Suppliers' Speed, Flexibility Are Hot Commodities in Strong Agricultural and Construction Markets
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To Meet High Demand for Machinery and Equipment, OEMs Are Relying on Agile, Versatile Sources that Can Anticipate Changing Requirements
By Mark Shortt
Editorial Director, Design-2-Part Magazine
As the world's population growth continues to skyrocket, global needs for food, fuels, and infrastructure are creating high demand for U.S.-made agricultural and construction equipment, especially in emerging economies like China, India, Russia, and Brazil. In the U.S. construction equipment sector alone, a strong commercial construction market and rising exports are offsetting the decline in U.S. housing construction. And looking out over the long term, demand for American-made construction equipment is expected to be driven by the need to rebuild and repair the nation's aging infrastructure system of roads, bridges, and rail systems, as well as by rising worldwide demand for new infrastructure.
According to statistics released by the Association of Equipment Manufacturers (AEM), exports of U.S.-made construction machinery topped $17.2 billion in 2007, closing out the year with a 26 percent gain over the previous year. In the agricultural equipment sector, U.S. and Canadian retail sales of tractors and combines are expected to grow overall in 2008, led by a 6.5% increase in sales of 4-wheel-drive tractors. Sales of combines are projected to rise 3.8% in the U.S. and 3.6% in Canada in 2008.
Certainly, with all of the emphasis that's being placed on renewable energies, whether it's bio-diesel or ethanol--with 30 percent of the corn crop being for ethanol--it's really having a very large impact on the manufacturers," said Charlie O'Brien, vice president of agricultural services for AEM, in a phone interview with Design-2-Part Magazine, "especially those manufacturers that are engaged in making equipment that's geared towards putting in the corn crop and harvesting the corn crop. If you look at our numbers, we've got double digit growth in the higher-horsepower tractors, as well as the four-wheel-drive tractors and combines. And this is the second year in a row that we've seen that kind of growth from the manufacturers.
"The other side of it is that, because of the high demand for the equipment in those particular sectors, there's more and more lengthening of time in terms of delivery. So it's getting more challenging to keep up with the demand that's out there. So for farmers that want to buy tractors and combines, the message is that they need to certainly order earlier than what they may have been accustomed to in the past, in order to make sure that they get the equipment.
The health of the agricultural equipment market is reflected in the rising global demand for new products and equipment that enable greater efficiency and productivity for agricultural producers. It's also seen in the expansions that OEMs and contract manufacturers are undertaking. Deere & Company announced plans earlier this year to invest an additional $90 million in its Waterloo, Iowa, facilities, in order to expand its capacity for manufacturing large, high-horsepower tractors by about 25 percent. The company, which says the upgrades should be "substantially completed" in early 2010, will add machine tooling, implement new manufacturing technology, and improve its work processes, in addition to replacing the current paint system. It's all geared toward meeting "continued worldwide market demand" for the high-horsepower equipment, the company says.
"John Deere has experienced strong global customer demand for tractors made in Waterloo that expertly integrate complex electronic and mechanical systems to provide powerful and versatile machines," said David Everitt, president, Agricultural Division--North America, Australia, and Asia and Global Tractor Sourcing, in a statement. "John Deere customers around the world are reinvesting in farm machinery as they sell commodities at higher prices due to increasing demands for food, especially meat, and increasing global use of bio-fuels."
Many of the new agricultural technologies that are being introduced are intended to facilitate either precision agricultural practices, which seek to optimize the use of seed and fertilizer, or efforts to meet stringent United States Environmental Protection Agency (U.S. EPA) Tier 4 emission standards for new non-road diesel engines. AEM's Charlie O'Brien says that a lot of R&D work is currently directed toward enabling farmers to more efficiently put seed and fertilizer on the field--targeting it to areas that need it rather than spreading it uniformly--and to accurately assess crop yields.
"A lot of work is being done on sensors that are put both in the tractor and on the implements themselves--to determine what's going on with the crop growth rates and what's happening with the crops themselves, via remote sensing, as the tractor is going across the field," said O'Brien. "As the soil changes across the field, the fertilizer need and content changes too. Sensors will look at information as to how fast the equipment is going across the field, the depth of the tillage, the number of seeds that were planted per square inch or square meter, and the amount of fertilizer that's being applied at that particular piece of ground. So they're really trying to maximize what they can do."
Opportunities Brings Challenges, or Vice Versa
For contract manufacturers that serve the agricultural and construction equipment markets, the boom in these heavy-equipment sectors is both an opportunity and a challenge. Keeping up with the growth is no easy task. But Jared Lotzer, sales and marketing manager for BTD Manufacturing, a rising metal parts fabricator based in Detroit Lakes, Minnesota, says that the fast growth of these markets challenges job shops to stay ahead of the growth by buying new equipment. Aside from the costs, he says, "It's always hard to buy equipment fast enough because it takes a couple of months to get set up."
Also, just as OEMs are being called upon to provide agricultural producers with machinery that boosts their efficiency, productivity, speed, and versatility, contract manufacturers face correspondingly similar demands from their OEM customers to produce component parts within drastically compressed timeframes.
Fast Response to Changing Requirements is Key
Today, contract manufacturers need to be agile, because customer requirements can change quickly. It's a trait that D&S Manufacturing has honed by listening closely to its customers, working hard to understand the applications of their parts, and designing efficiencies into its manufacturing operations. According to Michael Dougherty, president of D&S Manufacturing, the company strives to anticipate changing requirements rather than responding to requests for additional services.
"The key is really working closely with our customers and listening at lots of different levels of the organization," Dougherty told Design-2-Part Magazine in a recent phone interview. "We have people that are dealing day to day with customers that are expediting parts, and we learn a lot from that day to day interaction."
These days, Dougherty says, the company's customers are talking to D&S about lead time reductions, as well as price reductions. "They're interested in being able to have their schedules flex closer to the ship date to the customer. They want to be able to change the model mix within a week or two. That means they want our lead times to go from four-to-six weeks--or eight weeks--to two weeks or even one week, so that they're able to reconfigure the final product right up until it's on the line being assembled."
D&S Manufacturing, located in Black River Falls, Wisconsin, manufactures large-scale custom components, assemblies, and complete weldments for OEMs such as Caterpillar, Oshkosh Corporation, The Trane Company, CNH, and Parkson. The company's manufacturing capabilities include technologically advanced machining; laser, high-definition plasma, and oxy-fuel cutting; and manual and robotic welding. For the construction equipment industry, D&S Manufacturing produces structural and undercarriage weldments for crawler tractors, excavators, and other tracked vehicles. The company also manufactures suspension and undercarriage weldments for combines used in farming. Because of their rugged operating environments, these parts have special requirements that typically include high flexural and tensile strength, as well as abrasion resistance. The company also produces screening equipment that's used to separate solids from liquids in wastewater treatment.
"There continues to be a strong demand for the products that we produce," says Dougherty. "Certainly, pricing has become a real issue. We compete in a global marketplace: Our customers are buying things overseas, and they're quite comfortable buying things overseas, so we have to be able to compete globally. On the other hand, if our customer really wants to buy something from China or India, in the end, we're probably not going to make it as cheap. So we have to be able to find customers and products that are not well-suited to being made overseas. The larger, heavier weldments don't ship well. They tend to be expensive to buy from overseas: The freight costs are high, the transportation time is long. So we're looking to work with customers who value speed and flexibility over simply the lowest piece price."
Manufacturing processes offered by D&S also include shot blasting, painting, and assembly, as well as forming, milling, drilling, turning, and boring. In the course of its work, D&S encounters a number of different challenges associated with meeting its customers' requirements.
"Weld distortion is one of the most significant challenges we face," says Dougherty. "Materials expand and contract during the welding process, and minimizing and controlling this effect is necessary to achieve the specified dimensional characteristics." It's a challenge that D&S is prepared to meet, he adds, largely because of its more than 40 years of welding experience. "Our people have learned how to anticipate weld distortion," he insists. "We use this knowledge to design and manufacture our own weld fixtures that allow us to obtain the finished dimensions. We also develop specific work instructions that document the sequence of weld placement to distribute the heat effect as evenly as possible."
The company produces a C-shaped weldment for crawler tractors that weighs 1,500 pounds and has over 1,000 inches of weld. Distance between the arms is a critical dimension that D&S controls through fixture design and weld sequencing. The structure of the part, made predominantly of grade 50 carbon steel, is somewhat similar to a pair of eyeglasses, Dougherty says.
"The blade mounts up to the front of it, and the two arms that come off of the frame go back and attach to the frame of the bulldozer, and then the lifting cylinders are attached to it to raise and lower the blade," he explains. "So it's a pretty critical component, and one of the biggest challenges we faced in making that part was that there are bores in the ends of both of the arms, and everything has to line up across there. Obviously, if those arms were to twist, the blade wouldn't be level against the ground. We had a lot to learn about heat and distortion in making that part, and how to design fixtures and weldments to control heat and distortion as we went about making it."
Pairing Robotic Welding with CNC Machining
D&S has been using welding robots since the 1980s, when the company was doing defense contracting. Initially, the company wouldn't use robotic welding unless its lot size exceeded 100 pieces, but since then, the company has worked to streamline the programming process and some of the fixturing and setup issues so that it can make shorter runs with robots.
"Typically we need to have a lot size of at least 25 pieces," says Dougherty. "The robots offer a lot of advantages in terms of weld deposition rate. They're much faster at laying inches of weld than a person could ever be. Repeatability is another advantage. We use robots for projects that are welding-intensive, where there are a lot of pounds of wire in the weldment. So we look for products that are well-suited in that respect. We also have to make sure there aren't a lot of difficult-to-access welds. But generally we haven't found too many parts that we weld manually that we can't weld robotically. Sometimes it just takes a little longer in the programming and fixturing.
"On the machining side of it, we have a couple of families of parts that we make in a cell where we have one operator running both a horizontal machining center (HMC) and a welding robot. Years ago, the parts would have been manually welded in one location in fairly large batch sizes, and then hauled over to a machining center, or a manual machine.
"But robotic welding has brought much greater productivity in terms of the number of welds we can make in a given period of time. CNC machine tools have brought similar productivity improvements. We've tried to go one step further and pair machine tools and robots into a cell, where we gain the advantages of lower batch sizes and, essentially, going more toward the one-piece flow."
Dougherty says that in the agricultural and construction equipment industries, as in other industries, OEMs expect their suppliers to provide a competitively priced product, delivered on-time and without defects. But in order to set themselves apart from their competition, contract manufacturers need to do more. "There's a growing need for speed and flexibility," says Dougherty. "We distinguish ourselves by the speed with which we are able to respond to changing requirements. We've been able to cut our lead times without increasing inventory, which allows our customers to reschedule production within a shorter period of time. It also enables us to respond more quickly to engineering changes and product reconfiguration."
Tractor Hood Assembly Gets Strength, Heat Resistance from Two-Shot Overmolding
Two-shot overmolding and some complex tooling were instrumental in producing the John Deere 7000 Series Engine Enclosure, an award-winning hood assembly injection molded by Bemis Manufacturing Company, Contract Group, Sheboygan Falls, Wisconsin. The part, which uses over 90 pounds of engineering-grade plastic, took first place in the Commercial Product-Transportation category of the 2007 Alliance of Plastics Processors New Product Design Competition. Its main functions are to protect the engine and to act as an air management system that directs the flow of cooling air and exhaust for the John Deere 7000 Series tractor.
The OEM reportedly chose injection molding/two-shot overmolding for the hood assembly--consisting of the top hood, sides, and grill frame--for its design flexibility, cost savings, and high aesthetics. A high-impact, heat-resistant material (PC/PBT) was used for the cosmetic hood enclosure panels, which are mechanically fastened together and topcoat-painted. Rigidity and moldability are also key attributes of the PC/PBT material. To lower the cost and improve impact strength, Bemis co-injection molded the top hood and side panels with a regrind core.
The entire hood enclosure assembly can be stripped of any metal parts and can be recycled (paint and decals included) and used as core material for future products. Tooling for the top hood involves some very complex tool actions: Lifters, inside of larger lifters, create the attachment points for the assembly and reduce the potential for sink on the cosmetic surface. The complex tooling was required to produce the part as designed.
One-Stop Metal Fabrication Capabilities
OEM Fabricators, Inc., an ISO 9001:2000-certified company headquartered in Woodville, Wisconsin, has built a name for itself in manufacturing medium-to-heavy-gauge components, sub-assemblies, and turnkey products for OEMs in industries such as construction, railroad, energy exploration, road building, agriculture, and pharmaceuticals, to name a few. "The company started in 1986, and we really cut our teeth on construction equipment," says Mike Smith, the company's vice president of sales and marketing. "Today it still represents about 30% of our revenue intake. Our two owners--it's a privately held company--came from a construction background, working with a large lift crane (lattice crane) manufacturer at one time."
In the construction industry, OEM Fabricators' clients include manufacturers of asphalt pavers, variable reach forklifts, tow tractors, and overhead cranes, as well as makers of concrete placement equipment, front end loaders, and winch and hoist systems. The company also makes parts used in concrete hammers, concrete placing equipment (mixer trucks, concrete pump trucks), and hydraulic shears, which are basically attachments to backhoes. For the agricultural equipment industry, OEM Fabricators makes parts for liquid spray equipment, fertilizer spreaders, and a host of other products. Examples of agricultural equipment parts produced by the company include pins, steering axles, and components used in seed oil extraction equipment.
Besides providing processes that have long been considered staples of heavy industry, such as fabricating, welding, and machining, OEM Fabricators provides stress relieving, shot blasting, painting, and assembly. "The buyer can place one purchase order for fabrication, welding, machining of all types, finishing (blast, prime coat, and or top coat if necessary), and some assembly if they require it, and let us take it from there," says Smith. "We take full responsibilities for all of those processes, and we do them all in-house."
The company's in-house services include some that other job shops tend to sub-contract out. "We add value beyond conventional type job shop processes like fabrication, welding, and machining," says Smith. "We have a certified weld inspector (CWI) on staff, who can add some value-added experience and input into projects. We have level 2A particle inspection in house, a function that's typically farmed out to a test lab. We do ultrasonic test in house, and we also offer stress relieving (a thermal treatment operation) in house, and have full material traceability."
Design assistance is another area where OEM can help by making value-added suggestions that improve manufacturability and save costs. An important part of this capability is a finite element analysis (FEA) service that the company offers through its Midwest Mechanics business unit. To illustrate an application of the service, Smith told Design-2-Part Magazine of a case where OEM Fabricators redesigned a frame for one of its larger customers, ultimately reducing the cost of the frame "by a very significant amount," he said. But before the customer would accept the redesign, it wanted some proof of performance, at least on paper.
"They still needed to test it physically in the field, but on paper they wanted proof that the design would work," said Smith. "Midwest Mechanics performed that analysis, and [the redesigned frame] came out perfect, with no loss of integrity, structurally or strength-wise. We then built the prototype frames, and after testing them, the customer has given us the green light to proceed with production models."
For more on the Association of Equipment Manufacturers, visit www.aem.org.
For more on BTD Manufacturing, visit www.btdmfg.com.
For more on D&S Manufacturing, visit www.dsmfg.com.
For more on Bemis Manufacturing Company, Contract Group, visit www.bemisplastics.com.
For more on OEM Fabricators, visit www.oemfab.com.
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