Rethinking Supplier Relationships with Tool Providers
As advances in cutting tool designs proliferate, cutting tool providers find that performance optimization means partnering with users and machine tool builders. Payoff: productivity and profitability.
Competitive differentiation among cutting tool providers still begins with new product development. But today's leading providers partner with users to help fulfill the potential of the cutting tool design.
The product development/partnership emphasis is evident at Kennametal Inc., where, for the last five years, 45% of revenue has come from metal cutting products less than 5 years old, says Carlos Cardoso, chairman, president and CEO.
Maintaining that innovation emphasis is still the central mission of the company's global technical centers in the U.S., Germany, Israel and India. "Each research center is responsible for new product development, primarily in each center's local markets," adds Kennametal's George Coulston, director of breakthrough technologies. "We're trying to introduce products at a market-leading pace to bring ever-increasing value to our customers."
Enter partnering: As cutting tool suppliers speed product innovations, those suppliers are also rethinking the traditional vendor/purchasing relationships and are approaching the upper management of manufacturing customers with an enhanced value-added menu of services. The emphasis: process optimization through partnering with all of the functional manufacturing steps.
Machine tool builders are typically included in the partnering arrangements, says Brian Norris, vice president marketing with Sandvik Coromant. For example, machine tool builder Mazak's partnering functions include training and education, says Norris. He says cutting tool providers want customers to appreciate the machine tool's role in maximizing the cutting tool's ROI. "Correctly using the cutting tool accelerates and maximizes receipt of the payback in terms of quality and productivity."
The message implicit in the service initiatives is a reminder that while cutting tools may account for only 3% to 5% of the cost of producing a typical metal part, the cutting tools can have an enormous impact on product quality, efficiency and cost, adds Kennametal's Cardoso.
For example, a single custom-designed, high-performance cutting tool can replace the machining operations performed by two or three lesser-performing tools in certain applications. While the new custom tool may, in fact, be much more expensive than legacy tools, the performance improvement of the custom tool and its ability to reduce non-value-added time associated with tool travel and tool changes may reduce overall cycle time and cost to produce the part by 50% or more, explains Cardoso. In these cases, the financial benefits of improving the overall manufacturing process dwarf the incremental increase in tooling cost.
The two-fold rationale for the increased customer service emphasis involves both material change and the competitive imperative for process improvements, says Coulston. "For example, in the metalworking segment of our business, the work piece materials that our customers are trying to machine are [constantly] undergoing changes. As those materials change, the cutting tool technology must also evolve.
"The customer service emphasis also helps our customers' never-ending need for improved machining efficiency," he adds. "After all, the performance of that tooling dictates the overall productivity of the customer's machining operations. All of their fixed costs are basically determined by the performance of our tooling. Our customers can gain important time advantages simply by early notification as to the kinds of material challenges they are facing."
Coulston cites the material transitions in the aerospace market as a current example. Kennametal and other cutting tool providers are focusing on providing optimum solutions for the machining of composites. For example, Kennametal is partnering with Boeing to recommend cutting tool solutions for the 787 Dreamliner. By weight, the 787 airframe is 50% composite. That compares with 12% composite for the Boeing 777.
Early collaboration and partnering offers more than cutting tool optimization, Coulston explains. In a service offering called Kennametal Complete, a collaborative portfolio of services can engage a client's engineering, production and purchasing teams with machine tool builders. "If they engage us early enough, we can help the customer develop an overall machining solution."
By looking beyond the initial cost of tooling and by partnering with its clients, Kennametal deploys its service capabilities to impact overall shop floor performance and costs. Holistic process goals dominate -- the reduction of machine cycle times, increasing productivity, improving repeatability and enhancing service levels. The approach becomes a real revolution keyed to effectively applying the incremental evolution of cutting tool technology.
"The idea," says Coulston, "is to go beyond the traditional norm of first deciding on a [manufacturing] process and then proceeding to have one cutting tool provider compete against the others to provide the cheapest tool. That approach reduces the opportunities for system optimization of the machine tool and the cutting tools." Coulston's advice: Give the cutting tool provider the maximum opportunity to collaborate in optimizing the total machining process. "The payoff can come in productivity and quality." (So far this year, Kennametal says its collaborative services have documented $100 million in productivity cost savings among its North American customers.)
So how do you go about selecting a cutting tool provider? One recommendation is to evaluate supporting services -- the educational programs and consulting capability of the cutting tool vendor, says Don Graham, manager of turning products, Seco Tools Inc. "As cutting tool sophistication increases, vendor partnering will help optimize performance potential." For instance, weeklong classroom sessions are part of Seco's cutting tool educational program.
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