Issue Fall 12
After growing up in the family business, Jared Graening is now president of GMT Corp., a contract manufacturer based in Waverly, Iowa. As he and his sister, Vice President Darcy Graening Knights, took inventory of the company’s strengths and weaknesses, they realized GMT would need to diversify beyond the agricultural sector to compete in the modern-day marketplace.
“We are working to diversify,” Graening says. “We like our [agriculture] accounts, but ultimately we need to diversify.
Recently, GMT added 47,000 square feet of new manufacturing space in Waverly. Its manufacturing footprint now consists of 375,000 square feet across four facilities – three in Waverly and one in Nashua, Iowa. This recent expansion will allow GMT to focus its sales and marketing efforts on machining larger and more complex components for a more diverse set of industries. Target markets include heavy construction, mining and energy.
GMT was founded in 1973 by Larry and Jill Graening. Initial services were limited to the repair of industrial components. As the company grew it began to design and build metal stamping dies, weld tooling and custom equipment. Throughout the 1980 and ’90s, the company transformed itself into a reputable tool and die manufacturer. This division eventually was sold in 2003, allowing the company to operate as a contract manufacturer for production machining and fabrication services.
Today, GMT’s capabilities include machining and full-service steel fabrication. The company provides services to the agriculture, construction, defense, energy and airport ground support markets.
Graening himself has witnessed many of the iterations GMT has undergone throughout his 25 years with the company. He joined the family business while in college and has served in a variety of capacities, ranging from running machines on the manufacturing floor to purchasing, project management, scheduling and sales.
Flexibility is Key
Graening says no matter what the industry, GMT’s key to success is to remain flexible for its clients and to embrace change.
“We’re able to execute quickly on new opportunities,” he says.
In October 2011, one of GMT’s key customers approached the company about a machining opportunity on a family of parts. This opportunity required five additional horizontal machining centers to produce the annual volume.
GMT needed to be in serial production by March 2012. Given such a short lead time, the company’s initial response was to turn it down, primarily due to the capital investment and floor space requirements, not to mention the strain it would put on internal resources for process development.
It didn’t take long for Graening to realize that GMT was the preferred supplier for this project. Once GMT and the client were able to reach an agreement on the terms, an implementation timeline was developed. GMT was able to execute the stated quality, delivery and cost targets for the customer. Additionally, the collaboration between GMT’s internal resources from engineering, quality, materials and machine operators allowed the company to take ownership of the project and ensured that it was successful both at GMT and with the customer.
“Cross-functional teams are established early in process development,” Graening says. “This approach generates many different thoughts and ideas about machine placement, material flow and operator ergonomics. Our objective is to set up the operators for success at production start up. We are changing how we do things, installing more robust production systems and training our work force.”
Work force development will always be an important part of GMT’s success. Training programs provided by Hawkeye Community College, Iowa State University and the University of Northern Iowa provide GMT with a range of training opportunities, ranging from blueprint reading, interns and management development programs.
This initiative is of particular importance in the Waverly region because, according to Graening, the labor pool is particularly shallow in this part of the United States. To fill its staffing needs, GMT has resorted to hiring unskilled employees and offering in-house training.
Graening says the initiative – known as the “Quick Start Program” – sends new employees into a classroom for initial training before they are partnered with veteran machine operators on the manufacturing floor.
“The fact we are a family business and have been in business for 40 years means we’re in it for the long-term,” Graening says. “We’re constantly reinvesting in new equipment and facility upgrades.”
Construction on GMT’s new 47,000-square-foot facility was completed in June. The facility was designed for larger equipment than its existing facilities could handle. Graening says GMT has purchased and installed five 1250 horizontals, two 1600 horizontals, one 6-meter bridge mill and a 50.30.25 CMM. Lifting capacity is rated at 20 tons.
Currently, the facility is going through process development. In October 2012, it will have the initial phase completed. This site also has a rail spur under construction.
“We still have floor space to install seven more 1250 horizontals and two more 1600 horizontals,” Graening says. “For us to fully execute our diversification strategy, the building must be fully utilized. That process could take three to four years.
“Our challenge in the coming years will be to support both new and existing customers,” Graening adds. “The diversification at this new facility will provide a more stable base of business and allow our company to manage the changes in business cycles.”
GMT also boasts a full-service steel fabrication facility. This operation provides heavy steel fabrications to many of the same markets as the machining facility. However, the processes are distinctly different and much more involved. Process operations include plasma burning, secondary operations, welding, machining and painting. Components fabricated at this facility range from 500 to 50,000 pounds.
Lean and Mean
In the past two years, GMT has been very aggressive in implementing lean manufacturing. “We employ two lean engineers and recently had seven employees complete training in a lean certification program,” Graening says. In August, five additional employees will begin the process of becoming lean certified. This is an internal initiative that is having huge results, according to Graening.
“Our focus on continuous improvement has never been more important,” he says. “We are changing the way we do things inside our facilities. Cross-functional teams are working on multiple projects at any given time.
“Today, it’s commonplace to see teams of people working on current and future value-stream maps, standard work and daily management systems,” he adds. “Once we are able to get a repeatable process day in and out we will see our safety, quality and productivity improve.”