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Milacron goes after 'standards' business.

Turns `Wolfpack' loose:

Milacron goes after `standards' business

Cincinnati Milacron is going back to its roots. "During the past decade or so, Milacron has shifted away from building standard machine tools to providing more customized, highly value-added ones. We simply abdicated the huge standard machine-tool market to foreign competitors," admits Daniel J Meyer, president and CEO. "With our new Wolfpack program, we will focus on developing more standardized, low-cost products to gain new business and market share," he told a group of business journalists at a company-sponsored media-advisory day.

In addition to a reorganization to a decentralized mode of 15 divisions and the instituting of its Wolfpack product-development program to focus on designing new products and reducing the costs of existing products by 30% to 40%, Mr Meyer announced the company is committing $250 million toward capital expenditures over the next five years. That represents a doubling of investment compared to the previous five years.

He admitted, "Between 1982 and 1989 we did not invest capital in the machine-tool business to the extent of the depreciation we took. But now we are identifying where we want to spend the money . . .concentrating on the improvement of design and manufacturing processes. In addition to the capital spending commitment, the company will be adding about $7 million to boost its design function and expects to be adding 4% or 5% to its research and development budget," Mr Meyer says. It expects to be generating its investment dollars internally. That effort, however, will be supported by the $50 million the company raised in a recent public stock offering.

In its decentralized focus-factory approach, each of 15 division managers has full responsibility for product development, engineering, marketing, and profit and loss. There are six focus factories in the machine-tool and robot areas, including horizontal machining centers, vertical machining centers, turning centers, grinding machines, aerospace and special machines, and robots. Each division manager appoints a "killer" to head up the Wolfpack program, which, at Milacron, started in 1985 in the plastic injection molding machine division under Raymond E Ross, who has since been named senior VP-industrial products.

With designing for manufacturability and marketability as its goals, Wolfpack uses the simultaneous or concurrent engineering team approach to break down the barriers between traditional manufacturing departments and combine the expertise of design engineering, project management, production engineering, sales, marketing, purchasing, and assembly.

It's pointed out that the Wolfpack program stimulates other advantages. Products are developed in about half the time. There is also a strong emphasis on reducing the total number of parts, increasing the use of standardized components, and designing for quality from the inception of the product idea. "As a result, new products require less inventory, tie up less working capital, are manufactured more efficiently, and provide a much higher rate of return," the company claims. In addition, the company has initiated "Qprime," a team-driven quality program.

To date the Wolfpack approach has met with success in four product areas:

* On the Vista plastic injection molding machine line, the number of parts has been reduced by 50% and costs have been decreased by as much as 40%. * Price and manufacturing costs have been cut dramatically, the company claims, on the first machine-tool product developed via Wolfpack thinking. The Sabre-750 is a small, low-cost, vertical CNC machining center produced in Birmingham, England. The same approach has been used to develop a larger machine, Sabre-1250. * Milacron's Greenwood, SC, focus factory has used Wolfpack principles to produce its next-generation Atlas robot. As such it has 70% fewer parts and can be sold for about 30% less than its predecessor. * LK Tool Inc, the measurement and inspection subsidiary, used the approach to develop a new coordinate measuring machine that can be produced in high volume for the job-shop and tool-room market.

In the grinding-machine business, in which the company admits "we have had our problems over the past several years," Mr Meyer says the company is ready to again assert itself. "Grinding machines are a good business for Cincinnati Milacron," Mr Meyer claims. "We still have a good market position in the US and in Europe, and we'll work out any problems by the end of the year. The company produces machines, grinding wheels, and fluids; and is one of the few foreign suppliers to Toyota of Japan, sending grinding wheels on a just-in-time basis.

"We can design a product in about half the time and get it to market quickly, thanks to simultaneous engineering," Mr Meyer claims, "but we need more than a product; we need a good, solid marketing organization. Quite frankly, we did not have a solid marketing organization to sell the standard products we are now coming out with. We just plain need to knock on more doors with a product the customer wants." The recently appointed CEO says that distributors are now starting to again approach the company asking what's on the drawing board that they can start selling. "It's a tribute to our product design people," he adds.

In addition to its recommitment to producing standard machines, the company is putting more emphasis on its global strategy. It derives about 30% of its

business from foreign sources. "We need to adopt a global strategy if we are to bring the US back to machine-tool prominence," Mr Meyer told his audience. He reminded that 25 years ago the US represented about 31% of the world's output of machine tools, while today it's only about 8%.

"We need to look at the global market to support the economies of scale required to operate today," Mr Meyer said. He added that the European market for machine tools is 30% to 50% larger than that of the US.

"We need more manufacturing presence in Europe," Mr Meyer claims. He feels the sales and technical support offices that the company has in Europe "don't quite cut it with the Europeans. They like to go into the factories. We need not only a marketing presence but also a manufacturing presence there," Mr Meyer says. He concedes the company is looking at doing just that.

PHOTO : Machines in the "Chronos" family of flexible manufacturing cells at Cincinnati Milacron are being treated as "standards," permitting off-the-shelf availability, pre-engineered design, and affordability.
COPYRIGHT 1990 Nelson Publishing
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Title Annotation:Cincinnati Milacron
Publication:Tooling & Production
Date:Oct 1, 1990
Previous Article:Walking the 'world' Machine Tool Show.
Next Article:ASME calls for federal oversight of standards.

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