An employee at Ultra Tool and Manufacturing uses a digital height gage to check part dimensions against print tolerances
Photo courtesy of Ultra Tool

David Gaines
Design-2-Part Magazine

In recent years, many American OEMs have begun to understand the true costs of sending parts and components to overseas manufacturers. These costs are directly related to longer lead times, poor quality, and communication barriers, among others. One metal stamping and tooling company, Ultra Tool and Manufacturing, has found that part costs can be reduced when parts are redesigned for more efficient processing.

Ultra Tool and Manufacturing, located in Menomonee Falls, Wisconsin, near Milwaukee, offers a wide variety of manufacturing processes for its customers. The ISO-9001:2008 certified company has been in business since 1969 and provides parts and subassemblies for many industries, including recreational vehicles, automobiles, electrical, lawn and garden, small engines, and the military. The company's two core competencies are sensor-controlled metal stamping and the design and building of tooling; however, the company also offers R&D and prototypes, assembly, and welding, as well as a fabrication department with fiber optic laser cutting technology.

"We design and build tooling and we run metal stampings," said Dan Nelson, vice president at Ultra Tool and Manufacturing. "And two years ago, we also started a metal fabrication facility. So for the lower volume parts, we can provide low cost tooling options, compared to what we were able to provide in the past. We're one of the first companies in the U.S. to bring in a fiber optic laser, so we can cut virtually any type of metals, stainless steels, and aluminum, as well as low carbon steel up to 5/8-inch-thick. We also do assembly work, so if the sheet metal parts need hardware welded or inserted into them, we can provide that. In a lot of cases, we're a one-stop shop. We can supply an OEM with a complete subassembly that goes into a larger component in an assembly line."

When deciding whether to source production overseas, versus keeping it in the United States, total cost and lead time are primary considerations.

"Nowadays, everything comes down to cost," said Nelson. "However, there are times when a customer will pay a little bit higher price if we can supply the product in a shorter lead time. We design and build tooling for the OEMs to run in their facilities. This has been very beneficial because we've brought back multiple products that the OEMs now run in the United States. I've asked some customers if they know their true costs. The people that entertained that discussion are able to determine it. Instead of looking at the bottom dollar, they are open to actually calculating total costs, instead of just looking at the per piece price. You're not going to get everyone to look at it, but those that have find it beneficial."

Ultra Tool has a customer in North Carolina that runs a dozen dies built for them. The parts were once made in China. "It was at least a dozen tools, maybe 16 different dies that we designed and built for them," Nelson remembers. "They're headquartered in Europe, and their tooling has a lot of German design. It's a very nice partnership that we created with them. They knew what their total cost was for having the parts come back from China, and then being assembled in the U.S. The problems they had—the bad quality, the down time on their assembly line—[are] why they wanted high-end, high-quality tooling made in the U.S., to save them money."

Multiple drawn cups that required a secondary machining operation in China were redesigned by Ultra Tool. It allowed them to create a progressive die to handle the parts in one operation. "It's a customer in Illinois that was doing work for hydraulic valves," said Nelson. "They were very precision, high-quality parts. They were being made in China successfully, but they were doing a secondary machining operation on them. The OEM looked at their total costs, on shipping by boat and quality issues. By the time they had it dialed in with their true costs, they decided to give it another shot in the U.S. Fortunately, they found us. We were able to design tooling that eliminated the secondary machining process. Plus, we held the tolerances that were required on the parts."

The stamping and tooling company was successful in the design and construction of the new tools. It was a five-part package, with three different tools and interchangeable tooling to make multiple parts out of one die. "We now produce these parts here and then ship them to Illinois for assembly," Nelson commented. "One of the problems they were having in China was cost. The secondary machining process drove the cost of the part up. Our parts run progressively, and no one touches them until they go down to Illinois to get plated and then assembled. They came off of our stamping presses complete—no extra labor for us except for quality control. The OEM's lead times are now shorter, their supply chain is much shorter, and they don't have to worry about high volumes of parts on the ships, and they don't have to worry about keeping inventories. So we saved them time and money on this job."

Ultra Tool is able to meet its customers' needs better than most overseas suppliers had with a heavy allotment of customer service and good communication. "We're here in the U.S., so communication is easy," said Nelson. "If we have to have a face-to-face, we can make that happen virtually in hours. Another benefit of our location is we're able to ship just-in-time, so our customers don't have to warehouse anything. In a lot of cases, the lead times are getting shorter overseas, but you still have to plan for substantial more lead time than you would with a U.S. supplier. If there's a quality issue, we have resources available nearby for almost every customer. We can sub-tier that work to them if there is a problem. Fortunately, we don't have to do that very often."

Ultra Tool was able to provide a more cost effective part with shorter lead times and better customer relations than its Chinese counterpart. "The hydraulic valves were sourced in China, but because of our better pricing, shorter lead time, better quality, and better customer support, this work came back to the U.S.," said Nelson. "The OEM has a very short supply chain now for this part, very minimum inventories are kept, and we're delivering with a very short lead time, within days of when they put in an order. So this is a huge benefit to this customer. We are 100% on time with 100% quality right now, according to our files. And a few of these parts are high volume, so that's good news for everyone. And communication is much easier for this customer, with no language or time zone problems."