Automotive and industrial: A tale of two businesses
Microflex grows in automotive through automation, diversification
Embracing technology has given Microflex a firm foothold in the turbulent automotive marketplace.The Tier 2 supplier has garnered a reputation for advanced sheet metal forming, developing parts for exhaust, steering, and fuel system components. It has ISO 9001 and other quality certifications and has invested in software that will add traceability and cohesion throughout the automotive operation.
Every morning as John Atanasoski gets out of his car and walks over a parking lot to his office, he looks at an adjacent swath of land. There Atanasoski's employer, Microflex Inc., this year will start building a 45,000-square-foot facility to house Microflex Automotive, its 2-year-old OEM automotive products division.
That calls for a double-take.
With the auto industry's woes, many metal fabricators aren't touching the market with a 10-foot pole, let alone a 45,000-sq.-ft. building (see Figure 1). But Atanasoski, chief operating officer, and others on Microflex's executive team have reason to be bullish. The Tier 2 supplier has garnered a reputation for advanced sheet metal forming, developing parts for exhaust, steering, and fuel system components (see Figure 2). It has ISO 9001 and other quality certifications and has invested in software that will add traceability and cohesion throughout the automotive operation.
But how does this Ormond Beach, Fla., manufacturer make all this investment and compete with operations worldwide in a U.S. market that's characterized by a seemingly perennial contraction and required cost reductions? Atanasoski pointed to a hydroforming machine on the floor, then an automated forming line with robotics, welding, material handling, and inspection stations. Operators load stock, which is then carried through production and leak testing, after which bad parts are automatically sorted from the good (see Figure 3).
"Nobody can compete with China or India by throwing more people at a job," he said.
About 80 percent of the company's machines were designed and built in-house. At Microflex, he said, machine-making and parts-making intertwine. Employees view new projects from every angle. Can the current equipment produce the part? If not, can the company make equipment to make the part?
According to Atanasoski, "We never shy away from technology," and embracing it like it does has given Microflex a firm foothold in the turbulent automotive marketplace.
The Road to Automotive OEMs
John's father and uncle, company founders Josif and George Atanasoski, Macedonian machinists trained in chipmaking, engineering, and machine design, crossed the Atlantic and launched Microflex in 1975 in New Haven, Conn. In 1982 they purchased more than 30 acres in Ormond Beach, near Daytona Beach, to construct a 48,000-sq.-ft. manufacturing facility. There the company produced flexible metal hose (see Figure 4), expansion joints, and bellows for power generation and other industrial sectors. At the time, Atanasoski said, managers knew the products had broader applicability. "These products can be applied anywhere you have vibrational issues."
By 1989 Microflex's industrial distributors wanted to grow their business, and flexible metal hose for the automotive aftermarket seemed like a logical fit. Automotive parts experience plenty of vibration, after all, and for Microflex it offered a way to get into high production without the stringent regulation, part prove-outs, R&D, and other burdens that come with the OEM supply chain.
It was a private-label arrangement, so the industrial distributors handled the sales and marketing. This allowed Microflex to focus on shifting to mass production. Until then the industrial business produced runs ranging from one-offs to a few thousand.
During the late 1980s, "we were approached by a few [automotive] OEMs, but we weren't confident," Atanasoski said. "We understood that when you become a Tier 1 or 2, a lot of burden is put on your shoulders, developing, testing, and servicing [components]." Besides, the aftermarket was a good business, offering high volumes without those extra regulatory requirements.
A lot can change in a decade. By the late 1990s, "we saw the [aftermarket] change due to globalization," Atanasoski said. "Parts started coming from Korea, India, and China. The market was saturated, and there was no quality standard. It all came down to price, and that was not a battle we wanted to fight."
Microflex had timing on its side. Over 10 years the company expanded its capabilities, effectively operating two kinds of companies under one roof: low-volume, almost custom work on the industrial side, and high-volume production for the automotive business. The more confident managers became of their high-production operation, the more they considered the OEM business.
One contract in particular provided a significant stepping stone.
"During the late 1990s we started work on gas turbine hose assemblies for GE," Atanasoski recalled. "There was not a lot of quantity, [but it did entail] kits that had to be built over and over again." Projects involved a variety of individual parts put together into large numbers of kits, combining attributes of high mix and mass production. Such lean techniques were then the emerging modus operandi in automotive manufacturing. "It helped us transition to automotive," he said. "We learned where the trade-offs were and the bottlenecks, and we then knew where we needed to go to get to mass production."
Adapting to Mass Production
Even before the automotive division launched, some industrial projects didn't start the usual way, that is, with a print. Engineers would often visit an industrial customer, discover why the company needed Microflex's product, and discuss options to best suit the design. Would the bellow be made of a stainless, like 304, 316, or 321, or perhaps INCONEL® 864 or 625 for bellows used in corrosive environments?
As Atanasoski explained, this approach dovetailed neatly into the automotive business, which covets this kind of partnership. Microflex sells its competency in every aspect of production of braided hose and bellows, including engineering and design of both the parts and, often, the machines that make the parts. The company's machine shop has a bevy of mills, lathes, press brakes, punch presses, and other equipment to build machines and tooling on demand.
A tour of the production floor presents a kind of living company history. Some hose machines still in use today in the industrial division were built in-house back in 1975 by the founders themselves. Across the floor sit braiding, hydroforming, and resistance spot welding machines; tube mill equipment; and, at the far end, automated lines for automotive work. The hydroforming systems used in the automotive line are customized technology first developed for the industrial division. But they have evolved significantly, being integrated into automated cells with linked programmable logic controllers and higher-architecture systems for data collection and monitoring.
"During the past several years we've designed a complete assembly line, with robotic arms moving parts from one location to another, from a spot welding station to a crimping machine, for instance," Atanasoski said. He added that the company does purchase individual components—a welding power source, a robotic arm, a controller—but employees design the overall system and integrate the purchased components themselves.
The company's hydroforming machines are built specifically for Microflex's bellows. The company must process a range of wall thicknesses, lengths, diameters, and pressures, so engineers built a system to suit, including quick-change die fixtures.
The ideas for such quick-change equipment came from the industrial division, what Atanasoski still refers to as the "job shop" side, a business that generates 60 percent of the company's revenue. It's not a pure job shop—it produces a mix of product-line and custom work—but it has the mentality of one (see Figure 5). In the back of their minds, engineers know their work isn't immutable, that changes can occur after a batch of only a thousand. In other words, there's an air of creativity.
When it came to automotive, the fostered creativity presented both a barrier and a benefit. As a benefit, it meant that by the late 1990s Microflex employees had perfected its manufacturing process to a point where it was ready for automotive mass production. In other words, it fostered a culture of continuous improvement.
As a barrier, mass production meant that engineers had to approach projects thinking in the long term, not just over several batches. Once a project hit the floor, the technical attributes of the line had to be on stable legs. It required, Atanasoski said, a shift in mentality. "In transitioning to automotive, we had to move from thinking just about a lot or quantity of parts to building the machinery and processes that could produce parts over, over, and over again. We had to move employees from a creative job shop environment to one with different thinking [in mass production], knowing the part has got to be the same tomorrow and, perhaps, 10 years from now."
Atanasoski didn't deny that the company's heavy R&D investment—a must for OEM work—sometimes doesn't pay off, at least in the short term. Occasionally testing reveals that "the product is not attainable due to pricing or packaging restraints," he said. But because the company acts as its own automation integrator, and machine and part designer, engineers often are able to present some cost-effective options—and still win the contract.
Although this approach helped the business grow, he admitted it also created a complex animal. The industrial division operates as a quasi-job shop, the automotive division as a mass producer, and the machine shop builds equipment for both. With the plant having a mix of equipment serving different areas, managers knew they first needed to separate the automotive division from everything else, hence the new building. But considering the demands of automakers, they also needed a more advanced data-collection infrastructure to keep all departments on the same page.
Connecting "IT" Together
"We have an in-house software programming team that has designed a homegrown package over the years," Atanasoski said. "It was built around the industrial division, with a job shop [work flow] in mind." Unfortunately, it didn't account for automotive's production and traceability requirements."
So today Microflex is implementing a manufacturing execution platform (MEP), an IT infrastructure that ties together material resource planning (MRP), enterprise resource planning (ERP), electronic data interchange (EDI), quality programs like statistical process control (SPC), and myriad other elements. The company hopes to link quoting, production planning, machine and automation control, quality, billing, accounting, and everything else that happens under the company's roof. That's a lofty goal, but, according to sources, an attainable one.
"At this point, we're about 50 percent there," Atanasoski said, adding that the company hopes to complete implementation later this year.
The company is working with Plexus Systems, an Auburn Hills, Mich.-based provider of software systems for discrete manufacturing companies, to make it happen. It's Microflex's goal to have all employees and, to a degree, suppliers and customers see exactly where jobs stand. Using a Web browser, customers will log on to see quotes and quality reports, as well as access billing statements connected with their parts. Through electronic kanbans, key suppliers with blanket orders will access inventory and replenish it as needed.
Microflex's operation isn't typical, said Mark Symonds, Plexus Systems CEO. "We don't often see companies using mixed modes of manufacturing." Although the initial implementation is focusing on the automotive side, the machine shop, management, accounting, and other areas support the automotive as well as the industrial side, "so it's not just a straightforward automotive-division implementation. There are other aspects of the business."
For an IT platform to streamline—not burden—such an operation, the software must start where the rubber meets the road: on the shop floor, at the human-machine interfaces (HMIs). As Symonds explained, regardless of mode, made-to-order or repetitive, all manufacturing starts with a "job." People and machines may add value to the job in different ways, "but there's still that same underlying structure, regardless of the mode of manufacturing," he said.
The software can be integrated either directly into machine control systems or as a separate terminal on the floor. Microflex has opted for the latter to start and is hoping to implement the former down the road.
Control-level integration, Symonds added, has its advantages. Once the system is implemented, machine operators enter information on a control screen showing they've completed the setup. The Plexus software can be configured to prevent the machines from running if the operator misses any part of setup. The same is true for periodic inspections for SPC and other quality requirements. "If a measurement is out of tolerance, the software can notify quality personnel and, if over a certain limit, shut the operation down so as to stop making bad parts," Symonds said. He added that such stoppages may seem drastic and expensive, and idle machines do lose money, but machines making scrap lose even more—especially in the automotive supply chain.
He added that everything within the MEP draws information from the touchscreen HMI control panel (see Figure 6), which includes the work request, the digital part drawing, material requirements, machine setup and status, tolerance data, and other required items. That's because every business action in manufacturing—from quoting to human resources to accounting—depends on those specific shop floor interactions among workers, machines, and materials.
Atanasoski admitted the system requires a leap into unknown, perhaps uncomfortable territory. The platform stores information on a remote server. Local backups are there if Internet service goes down temporarily, and the server itself backs up continually. "But we were a little skeptical from a security standpoint," he said. "Your data is not just sitting in the back office."
Because the automotive market embraces such transparency and efficiency the MEP offers, the benefits outweigh the risks, Atanasoski said. He added that it also automates the administrative burdens of the automotive marketplace, allowing the company to focus on what it does best: designing and manufacturing bellows and flexible metal hose.
Diversity and Focus
Microflex, which employs 165, has come a long way since two brothers started the company 33 years ago. It still isn't a large company by automotive standards, but size doesn't dictate success.
The success, Atanasoski explained, hinges on two factors: core expertise and diversity. For the most part, the company specializes in only two product categories: flexible metal hose and metal bellows; that's the core expertise. The expertise, though, can be applied in various industry sectors, and managers continue to hunt for more; that's the diversity.
"With crude oil prices how they are, there's a big focus on energy, and that's very good for our industrial products," he said. "Our two key areas involve expanding business in energy with our industrial customers and, in automotive, expanding our business with the transplants."
The challenge comes in serving diverse markets and designing drastically different manufacturing processes to suit, from the custom, one-off job shop project to the mass-produced bellows for exhaust systems and steering columns.
That, sources said, is where shop floor innovation and MEP software come into play.
Some of Microflex Inc.'s technology resembles that of many tube and pipe manufacturers', with a bank of tube mills, hydroformers, crimpers, and so on. But according to Chief Operating Officer John Atanasoski, the Ormond Beach, Fla., manufacturer does take advantage of some less common metal forming techniques to create convolutions within the bellows and the weaves in its braid.
For bellows, tubes get inserted into either a punch forming or elastomeric forming system. In punch forming, a die inserted into the ID expands to create the convolution. Similarly, in elastomeric forming, a rubber doughnut on the ID is squeezed by a set of jaws on the OD.
For braiding, a technology the company was founded on, a specialized machine weaves 0.012-inch, 0.016-in., or similar-diameter material (usually stainless 304) onto a series of bobbins arranged in a carousel. Wire is threaded from these bobbins to a central mandrel, where wires overlay in a crisscross pattern to create the final weave.
"We have machines that can make diameters ranging from 0.25 inch all the way to 30 inches," Atanasoski said.
The FABRICATOR is North America's leading magazine for the metal forming and fabricating industry. The magazine delivers the news, technical articles, and case histories that enable fabricators to do their jobs more efficiently. The FABRICATOR has served the industry since 1971.