Quality control key to cracking into aerospace industry

By Alex Gary

BusinessRockford.com

When Patrick Bye was looking to buy a company two years ago, he was drawn to Energy Dynamics Inc. because of its 27-year track record. It is also in an industry — hydraulics — that has a solid future.

The company, which employs 26 workers on two shifts, is a contract machining company that makes components for hydraulics systems used in earth moving equipment, at airports and to build bridges.

Bye, though, looked to the skies.

He decided to make components for aerospace suppliers. Even in a sagging economy, the growing need for airplanes in developing countries means the long-term growth potential for the major airplane makers — Boeing, Airbus and Bombardier — and the companies that supply them is unlimited.

And many of his potential customers, like Hamilton Sundstrand, Woodward Governor, GE Aerospace, are major local employers.

Bye and his administrative team researched several aerospace suppliers and joined the Supplier Excellence Alliance, a nonprofit program based in Irvine, Calif., funded by aerospace heavyweights such as Lockheed Martin, Cessna Aircraft Co. and Honeywell Aerospace. The SEA’s mission is to improve the supply chain performance by identifying and helping suppliers become more efficient — lean — manufacturers.

“Lean manufacturing has been our major focus on since I got here,” Bye said. The goal is to battle the two big evils of manufacturing — inventory and scrap.

“We focus on ‘order to cash,’” Bye said. “The old system of running large batches on orders and then storing the parts in your building until the next order may seem more efficient, but you can’t pay the electric bill with inventory. You can’t buy new equipment with inventory.”

Instead, the company focuses on building only what the customer needs, but that means turning the order around as quickly as possible. Bye said they’ve reduced the time of order to payment on some of its product lines from 200 days to 35.

That means cutting down on inefficient processes. Energy Dynamics reorganized its shop floor into manufacturing cells, with laptop computers at each cell so operators can track their quality control. The company has a weekly meeting to go over the results and make sure there is continual improvement.

The numbers also go to the SEA, which tracks the progress and processes.

“It’s like golf. If you can keep most of your shots on the fairway, then you are going to shoot a good score,” Bye said. “It’s when your shots start straying into the rough that you have trouble. If you are not controlling the process, then you are creating scrap, and that’s wasted money and time on the machines. It’s a double evil.”

Energy Dynamics, where workers earn from $10 an hour to the mid-$20s with medical benefits, profit-sharing and a 401(k) program, is awaiting final certification from the SEA.

But the company already is benefiting from just going through the process. It’s been visited by several aerospace suppliers and placed bids with three. If it lands any of the three, Bye said it will quadruple its annual $5 million revenue.

“What’s going on in the economy is very serious, yes. But it’s a moment in time,” Bye said. “The economy will revive at some point and we are positioning ourselves quite well for when it does.”

Assistant Business Editor Alex Gary may be reached at agary@rrstar.com or at 815-987-1339.