Janis Hubschman reports on Milwaukee Gear Company, a manufacturer of custom precision gears that has achieved a leadership position by offering a full range of in-house services to a quality market.
Milwaukee Gear, a corporation that touts itself as the “gear source that loves a challenge,” pursues the more specialized high-quality gear market. With one of the industry’s most comprehensive systems of process integration – including engineering support services, an in-house heat-treating facility, grinding and balancing operations – Milwaukee Gear has proven to be well equipped to meet the challenge, having achieved top 10 status in the industry with $24 million in sales this year. This performance is unique in a domestic industry of 235 gear manufacturers – one in which, according to the American Gear Manufacturers Association (AGMA), the average annual revenue is only $9 million.
“We are one of the noted companies in the industry, if the customer is looking for a high-quality gear class,” says Manager of Sales and Marketing Thomas Geiger. “Our forte is in tough jobs – more difficult styles of gearing, higher classes, gears with tighter tolerances. We can do more common gearing as well, but this is the more competitive part of the market. We’ve moved to more precision areas.”
By serving a variety of industries within this specialized market (AGMA-rated 10- through 14-class precision), Milwaukee Gear has acquired the technology and experience to meet the unique specifications of a wide range of applications, running the gamut from air and gas compression to wind power. The company’s ability to design and manufacture prototype gears and pinions in small production lots or large production runs for original-equipment manufacturers’ (OEM) requirements has enabled it to be a high-quality, cost-effective source for a wide range of customers. Milwaukee Gear supplies to the leading companies in the fields of compressors, blowers, plastic extrusions and light rail.
Providing solutions for its customers’ specialized gear applications is an outgrowth of Milwaukee Gear’s tradition of quality and service, which was established right at the beginning by its founders, Emil G. Borisch and Walter C. Kohls. Begun in 1918 in downtown Milwaukee, the company started as truly a two-man operation, with Borisch and Kohls serving as its salesmen, machinists, order clerks and product inspectors.
The founders personally delivered orders by horse and wagon, taking care to learn each customer’s needs. No matter how large or small an order, Borisch and Kohls remained focused on their policy of quality and service. According to Geiger, it was this level of dedication, carried on through subsequent generations of management, that is responsible for the continued loyalty of many of the company’s earliest customers. Indeed, the tradition of excellence has been sustained for more than eight decades. It is preserved by current Chief Executive Officer Harold Trusky and President Richard S. Fullington, and the entire staff of 200 employees – including sales, marketing, engineering, operations and quality-control personnel – at the company’s 250,000 square-foot facility in suburban Milwaukee.
With a level of vertical integration that is unique in the industry, Milwaukee Gear is better able to control the quality of its end product. As part of the company’s full-service menu, it offers one of the few on-site heat-treating facilities in the business. “We have one of the better heat-treating operations in the Midwest,” says Geiger. “This gives us an advantage, since most gearing is heat-treated. It gives us control over quality, better cost controls and reduced through-put times.” Its affiliate, Treat All Metals Inc., is situated in a 50,000 square-foot facility adjacent to the gear plant, and includes a metallurgical laboratory and a gear measurement lab outfitted with the most sophisticated equipment available. About 25 percent of Treat All Metals’ business is derived from Milwaukee Gear, with the balance coming from general industry.
Milwaukee Gear’s skilled engineering staff has played a pivotal role in placing the company among the industry leaders. Says Geiger, “We carry more design and manufacturing engineering staff than other companies of our size.” Indeed, the company’s engineering capabilities are extensive, with highly trained personnel assisting customers through application engineering, design and development, failure analysis and value engineering. Using the latest in CAD/CAM technology, the design engineering staff works with project engineers to evaluate each application and to design a product to meet every exacting specification. The manufacturing engineering department uses unique planning tools, including computerized manufacturing programs, to develop processes that will consistently produce effective, quality parts.
Certified for ISO 9002, Milwaukee Gear maintains the highest standards in each step of the design, ordering, manufacturing and inspection processes. Every employee is responsible for maintaining the customer’s quality requirements. The company’s design engineering is based on AGMA standards. During gear manufacturing, the staff constantly monitors and checks quality, using state-of-the-art equipment. Manufacturing inspections are measured and stored electronically.
Keeping the Lines Open
With good reason, the company is particularly proud of its customer-service capabilities. “At Milwaukee Gear, we not only provide customized products, but also the unique handling of each account on its own merits and the customer’s approach to order placement,” says Geiger. “We strive to distinguish ourselves through a proactive communications approach. For example, if we feel that we might be late on a shipment, we will contact the customer well in advance to give them notification, and to map out a plan to get them enough parts to keep their production going. We maintain an on-time shipping performance rate of 95 percent by aggressively analyzing our machine loads and then using overtime or split production runs to meet customers’ critical dates.
“Our promised shipping dates may not be the shortest in the industry, but we feel that they are the most reliable. We take our promises very seriously and will reshuffle the production schedules to accommodate our customers’ requirements.”
Assistant Sales Manager Sharon Gerek adds, “We believe our communications is a factor that separates us from other gear companies.
Communications is the link to knowing our customers’ requirements and is another part of being a quality gear house. We strive to maintain total communications by having the tools to answer customer questions while on the phone. Our computer system provides us daily updates of order status, production schedules, delivery information, inventory levels, previous sales and usage information, just to name a few of the capabilities. If follow-up is necessary, our goal is to respond within a 24-hour period.”
Another area of customer service where Milwaukee Gear shines is in its comprehensive stocking programs. “A significant amount of our work is transacted via annual blanket orders,” says Geiger. “Customers will give us estimates of their annual demand usage by part number, and we will build inventory and hold the stock for customer releases. During this time, the customer has the flexibility to adjust their schedules however they please. This gives the customer the advantage of better pricing achieved by larger production-run quantities and delivery just in time, since we can ship a custom gear from our warehouse stock.
“All of our customers are unique in the way they want to do business, and rather than try to fit them into a cookie-cutter mold of our own design, we are very flexible and adaptive in the design and implementation of our stocking programs.”
Investment for Opportunity
An ongoing commitment to intensive capital investment has helped keep Milwaukee Gear at the forefront of its industry. Company President Fullington was quoted in a recent publication as saying, “Our investment has been extensive in those areas that make us unique. This includes our engineering personnel, quality-control instrumentation and technicians, and our manufacturing capabilities.”
Since 1993, the company has invested more than $9 million into capital assets. Two-thirds of this has gone into new tooth-grinding machines, such as Opal and Gleason Pfauter form grinders, to accommodate the increase in orders for large, precise gears in low to moderate volumes. At a cost of $1 million to $2 million per installed and tooled machine, greater accuracy can be achieved to meet higher AGMA classes, while reducing setup costs. The balance has largely been in CNC equipment for gear hobbing, shaving, turning, surface grinding, balancing and inspection. An additional $5 million has gone to support and upgrade furnaces in the heat-treatment area, including a new continuous-flow pusher furnace.
“To remain competitive,” says Geiger, “we need to invest a lot of money into equipment. It helps us stay on the leading edge of technology. AGMA reports that a typical gear company invests about $500,000 annually. We are spending that much on a single piece of equipment.”
That is one way to stay competitive. Geiger offers another: “We have to be opportunistic, to do what we call mining the best opportunities that come available. We’re small enough to be versatile, yet large enough to supply the best services and support capabilities in the marketplace.