February 2008 Edition

VMC

Success at More Than 300 Miles Away

Natoma Corp. isn't a shop in the middle of nowhere, but it's in an outer suburb of it. But, that hasn't kept it from prosperity.

Competition from offshore sources has penetrated to the heart of the U.S., but a specialty shop on the Kansas prairie proved that it has nothing to fear from foreign outsourcing.

In the western end of Kansas, halfway between Denver and Kansas City, is Natoma Corp., which machines small, close-tolerance parts and ships them to customers hundreds of miles away.

The success of this geographically-isolated shop results from quality work and equipment, short runs of small parts, an experienced and stable workforce, low overhead, and customer loyalty fostered by on-time deliveries, according to Gail Boller, founder and president of the company in Norton, KS.

In what Boller himself calls "the middle of nowhere," machine reliability is a prime consideration, that's why his shop has 10 Fanuc RoboDrill high-speed CNC vertical machining centers, purchased from Methods Machine Tools through McClain Tool & Technology, a Methods dealership in St. Louis.

"We're loyal to the RoboDrills because they're problem-free," Boller said. "They have strong tool-changer systems, and they're twice as fast as the machines we were using six or seven years ago. We run them every day."

Boller purchased his first RoboDrill about 13 years ago. Its performance, together with McClain's attentive customer service, convinced him to add more.

300 Miles from the Nearest Major Airport

If one of the Natoma machines goes down, it needs immediate attention; a challenge when it's a 300-mile drive from the nearest major airport. But, Boller reports that service has been excellent in his opinion.

The shop had bad experiences with other machining centers. Boller said the machines were less expensive but not as well engineered as his current stock. Though he is reluctant to discuss the details, he says some of these machines were not designed to handle chips.

"We'd run them awhile, chips would build up under the pallets, and Z-axis tolerances would be lost," he said.

McClain Tools took the machines back and replaced them with RoboDrills.

Today, Natoma has three 4-axis RoboDrill E models, three long-bed PC2 pallet-changer RoboDrills, three older standard RoboDrills, and a RoboDrill Mate.

Half of these machines run 16 hours a day, tended by five night-shift employees. The pallet-changer models are used for parts that require machining of only one surface and for the occasional longer runs of several thousand parts.

An ISO-certified contract manufacturer, Natoma specializes in the production of small, close-tolerance parts for customers in the aerospace, medical, and laboratory instrument markets. The business is ISO 9001 and AS 9100 [aircraft] certified. All work for medical- and aircraft-related customers is documented. Extra services include CNC turning, CAD/CAM design, deburring, and finishing and plating.

No Fear of Offshore Competitors

Boller said he doesn't fear Asian competition because Natoma's customers require short production runs of 100 to 300 parts, and it is not practical to send such short-run work overseas.

"We just quoted a job for a company that returned 400 rejected parts to a contract manufacturer in Singapore that it needed to keep its lines going," Boller said.

"They found the lower price wasn't worth the headaches. When it comes to low-volume runs of parts with close tolerances – some of which can be quite complex – we don't have the problem with the Asian competition that high-volume shops have. We work with total tolerances of two-tenths [0.0002"] or less on many of our parts. It takes the right equipment and people to hold those tolerances, plus good inspection systems."

In fact, an ISO auditor recently told Boller his shop came out ahead of every other contract-manufacturing shop he had audited.

The largest portion of Natoma's business comes from aircraft and avionics manufacturers. Most of these customers are based in Wichita or Kansas City, both cities about 300 miles away. Many Natoma-machined parts for commercial aircraft end up in assemblies for directional gyro systems, radar units, and flat-screen integrated cockpit panel instrumentation. When a part is destined for the military, Boller and his employees sometimes have no idea of its use.

Natoma has four customers in the medical field. For two of those, the shop makes core pins and other parts for the molds that form disposable syringes. The third needs replacement parts for pharmaceutical manufacturing equipment. The fourth requires parts for a cast-cutting device.

Customers in the laboratory and environmental fields count on Natoma for the parts they need to assemble liquid chromatography instruments, probes that detect soil and groundwater contamination, and other analytical devices.

Approximately 60 percent of the parts Natoma makes are aluminum, about 20 percent are stainless steel, and the rest are copper alloys and machinable plastics. The RoboDrills handle all these materials.

Cashing in on the Tiny

"A typical part weighs less than an ounce, so these are small parts," Boller said. "For us, a 1/2" end mill is huge. Most of the time we use a 1/4" or smaller end mill. With two points of contact, the RoboDrill's Big Plus spindles provide the needed rigidity. Sometimes I'm amazed that we can machine such tiny parts."

Natoma's home base in Norton has a population around 3,000. The surrounding countryside is cattle ranches and wheat fields. Boller named his company after the still smaller Kansas community where he spent his childhood and later, in 1982, started the business. Natoma is derived from a regional Native American term meaning newly born.

"Our location works to our advantage," Boller said. "We've never had an employee quit to take a machining job in another town. We're the only shop in the western half of Kansas that does our type of machining, so we don't have to compete for labor the way shops in the big cities do. Our employee turnover rate is low. Of our 55 employees, 35 are machinists. All but three of them learned the trade right here. It's slow going, but they learned it our way."

Kansas real estate prices, about one-tenth of the costs in Denver, also work in the company's favor as the business has grown. When he moved the company to Norton in 1984, it was a two-man shop with 3,000 ft². He expanded it in 1988, and again in 1995. In 2005 he completed a 23,000 ft²addition that more than doubled the size of the facility, boosting floor space to 40,000 ft².

Boller financed the early expansions primarily by selling stock to his family and friends.

The Proof is in the Profits

"I wasted a lot of time talking to bankers and other potential investors," he said. "They said I'd never make it because my customers would all be so far away. I proved them wrong."

Such success, of course, would not have come without careful attention to customer needs and a reputation for on-time deliveries. Boller has his own plane, so he can make a quick trip to close a deal with an old customer or to court a new one.

"The distance between us and potential customers sometimes makes it tough to get in the door at first," Boller said. "The good news is that our location is not a factor when it comes to freight costs. Because we're only 60 miles from the geographic center of the continental U.S., shipping accounts for an average of less than one percent of the customer's total cost. We ship almost all of our parts by UPS." Fanuc RoboDrill

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