Transmission Manufacturer Combats Supply Chain Disruptions With Transparency, Collaboration and Creativity
Category: Supply Chain • Jun 30, 2021
Is there anyone not experiencing supply chain disruptions? Because it’s gone way beyond cars and computer chips. Crain’s Chicago Business routinely chronicles manufacturing interruptions. Its May 7, 2021, issue featured long-time IMTS show attendee HM Manufacturing, a 22-person operation based in the Chicago suburb of Wauconda.
HM delivers quality custom-precision timing belt pulleys, gears, splines, sheaves, shafts, and other power transmission components for the aerospace, automotive, food/beverage, defense, and packaging industries. Their services include turning, gear shaping, hobbing, milling, broaching, grinding, and assembly, for their operations.
For a better understanding of how HM is battling supply chain disruptions, IMTS reached out to HM president and CEO Nicole Wolter. Among other things, Wolter advises more transparency, curating talent, and willingness to lead from the front, right down to operating a broaching machine herself.
IMTS: What is the most critical issue you face when dealing with supply chain disruptions?
Wolter: Throughput is the most important consideration. It’s stalling on so many fronts, so I’m responding differently. I’m asking my customers for their forecast not just for this year, but also for next year. What I’m doing is dealing with disruptions now while looking to mitigate problems next year.
IMTS: How does forecasting help?
Wolter: First, we’re creating an open dialogue that helps customers understand what we’re dealing with. Second is transparency. The nature of these disruptions creates an increase in material surcharges that we must pass on. When customers understand our lead time and sourcing issues, they can better understand how that translates to our pass-through costs to them and when it could possibly end. This opens the door so we can find creative ways to meet their needs and where I can push certain products first and push others back.
IMTS: How has your response changed?
Wolter: I’ve had to order materials in advance to get stock on my shelf. I don’t want to carry inventory that isn’t tied to an order, but I know if I used it last year, I will be using it again. No one wants to play the game of futures, but you don’t have a big choice right now.
IMTS: What other areas are being affected?
Wolter: In the beginning, there was so much frustration just trying to get the product out and keep billing. Now it’s more than the supply chain; it’s affecting OEMs and other suppliers are backed up as a result of labor shortages, and raw materials, even down to rising chemical costs for plating. Miniscule things like getting packaging materials are getting extended. Having a conversation with your customer about what can be done differently, now and going forward, is a major way to keep the boat rowing, even if it’s being able to ship a partial order instead of a complete order. As a result, customers see us as more of a strategic partner because we actively help them go forward, even if their options are limited.
IMTS: How do you preserve morale?
Wolter: We’re all sweating bullets while we figure out how to complete projects. I’ve been on the floor running parts this year. I’m very much in the thick of it. I spent two days running the MECO broaching machine, but with my laptop so I could keep up with my own work, I’ve been shipping and helping in the Q.C. department as well. It shows good faith to my employees and my customers.
IMTS: How has your role changed in the last year and a half?
Wolter: I’m more involved in meetings, purchasing, CAD, customer service, accounting, engineering, out in the shop, you name it. It’s important that I keep people focused and make sure they know I’m available. That said, I still have to be a manager and make tough decisions and get after my team if things aren’t moving as they should. I’m wearing so many hats, but at the end of the day, it makes me more resourceful and creative in my solutions.
IMTS: Have you made any changes to the shop floor to improve efficiencies?
Wolter: Multi-axis machines help. We added an Okuma Genos M560-V vertical machining center and an Okuma LB3000 EX II horizontal lathe with live tooling functions. Instead of going from one area to another and another, we can accomplish multiple operations on one machine and have grouped machines in a cell-like system. We have also invested in a lot of tooling for quick changeover and have cross trained the team to be able to run different machines. When there is light work at one station, they can jump in on other divisions to keep throughput flowing.
IMTS: What are some of the supply chain issues that you were not expecting or ways you’ve had to improvise?
Wolter: We had to restructure how we ship things. For example, wooden pallets were difficult to come by, so we would take older pallets and refurbish them for the really heavy items. For smaller items, we minimize the shipment size. Instead of putting 1,800 lbs. on a pallet, we’ll ship 75 lbs. in multiple boxes. When my material supplier ran out of material until the middle of July, my customer and I found a solution to locate that material from a local branch by them and have it shipped to me. Right now, it’s all about being collaborative, transparent and, in this case, very creative.
IMTS: How will your experiences in this environment help you in the future?
Wolter: It has helped us maintain a more personal touch. People may think I’m crazy with all the calls and texts going back and forth but it’s a good problem to have because we’re talking more with our customers and suppliers. We know beating on the door with demands isn’t going to get anyone anywhere. Being able to shift on a moment’s notice, regroup and be resourceful is helpful to customers. We have to think outside the box, and it will only make us better as a supply chain partner.
IMTS: What’s changed inside the shop?
Wolter: Transparency must happen internally as well. Everyone needs to understand what it means to be unable to get materials right away or why we have to work on another job in the meantime or why certain areas in the plant are on overtime. They need to know how it will affect them, so they have a reason to move things forward, no matter what the extenuating circumstances. If we’re not getting enough throughput, it hurts us on the back end 60 days later when it comes to incoming cash flow.
IMTS: We have a labor supply chain challenge as well. How are you managing it?
Wolter: We are short of help and traditional hiring options are not effective. People haven’t stayed or just didn’t have the passion. It’s tough, because I believe in apprenticeship and internship programs. Training is time consuming and costly, but we have to do it. I’ve worked to get people here from the high schools that have good manufacturing programs, even if it’s just for a six- to eight-week internship in the shop. Then, if it’s clear they have a longer-term interest, I’ll bring them on full time and enroll them in the apprenticeship program.
IMTS: Can you provide an example of an effective internship?
Wolter: I had a full-time student from nearby McHenry High School who comes to our facility from 2pm until 6pm. He learned to read blueprints in a serious fashion, has performed setups on his own now and even learned how to do inspection under the direction of the team on the floor and our production manager. He just graduated and is working here full time. This is when you realize that this kind of investment really works.
IMTS: Do you have a training program?
Wolter: Yes, and I openly and gladly pay for it 100%. Our industry cannot kick the can down the road and remain sustainable by not offering training to its employees. I believe employees will stay if they can progress, so I curate their experience. If they like it here as an intern, apprentice or new hire and want to advance their skillset, I will send them for further training, whether it’s at a community college, MasterCam or the Technology Manufacturing Association. We will pay to send them to a program that fits them and where they can advance their skills. We both have more allegiance that way.
IMTS: What is the advantage to hiring an intern versus an older, more experienced worker?
Wolter: It’s been easier for us to bring in an intern and move them up the ranks. I wouldn’t say one has more advantages than the other, but a younger person who has been in a robust manufacturing program at a local high school and wants to try it out in a real life scenario is someone who is excited or passionate about manufacturing and looking for opportunities. Gen-Z is all about a pathway to a career and growth. I’ve always been a big believer in bridging the gap between high schools and a full-on manufacturing career. In the short term, efficiencies might not be that great, but they really start to tick up after six months. I’ve had four McHenry students that have stayed with me and are doing very well.
IMTS: How does a younger workforce benefit you?
Wolter: Curating young talent gives us an advantage because we can go after bigger, more complex jobs that require tech and program savvy ability. They are eager to learn, push the boundaries, and adopt new technology. Half the team likes to program and code in their spare time or rebuild their cars/bikes. Our whole team averages 34.5 years old, which tells you that we have plenty of growth opportunities, particularly when it comes to bringing in new technologies for them to use. They love that.