle, loaded machining site,” he says. “We deburred the part with a robot, engraved it with the robot; the robot had functions other than part handling. We were running three spindles all the time: twin spindle on the lathe, and then a four-axis mill.”
Over the next three years, Smiths continued to purchase high-end machines, and in 2008, the company added about ten new machines. All told, Smiths now has 25 DMG machines on the floor, including five DMG DMC U duoBLOCK® series five-axis universal machining centers.
DMG / Mori Seiki USA Regional Sales Manager, David Morgan, welcomes the chance to help customers like Smiths Machine learn more about the machines they buy.
“Investing in and implementing new technology expands the user’s ability to compete,” says Morgan. “Smiths’ 37 years of experience in perfecting its manufacturing process is only heightened by the addition of unrivaled machine tool technology.”
“A lot of DMG’s competitors are very engineering-driven, but they have trouble bringing technology to the customers,” DMG / Mori Seiki USA Product Manager Daniel Lecher says. “At DMG, our product managers are solely focused on technology that constantly supports our sales staff. Especially now that we’ve partnered with Mori Seiki, we can offer customers so much technology. Our sales reps’ skills allow them to match customers with the right experts for every project, to solve every problem.”
That technology transfer is a critical part of Smiths’ success, Tim says.
“If we buy these fancy machines and can only use 10 percent of their capability, we’re not really utilizing them,” he says. “We rely on Daniel to support us and help us learn what we can do. I’ve been to the DMG factory to see applications where the lower turret was removed and a special milling device or a gear hob is added to the machine— that’s the kind of knowledge that only comes through our relationship and interaction. We recognized that when we chose DMG.”
Smiths Machine is working to build a similar partnership with DMG / Mori Seiki and Ellison, which locally distributes both DMG and Mori Seiki machines. It hasn’t always been a smooth transition, but Tim is confident.
“It’s about a relationship; you don’t get married overnight. As the DMG / Mori Seiki relationship came together, it was sometimes a bumpy road. We’ve had a lot of ... special meetings,” he laughs. “When two large, world-class companies with opposite cultures come together, it’s not practical to think everything will be ‘business as usual’ overnight. But the process has helped us focus. As we continue our partnership, we want to now learn even more from the organization and take advantage of the larger capability. Strategically, we are going to continue our long relationship with David Morgan and the expanded DMG / Mori Seiki USA team.”
Making the Connection
High-performance machines form a cornerstone of the Smiths Machine Philosophy, but Tim explains that there is much more to it than that.
The central idea is repeatability: consistent, reliable performance on every part, from every machine and technician.To achieve that kind of environment, Smiths performs rigorous in-process inspection, and everything is designed to standardize each process.
“We focus on total process time, not just chip- to-chip time,” Tim says. “In this industry, it’s a common practice to make it ‘just good enough.’ We’re changing that concept. We engineer the entire process: the tool list, the inspection plan, the CMM program, the CNC program. We want to capture the best practices at each step.”
Smiths’ investment strategy is about more than capital cost.
“When you reduce the number of setups, when you reduce the part holding, it makes a huge difference,” Tim says. “Each step creates an opportunity for error, and you lose tolerance. That creates a process variance and slows you down. In today’s market, it’s about speed: The fastest will win.”
A recent prototype project for a defense industry customer provides a case in point.
“We received the order on Wednesday, we started the project on Friday, and 14 days later we completed it,” says Tim. “We delivered that project complete, plated and everything—they could have sent it to the Army that day. A lot of companies could make that part, but not in 14 days. The customer told us they had no other vendor that could offer that kind of turnaround.”
A skilled workforce is critical to Smiths Machine’s high-repeatability philosophy. Though the company used to rely on staffing agencies, the strategy has changed.
“We’ve internalized the hiring process so that we can control it,” Tim explains. “Our management team stays involved; no one at Smiths Machine gets hired without at least two members of the management team approving. That’s our company culture.
“Obviously we look for skill and background, but we also must make sure that new hires work well within our team; that gets more challenging the bigger we get,” he continues. “Our best-practices shop also helps us attract and retain the best workers. We have brand-new machines, the latest and greatest software, and an excellent work environment, inside the office as well as on the floor.”
Another advantage is Smiths Machine’s family feel. Though it is common for smaller machining businesses to be family owned, the Smiths make it work particularly well, Tim says.
“In a family business, we are able to react rapidly to changing market demands; the ability to make fast, fact-based decisions is critical,” he says. “Our customers deal with our owners. That’s important. We have a great staff, but we owners are always available. As we’ve grown, we have not become less visible to the customer; we feel that is one of the most critical things we can do. Another great element of a family business is trust. You can trust your mom or your brother—or you should!”
In the end, Tim says, it’s all about process.
“A good machine, good people, good management—but what connects all of those different ingredients? The process,” he says. “We never plan a job saying, ‘Okay, by the tenth part it’s going to be right.’ Ninety percent of the time, our first parts are sellable. That is a bold statement, but it’s true. We achieve that by having predictable results. We know our equipment, we know our capabilities—through that, we can reduce all of our variances.”
