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For Sandvik Coromant added-value is at the core of its business

The Saturn Corp. is known for its efficiency and continuous improvement processes. When the Spring Hill, Tenn.-based automaker wanted to increase productivity and cutting tool life in its gear-turning operation it looked to cuffing tool manufacturer Sandvik Coromant in Fairlawn, N.J.

Sandvik, through its Productivity Improvement Program, helped Saturn to identify more efficient cutting inserts and machining processes. Optimized inserts with improved geometries, increased turning speeds and improved manufacturing routines increased throughput by 23 percent, increased cutting tool life by more than 50 percent, and reduced scrap rates.

One process improvement entailed machining parts from 5120 low-carbon steel forgings with 150-160 Brinell hardness. A relatively soft and gummy metal, it is a difficult material to machine. Ordinary inserts fail quickly due to a built-up edge and stringy chips. In one process, the inserts failed after 200 parts. At normal production rates, this meant four to five shutdowns daily. Each setup and test cut could create a costly scrap part.

Sandvik's productivity team surveyed the operation and recommended high-feed Type CNMG 432 WM wiper geometry inserts with Grade GC2015 carbide. The inserts were designed for metals with stringy chips like 5120 steel and are formulated to withstand high temperatures while a chemical vapor deposit reduces built-up edge. Wiper geometry allowed for higher cutting speeds and a greater feed rate without sacrificing finish quality.

In another process, a facing operation was hampered by chip build up in the previously machined bore. Sandvik determined the face cutter, not the boring tool, created the chips. Changing the direction of cut reversed the curve of the chips and eliminated the build-up.

Saturn realized additional benefits from Sandvik's Insert Rationalization Program, which reduced insert types by a third and decreased inventory by 50 percent. By implementing all of Sandvik's proposed changes, Saturn was able to realize greater than $60,000 in annual savings at no additional cost.

Of course, Saturn operates large productions runs and optimized processes. Potential savings can be greater for companies making smaller production runs where set up time is a major expense. For Chrissair, Inc. in Palmdale, Calif., most jobs entail production of only 15-30 pieces.

The company, a manufacturer of precision fluid power components for the aviation industry, makes more than 3,500 parts from a wide variety of metal stock. Quick-change tooling allowed Chrissair to reduce setup time on its CNC machines from five to six hours to a target of less than two hours. The results of the changeover total nearly $600,000 in annual savings.

Supply chain partners

Sandvik not only brings value to its end customers, but it strives to extend that value through the distribution supply chain, says Sandvik Coromant U.S. president Mike Abberley. That is one of the reasons the company was the recipient of the 2002 Value-Added Partner of the Year award from the Industrial Supply Manufacturers Assn.

"We don't sell to distributors, we sell through distributors," says Abberley. "Value-added is at the heart of what we stand for."

In an environment with high pressure to purchase the lowest cost products, Sandvik works with its distributors to bring across the value-added message, says Abberley. Joint sales efforts and manufacturer-sponsored training of distributor sales reps are two ways Sandvik offers value to its distributors.

The training isn't merely an occasional in-service at the distributor location. It involves a standardized home-study course as well as regular training sessions at the distributor's location, says John Jacobsen, Sandvik director of commercial services. The company also has distributor information days to meet with principal members of its distribution team.

"These opportunities allow us to introduce new products to distributors," says Jacobsen. "It also allows us to reiterate our message and assure that we speak to our customers with one voice."

These meetings are an opportunity to recognize performance and to increase the strength of partnerships, says Jacobsen. Though partnership is often an overused buzzword, he says Sandvik attempts to embody the meaning of partnership with its distributors.

One unusual way that Sandvik does this is by providing its products through drop shipments to customers. This isn't an added service, it's how Sandvik does business.

"When a new distributor prospect asks how much of a stock order is required, we explain that we don't accept stock orders," says Abberley. "When we deliver the product, it allows the distributor to devote more time to the customer."

Sandvik discovered that its robust IT systems allow it to deliver product more efficiently than if it were to keep inventory in the distribution supply chain, says Abberley. Distributors would often hold orders to get a better volume price, sometimes at the cost of a delay in delivery to the customer.

"Next day deliveries used to cost distributors extra and came with higher freight costs," say Abberley. "Now we deliver product next day direct to our customer for $8.95 on any sized order."

Sandvik subsidizes the freight costs, yet still comes out ahead, says Jacobsen. Nearly half of the company's products have been developed in the last five years. By handling the logistics, there are never returns or dead stock and the company can collect better forecast information.

Distributors don't need to devote warehouse space, increase "turn and earn" ratios and it frees up shipping personnel, says Abberley. Delivering value to the distributor and the distributor's customers leads to brand loyalty, he adds.

Guarding the channel

"Currently there is a lot of channel conflict because there are so many ways to purchase products," says Abberley. "Internet, catalogs and integrated supply all claim to offer lowest cost, so we support our distributors by offering greatest overall value."

The productivity teams, who make several hundred visits to end-customers each year, are a value that distributors can offer their end customers, says Abberley. The cost of cutting tools may be as little as three percent of a finished product while machining often tops 30 percent. Improving processes and machining efficiency can lead to far greater savings overall.

Sandvik seeks to partner with distributors that share its own value-added philosophy. It is no surprise that Engman-Taylor Co, Inc., headquartered in Menomonee Falls, Wis., is one of Sandvik's leading distributors. Engman-Taylor received the 2002 Value-Added Partner of the Year award for distribution.

DoAll Co. president David Crawford says the Des Plaines, Ill., distributor, has a great working relationship with Sandvik. DoAll is the largest Sandvik distributor in the U.S., adds Crawford.

"DoAll has embraced the philosophy of bringing value to the end-customer and documenting that value," says Crawford. "Sandvik does business with a similar philosophy."

Sandvik and its distributors identify a champion with decision-making power so that if they can document increased value, they know that key employee will champion their cause and implement the changes.

There is increased demand for greater productivity even as employers continue to announce layoffs, says Crawford. Therefore, the process of surveying a customers operations, finding the best tooling and processes, and assuring those results in its test facilities is valuable to many customers.

"It is a lot of work but everyone benefits," says Crawford. "By performing these engineering services, the customer reduces its costs and becomes more competitive, we develop a loyal customer, and increase our market share."

COPYRIGHT 2003 Reed Business Information in association with The Gale Group and LookSmart.