Higher technology machining halves prices

By buying affordable high technology CNC machine tools a UK subcontractor has halved component prices in order to realise sufficient return against strong overseas competition.

George Thompson, managing director of Tewkesbury-based contract machinist, Helander Precision Engineering, has reduced component prices over the past five years by 48 per cent.

He says that overseas competition, particularly from the Far East, continues to keep strong downward pressure on what he charges customers.

This is why he has adopted a policy of buying affordable, high technology production equipment, such as Daewoo CNC machine tools from UK agent, Mills Manufacturing Technology, as it is the only way can he make sufficient profit on his offshore and aerospace work to expand his business.

The problem of reduced margins has been made worse over the past 12 months by soaring raw material prices.

Stainless steel, for example, costs 60 per cent more than a year ago, while the price of nickel is now well over GBP 7,000 per tonne.

He uses a lot of both materials, but customers will not allow the extra cost to be passed on in higher prices.

At the same time, the aerospace industry continues to ask for top quality and ?cost down year on year; while even higher quality is being demanding by oil and gas companies, especially those involved in directional drilling of part-exhausted fields, as component failure would be catastrophically expensive.

In the last three years, Helander has invested GBP 1.6 million in new machine tools, including the company's first twin-pallet-change vertical machining centre (VMC), a Daewoo ACE VC500 with rotary table.

From the same Korean manufacturer he has also purchased a single-table Mynx 540 VMC with a 4th axis indexing table, two Puma 400 oil industry lathes including a long-bed model, and a smaller Lynx 210L turning machine with a 12-station turret for machining parts up to 280mm diameter.

"Our strategy to compete with low-wage economies has been to utilise our fixed costs better through lights-out production and extending our manned shifts to 22 hours a day, and to target complex, high-added-value, small batch work, particularly larger components," said Thompson.

"It is difficult to compete making large volumes of small, simple components because the margins are just not there.

I predict that there will be a shake-out at the lower end of the market and that many UK subcontractors in that sector will not exist in 10 years' time.' Helander was established in 1976 as a two-man venture to serve the aircraft industry.

Thompson joined the company in 1984 and by 1999 it had grown to become a 20-strong contract machinist with a strong presence in the oil and gas industry, which now accounts for 75 per cent of turnover.

It was at this time that the company moved to its current premises on Tewkesbury Business Park and it has since double in size.

Managed projects are a particular speciality, encompassing not only component manufacture but also assembly, plating, hard facing, welding and flaw detection.

Prismatic machining accounts for three-quarters of the work going through the shop, while the remainder are rotational parts that are almost exclusively mill-turned.

One of the most dramatic changes at Helander in the last three years has been a big increase in component diameter that can be turned, from the previous 42mm maximum up to the 550mm capacity of the Puma 400B and long-bed 400LB lathes.

The latter, equipped with a steady rest, is able to turn components of over two metres between centres.

Both were purchased for oilfield development work requiring parts machined to within a few microns in difficult materials, so the main criterion when researching the market was machine rigidity.

Continued Thompson, "We had never bought a big lathe before so we spent more time looking around for these machines than for any other.

We spoke to all the major suppliers but decided on the slant-bed, 26kW Pumas because they were the most solid and powerful machines on offer in the price bracket, which is mid-range.

We found that we did not have to go to more expensive machines to hold the tight tolerances we need, while cheaper machines would not have been rigid enough and neither would they have held their value in the same way as the Pumas, which have proved to be very reliable." Rigidity of build and accuracy of machining for a mid-range price was also the reason that Mr Thompson opted for the 40-taper ACE VC500 VMC from Daewoo, which has a twin pallet changer, 760 x 510 x 570mm working envelope, a 15kW spindle motor and weighs in at over nine tonnes.

Justification for the purchase was receipt of a long-running contract to machine directional drilling rig parts from the solid, the 2APC configuration allowing the operator to load and unload during the cutting cycle, reducing floor-to-floor times.

"We liked the weight and look of the machine, which was a reasonably priced package complete with rotary table and high pressure coolant," confirmed Thompson.

"Service back-up from Mills is also very good ? probably the best of all the suppliers that have delivered machines here." When an old VMC on the Tewkesbury site became due for renewal, another Daewoo was an almost automatic choice because this too was to be deployed for machining oilfield parts out of solid Inconel 718.

The machine chosen was a Mynx 540, another 15 kW/40-taper model weighing seven tonnes whose X-axis of over one metre gave more versatility than the machine it replaced.

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