July 2010 Archives

Cycle Start!

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IMTS 1990.jpgI looked out at a sea of business people lined up thirty deep waiting to enter IMTS. IMTS; The Super Bowl of the global machine tool industry. IMTS stands for International Machine Tool Show and it's held every two years at McCormack Place in Chicago. Today, September 4, 1990 was one of those crystal clear fall days on the shores of Lake Michigan. Even though it was 55 degrees outside there was sweat trickling down my forehead.

You see, Mayor Richard Daley was standing next to our new product, The Synchron Flexible Cell, and was about to officially open IMTS to the public. Over eight days 100,000 people would attend the show and our booth sat dead center on the front row. Cincinnati Milacron had been the world's largest machine tool builder in the 50's and 60's and we still held the premium spot at the show.

So to get a little evening television the mayor was here at McCormack to kick off the show. It had been decided that he would press the Cycle Start button on our new product and when the machinery started to move that would signal the start of the show. Now, the $64,000 question - would the damn thing work?

But first, let's snap back two years to a meeting in Cincinnati with the executives of Milacron. I'm in a room with them trying to explain how we just lost a $3M deal in N. Carolina to a European company named Fritz-Werner.

 "Who in the hell is Fritz-Werner?" I was asked. I explained that they were a small German machine tool builder that focused on simple flexible machining cells, had a good reputation and a large installed base of machines in Europe.

"How can they be 50% of our price?"

"I'm not really sure," I replied. "The customer was not willing to disclose much about their product. They just made it clear that their price was half of ours and Fritz-Werner's equipment will get the job done. "

"Well get your ass on a plane and figure this out," was the coaching I received. And so, the product development project that would create Synchron was born.

Fortunately for me Milacron considered flexible manufacturing systems (FMS) the future of the industry so I had the help of many gifted software, electrical and mechanical engineers during the project but all their technical abilities would be wasted if we couldn't unlock the huge competitive disadvantage we were facing. We knew from the sales of our FMS's that customer like Lockheed Martin or Vought Aerospace really valued its ability to run around the clock, precisely machining a large variety of parts with no downtime for changeover.

OK, but where did the pricing power come from? Without diving too deep into the details Fritz-Werner had lowered their cost structure in two ways. First they used a simple Rail Guided Vehicle (RGV) to move the raw materials around.  We employed a much more expensive Autonomous Guided Vehicle (AGV). Secondly they employed a low cost PLC (Programmable Logic Controller) to control the cell. We built our system controller with a mini computer that was housed in an air conditioned room to protect it from the heat of the factory and was operated by a computer programmer.

"Great, good work Adkins. Glad you uncovered their advantages. Now let's get this thing designed and built so we can push these guys back to Germany."

A pat on the back was good but something just didn't feel right. It was tempting to just reverse engineer their solution, match them in price and hope our customers would "Buy American" but during our two months of market research we had learned more than just the design of the Fritz-Werner system.

We had been asking ourselves 1) Are there technologies outside our industry that would not only let us lower our manufacturing costs but provide a competitive advantage?  And 2) wouldn't more companies buy flexible manufacturing if they could operate it from their shop floor, not from a computer room in the sky?

In 1998-99 there was emerging both hardware and software technologies that fit that bill - Unix Workstations and Graphical Users Interfaces (GUI's).  Our vision was to replace the minicomputer and bring the control of the cell to the shop floor. Not only would we bring it to the shop floor but design an interface that allowed the shop floor people to operate the cell instead of that computer programmer sitting up in an air conditioned office above (literally and figuratively) the shop floor.

Back to Chicago, McCormack Place, 10:00a.m., Tuesday morning, September 4th, 1990. Mayor Daley listens to our instructions, smiles for the cameras and pushes the button. The rest is history. The system starts running, we wow people who attend the show with our revolutionary shop floor cell controller and go onto sell over 100 of these Synchron Flexible Cells for over $200M that decade.  What happens to me? Well, that comes later...

Lesson #1 - Identify a real, tangible benefit for the customer, execute a technology scan for technologies that can be brought into your industry and then define the differentiated feature(s) that merge technology and user requirements into a clear competitive advantage.



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