September 26, 2013 Engineering the Best Solutions

Volume 16 | Issue 8

Advance Machine & Engineering Company has maintained a solid reputation for innovative design and manufacturing of high-precision produc

For nearly 50 years, the Illinois-headquartered company has supplied the world with machine tool components and continues as the pioneer of carbide sawing, reports Dan Harvey.

When it comes to precision machine tool components and metal cutting solutions, Advance Machine & Engineering Company (AME) has transformed from a small start-up business into an international leader in manufacturing and distribution.

Over the last 50 years AME has maintained a successful track record when it comes to working with major companies throughout a range of industries to create innovative solutions to solve unique problems. “Our tagline is, ‘Engineered Solutions for Industry,’ and that is what we accomplish with the design and build capabilities that we have developed,” says Dietmar Goellner, president and CEO of this family owned enterprise founded by his father.

The company’s engineers create “complete solutions’ for industries such as aerospace, machine tools, and fluid power.

AME boasts a diverse set of product lines. “We build special carbide sawing machines, and one of our business units produces work holding fixtures for CNC machines. In addition, we have components designed into machinery – niche products that machine builders would utilize in their machines. We also do a significant amount complex machining and manufacturing,” reveals Goellner.

Specifically, the lines include the following:

• Production Carbide Sawing Machines;
• Saw Blades;
• Work holding (custom and modular);
• Safety and Position Holding Devices;
• Power Drawbars;
• Spindle Interface Components for the Machine Tool Industry.

In addition, AME offers a wide-range of services, from designing and building custom machines for various industries to special services such as machine rebuilding, retrofitting and contract manufacturing.

Goellner describes AME’s forward direction as follows, “The machine tool industry represents a major portion of our customer base. And because of our heavy investment in machining capabilities – we recently invested millions of dollars in state-of-the-art machine tools – we are now able to meet the increased demand for our products with high-precision, low-volume contract machining. Lately, work holding and fixturing for CNC machines is an area that we’re really focusing on,” states Goellner.

He underscores AME’s diverse nature. “It enables us to focus on niche product offerings. Some product applications reside outside of the machine tool industry, and that helps us smooth out the downtimes in a highly cyclical industry. But to get down to what we do, a core competency is the manufacturing of very precise and complex parts,” he says.

Founded by German Immigrant
“The company was founded in 1966 by my father Willy Goellner, who moved from Germany to America in 1958. He established his business as an engineering design house,” relates his son.

His father remains active in the business as chairman.

The company was founded as Advance Engineering Company and offered design, engineering and consulting to industrial customers – services particularly related to machine tools, assembly, and packaging machines.

“Then my father began designing and building special machines,” continues Goellner. “By adding manufacturing capabilities, we went from design to design and build. In subsequent years, we developed key partnering relationships with companies in Europe and then attaining the licenses for manufacturing products for the North American market.”

Established Partnerships
Indeed, AME’s diversified capabilities and products have enabled the enterprise to establish partnerships with global companies such as OTT-Jakob, Sitema, Spieth, Stotz, Triag, Gerhard and Ott-Wormgears, which are joined by AME’s sister company Hennig Inc. (AME and Hennig reside under the Goellner Inc. holding company).

For more than half a century, Hennig has designed and produced custom machine protection and chip/coolant management products for state-of-the-art machine tools. Its products include the following:

• Telescoping steel way covers;
• Way cover repair services;
• X-Y face shields;
• Folded bellows;
• Roll-up and apron covers;
• Way wipers and wiper systems;
• Telescoping springs;
• Chip conveyors and filtration systems;
• Machine tool enclosures;
• Fuel tanks for power generators.

Small Becomes Huge
In the beginning, back in 1966, the company rented about 1,000 square feet of office space in Loves Park, IL. Two years later, the business relocated to Rockford. In 1985, the company bought its own facilities and moved its operation to the present location in Rockford, where it runs an under-one-roof operation that measures about 150,000 square feet and employs 140 people. This high-tech facility can handle nearly any workload. “We possess very sophisticated machine tools that allow us to manufacture to the highest tolerances,” describes Goellner. “Two main areas of core competencies are precision grinding and large and complex manufacturing of prismatic parts.”

Further, the facility – and its management and employees – have embraced a culture based on continuous improvement. “We have embraced a lean enterprise approach,” Goellner reveals. “We follow the Toyota Production System, which focuses on waste elimination as well as increased throughput and reduced inventory, resulting in build- to-order.”

Meanwhile, AME continued to evolve. In 1997, it became the exclusive North American partner for Triag, the Swiss manufacturer of high precision mini vises and multiple work holding components. A year later, AME segmented into six strategic operating units to better serve their customers. These segments included:

• Design and build/special machines (which includes carbide saws);
• Machine components;
• Fluid power products;
• Work holding systems;
• Power drawbars, tool holding, gauging;
• Contract machining and inspection.

In addition to investments in plant and equipment, AME sets a high value in the development of their people and the streamlining of their products and processes. As a result, continuous improvement is deeply embedded in the company culture. “AME records revenues in the $25-30 million range, which produces a growth rate of roughly 30-35 percent in the last few years,” says Goellner.

Financial Trends – Good and Bad
One of the positive trends that has impacted AME is a recent 50 percent bonus depreciation for new equipment, informs Goellner. “That has encouraged us to make larger investments in state-of-the-art machine tools and similar technologies,” he says. “That’s a positive. On the negative side, it’s hard to find qualified, skilled labor. To counter that, we have developed one of the largest apprenticeship programs in our area.”

Another challenge is taxation. As Goellner relates, “AME was recently subject to a tax increase due to being a “Subchapter S” corporation. And higher taxes means less money that we can reinvest.” Increased regulations, for safety and workman’s compensation, are also problematic. “Regulation is increasing to a level where it inhibits us from running our business as effectively as we would like,” says Goellner.

But Goellner gets back to the positive when he states the following:

“On a macro level, there is a focus on re-shoring and insourcing. This offers the opportunity for a manufacturing revival. And we are already an organization highly dedicated to the movement, as you will see in our upcoming marketing campaigns. We will continue to grow organically by reinvesting in our manufacturing and marketing infrastructure in order to seize these new market opportunities. We believe our best days are yet to come.”

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