Speed is everything
A partner in the commercial vehicle, passenger car, mining and construction, agriculture, and general engineering industries, LEAX Group is a fast growing, privately-owned, business group with its origin in Köping, Sweden, that is continuing to strive for innovation
LEAX Group began with Lennart Berggren and Axel Seger exactly 40 years ago, when one worked for Grimaldi and the other for Sandvik. Neither of them envisioned that 40 years later, their company would become a global enterprise, with nearly 1500 employees, including Joint Ventures, and an international footprint. Speaking with Tony Nicol, the Group President and CEO, we learn more about how LEAX Group is taking the manufacturing business by storm. “I have been with the business since January 2021. My background was as an entrepreneur back in Canada, where I’m from. Then I went to work for a global Tier 1 leader in the commercial vehicle segment, Meritor, for ten years before deciding to go back into the entrepreneurial private sector, which is how I came to LEAX Group,” he shares.
Now, based in Köping, the company has big plans to take its manufacturing capabilities to the next level, as we learn from Tony. “Our vision for the company is to migrate from contract manufacturing, to making more complex pieces with greater engineering content. As a very competent contract manufacturer, what differentiates LEAX Group is the fact that we have a full-service process that includes soft or green machining, heat treatment, and hard machining, with heat treatment serving as part of our speciality. When it comes to contract manufacturing, we tell our customers to give us their most difficult pieces. We really are great at complex, highly precise, tight tolerance machined components, which is a fantastic differentiator for us.”
The journey that is taking the company from contract manufacturing to produce more engineering-oriented content will allow it to develop its own products, which will in turn enable LEAX Group to better fulfil the needs of its customers. “We are in the propeller shaft manufacturing and assembly business, and we have recently developed and commercialized our own line of propeller shafts. We are also engaged with our customers to help them optimize their own designs. Considering this, rather than working with a blueprint, we are actually helping them design the tolerances and specifications for their products through engineering services, and offering more value through that process. This engagement gives us the opportunity to refine the product by being involved earlier in the development process. In order to enable that, we established a gear and precision component technology team, and we have invested heavily here in Köping in our capabilities to fulfil that,” he expresses.
Recent developments have found the company setting up a Centre of Excellence in the Swedish town to help execute its vision. Investments in rapid prototyping and tooling innovation are leading to significant breakthroughs for the group. “Although we are not selling tooling as a business, we see that through our technology team, we can optimise the tools that we use in our production by having in-house competence; some of the facts and figures are impressive. For example, one tool that we were buying on the open market, we were getting 50 pieces per machine set up. However, by having our own development, we can now produce nearly 600 pieces per set up, which is just an enormous improvement. The entire company is thrilled by these results and our production sites are lining up to be the next internal customer.
“When I saw the industrial level that LEAX Group had accomplished to make what we call silent gears for a fully electric Swedish vehicle manufacturer, I immediately knew I had come to work with a pioneer. When there is no internal combustion engine in a vehicle, everything else becomes potentially the noisiest part of the car. This means that the gearbox in the electric vehicle must be optimized to reduce noise. Working with the customer on the gear design and production process resulted in a quieter gearbox, which is fantastic. We call these products ‘silent gears’, and we have taken the technology into mass production where we are making 15,000 gears a week in that facility.”
Speed and agility
Tied closely to its impressive manufacturing capability is a team of experts running a tight ship to ensure customers receive high quality products. “The reason I joined the company was its culture. The roots of the company are still family-oriented, and the second generation in the company are Axel’s two sons and Lennard’s two sons. There is a culture of mutual respect and trust, and a mentality that is geared towards continually improving in every aspect,” Tony shares, adding that one of the mantras that the company closely abides by is that ‘the day we cease getting better is the day we stop being good’. Subsequently, LEAX Group constantly strives to innovate its operations to achieve new, cutting edge results.
“Honestly, the team here continues to astonish me, there’s this conscious decision to go into a higher engineering sphere because we have new customers, new industries, people we have never talked to before who are looking into this little project we have going on. We really are customer-centric, we are very fast and it’s creating the production opportunities for us that will continue to see us expanding our operations,” he continues.
Our conversation begins to draw to a close as Tony reflects on the last two years, and the lessons that LEAX Group will be taking moving forward. “The reality is that there is no static state anymore. In commercial vehicles, for example, when you were able to time your watch on the cycles of the commercial vehicle market, every seven years there would be quite a low point and then it would build back up to a peak. But you cannot do that anymore, and the world changes faster today than it did ten years ago. I have spent almost 30 years in this business, and, even in my own lifetime, I have seen incredible changes, not just in business but socially, and it’s interesting for me that the speed of things happening can have these giant impacts on business and our operations.
“We must continue to refine our speed, agility and flexibility to adapt to these changes seamlessly so I guess the lesson is speed and agility are becoming more necessary, and, more importantly, we have to be able to do this while maintaining our quality promises to our clients.” Tony highlights that in the commercial vehicle sector, for example, it would take a major OE business many years to develop a new truck. However, with fierce competition with new technologies and features, that timeline is no longer acceptable. “They must reduce the development time, which means we need to be able to be fast and match their needs to accelerate the product’s time to market.
“It is always assumed in manufacturing that quality and delivery are a given and that is not necessarily the case anymore. It takes a lot of systems to ensure that a product is of the highest quality and with speed becoming such a relevant metric, our systems must evolve alongside our business model. Just saying we will be faster won’t be enough.”
Now, with the 40th anniversary celebration underway, Tony would like to share his congratulations with the business, and trusts that the managerial team will continue to lead with support and determination for the next 40 years and beyond. “We are really focused on the human aspect of the 40 years, our core values and what makes this global enterprise continue to operate like a family company. We announced some time in November 2021 that we were contemplating taking the company public through an IPO with the proceeds funding the future growth of our business, all the while maintaining the spirit that got us here.”
For Tony, it is important that LEAX Group remains committed to delivering 100 percent on time with a zero rate of defects. “For a solid foundation we must remain committed to excellence in all of our Key performance indicators and focus on our Objectives and key results. To accelerate our journey, our strategy to move from contract manufacturing to higher engineering content and consciously diversifying our end markets have already started paying dividends. Because we are being driven by the pace of change it sort of speaks to how we are handling the challenges that we’re currently facing. Everything we are doing, be it managing through supply chain disruptions, Covid-19 or rapid inflation we are pushing ourselves to either react quickly with regards to our product development or improve the efficiency and flexibility of our operations to ensure that we have the best equipment, people and systems to get the job done; speed is just everything.”
With all this in mind, Tony wants to see LEAX Group double in size over the next eight-to-ten years. “To enhance this growth, we want a balanced portfolio of customers with 50 percent of revenue in the commercial vehicle space, and 50 percent of our revenue in other end markets, and we would like to see 50 percent of our revenue from contract manufacturing and 50 percent from engineered products; that’s our vision for the company. We will achieve this through organic growth, and I believe we will augment that with strategic M&A activity as well. It’s an exciting time, and I look forward to seeing LEAX Group continually push its boundaries to reach its full potential,” he concludes.
Services: Vehicle machining