Turning a machine shop into a fabrication shop
Contract manufacturer rolls with the changes
Senior Editor Eric Lundin traces the history of a machine shop-turned-fabricator. Founded in 1984 as Target Boring, the company changed from a machining shop to a fabrication shop when, in 1994, it purchased its first sheet and plate laser cutting system. Now named Target Laser & Machining Inc., it boasts three lasers for sheet and plate (two 2-D machines and one multiaxis machine) and one for cutting tube.
Like most contract manufacturers, Target Laser & Machining Inc. started out as an idea that became a concept that evolved into a plan that eventually developed into a business. It was Gary Reiter's idea, machining was the concept, and subcontracting a large amount of work for a local manufacturer, Atwood Mobile Products, was the plan. It was a solid plan. Atwood had been around for decades and had carved out a niche in manufacturing components for recreational vehicles or, as Atwood described it, the non-Detroit automotive market.
So Gary and his youngest son, Brent, founded the company as Target Boring in Rockford, Ill., in 1984. The timing was very good. The catastrophic recession of 1981-1982 was over, interest rates were falling, inflation was in check, and the U.S. economy was in the midst of one of the longest economic expansions on record. Rockford had a strong manufacturing base, and Target found no shortage of work.
Still, the Reiters had to be careful. Memories of the recession were still fresh. Although Target Boring's main customer was not tied to the Big Three, the link between Rockford's manufacturing base and Detroit's was strong. The 1981-1982 recession was so severe that the unemployment rate in the Detroit metropolitan area was nearly 25 percent, the highest in the nation; Rockford's was second-highest at more than 19 percent.
First Opportunities, Then Challenges
Atwood provided plenty of variety to subcontractors such as Target Boring. In business since 1909, Atwood manufactured furnaces; water heaters; ranges; cooktops; windows; doors; seating systems; and chassis components such as jacks, couplers, and brakes. While its main focus was recreational vehicles, it also served the agricultural, marine, mass transit, and van conversion markets.
The work was good, but manufacturing was going through many changes. By the time Target was 10 years old, the long economic expansion of the 1980s had given out. The following recession was short, and the 1990s expansion, which would last exactly 10 years, was well under way. In the meantime the New Domestics' importance had grown, reducing Rockford's reliance on Detroit. The North American Free Trade Agreement brought fresh opportunities and challenges.
The world was changing, manufacturing was changing, and Target was changing too. In 1994 Reiter brought in his oldest son, Steve, who brought a fresh perspective and opened the company up to a market that it had not tapped before: fabricating. The company's name changed, reflecting a new service it offered: laser cutting.
Under its new banner, Target Laser & Machining Inc. continued to provide its original services: CNC machining (lathe and mill) and grinding (centerless, internal, external, service, and bar). It added CNC forming (press brake forming, rolling, and stamping), tube bending, and welding (gas tungsten arc welding, gas metal arc welding, shielded metal arc welding, and spot welding). The big change was the addition of laser cutting for sheet and plate.
The company started with a Mazak Optonics Super Turbo X510 Hi-PRO for two-axis cutting. The machine was equipped with an automated load/ unload cell for unattended operation. This was a success, and Target later acquired a second one, also equipped with a load/unload cell.
The business continued to grow, and Target soon found itself considering a third laser cutting machine. This time it looked for something different to handle more sophisticated applications. It settled on a SpaceGear, also made by Mazak.
"It's a multiaxis machine, which gives us increased versatility," Reiter said. Suddenly the company was able to laser-cut many features it couldn't do before—holes at various angles, bevels, and saddles.
The machine allows the company to bid on contracts that it simply wouldn't be able to pursue otherwise. For instance, it recently received a sizable order for parts to be used on a military vehicle. The project is sophisticated, requiring a variety of slots, holes, and perimeter trim cutting—a job that would have taken quite a few setups on different machines if the company used conventional drilling and machining. Using a multiaxis laser machine changes everything. It requires writing just one program, eliminates tooling, and does away with the material handling needed to move the workpiece from machine to machine. The first stage, estimating the part cost, is easier because Target does all the work on one machine, and it doesn't require tooling. The final stage is better because the finished product doesn't have the stacked part tolerances associated with work done on several machines.
Even with this level of flexibility, the company wasn't finished investing in laser machines. It had its eye on high-volume tube applications such as motorcycles and motorsports. Target's latest acquisition, which it purchased in November 2005, was another laser from Mazak Optonics, the FabriGear 150 BH, a 4,000-watt tube-cutting laser with a bundle handler.
"Target Laser is the first company in the U.S. with this machine," Reiter said.
Target uses it to fabricate parts that previously required several machine tools and several setups. It automatically loads, feeds, cuts, and unloads pipe and tube up to 26 feet long. It can handle round, square, rectangular, and regular tube up to 5.9 in. (150 mm) in diameter and 0.750 in. (19 mm) thick.
One component Target manufactures is a rectangular frame made from square tubing. The conventional way is to make it from four lengths of tubing. This requires four cuts and fixtures so that the finished frame is true and square. The unconventional way uses a laser to make this component from a single length of tube. The laser notches the tube in four places and the assembler bends the tube at each notch and welds it at each bend.
"The result is a stronger part that takes much less time to produce," Reiter said.
Reiter likes to describe the company as a "new-school" manufacturer with an "old-school" attitude. The new-school thinking follows manufacturing trends—emphasis on improving efficiency, cutting costs, and investing in technology. And like many manufacturing firms these days, it recognizes the value its workers bring to the table.
"After we hire people, we let them do what they do best," Reiter said. "We offer competitive wages and provide good benefits. We don't lose people, which is unusual these days."
The company believes in cross-training, so most of the employees are trained on most of the machines.
"The result is well-rounded employees who can carry out a majority of the duties in the shop," Reiter said.
The old-school focus is on honesty and integrity. "If we make a mistake, we'll do what it takes to make it right," said Mike Kubera, head of sales and marketing. The result is a foundation of trust. Target receives many jobs from customers in too much of a hurry to mess around with shopping jobs around for bids.
"Many times customers call with a job and say to us, "Just get it done,'" according to Reiter. "They trust us, and sending the work straight to us takes the time and work out of quoting a job. To me, that's the ultimate compliment."
This level of trust is an outgrowth of the company's business philosophy, which views its customers as business partners rather than accounts or clients.
"We're much more apt to partner, or form a strategic alliance, with another company," Reiter said. "Obviously, a large part of our business is making individual parts, but we also do a considerable amount of work in making entire assemblies. With many of our customers, we started out making a part, but as time went on and our capabilities grew, we would get more sophisticated and complex projects. Instead of making a part for an assembly, we'd get the order for the entire assembly. As our experience grew, we'd begin to offer design advice. We continually strive to make products faster and more economical. We attempt to remove steps, reducing time and cost while maintaining the integrity of the original design."
Interlopers With Imports? Like every fabricator, Target looks to the East with apprehension. Chinese manufacturers have lower costs than U.S. manufacturers for many reasons, but the biggest thing that separates the U.S. from China is, well, the thing that separates the U.S. from China: the Pacific Ocean. All 6,600 miles of it measured port to port, Shanghai to San Diego.
"Right now we are unable to compete with China on a price-per-piece basis," Reiter said. "We have to create value for our customers through delivery, support, and service ... the days of simply providing a part are waning."
Parting With the Past, Embracing the Future
Just as much had changed during the company's first 10 years, more change came in the next 10 years. The rush of the 1990s had given out following a spate of interest rate increases, the bursting of the tech stock bubble, and Sept. 11. According to an index the Federal Reserve compiles, the output of fabricated metal products in the U.S. hit a peak of 112.29 in June 2000, bottomed out at 97.80 in January 2002, and still has not fully recovered. As of January 2007, the index was 109.96.
Despite the severe crash and slow recovery for the fabrication industry, Target thrived. By 2004 the company had outgrown its 18,000-square-foot facility.
New Digs. In its search for a new home, Target considered a few locations in Wisconsin, but many of its Rockford-based customers convinced the company to remain in town. As fate would have it, Atwood Mobile Products had moved and vacated a 50,000-sq.-ft. building across the street from Target.
Because the move was such a short distance, Target was able to move bit by bit, allowing it to keep some machines running while it moved others. Its goal was that, other than seeing a new address on the company letterhead, its customers wouldn't notice.
The result: No service disruption.
All the Right Stuff. Although the change paradigm is a cliché these days, Target exemplifies the business strategy that many consultants preached relentlessly more than a decade ago. In fact, Target's latest laser and real estate investments were the most progressive in the history of the company.
"We bought the tube laser after several of our customers committed quite a bit of tube work to us," Reiter said. "In other words, before we bought the machine, we had substantial business lined up to justify it. The building was a necessity to accommodate our fabrication needs. Still, these were decisions that would change the face of our company. We've become one of the most versatile laser and fabrication shops in the Midwest."
Although the lasers ushered in a change and Target went through a metamorphosis from a machine shop to a fabrication shop, the change is not finished. In addition to its physical move to a new location, the company has moved into a new market niche: rapid prototyping.
"We recently received a call from a large Chicago-area manufacturer about some potential prototyping work to be done on one of the lasers. They had been waiting three to five weeks for prototypes. In a casual conversation between one of their people and one of our customers, it came to light that they were dissatisfied with their current vendor's turnaround time. Our customer suggested that they call us.
"The word is spreading... we are very fortunate to have our customers "selling' for us," Reiter said.
Are any other fabricators in the Chicago area equipped for prototyping work? Probably. Nonetheless, Target is a contender. It has the right location; Target doesn't have the real estate costs and labor rates you'd find in Chicago. It has the right type of staff—one that is long on cross-training and experience. It uses its collective experience to reduce manufacturing steps, time, and costs. It has the right combination of technologies, providing both machining and fabricating services.
And it has a track record of adapting to change.
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.