Marking a milestone year for National

oct. 21, 2014

As National Machinery prepares to celebrate its 140 year anniversary, Phil Matten revisited its headquarters in Tiffin, Ohio, USA , to see how an unprecedented programme of investment has enhanced capabilities to support a global customer base and deliver further growth in a highly competitive market. A follow up personal meeting with owner and CEO, Andrew Kalnow, provided a rare opportunity to explore his perspective on a milestone year for National.

founded in Cleveland, Ohio in 1874, it was only six years later that the National Machinery Company relocated to Tiffin: Then a nascent industrial city, now a pleasant, leafy county capital, with a population of around 18,000, surrounded by open farmland. By 1889 , the New York Daily was describing the National Machinery Company as "a mammoth concern .. enjoying the unique distinction of being the only establishment in the world capable of equipping a bolt and nut factory with machinery." The Daily continued: "They have correspondence and make sales all over the world." While the unique distinction is clearly no longer, the Tiffin plant has expanded throughout its long history and remains the large-scale, engineering facility at the heart of a business that long since won worldwide recognition for the performance and durability of its machinery.

Andrew Kalnow and Cara Kalnow wire 2014_sbNational's detailed timeline offers a fascinating chart of its course through nearly a century and a half (you'll f ind it at www.nationalmachinery.com/about- us/history). In the context of this article two century-apart dates are particularly significant. In 1900 Mr Earl (E.R.) Frost, son of Meshech Frost, the local entrepreneur who helped bring National to Tiffin and later purchased the company, was asked to step in as the company's general manager in order to turn around a then troubled business. 102 years later, his descendant, Andrew Kalnow, stepped in to reclaim an again troubled business into family ownership, renamed National Machinery LLC and part of the NM Group of companies.

It's some five years since this magazine's previous visit to Tiffin and the contrasts in many aspects of the National plant are striking. National machines are structured on a steel plate frame, rather than a casting. Similarly, in addition to normal castings, most of the major components are either welded assemblies (which are fabricated and then stress relieved in an on-site furnace), or turned from bar stock. The reasoning is simple: Good quality forging capacity was not available locally so National developed machines based on production technologies it could achieve and rely on in-house. There are clear benefits. While Tiffin holds more than 7,000 SKUs specifically reserved in a separate warehouse for servicing the massive world population of Nationals, the durability and longevity of the machines means many, still performing totally reliably, are decades old. Producing from bar stock presents a crucial flexibility, where necessary, to rapidly produce required spa res in the Quick Response Center a dedicated area in which some of National's most experienced operators direct-program modern CNC machine tools and operate traditional tooling lathes and equipment.

FF Open House InviteA full tour of the plant takes a solid hour. Immediately, the fruits of new investment are evident, in the shape of brand new, advanced machining centres. Several are now grouped into production cells, supported by banks of ready to use tooling, allowing automatic programmed product ion throughout National's two-shift six-day week.

Walking further, there is an initially less definably but noticeable difference in t he plant. By definition it is largely a historic structure, previously  painted in a rather archaic  pale green that cast something of a gloomy pall, belying the modernity of  technology in operation. A  major refurbishment  programme has replaced older sodium  lighting with banks of modern daylight units, the output from which now reflects from NM Group livery cream walls. The programme is not complete and the occasional contrast with older lit halls reinforces the radical improvement in working environment achieved.

In the main assembly hall, ranks of partially assembled FORMAX machines, as well as the smaller ball and roller headers for which National is also well known, reflect the global penetration of the company. Machines are destined for Asia and Europe as well as North and South America. Dominating the hall is National's new FORMAX XXV- in the final stages of assembly and crowned by a distinctive robotic arm that facilitates rapid change of individual die blocks. This is the second of the newly designed 25 mm cut off machine, launched at the 2014 wire show in Dusseldorf, where National won multiple immediate orders for this massive former.

Before being packed and readied for shipment every National machine is run on the company's own wire stock and tooling to levels substantially beyond normal operating conditions. The severity of that test process means many customers choose not to commission in their own wire and tooling at Tiffin, confident that the delivered machine will perform as soon as it is installed in their own facility.

Towards the end of the tour, two further changes epitomise the primary targets of National's investment programme. National's new Tooling Technology Center is an extraordinary technical facility, clearly demonstrating how tooling design, development and manufacture has become a major element in the comprehensive service National provides its global customers, notably through its Met-MAX Innovations technology division. Equipment in the newly expanded centre genuinely lives up to the 'state of the art' description. Equally important it is home to the combined experience and knowledge of more than thirty technical specialists.

Ironically, this development 'robbed' the 400 strong Tiffin workforce of its previous recreational area-something none are likely to resent given the looks of the totally new employee recreational areas. This multi-room "RecCentre" includes an eating and relaxing hall decorated in part with photographs of hundreds of former Quarter Century Club members (employees who have worked for 25 years or more at National). The main room opens onto an outside sunken terrace with a garden-like setting for relaxing and/or picnicking. There are also true recreational areas where billiards, ping pong and even basketball on a half court can be played, depending upon the skills and preferences of a multinational workforce.

Less obvious but equally key are developments in National's global foot print to support its international customer base. Seven years ago National established its own manufacturing plant in Suzhou, China, to produce the LeanFX model as a new branch of its FORMAX family of cold formers. Half of its output is now supplied to customers within China, with the balance exported to global customers look ing for a high-speed robust machine, worthy of the FORMAX name, but with less complex operating controls and changeover capabilities. Two year's ago National Machinery's European operations moved to a custom-built service, rebuild and parts facility, still located in the historic city of Nurnberg, Germany.

Behind the scenes National has invested substantially in online capabilities to support its customers. including service via online links direct to installed machines to achieve rapid response to customer's production management queries, which, if appropriate, may obviate the need for a service visit. Additionally, National Machinery's Quikcalc ePlus tooling software is now Cloud hosted for rapid, global access.

There is much more that impresses as one walks through this plant - be it technology, the skill's base or simply the 'feel' of a business confident but not complacent about its capabilities. At National's 140th Anniversary Open House not just customers but also suppliers. National's own employees and retirees.

A wide-ranging discussion with CEO and owner Andrew Kalnow, touches on various topics including National's investment strategy. the company's 140'" Anniversary Open House plans and why-it-matters that National espouses corporate family values. From the outset he emphasizes the significance of the largest investment programme in the company's distinguished history. "National is about 75% complete in a three-year, US$21.5 million capital expenditure programme at its main factory and world headquarters in Tiffin. This CapEx programme is dedicated to manufacturing capacity expansion and modernisation, facility upgrade, and office renovation. This amount does not Include additional CapEx at National's other facilities in Germany, China and Japan, which are all part of its global reach to provide customers a worldwide network of service and support."

 We turn to the major investment in tooling development and manufacture. "I should ask a bit of forgiveness for the name 'Tooling Technology Center'," Andrew Kalnow smiles wryly, "but the truth is this is a generation away from the tool room of old and to continue to call it that is simply unrepresentative and unfair, both on the investment in technology that goes into it and the quality and application of the people within it There is still a major skill set required of the people but as never before they are aided by advanced technologies. which ensure repeatability."

Recognising the crucial significance of the human resource needed to deliver the best from the new technologies continues  as a t heme. "There are three areas in particular where we continue to need solid, you could say, old fashioned engineering knowledge. In addition to tooling development and production there is our Quick Response Center, where we produce parts for traditional machines when a customer has a machine down or needs repair parts."

"More demanding than that are the challenges presented to our service and rebuild technicians - working on older models that may have been discontinued from production for some time. National still finds a major demand f or these services, which is testament to the durability and reliability of the machines we build. In many cases these customers are most likely investing significantly more than the original acquisition cost of the machine."

Skill retention at Tiffin is good. ·we benefit from not being a massive multinational. There is a philosophy that we are one big family in the company. That might sound a bit old-fashioned but if it resonates, and it most certainly does in Tiffin because it has a genuine foundation, then it contributes strongly to the overall performance of the business... Still, retirements are inevitable, and National's growth also demands an expanded, skilled workforce not readily acquirable in today's America. "We are, therefore, very committed to bringing along younger people and ensuring the full complement of staffing we need," explains Andrew Kalnow. There is nothing superficial about that commitment. National Machinery annually funds up to three engineering scholarships. 'We're essentially paying for a full ride into engineering with a guaranteed job at the end of the five-year university programme. Add two years of in-house training and development before that person starts to meaningfully contribute, and it is a seven-year period before we really see a payback." The Tooling Technology Center is an obvious beacon to attract young talent brought up in the world of smart phones and tablets. "Perhaps surprisingly, though," Andrew Kalnow reflects, "We find plenty of people happy to work on the older machines, partially because of the variety and also because they are contributing a direct individual value."

In Suzhou, the employment challenges are different and National Machinery is not immune from the high level of labour mobility in China. Family principles, however, clearly have a positive effect and, although demanding continued effort and not a little ingenuity, the reward for National has been significantly lower 'churn' than the typical 20% annually that plagues other firms operating in China. "We're doing all the things that other people are doing but, perhaps, we are doing it a bit better, and bit more. There is a definite sensitivity to the employees. There are more family days and company outings than in our US or even Japanese facilities. We also regularly change our cafeteria contractor - the quality of food is always close to the top of people's list! The tricky bit is pulling all the levers while ensuring that we maintain acceptable expense control."

Overall, though, Andrew Kalnow is more than satisfied with a development into China born as much, at the time, from necessity as strategy. "We are very clear, from our own research, that some 60% of the world market value for our type of machinery is now in Asia - substantially more, of course, if one calculates on machine population- so having a strong manufacturing, service and support base in China is essential." In 2006, though, when the commitment to Suzhou began, National faced a stark domestic market. "North America was, at best dormant, and really one can say dead. It remained that way until late 2009 when there was a cathartic upswing with the rescue of the North American automotive manufacturing sector and a greater consciousness of the necessity of effective regional supply chains."

"That made National something of an enigma, firstly in terms of being the only remaining American company amongst the successful machinery makers; secondly in having a strong home market in North America, which was so active for everyone in the 1990s, but then almost literally disappeared in the 2000s."

Including those assembling for affiliate company, Cleaning Technologies Group, National now employs 125 people in Suzhou.  A recent agreement means the plant also produces some Mectron inspect ion machinery under licence. "This has been very successful with good sales into China and we are really pleased with that," says Andrew  Kalnow. Including those assembling for affiliate company, Cleaning Technologies Group, National now employs 125 people in Suzhou.  A recent agreement means the plant also produces some Mectron inspection machinery under licence. "This has been very successful with good sales into China and we are really pleased with that," says Andrew  Kalnow.

So , what are the plans for the Tiffin Open House in September? "There are four major audiences," outlines Andrew Kalnow. "The first is actually our own people. Monday of the Open House week will be dedicated to current employees, who will all take the full tour to see what we will be showing their customers. It will be a special opportunity to stop and see what is done in each area of a large facility with a very diverse range of functions."

"We'll also... he adds, "be inviting our Quarter Century Club retirees who served more than 25 years with National. Then we will have three days dedicated to our customers. As well as a guided tour of the whole factory and office complex, which will take about 90 minutes, there will be a series of six technical seminars each day - including from our affiliates ­- Mectron, Ransohoff (CTG) and DTI. There will be three National demonstrations- a Lean FORMAX with a CTG cleaning line; the new FORMAX XXV and a warm former. Mectron will also have its own demonstration area. Of course, we will also be extending hospitality to our customers and providing great opportunities to relax and network."

"The final weekday will be for suppliers and friends of the firm, including local support businesses. Then on Sunday it will be Ope n House for the community, when employees will be encourage d to bring family and friends but there will also be a general invitation to all members of the community. Traditionally, when we've had these types of events we have had very good attendance so we are very excited about it."