Cost Reduction Creates Customer-Supplier Partnership

MANUFACTURERS always are looking for additional ways to reduce costs. One welding supplier says it is willing to guarantee cost savings if manufacturers purchase its products and follow its recommendations.

Guaranteed Cost Reduction (GCR) from the Lincoln Electric Company, a manufacturer of welding equipment and consumables, guarantees a total savings in writing if a company will follow its cost-cutting recommendations. If savings do not equal the amount forecasted, Lincoln will write a check to the company for the difference.

The Holland Binkley Company, a member of the Holland Group, decided to try the GCR program. The company is a manufacturer of components for tractor trailers, including landing gear, suspension undercarriages, and custom parts. It uses high-strength steels to create its trailer components. Welding plays a large part in its production.

For many years, the company's Warrenton, Arkansas, plant had been purchasing Lincoln Electric's L-50 welding wire. Not only did the GCR program secure the welding wire business that Lincoln later discovered was in jeopardy at the Warrenton plant, it also provided an opportunity for Lincoln to supply welding equipment to Holland Binkley's other plant, which had not previously been a Lincoln customer.

The GCR program looks at the entire picture of a company to lower total welding costs through creative solutions. The overall goals of the program are to trim arc welding costs, improve product quality, and enhance productivity.

Site Audit

The GCR program for Holland Binkley began with a two-day site audit of the Warrenton plant where a team of Lincoln engineers evaluated welding procedures and identified specific improvement targets. Recommended solutions as well as dollar figure for cost savings were presented to the company.

The site visit is an important step in the GCR program, says Tom Angelino, district manager of the Lincoln St Louis office. "After you service an account for a while, you tend to develop tunnel vision. By bringing in other, knowledgeable people, you get different perspectives. You also have an opportunity to brainstorm and bounce ideas off each other to come up with the best solutions."

Holland Binkley chose to work on a number of initiatives as part of the GCR program, including a part redesign to make one troublesome part quicker and easier to weld; a change to pulse welding for some parts to reduce spatter and undercut problems; a switch from coils of wire to bulk packaging to save costs; and a reduction in inventory through the use of a purchasing plan.

With the switch to pulse welding in some areas of the plant, Holland Binkley purchased new, Lincoln Invertec V300 power sources. The GCR program also provided follow-up training for employees on these new systems. Operators attended training sessions to learn the fundamentals of the process and how to set procedures on the machine.

Additional Customer

After successful implementation of the GCR program at Warrenton, Lincoln Electric was recommended for a project at Holland Binkley's plant in Dumas, Arkansas, requiring a robotic welding system. Prior to GCR, the Dumas plant had worked with another robotic supplier. Holland Binkley purchased three robotic systems after evaluating the overall package of equipment and services that was offered through Lincoln. The systems were custom-tailored for Holland Binkley at Lincoln's world headquarters in Cleveland, Ohio. The systems included a six-axis robot with the PowerWave 450 power source.

"Employees have reacted very positively to the GCR program," says Jim MacLellan, vice-president of materials at Holland Binkley. "We have impacted costs significantly and have also been prompted to start production improvement process teams in the welding areas of both our locations."

Lincoln Electric recently performed a second GCR audit and presented its finding to Binkley. "The employees were very excited to go through the GCR audit process again," says Deanna Carter, a Lincoln technical representative. "They had prints of parts they wanted to automate and were ready to discuss solutions for welding bottlenecks."

Angelino also sees the difference in the second GCR program. "We are now a production partner with Holland Binkley personnel. They tell us what is important to them and really look to our advice."

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