December 2007 Edition

MACHINING CENTERS

Excess Capacity? No Such Thing

A Guyana toolmaker runs a successful Canadian company on the philosophy to be prepared to take advantage of that "golden" phone call from a customer

The Boy Scouts live by the motto "Be Prepared." For Peter J. Harry, managing director of Eldorado Tool & Manufacturing Co., Waterloo, Ont., Canada, it's a way of growing his business. Part of his business model is to make sure he has enough machine capacity to take any work, even the unexpected.

Harry, a toolmaker, founded Eldorado in 1974, about nine years after he immigrated to Canada from Guyana in 1965.

"You must have capacity available at all times since a phone call could be a goldmine," Harry said. "We're ready. If you're not growing, you're going backward."

In Canada, Harry worked for Raytheon and Budd Automotive before starting the one-man Eldorado operation with a small manual lathe and a small manual milling machine. In 1978, he took a calculated gamble and sold his house to raise the money to buy his first CNC machine, a slant-bed lathe, the first of its kind in Canada. It was proof of his commitment to go to the leading edge of technology and stay there.

"It was the cornerstone of the company," Harry said. "I should have bought 10 of them. No other company kept such close tolerances. People came from far and wide to see it."

In the early 1980s, he again became the first in his area with the acquisition of a coordinate measuring machine.

Technology Booms Business

Today, Eldorado has 80 CNC machines, 70 employees, and an annual revenue of $10 million. Eldorado's prime customers are off-road mining and military equipment manufacturers. It also services second-tier automotive suppliers, as well as companies in the information technology, postal, and aerospace industries. The variety of products Eldorado has made range from stainless steel pumps for nuclear power plants and carbon fiber circuit boards for Russian calculators, to mirror casings for projection television systems.

Harry said the reason his company can attract and maintain such a broad customer base is his technology investment.

"I must have the latest and best manufacturing equipment," Harry said. "When prospective customers see the newest and latest equipment on my shop floor, they know we mean business."

Eldorado turns parts from 1/16" to 28" in diameter and in lengths from 1/16" to 40". It mills parts from 1/16 in³ to 24 in³.

Harry projects his business to more than double as a new plant in nearby Kitchener comes on line.

The plant will feature a high-rise Mazak Palletech manufacturing system consisting of three Mazak HCN 6000 Horizontal Machining Centers with 160-tool magazines, 40 pallet locations, two load/unload stations, and one stacker/transfer robot. Eldorado's Kitchener plant also has a stand-alone Mazak HCN 6000.

The plant will be capable of manufacturing prototypes and large-volume production runs. The Palletech system lets Eldorado provide just-in-time, low-to-medium-lot manufacturing with minimum lead time. Efficiency increases for repeat orders by eliminating setups and first-off inspection. This lets Eldorado minimize inventory and maximize profits.

Quick Decisions

Eldorado prides itself on its flexibility and quick delivery time. Harry said one of the keys to Eldorado's success is speedy reaction to customer requests, from manufacturing one-off prototypes to full production runs involving multiple components and final assembly.

Quick turnaround and a streamlined management structure are vital at Eldorado.

"I'm the only one who has to make a decision," Harry said. "There's no waiting. Companies that take a year to make a decision are going to lose business to me."

Harry remembers being impressed with what he saw as Mazak's forward thinking when he saw the company's advanced concepts at a trade show in the 1980s.

"They were thinking and I could see that," Harry said.

He bought his first Mazak machine in 1995, a CNC turning center. The transaction was completed because Mazak was as prepared to do business as Harry was.

"I had to make a simple part, but it had to be made accurately, and they could deliver the machine in two weeks," Harry said, recalling the negotiations.

He needed the lathe to produce a rolling bar for a credit card imprint device back when a machine rolled across the embossed characters of a credit card to print an invoice rather than electronically scanning cards.

"I asked: 'Can it make the part in a minute?' They answered 'yes,' so I bought it."

Eldorado now has 15 Mazak turning and horizontal machines, eight with Palletech systems and a total of 72 pallet positions. His first Palletech system, installed in 2002, helped him double his business, from $2.5 million to $5 million.

"We make 100 production parts for off-road vehicles," Harry said. "That's 100 setups. You can't make that many setups without something like Mazak's Palletech.

Eldorado would still be in business if it didn't have flexible production systems, according to Harry, but the company wouldn't have grown as well.

"Service, service, service," he said. "There is nothing else."

Harry – who visited Mazak's new World Technology Centre in Japan a year ago – is impressed with Mazak's capacity for long-range planning.

"Mazak is constantly pushing the envelope to a higher level of technology," he said. Mazak

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