Issue Mar Apr 14
Two of the latest trends in manufacturing to which Chandler Industries has responded are regionalization and risk mitigation. OEMs are doing business with component manufacturers that are located near their production facilities and which – in the event of a natural disaster – can manufacture in multiple locations.
“Time-to-market, pricing, quality – all that comes into play, but the new items OEMs are talking about is regionalization and risk mitigation,” Vice President of Marketing and Sales Matt Mountain reports. “When you take a look at the precision-machining industry itself, about 90-plus percent of companies that play in this field are small, family owned operations with one facility.”
Chandler Industries has four manufacturing locations in Minnesota and one each in Changzhou, China, and Chihuahua, Mexico. “We are probably 10 or 15 times bigger than the average machining company,” President Don Alter adds. “We’re in a class by ourselves. What we do is offer the opportunity for our customers to put a large diversity of work into one company with multiple sites and multiple capabilities and only have one supplier on their list. We’re doing very well with their strategy of supplier regionalization.” Alter says Chandler Industries is well-aligned with current market trends and needs.
The company established its location in China in 2008. “We started supplying U.S. customers that have sites in Asia, but now we are starting to do work with Chinese national companies and even a large Japanese customer,” Alter points out.
“Both international facilities are not to take jobs away from Minnesota or U.S. locations,” Mountain emphasizes. “They service existing customers that have facilities in those regions and grow organically through sales to those regions by themselves.”
With its multiple locations, Chandler Industries can handle surges in demand, such as when a company requires two or three times as many products as it normally does. “We can tool up another site to produce parts for them,” Mountain notes. “It’s all about flexibility.”
Chandler Industries is a contract manufacturer of precision-machined components, sub-assemblies and complete assemblies that is ISO 9001: 2008, AS 9100 and ISO 13485-certified. Among the industries it serves are aerospace, medical, cryogenics, process control and the automotive aftermarket. Approximately half of Chandler’s business is international and 80 percent is on an annual contract basis.
“That provides stability for us to deploy and acquire capital equipment,” Alter notes. “If you have a contract for three years, we can buy equipment knowing it is going to be utilized for three years vs. on an order-to-order basis.”
The components and subassemblies that Chandler Industries manufactures for its customers are complex – some of them may consist of 150 different parts. Among the processes that are performed at Chandler’s manufacturing facilities are precision-machining and fabrication; laser, spot and tungsten inert gas welding; wire and plunge electric discharge machining; and assembly. Its six locations encompass a total of 229,000 square feet.
The company has a total of 58 CNC lathes/turning machining centers and 54 CNC milling machining centers among all its manufacturing plants. “We’re highly automated,” Alter stresses. “We have 11 active robots within our Montevideo, Minn., location, which is unique to our industry in the volumes that we manufacture. We implemented a lot of lean manufacturing techniques. So we’re very good with reduced lead-times to our customers – for 75 to 80 percent of our business, the time from order to shipping takes five days.”
Chandler Industries uses just-in-time or vendor-managed inventory. “We need to have enough inventory on-hand to supply our customers with 100 percent on-time delivery, but also keep the amount extremely low based on mutual agreement,” Alter says. “We adjust inventory as a true partnership with our customers – to ensure we understand their needs best – so we can keep our inventories low but supply them with the materials as needed. We’re very lean with our raw material inventory, as well. We can order and get most materials in 24 hours or less.”
The company can work with a variety of metals. “Other machining houses mostly work with aluminum,” Alter says. “Our specialty and our niche are in the high-nickel alloys. We do a lot of work with different types of stainless steel, titaniums, Inconel and Hastelloy metals. We have a strong supply base locally. Just like all people today, we’re pushing back on our suppliers to hold that raw material in stock at their facility so they can meet our requirements with 24-hour turnaround. Most of our perishable tooling shop supplies are on a vending machine system that is automated and reordered to our suppliers as items are dispatched. So, that helps in the shop supply area.”
Founded in 1962 by Chandler Olson, Chandler Industries is owned by a private equity firm and 22 employee investors who are mainly the company’s key managers. “I would outline our advantages as a multi-location manufacturer with a true international footprint that works with very difficult, high-nickel alloys with very tight tolerances that other folks can’t or don’t want to do,” Mountain summarizes. “We’re an extremely lean organization and we’re highly automated – which gives us a lot of strategic advantages – with excellent engineering support for our customers.”