Benefits from reinvestment: Machinery, people, environment

Forest City Gear produces components that are used on the Boeing 777In order to succeed in today’s manufacturing environment, companies need to reinvest in their machinery, their employees, and in the environment. Since 1968, when Fred Young took over as CEO of Forest City Gear, that is exactly what he has done.

It is the firm belief of Young that reinvesting in the organization is imperative to surviving in today’s world. When speaking with Young, one of the first things he will tell you is, “For well over 30 years, we have typically reinvested from 25% to 40% of our gross sales each year in new equipment.” He believes that those companies that are able to reinvest during this down economic time will be even stronger for it when the recession ends.

Young’s philosophy is simple and, after nearly 40 years of practicing what he preaches, it must work. He tries to sell one machine for every new machine he purchases. By doing this, he tries to keep the average age of his equipment between seven and eight years old, compared to the industry average of 25 to 40 years of age in the United Sates. Young also believes, “That with each acquisition, we try to enlarge our envelope so that we can do something slightly smaller, larger, longer, or a different type of gear that we could not do before. By doing that, we are increasing the breadth of our offering to our customers. 

“In addition, by reinvesting in new equipment we will get a piece of machinery that is more efficient and has better technology, which is what helps us achieve a higher level of quality. Furthermore, the new equipment is more energy efficient, which creates a greener footprint.”

New machinery also gives added confidence to potential customers. When looking for a new supplier, many customers live by the, I want it now theory. Young explains that, “When a customer comes into a facility and sees newer equipment that can handle their requests, they are more likely to show confidence in that supplier by granting the contract as opposed to the theory of, if I get your contract I will purchase the machine.”

A hidden benefit is realized during installation; employees receive training over and above what is typically available. The training is provided directly from the builder of the equipment, who knows the exact the limits and capabilities. Meaning this is well above the average training session.

Another one of Young’s practices is sharing his information with his competitors. If asked, Young will share almost anything that is asked of him. He will share a list of his customers, his profit and loss statements, his prices, and a list of machinery and inspection equipment. Young says “By opening our books and showing them everything that we can do, we hope it will encourage others to follow in our footsteps and modernize their floor plans, realizing the multitude of benefits that are gained from acquiring new equipment. Hopefully, this will help keep more manufacturing here in the United States.”


Other means of reinvesting
Forest City Gear also reinvests in the plant. “We put in a centralized cooling and filtration system for the oil on our gear grinders after realizing several things: the filtration system on our gear grinders was costing us at least $100,000 per unit, they occupied a huge amount of valuable floor space, and furthermore, they kicked off a great amount of heat. By going to a centralized filtration system, we were able to regain quite a bit of floor space which allowed us the room to add several more machines. We also were having trouble with our air conditioning keeping up because of the heat from the original filtration system,” Young explains.

The result, the heat out-put produced by the original filtration system on each gear grinder is now reduced through the use of the centralized filtration system.This  has resulted in in a significant reduction in  having to use the A/C. Additionally, cleaner air is delivered throughout the plant for the health and safety of their employees.

Inspection equipment, another capital equipment reinvestment decision, means Forest City Gear has multiple methods of inspection for verifying that the dimensions measured are accurate. This is why Forest City Gear is frequently asked to verify other gear manufacturers finished products with one of the 59 pieces of inspection equipment.

It could be said the most important form of reinvesting at Forest City Gear is that of investing in their employees. With 55 employees, it takes time to get everyone trained. However, with the purchase of a new machine, Fred will have two to three key setup people train with the manufacturer of the new machine. The setup people then train the rest of the staff in a cross-training program. Eventually, every employee will know every machine.


Business stability
Securing contracts that other manufactures are unable to win is another financially sound reason for equipment reinvestment. A perfect example of this is the Mars Rover, scheduled to go into space in late 2011.

Aeroflex was contracted by Jet Propulsion Lab (JPL) to manufacture these gears for the new Mars Rover. After being unsuccessful in manufacturing them to the specifications required, they went to Forest City Gear for help.

Forest City Gear was able to successfully complete the order of nearly 60 different space qualified gear components, housings, and carriers for Aeroflex. These products ranged in production runs of a few pieces to a large run of nearly 100 pieces. The items are used for mechanical motions on the actuator boards, including drive gears, gearboxes, planetary gears, and wheel assemblies.

Forest City Gear was successful because of its reinvestment into new machinery and inspection equipment that has capabilities the older units do not provide. These components needed to be hobbed, shaped and finished with diameters ranging from ¼" up to 4½" on gears with a 96 pitch.

There were two particularly difficult parts; one was a three-tiered, internally-geared carrier, machined from bar stock of an advanced engineered alloy similar to titanium, but better able to hold the fine pitch and undercut gear design. The other part was a gear that was used in the previous generation of the Rover. This was a heat-treated 17-4 stainless steel tether line ring gear with a wall thickness of 0.150"

This is not the first time that Aeroflex had dealings with Forest City Gear. During the manufacturing of the second Rover’s gears, Aeroflex asked Forest City Gear for an inspection of their current supplier’s work. After seeing the inspection report and the out-of-tolerance data provided to them from the quality department, Aeroflex asked Forest City Gear if they would like the contract on the spot.


Benefits
By reinvesting in the company and in its processes, Young has been able to build Forest City Gear into a company that ships more than 8% of its product to China, when it has become common practice for the United States to import a larger amount than we export. They also ship nearly one third of their finished product to competing gear manufacturers who are unable to meet their customers’ requirements.

A company reinvesting in newer and different types of machinery has the opportunity to diversify their customer base. “This is one of the many benefits of reinvesting in a diverse line of machinery. We supply parts for aerospace, automotive, military, medical, and even racing vehicles. We are so diversified that our top customers make up 17% of our total sales,” Young concludes.


Forest City Gear
Roscoe, IL
fcgear.com