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Wisconsin metal fabricator thrives on complexity

Wisconsin fabricator goes paperless, streamlines employee communication, and dreams big

Assembly personnel at Advanced Laser Machining look at a screen to ensure the assembly matches the print. The shop went entirely paperless starting about two years ago.

It’s common for custom fabricators to hit a glass ceiling of sorts. Once annual revenue gets to a certain point—for many it’s around $10 million—shop owners often need to make a choice. Until that point they’ve worn many hats: machine operator, welder, CAD technician, estimator, purchaser, and chief salesperson. Now the founder may choose to shed most or all of these hats so he or she can get to work on (and not in) the overall business.

Some choose to stay small; others choose to grow. John Walton chose the latter (see Figure 1).

As president and CEO of Advanced Laser Machining Inc. (ALM) in Chippewa Falls, Wis., Walton has lived through a lot of change in the metal fabrication business. He began his career in the early 1990s, right when new cutting lasers were appearing in fab shops across the country. These new blanking machines, along with software and other technologies, were starting to change everything.

For a few years a shop could make it just fine with just a laser, considering the fact that not every operation had one. But by the 2000s laser cutting was everywhere, and fab shops had to offer more than flat parts—much more.

By offering more, Walton and his team have grown ALM into a 100-plus-employee enterprise. Last year sales were $17 million; this year the company is on track to reach $22 million; and it’s just finishing up a $4 million expansion, doubling manufacturing space to 70,000 square feet in Chippewa Falls. It also added a new solid-state cutting laser from TRUMPF Inc. during the past year.

In breaking that glass ceiling and continuing to grow, the company expanded its process offering; structured its front-office engineering staff to handle complex projects and drive improvements; went paperless; and, most recently, began an initiative that helped ALM communicate across departments.

Metal Shop and Software

In his early 40s, Walton is just old enough to benefit from a public school system that still had strong vocational education, though in the 1990s the modern, negative view of shop class was in full swing. “I was the guy in high school that took every metal class they offered. I was kind of an outcast, at the ‘bad end’ of the building. I didn’t look at it that way, but many people did, unfortunately.”

In one metals class he made a manual tube bending machine, and as part of that project he needed several heavy plates to be bent. So the instructor sent them to a local shop. Several days later the plates came back, bent to precision, and Walton was hooked. “I remember thinking, ‘You’ve got to be kidding me. They bent this half-inch plate with a machine?’ I was intrigued.”

By his junior year, the shop teacher noticed his eagerness and let him work in the computer lab after school. “I sat there and taught myself AutoCAD® for hours on end. That was my breakthrough. That really got me into manufacturing, especially the computer side of it.”

His knack for software came in handy. When he graduated from high school, he started working for a sheet metal shop, the same one that had bent the plate for his tube bender project. He started as a welder but quickly moved up to become the shop’s CAD programmer. He joined the company (and the industry overall, for that matter) at a time of transition. It’s hard to fathom now, but that early 1990s fab shop still used punch presses programmed with paper tape.

Figure 1
John Walton launched ALM with his business partner, Rod Tegels, not long after high school. Walton was 23 and Tegels was 21. Today Walton is president and CEO and Tegels is chief technical officer.

Walton chuckled a bit. “I’ll never forget it; we got a BTR, a behind-the-tape reader, and we turned that tape reader into a serial connection so we could connect it to a computer. We thought we were living the life. Purely by circumstance, I was right on the cusp of going from tape to networked PCs.”

The shop soon purchased software that offered a graphical interface inside AutoCAD to program blanking machines. The company started using the package, offered at the time by Ncell, to program its plasma machines and punch presses. As Walton recalled, “With that software I could do in 30 minutes what used to take me two days.”

About a year later Ncell hired Walton away. He spent the next year working for the company, installing and setting up the software and training the programming staffs at various fabricators. He visited shops that bought their first laser, then their second laser, then their third. As Walton recalled, “That was my clue. There was something to this laser thing.”

Walton soon returned to the fabricator he left a year earlier—a decision that, in retrospect, changed his life. The fabricator operated in the same building but was now under new ownership, which in the end didn’t succeed. Within two years the fabricator went bankrupt.

After that happened, Walton and his friend Rod Tegels, who also worked at the now bankrupt fabricator, decided to launch ALM. They didn’t start ALM out of a garage; neither business partner had one, actually. They instead started out in 6,000 square feet, inside a business incubator called the Chippewa Valley Innovation Center (www.chippewavalley innovationcenter.org) that helped local businesses, including manufacturers, get off the ground. They started in September 1996 with a laser, a press brake, a welder, and that’s it. But it didn’t stay that way for long. They quickly got enough work to fill the laser to capacity, and they knew they would need another laser soon. “Our ramp-up was extremely short,” Walton said. “We started with one laser with nothing to do, to 18 months later having two lasers and being busier than heck.”

In April 1998 the business moved over Easter weekend. “We moved our equipment to our current location,” Walton said, “and I met my wife that weekend at lunch. It was a hell of a good weekend.”

ALM was off and running.

More Processes

The fabricator launched in a time when just having a laser set a shop apart, but that didn’t last long. By the 2000s, laser cutting machines were being installed everywhere. If ALM wanted to grow, it had to offer more. This included more customer service, including quick turnaround, as well as a diverse technology mix.

As Walton put it, “We decided that we needed to offer a service that very few offered, or offer a more complete service very few were capable of.”

A prime example of this is in forming, where the company offers not only press brake bending (see Figure 2) but also panel bending and (most unusual of all) hydroforming.

Figure 2
Besides press brake forming, ALM also does panel bending and, most unusual of all, hydroforming.

“The owners will reinvest in the business to accommodate customer needs,” said CJ Eilers, ALM’s outside sales and marketing manager. “An aeronautics customer needed parts that couldn’t be formed in a traditional press brake. We got our engineering team involved, and we figured out that a hydroformer gives you the ability to do complex forms for a fraction of the tooling costs that you’d have in a stamping die.”

This includes form geometries that would be time-consuming or simply impossible on the brake or panel bender (see Figure 3). And the tooling costs are low, relative to typical hard tooling for stamping, because the process needs only a single male tool for the hydraulically pressured bladder to form against.

11 Axes

It’s common for a fabricator to have a machining department, perhaps with several basic vertical machining centers (VMCs) and a handful of manual lathes and knee mills. These departments usually support the company’s primary sheet metal fabrication and assembly, and this holds true at ALM as well. But ALM doesn’t shy away from machining-exclusive work. Moreover, many of the shop’s assemblies involve machined parts that are quite complex.

Considering this, it makes sense that ALM made an unusual move earlier this year and invested in a DMG Mori 11-axis machining center, which basically can mill and turn in one setup. The company made the leap to serve an aerospace customer that needed a way to machine a complex assembly. The machine isn’t common, which in turn has helped the company expand into more customer markets.

As Eilers explained, “We’ve been getting more and more into turnkey assemblies [see Figure 4]. The type of work we’re really good at is something that touches every area of our shop. So you’ve got brackets that have been cut on a laser or on a punch, formed in a press brake or hydroformer, maybe welded to another component that’s a machined part, and it then goes to our assembly.”

Diversification and Service

According to Walton, since very early on

no one customer has made up more than 30 percent of ALM’s annual revenue, and he prefers to keep the largest customer at less than 20 percent of revenue.

He added that the customer mix isn’t just a numbers game. It’s also about finding the right customer. As Walton put it, “We really do bend over backward for our customer.” That’s not an unusual statement, of course. But what is less common is what Walton said next: “If we bend ourselves backward to serve our customer, and the customer doesn’t appreciate those extra services, that customer won’t be our customer very long. You just can’t do what we do for our customers for those who don’t appreciate it. If you want a 5 percent cost reduction year over year, after we’ve done design-for-manufacturability work to take a lot of cost out of it, well, sorry, we’re not your guys.”

Communication and collaboration require a two-way street, he said. Otherwise, a business model founded on customer service really won’t be sustainable. “I’m not brash about it, but I tell customers this upfront,” Walton said. “And I think people appreciate the honesty.”

Going Paperless

In 2010 the shop’s revenue hit $10 million and it employed about 50 people. Walton and Tegels knew they had reached that glass ceiling, the point where they just couldn’t manage the operation like a start-up anymore. “Neither of us had a mentor,” Walton said. “At that point we had worked twice as long for ourselves than we did for anybody else.”

That year they hired a chief operating officer with management experience to execute daily operations.Walton then could spend more time with customers, and Tegels, who has a technical bent, could spend more time plotting the course for future technology investments.

Figure 3
Tooling costs for this hydroformed part are less than what they would be if the piece were stamped.

They also began considering getting rid of the confounded paper travelers (or router packs, as ALM calls them). The next year the shop launched its paperless initiative.

Of course, going paperless didn’t happen overnight. “It was a challenge getting the ERP software to do what we needed to do,” Walton said, conceding that it was difficult for people to stop scribbling notes. It was the little nuances that mattered. For instance, the first thing a laser operator will want to know is the type and thickness of material for a job, and ideally those specs should be on the leader board, the top-level screen listing all the jobs for the day. If it’s not there, the operator has to click on each job individually and take notes. That’s not at all “paperless.”

“Having the ability to get the relevant information in front of the correct audience was the key,” Walton said.

They worked through these challenges, one by one, and eventually got the system right. Starting about two years ago, not a traveler could be found on the floor, just 4- by 6-inch move tickets attached to each batch of material. Every workstation in the company now has dual monitors and a computer. Employees scan the bar code, and everything they need to know appears on the screens in front of them. If a revision change comes down to the floor, there’s no massive paper shuffle. Everything is updated virtually inside the company’s MIE Solutions enterprise resource planning (ERP) software (see lead image).

About the Part and the Process

ALM has, of course, a very high mix of products, many of them quite complex. To handle it all, the company processes new jobs in the front office in an unusual way. Many new orders not only get reviewed by a mechanical engineer but also a process engineer—that is, a person who focuses on the manufacturing steps in a job and identifies improvement opportunities. ALM started this approach as it expanded into more complex assembly work, where sometimes hundreds of pieces need to come together.

Consider a complex formed part that requires a few pieces of hardware. The mechanical engineer reviews the part’s forming characteristics, making sure that the flange widths are sufficient and the bend angles and radii can be made with available tooling. He also may determine the best manufacturing technology to use to form these flanges, be it on the panel bender or press brake or, if the flange is short, on the punch press.

The process engineer looks at the same part and sees that hardware must be inserted into the part between certain flanges, which causes access issues. A hardware press operator wouldn’t be able to access the spot that needed hardware if the part were fully formed. If this part were to be made on a press brake, the operator would need to form half the part, hand it off to hardware insertion, then get the part back to bend the rest of the flanges.

This would be a red flag for the process engineer. Could the flanges be tweaked so the brake operator can form them up in one setup, while still giving enough access for the hardware press operator to insert the nut? Or could a hardware press be moved close to the brake, so the operator can insert the hardware in the middle of the bend sequence?

Walton calls the process engineering function “the boots on the ground.” Process engineers are in constant communication with shop floor personnel. In short, ALM’s current engineering structure ensures that all questions get asked, both from a product and process perspective. “We should never get a part in and just make it,” he said. “Is there a better way to make it? We need to scrutinize it and never stop asking questions.”

Entrepreneurial Operating System

About a year and a half ago, during a planning meeting with a representative from the company’s accounting firm, the accounting rep brought up a term Walton never heard before: the Entrepreneurial Operating System, or EOS (www.eosworldwide.com). His accounting firm was about two years into the initiative, and it looked like it might be a good fit for ALM.

Figure 4
Advanced Laser Machining Inc. is taking on more complex work, including mechanical and electromechanical assemblies, plus other work that involves multiple material types and parts.

“I read a few books, and I got so excited,” Walton said. “EOS is not complicated. You don’t need to rethink the way you run your business. It’s a regimented, structured system to make you more effective.”

There’s a lot to this system, Walton said, but a big part for ALM has been the cross-functional meetings. Any org chart has silos, the departments with a hierarchical reporting structure. If you draw horizontal lines across different levels of the org chart, you’ll identify groups of people who often have similar challenges, yet they rarely get a chance to communicate.

EOS changes this by instituting meetings between people from different departments. For instance, supervisors from welding, bending, cutting, assembly, and elsewhere periodically have a highly structured meeting covering problems and concerns as well as best practices. They then leave the meeting with a short “to-do” list of improvements to accomplish before the next meeting. Similarly, meetings of top managers, operations managers, and other “horizontal groups” from the organization meet regularly to discuss action items, and they leave with similar to do lists. Those lists are important, Walton said. Without them, the meetings would be a waste of time.

For Walton and his team, the simple act of meeting briefly—and, most important, purposefully—with people across the organization has helped keep everyone on the same page, share best practices, and gain fresh perspectives. The engagement is similar to the kind Walton and Tegels had almost two decades ago in the business incubator. It’s just scaled up to work for a larger business, which is a good thing for ALM. According to Walton, the goal is for the fabricator to be a $75 million company in 10 years.

Photos courtesy of Advanced Laser Machining Inc., 600 Cashman Drive, Chippewa Falls, WI 54729, 715-720-8093, www.laser27.com.

About the Author
The Fabricator

Tim Heston

Senior Editor

2135 Point Blvd

Elgin, IL 60123

815-381-1314

Tim Heston, The Fabricator's senior editor, has covered the metal fabrication industry since 1998, starting his career at the American Welding Society's Welding Journal. Since then he has covered the full range of metal fabrication processes, from stamping, bending, and cutting to grinding and polishing. He joined The Fabricator's staff in October 2007.