Think You Can’t Afford New CNC Multi Technology?

 At first glance, one might not think that spending hundreds of thousands of dollars on new CNC multi-spindle technology could actually improve a shop’s financial statement within several months, but it can and has at 64-year-old Kaddis Manufacturing in Rochester, New York.

“You have to look at the totality of the investment impact on an annualized basis,” states Ron Iannucci, Kaddis’ owner since 1984.

Mr. Iannucci, like many owners of shops serving customers pressing for zero defect parts, was at a point at which he couldn’t afford not to move up to CNC technology. His cam-driven multi-spindles and Swiss single-spindle automatics had their place, and they still are the best choice for certain jobs. However, in the arena of tight tolerance parts and documented continuous improvement, those machines were becoming less and less cost-effective to operate. Long setup times; the need for rare, highly skilled mechanical people; and the constant checking to ensure that quality was holding were among the expensive down sides. Those machines also seemed most subject to foreign price competition.

“My background was finance before acquiring Kaddis so, together with my chief financial officer, we conducted exhaustive productivity studies to find out whether installing CNC multi-spindle equipment would be cost-effective,” explains Mr. Iannucci. “We run Kaddis conservatively; we don’t drain profits. We wanted to make sure it made sense on paper before we made the investment.”

Several factors came under review during the justification period. These had to do with the emerging realities of the manufacturing business today, primarily the lack of mechanically skilled people and the fact that customers want high quality parts—virtually on demand—at very competitive prices.

“Tight tolerance jobs are less vulnerable to foreign price competition,” says Mr. Iannucci. “If a shop is competing on price alone, those are the jobs we see leaving the U.S. Fortunately, since the mid-’80s, we’ve been in the business of serving the higher quality end of the spectrum, so we didn’t need to totally revamp our customer focus. We already had that mindset, that dedication. The problem was we needed to find a better way to achieve and continually improve upon our quality.”

For example, on one of the cam multis, the most difficult tolerance to control is length, which is held reliably to the low thousandths. When a shop is competing in the world of Six Sigma quality control processes and its customers are demanding zero defects, that level of quality can be a difficult sell with the old technology.
“There are PLCs for the cam multis,” explains Mr. Iannucci, “which do help, but the level of operator intervention required can significantly cut into the productivity of the machines. Anybody can do a job once. The trick is to do tough jobs repeatedly, do them profitably and actually improve the process a little bit each time.”

As it turned out, two MultiDECO 26 mm six-spindle CNC multi-spindles from Tornos Technologies (Brookfield, Connecticut) became available for purchase with less than 5,000 hours on each machine. Kaddis bought them as an experiment to determine whether its justification process proved itself. “We have operated these two machines for 7 months now, and they met our expectations,” says Mr. Iannucci. “They are producing parts of a quality level we could never repeatedly achieve on the cam-types. They gave us the capability of developing continuous quality improvement programs, which our customers demand. And they are cost-effective.”

Those results spurred Kaddis to order three more brand-new multis, two 32 mm six-spindles and one 20 mm eight-spindle for delivery this year. In addition, Kaddis plans to order three additional units in 2004, for a total of eight MultiDECOs by the end of next year.

JIT delivery has meant a low inventory for the customer but a high one for shops using cam-activated equipment. Peak efficiencies on those machines come at the cost of long runs and keeping 6 months worth of parts in stock. Inventory is expensive. Kaddis, when justifying the CNC, took into account the reduced inventory cost. “The CNC is so flexible; we can make parts when the order comes in rather than pull them off the shelf—and still deliver on time,” reports Mr. Iannucci. “Particularly if it’s a part we’ve run before, the time savings is dramatic.”

Comparing the cam versus CNC equipment at Kaddis, the cam machines can often take a week to set up for a difficult, new part. Further, once the part is run on the cam multis, there are often secondary operations, such as drilling, forming or threading on separate machine tools. Mr. Iannucci cites one part as having a total machine cycle time of 34 seconds producing it the “old” way versus 11 seconds on the MultiDECO. He reports that the MultiDECO takes about 2 1/2 hours to set up for a repeat order and produces at peak efficiency “out of the box.”

“The programming is accomplished off-line, the cutting tools are made in-house and are preset and ready to go, while the tooling system is a quick-change one,” continues Mr. Iannucci. “On the six-spindle machines, we have 17 axes to employ, which, with the back-working stations, permit most parts to come off clean with no secondary operations required.”

When Mr. Iannucci and his financial officer conducted the productivity studies, they determined that the MultiDECOs would have to run at efficiencies much higher than their cam machines to make them cost-effective. In actuality, the machines have performed to their expectations during the last 7 months.

“Again, you have to look at the totality of the operation over a length of time,” reiterates Mr. Iannucci.

At Kaddis the justification involved a combination of facts—the increased level of productivity, the reduced cycle times, the excitement the new technology generates in new hires, lower inventory costs and fewer tooling costs for inserts versus standard tools.

“I’d like to stress that new equipment alone is not a panacea for the current challenges facing our industry,” concludes Mr. Iannucci. “It is one step, albeit an important one, on the journey toward continuous improvement. If you take a MultiDECO and run and tool it like a cam-type, you will be disappointed in the results. But if you use the machines the way they are intended to be used, and you are dealing in tight tolerance, complex parts, you will be satisfied.”