November 9, 2004
Contract manufacturer Morton Metalcraft talks about how it faces challenges in fabricating weldments and assemblies for heavy-duty equipment, including ramping up after a slowdown—with machines, manpower, and material, and revising material flow.
Just a missed exit away from the Caterpillar facility in Morton, Ill., contract manufacturer Morton Metalcraft Co. teems with noise and activity. It seems fitting that the company's headquarters is planted among rich, green farmland and gravel-dust-steaming road construction sites, because Morton Metalcraft is one of the largest—if not the largest—fabricator of heavy-duty agricultural and road construction equipment for Caterpillar Inc., Deere & Co., and other OEMs.
Roughly 140 million pounds of steel annually begin their road trips here as weldments and assemblies that will become engine enclosures, frames, cabs, grills and grill housings on backhoes, loaders, excavators, tractors, and other earthmoving and agricultural equipment.
Locating near its customers' facilities is part of Morton Metalcraft's strategy for riding shotgun in the supply chain. "As our customers moved southeast, the infrastructure wasn't there to support them, so we moved down there as well," said Brian Doolittle, senior vice president, sales and engineering. Three of the company's five facilities are located in the Southeast, and two are in the Midwest.
The recent construction boom has taken the heavy-duty-equipment industries by storm. That, and the company's own successful strategies, have put it in the enviable position of having to deal with growing pains.
"In 1990 we did about $30 million in sales," Doolittle said. "Last year  we did $133 million in sales. We're experiencing 25 percent growth this year, and we project another strong year for 2005.
"When you ramp up, you've got the three basic Ms—manpower, machines, and materials," Doolittle said. "We lacked enough of all three during this cycle. When it gets busy and you get behind, you end up with frustrated customers and excess costs." He said the company either had to steer ahead of the storm or be swept up into it.
"Demand came at us more quickly than anyone anticipated, so we soon found ourselves behind the demand curve," Doolittle said. "We worked very hard on our capacity models. The process starts with working with the customers and understanding what their future needs are. It's having our engineers work with their engineers to define the requirements and coming back and sitting down with the manufacturing folks and asking, 'Do we have the processes to do this? Do we have the capacity?' This year the whole process had to be accelerated," he said.
'What new machines do we have to get online for this?' 'How do we get machines in more quickly?' 'How many more people do we need, and how do we get people trained more quickly?' 'Can we get the materials we need?'"
Machines. Within seconds of putting on safety glasses and stepping out onto the shop floor, it is easy to be blown away by the whirlwind of activity and the voluminous number of machines and equipment. There is a constant clamor of beeping forklifts, clanking press brakes, crackling weld units, and whistling laser cutters. Names such as TRUMPF, Amada, Cincinnati, and Cloos brand 35 to 40 laser cutting machines, a dozen weld robots, two dozen press brakes, punch presses, and plasma machines.
"We want to have the best equipment because our customers are global companies—we're competing with global sources," Doolittle said. "Technology is not something that will necessarily drive success, but it can accelerate your existing processes. So we are always looking at ways that technology can move us forward."
The company leases its equipment to use the newest technology available. "We'll be leasing numerous lasers within the next 12 months, because we have some equipment coming off of leases—and then we'll replace them with newer technology," Doolittle said. We've gotten higher-wattage lasers and faster, more precise machines."
"We cut material up to 16 millimeters thick, but most of the material we cut is in the 3- to 6-millimeter range. Because of the large number of lasers we have available, we are able to finetune each machine to a particular thickness—we've found that to be a competitive advantage," Doolittle said.
Generally, the company has been able to work with its suppliers to find machinery on a timely basis, sometimes in as few as 30 to 45 days. "We've been doing it in weeks instead of months," Doolittle said.
Manpower. Of the 1,500 people who are employed at the company's five facilities, 380 were hired in the last 12 months. The company increased the number of shifts per day from 11/2 to a full two shifts, and sometimes three shifts.
"We've been struggling to hire qualified people," Doolittle said. "You've got to find them, you've got to train them." He said some of the training is basic, such as how to use measuring equipment or how to operate a particular machine, but that about a third of the new hires need welding skills. "One of the biggest challenges we have is keeping up to speed with the need for good welders."
Eric Johnson, director of quality and business systems, said the welders have to be very skilled because the weldments the company fabricates have to withstand rigorous safety standards testing—many of the fabrications they make are rollover cages and cab enclosures.
"There are varying degrees of skill," Johnson explained. "There are welders who weld pipelines and large structures who might have difficulty welding sheet metal. High school students can take the vocational classes for two years but need further training before we hire them."
The company has taken a proactive approach to welder training. It has contracted with the local community college to train welders specifically for its requirements. The tuition and other training costs are company-paid, and after the welders pass a standard AWS test, they are hired to work for Morton. The company also offers classes at the local high school and vocational schools. It even gives the high schools the equipment to train with, Doolittle said. "We're going to be working a lot more closely with the vocational schools and community colleges so that they're training people in the trade, and training them correctly."
Material. Doolittle said that the company has experienced significant material shortages this year, and that the shortages have caused order fulfillment delays. "That has caused all kinds of grief," he said.
"We paid whatever we had to pay to get the steel. Despite the price, we have been out of some grades of steel on any given day," Doolittle said. "One day in June, there were 14 sheet sizes or grades that we were out of. Today I can guarantee that we're out of one, two, or three grades or sizes of steel. That's steel that we can't put in front of our lasers or other equipment."
He said their construction and agriculture customers are building many more products than they forecast. "Today if you're out of it [material] and you haven't forecast it, material suppliers want a 16-week lead-time."
|The making of an engine enclosure|
A hood of an engine enclosure for a Caterpillar motor grader begins as 14-gauge sheet metal. It is sheared (blanked), and louvers and holes are punched. Next the profile is laser-cut with notches, keyholes, and other holes.
The hood and other components that will be welded to it are formed in a series of complicated press brake bending sequences. Forming a part as large as the hood is a two-person operation, with both operators acting in unison.
Each hood requires four complex, difficult-to-execute angles with specific dimensions for fit-up to the other enclosure panels.
Seams are welded and additional components such as brackets and reinforcement bars are welded on. On the finished side, weld bleedthrough must be ground smooth and the original contour maintained.
The hood is cleaned, powder-coated, cured, and then readied for assembly.
The grab bars are attached, the hood is assembled with the other panels of the engine enclosure, and latches are riveted on.
The enclosure is hoisted into a rack that is dimensioned so that the enclosure can be checked for fit before it leaves the plant.
|"The unique thing about the engine enclosures is that our customers trigger those based on the serialization. They tell us which models to build, and in what sequence to build them in. Those guys label that sequence number on the ship tag, and when they get to the motor grader line, they have the exact motor grader going down the line that requires that engine enclosure. So it's all custom shipments."|
—Martin Jones, Supply Chain Specialist
Doolittle called the experience "a wake-up call" that has driven process improvements. "You can't get manpower overnight. You may end up waiting for machinery—and for enough steel, for sure." He said they have performed root cause analysis in each of those areas.
Doolittle said that the analysis has helped them determine that using better planning tools is essential. "The entire enterprise—from customers on to our supply base-everybody must work to do a better job of forecasting, to get a better view for a longer period of time."
Doolittle said it is critical that the entire process works. "Anybody can go out and buy the technology. The key is making sure that our front-end systems are tuned so that we shorten our cycle time, so we don't have non-value-added expenses, and so that we ship quality products on time.
"We have a couple dozen engineers trained to do total engineering. CAD systems allow us to do everything from the front end—the EDI, MRP, bar coding, ASNs—we do everything electronically," Johnson said.
"We've put a huge emphasis on lean over the last few years," Johnson said. "We've implemented Six Sigma in our organization. We have something we call VAST—value-added supply team. It's a sort of scorecard system designed to focus us on the metrics that drive our business."
"OK, so all that's good. Now you've got to have a flow that works," Doolittle said.
Johnson said that improvements had to be made to the physical layout of the machines and to the 41-year-old building. "One of the problems we had was related to the facility. Through the years the building has had numerous additions. A lot of the ceilings were too low. We looked at the mechanisms we had for material flow and we saw that we struggled."
Johnson said they used the Six Sigma philosophy to look at the big picture—at the factory as a whole. This approach allowed them to utilize their equipment to the fullest capacity, and to use common setups and methodologies, he said.
The number of different parts that the company produces is about 8,000. Although some parts have runs of 8,500 a year, most runs are of fewer than 1,000 parts annually, Johnson said. "The variety of parts that we push through here on any given day is very high, so we had significant setup issues."
Johnson looked closely at the range of part material thicknesses. Parts range from 1 to 16 millimeters thick—most are 3 to 6 millimeters thick, he said. "It didn't really jive to have a large number of individual cells dedicated to one part, from raw material to finished product. So we consolidated equipment to utilize common setups and tooling that incorporated the flexibility of the lean process."
Johnson said they took a bird's-eye view of the optimal layout and decided to make the facility U-shaped, so that the whole facility functions as a cell. They knocked down some of the walls to smooth out the flow, and a facility addition is being constructed to support the new layout design.
The company has been able to refine its processes so that it ships every day, based on demand. Lead-time typically is five days, with some parts going out the same day and some with a 10-day lead-time. But the most noticeable improvement has been to throughput.
"Since last year the throughput improvement is huge," Doolittle said. "We were producing about $300,000 a day in October of last year, and now we're producing over $470,000 a day. That's a 57 percent increase—which is pretty phenomenal."
Morton Metalcraft Co., 1021 W. Birchwood St., Morton, IL 61550, 309-266-7176, fax 309-263-1866, www.mortonmetalcraft.com
All photos courtesy of Morton Metalcraft Co., except where noted.
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