May 26, 2013 What Could an Equipment Manufacturer Accomplish in Six Decades?

Volume 16 | Issue 4

which has been described as a manufacturer for manufacturing companies. Founded in 1947, this company has diversified, innovated

Headquartered in Winnipeg, Manitoba – a thriving center of North American machinery manufacturing activity – Canadian Tool & Die Ltd. has more than a half-century’s worth of experience.
Wheels, hubs, spindles, heavy duty and OEM cylinders, and cylinder replacements for agricultural and industrial applications – all of this the company manufactures.

Specifically, offerings include wheels for tractors and agricultural implements, agricultural hubs and high-speed hubs, spindles for hubs, welded hydraulic cylinders, ductile-iron implement-hitches, and castings. All are innovative in nature.

Adhering to the most stringent quality standards throughout all production phases, Canadian Tool & Die established a reputation for dependability. That’s why, throughout its history, it has moved beyond just agriculture; it now serves construction, mining, oil and gas, medical, aerospace and industrial machinery industries in Canada, the United States – and even beyond.

Besides products, the company provides lean manufacturing, custom machining, and contracting services.

Part of a Group
This year the company is observerving its 65th anniversary. Founder John Gatschuff started out making tools and dies in the Winnipeg area. “He then moved into the farming equipment business, doing parts,” relates Darren Lodge, vice president of sales and marketing.

The business remains a family owned operation, now in its third generation of ownership.

Today, it is part of the CTD Group, which includes four companies, all family owned, reports Lodge. Along with Canadian Tool and Die (which boasts a main facility that measures an impressive 100,000 square feet, and is being re-branded as CTD Ltd.), the enterprise includes CTD Machine Works, a 40,000 square-foot custom machining facility located in West St. Paul, Winnipeg; and a metal-casting foundry, Integra Castings, located in Winkler, Manitoba, according to Lodge.

These subsidiaries have made the CTD Group a diversified global supplier that does business in North America (Canada, the United States, and Mexico), as well as in eastern and western Europe, Russia, and Australia. The Group operates in six business segments: ductile and grey iron castings, hydraulic cylinders, hubs and spindles, wheels, hitches, and custom machining.

“Among all three company segments, we have about 375 employees who help generate a total revenue base of about $70 million,” reports Lodge. The organization invests heavily in employee development and the upgrading of skills, which helps keep turnover low. Employees work in a family oriented environment, and – in 2010 – the organization was recognized as one of Manitoba’s top 25 employers.

Synergistic Enterprise
CTD Ltd. produces about 70 percent of the Group’s revenue, and about 50 percent of what it does relates to the agricultural industry. Each element of its six-product-line suite has been developed to create synergy among all products, says Lodge, referring to a main company differentiator. “Essentially, we’re a one-stop business model, wherein we can do everything as a complete package for the customer,” he says. “In the past, manufacturers would produce, for instance, a wheel hub and then sell it with all the components loose. The end customer – John Deere, for example – would put it together on new cells and finish the assembly into their end unit.”

Conversely, CTD takes it to the next step. The company focuses on what it views as the “white space” between products. “That’s an additional service element that we bring to the product, and it strengthens the value for end users,” says Lodge. “Our customers create revenue by making one more piece of equipment a day, and not in the assembly of our products. Therefore, on our end, we are pushing down into the supply chain, providing them with more value in an assembled, painted, coated and heat treated product. Ultimately, we provide them something that is bolt-on ready. It comes out of the box, and they put it on their end unit.”

Unique Position
The company has competitors with each of the products it sells; however, these competitors don’t sell all products, which places CTD in a unique position: “We have competitors in each product line, but we have no competitor across all product lines. So, our value proposition is about strengthening the synergy among all of our products, packaging them together, and coupling that package with the best customer service.”

Customer service relates to CTD’s focus on quality. Its rigid standards extend through all production phases, which results in dependability. Commitment to quality is reflected in the company’s associations: Society of Manufacturing Engineers, American Foundrymen’s Association, American Society for Metals, American Society of Agricultural Engineers, American Society for Quality Control, Association of Professional Engineers, Canadian Society of Agricultural Engineering, and Canadian Credit Institute.

Creating Standards
CTD Ltd. not only adheres to standards; it creates them – and this involves another facet that has kept the company in business for 65 years: innovation.

“Looking at one of our products, we created the only hitching standard for North America’s agricultural industry,” reveals Lodge. “We work with the ISO and ASABE engineering groups to develop a standard where there had been no standard to follow. Now, the hitching product we sell has become the industry hitching standard.”

CTD’s line of innovative ductile-iron implement hitches offered farmers with a one trip tractor implement drawbar coupling that was safer and more efficient than what before existed. “We also developed standards for safety chains,” continues Lodge, “and those are complementary to the hitch, much in the same way that wheels and tires complement each other and, in turn, are complementary to the hubs. So, again, there are tire manufacturers, wheel manufacturers, hub manufacturers, and hitch manufacturers, but CTD is a company that does it all.”

All of this involves significant investments – CTD understands that you have to put in to get back. And it gets back by engineering and manufacturing products that meet customer needs while introducing new safety and functionality standards.

Hydraulic Cylinders: a Collaborative Effort
CTD’s innovations are based on a close collaboration with customers. For instance, this led to its advanced hydraulic cylinder line that accounts for about a third of revenue.

“We produce hydraulic cylinders that measure from a one-inch bore to an eight inch bore and out to about 12 feet in length,” describes Lodge. They’re custom engineered and characterized by welded construction. As such, they are heavy duty – with multi-stage telescopic and position sensors – which came about through custom engineering based on client needs.”

Hydraulic cylinders represent the company’s fastest-growing product line, for good reason:

• The cylinders are built to customers’ exact engineering requirements;
• CTD’s engineering department deploys SolidWorks CAD software; and
• Company design engineers, in offering industry leading design solutions, approve new processes and products within CTD’s own system.

Also, consider CTD Ltd.’s hydraulic cylinder manufacturing parameters:

• Working pressures up to 10,000 pounds per square inch;
• Shafting choice of precision-ground, hard-chrome plating, precision-ground induction hardened hard-chrome plating, and the nitrided option;
• Bore sizes from one- to eight-inches;
• Closed lengths up to 12 feet;
• Individualized testing for function and potential leakage.

“Hydraulic cylinder sales have tripled in the last 10 years,” says Lodge. No wonder.

Challenges Encountered
Success doesn’t come without challenges, and CTD has faced its share. One of the most recent involved – no surprise – recent global economic circumstances.

“The biggest challenge we’ve faced came after the economic downturn of 2008-2009,” reveals Lodge, “when we witnessed a completely unexpected resurgence among all of the industries we serve. Inventory levels among all customers had been depleted. But, suddenly, their order books were refilled, and as the customers became revitalized, they said ‘we need this – and now.”

This situation put a huge demand on CTD’s manufacturing levels. “It was down to about 60 percent at one point and then suddenly jumped to 200 percent, which seriously challenged our abilities related to lead times and on-time deliveries,” says Lodge.

The situation called for a quick, but effective, response. Lodge explains what the company did: “To keep up with the new demand, we had to become very circumspect in our scheduling and very agile in our manufacturing abilities. It was a very difficult time.”

CTD responded well. But the problems didn’t end there. Lodge continues the narrative: “Subsequently, just as quickly, our customers found themselves backed up, and their requirements significantly slowed down.”

How to deal with the twists and turns of an industry? The upshot turned out to be a $6 million investment in the CTD main facility, which entailed a complete transformation of all hydraulic manufacturing lines. “We’re starting to see a 200-percent increase in capacity,” says Lodge. “Investment involved new equipment, complete plant reorganization, a fresh look at our processes, and new training for manufacturing steps. It has been absolutely dynamic for us.”

Indeed, the situation involved a complex self analysis. “It helped us better understand our weaknesses. The blindfold came off, as far as the business end. At the same time, it also revealed our strengths: our agility and our ability to maintain service levels, capabilities, and the willingness of our employees to go above and beyond,” says Lodge.

So it was a negative/positive scenario.

“Everything became highlighted for us,” says Lodge. “It allowed us to see where we needed to invest our money – as well as why and how quickly.”

Moving Forward
As the company heads into the future, it will also make investments into its hub manufacturing lines. “We have a new, fully automated, robotic manufacturing system coming into the plant,” reveals Lodge. “That’s going to amount to a $1.5 million investment. In the next 18 to 24 months, we will be looking at adding two more of those lines, which will double our hub manufacturing capacity.”

– So the company is well-positioned, and this placement is based on recent success. “The last five years has been a tremendous growth period for us,” says Lodge. “Company revenues have grown by about 75 percent, thanks to our very robust sales team. Our customer base has responded well. We have gone from an earlier figure of about $26 million. This year, we are looking at the $47 million range.”

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