Congratulations

2015 Top Shops!

Modern Machine Shops Top Shops benchmarking survey included an Honors
Program to highlight a few of the companies that ranked in the upper-echelon
benchmarking group. Vetted by Derek Korn, our senior editor, the four successful
shops shown above represent a quality cross section of leading U.S. machining
businesses relative to size, location and industries served.

From the Modern Machine Shop Top Shops Sponsors:

mmsonline.com

Top Shops
Traits, Metrics

2015 TOP SHOPS DIGITAL EDITION

________________________________________________

VIDEO

CONTENTS
OCTOBER 2015

VOLUME 88A, NO. 5

MMSONLINE.COM

FEATURES
6
14

Best Practices of Top U.S. Shops

Benchmarking Side Benefit: Gaining a Customer

16

COMPANY PROFILES

18

16

Applied Engineering, Yankton, South Dakota

18

Chapter 2, Lake Mills, Wisconsin

20

LeanWerks, Ogden, Utah

22

Protomatic, Dexter, Michigan

COMMENTARY
4

One-Off

ONLINE RESOURCES
20

Whats New on MMS Online

ABOUT THE COVER

22

This complex engine block, machined and photographed by CNC Industries in Fort Wayne,
Indiana, is representative of the challenging work performed by leading U.S. machine shops.
The traits and metrics such shops share are highlighted in results from our fifth annual Top
Shops benchmarking survey, which you can read about in the story starting on page 6.
mmsonline.com/topshops October 2015 MMS 1

MMSONLINE.COM

This month on mmsonline.com

TOP SHOPS ZONE UPDATED

This year represents the fifth edition of our Top

Shops benchmarking survey. Responses for all
41 questions posed in this years survey are available in a free Executive Summary that can be
accessed at our updated Top Shops Zone at
mmsonline.com/topshops. That Zone also includes
articles and data from past surveys.
TOP SHOPS LINKEDIN GROUP

additivemanufacturing.media

As a complement to our annual benchmarking

survey, weve also set up an exclusive Top Shops
LinkedIn group to enable you to share ideas, offer
opinions and pose questions to other group
members on a range of topics. The group is open
only to decision-makers in machining facilities,
including shop owners, managers, engineers,
programmers and other senior personnel. Some
of the threads have spurred multiple comments
and interesting exchanges. Email me at dkorn@
mmsonline.com if youd like to join.
RE-INTRODUCING ADDITIVE MANUFACTURING

October 2015

What We Learned by

Vol. 4 No. 4

I N A S S O C I AT I O N W I T H

Growing a Part
A property of Gardner Business Media

MMS Extra is Modern Machine Shops

free email newsletter. To subscribe,
visit mmsonline.com/extra.

2 MMS October 2015 mmsonline.com/topshops

Since 2012, Gardner Business Media (publisher

of Modern Machine Shop) has also produced the
Additive Manufacturing supplement. This digestsized magazine has defined itself as a source of
information on industrial additive manufacturing,
with a specific focus on the application of AM
technologies to produce functional prototypes
and real-world, end-use parts. Weve recently
expanded our coverage of AM with a revamped
website at additivemanufacturing.media, a monthly
e-newsletter, and a new, full-sized magazine.

Top Shops
Zone
Find Solutions, Strategies and Suppliers by visiting
mmsonline.com/topshops
ARTICLES and SURVEY DATA
Best Practices of Top U.S. Shops
Read the 2015 Top Shops Benchmarking
Executive Summary
A Side Beneft to Benchmarking:
Gaining a Customer

TOP SHOPS ZONE SPONSORS

Visit mmsonline.com/topshops

ONE-OFF

Commentary

Software: The One Big

Thing for Many Surveyed
Participants in our 2015 Top Shops benchmarking survey offer feedback to our
open-ended silver bullet question included in this years edition.
The article starting on page 6 highlights data
for the primary survey questions we posed in our
fifth annual Top Shops benchmarking survey. We
ask many of these same questions each year.
However, our surveys have also included a few
open-ended questions that we commonly change
up. Unlike multiple-choice or closed questions,
open-ended questions enable respondents to
answer in their own way and in their own words.
This year, we asked what we call our silver
bullet question, one that weve included in a
couple of previous surveys. Specifically, we asked:
What one new technology, machining strategy
or strategic initiative has been most influential in
contributing to the overall success of your business in recent years and why?

DEREK KORN
SENIOR EDITOR
DKORN@MMSONLINE.COM

Email to tell me what youve

recently implemented to
improve your processes.

Many respondents noted that software has

played a big role in their recent success. Some
pointed to more capable CAM packages offering
capabilities such as adaptive tool paths and trochoidal milling, which have extended tool life,
reduced cycle times and enabled them to realize
more of their equipments potential.
However, many more said implementing enterprise resource planning (ERP) software has had

4 MMS October 2015 mmsonline.com/topshops

the biggest effect on their operation. This software

offers potential advantages with respect to costing, estimating, scheduling and job tracking. Having
fully interactive access to process control software
enables supervisors to stay close to activities on
the shop floor so they can quickly access pertinent
information and make changes on the spot.
Here are a few of their comments:
ERP has greatly streamlined data collection
and increased productivity by 120 percent.
Having access to our ERP software via an
iPad enables schedulers and expediters to help
make fast decisions on the shop floor.
Implementing ERP reveals actual costs and
revenue where they happen.
That third comment reminds me of an experience that a shop owner once relayed to me. After
running his shop for many years without ERP, he
finally gave the software a go starting with the
most commonly repeating jobs in his shop. After
entering all information for two jobs with seemingly
slim profit margins into the ERP software, the
owner ultimately found that those jobs were actually his two biggest moneymakers. Conversely,
a few other jobs that he believed were highly
lucrative were found to be unprofitable when lot
sizes were smaller than a certain amount.
It often takes time to set up and implement
ERP software, and versions vary in terms of their
sophistication. However, as some Top Shops
survey participants point out, there are clear
advantages to having a more concrete understanding of whats actually happening on the shop
floor, and this software tool seems as if it can help
in that regard.

market
expansion

business
intelligence

FEATURE

Part machined by and photo courtesy of CNC Industries, Fort Wayne, Indiana.

6 MMS October 2015 mmsonline.com/topshops

FEATURE

Best Practices of

Top U.S. Shops

Results from our ffth annual Top Shops benchmarking survey reveal operational metrics, strategies and tools common to leading machine shops here
in the States.
BY DEREK KORN

his year marks the fifth edition of our annual

Top Shops benchmarking sur vey, which
enables participants to compare their machining
and business metrics and strategies with leading
U.S. shops. Since 2011, approximately 1,700 shop
owners or managers have participated in the
survey, with 277 taking part in this years edition.
Those participants received three reports that
evaluated survey responses based on type of
shop (job shop, contract shop or captive operation), number of parts produced in 2014 and
number of employees in 2014.
This article highlights key findings from this
years survey, which is based on shops 2014
performance. The survey is divided into four main
categories: machining equipment, shopfloor
practic e s, bu s in e s s strate gi e s a nd hu ma n
resources. Here, I analyze key data and interesting findings in these areas, comparing responses
from the Top Shops benchmarking group to other
shops that participated in the survey. The benchmarking group represents the top 20 percent of
shops as determined by totaling the points
assigned to certain business- and technologyrelated survey questions.
When citing numeric survey responses in this

article, youll see that I primarily use the median

value instead of the average. Thats because unlike
an average, the median is not adversely influenced
by overly high or low values (although data
scrubbing is performed to remove obvious low
or high outliers in each data set).
Responses for all 41 survey questions are
available in a free Executive Summary that can
be accessed at our Top Shops Zone at mmsonline.
com/topshops. This Zone also includes articles
and information from our previous four benchmarking surveys and profiles of all past Honors
Program winners. Previous Executive Summaries
are available there, too.
PARTICIPANT BREAKDOWN

Each year that weve offered this sur vey, the

percentages of shop types have been similar. This
year, 46 percent are job shops (independent shops
that typically perform short-run and other nonrepeating work), 38 percent are contract shops
(independent shops that primarily have contracts
for repeating part numbers), and 16 percent are
captive shops that are part of a larger manufacturing company. The top industries served by this
years Top Shops were aerospace (46 percent),
mmsonline.com/topshops October 2015 MMS 7

FEATURE

TOP SHOPS HONORS PROGRAM

Our annual Top Shops benchmarking survey
includes an Honors Program to highlight select
shops in the top 20-percent benchmarking
group that performed well in a particular survey
category. These shops were vetted by Modern

Machine Shop Senior Editor Derek Korn and

will be profiled in upcoming issues of the magazine. Congratulations to the following four
Honors Program winners for the 2015 Top Shops
benchmarking survey:

2015 Award Winners

Machining Technology Applied EngineeringYankton, South Dakota
Shopfloor Practices

ProtomaticDexter, Michigan

Business Strategies

Chapter 2Lake Mills, Wisconsin

Human Resources

LeanwerksOgden, Utah

machinery/equipment manufacturing (44 percent),

and medical and military (both at 29 percent).
Other leading markets for Top Shops include
automotive, oil/gas, and hydraulic/mechanical
component manufacturing.
Here is how these Top Shops compare to the
others that participated in the survey in the four
survey categories:
MACHINING TECHNOLOGY:
INCREASED USE OF TURN-MILLS

For the most part, there isnt that big of a difference in the type of equipment used by Top Shops
and other shops. However, a much higher percentage of Top Shops use turn-mill multitasking
machines at nearly 54 percent compared to 27
percent for other shops. These machines offer
the chance to produce parts complete to minimize
work in process (WIP), setups and the number of
times a part is touched during production.

TABLE 1
USE OF FOUR-/FIVE-AXIS MACHINES
Top
Shops

Other
Shops

Four-axis positioning

56%

24%

Four-axis contouring

59%

37%

Five-axis positioning

44%

18%

Five-axis contouring

44%

22%

8 MMS October 2015 mmsonline.com/topshops

Top Shops have historically been more apt to

use HMCs than other shops. This year, those
percentages are 50 and 42 percent, respectively.
HMCs are pricier than VMCs, but horizontals with
dual-pallet design enable parts to be set up on
one pallet, possibly on a tombstone, while machining is being performed on the other pallet, maximizing spindle uptime. They also lend themselves
to pallet pool setups such as flexible manufacturing systems (FMS), which enable long stretches
of unattended operation. This year, nearly 12
percent of Top Shops have FMS systems compared
to only 6 percent of other shops.
The Top Shops also tend to use more advanced
machining strategies. One example is highlighted
in Table 1, which shows that a higher percentage
of those shops are using four- and five-a xis
machining, either for full contouring or positioning
operations. Although contouring operations tend
to be more exotic than positioning, there is tremendous value in rotating and locking a part into
an angled position and essentially performing a
three-axis operation with the part oriented in that
way. In many cases, this provides access to as
many as five sides of a part to minimize setups
and help ensure feature-to-feature accuracy. The
best shops are also able to recognize that even
relatively simple prismatic parts can oftentimes
be prime candidates for four- and five-axis positioning operations.
Although just more than one-third of all surveyed
shops perform hard milling, a greater number of
Top Shops perform hard turning (48 compared

FEATURE

to 35 percent). Hard turning can minimize or in

some cases eliminate secondary grinding operations. A higher percentage of Top Shops perform
high-speed machining (HSM), too, at 57 compared
to 45 percent. HSM enables them to maximize
material removal rates by taking lighter, faster cuts
versus slower hogging operations. That said, an
effective HSM process requires a number of elements to work in concert with each other, including the machine, the machines CNC (having
sufficient look-ahead capabilities), tooling, fixturing and CAM software.
Many more Top Shops have machines with
through-tool coolant delivery (81 compared to 49
percent) as well as high-pressure coolant systems.
In fact, the percentage of leading shops using the
latter has increased every year since we started
the survey (see the Trends Spotlight sidebar on
page 10). By directing the coolant stream more
precisely and with the optimum amount of pressure, dramatically more heat can be removed from
the cut zone. This degree of cooling also enables
the cutting tool to remove greater amounts of
metal, thus improving machine tool cycle times.
High-pressure coolant also helps break up chips
and remove them from the cutting area more
efficiently, which means the cutting tool spends
less time re-cutting chips.
The software used by Top Shops demonstrate
the extent to which these shops want to have a
firm handle on all aspects of the work that flows
through their facility as well as the complexity of
the work they perform. For instance, 67 percent
of Top Shops use enterprise resource planning
(ERP) software compared to only 45 percent of
other shops. This shop management software
enables more effective costing and estimating
for more accurate predicting of how much it will
truly cost a shop to produce a particular part. It
also manages scheduling, which has to do with
assigning the various operations of jobs to the
shops various machines in an order that makes
the most sense, and enables tracking each step
in a parts progress through the shop, so a parts
current status can be immediately known. These
shops are also more apt to use toolpath simulation software (54 compared to 43 percent) due
to the complexity of their parts and the more
challenging machining operations they are more

likely to perform on equipment such as five-axis

machines and turn-mills.
SHOPFLOOR PRACTICES:
INTEGRATING UNATTENDED PROCESSES

There are a few key shopfloor metrics that demonstrate the extent to which leading shops have
established an ef fective overall approach to
machining. One is spindle utilization. Top Shops
report a median spindle utilization of 75 percent
compared to 65 percent for other shops. Overall
equipment effectiveness (OEE) is another telling
metric. OEE is the product of the percentages of
three equipment utilization indicators: machine
availability, optimal rate that machines operate
and quality yield. It indicates how close a given
machining process is to achieving its full potential.
A world-class OEE value is said to be 85 percent
or higher. This year, Top Shops report a median
OEE of 73 percent compared to 65 percent for
other shops. While not all shops track this metric,
more might start to, given the advancements in
sensor and equipment monitoring technologies
and application of concepts such as the Internet
of Things and MTConnect (the Web-based manufacturing connectivity standard for gathering
and sharing data from machine tools and other
manufacturing equipment).
The most surprising finding from this years
survey relates to setup time, defined as the time
between the completion of the last good piece of
the current run and the first good piece of the
subsequent run. This years survey is the first in

TABLE 2COMMON LEAN

MANUFACTURING INITIATIVES
Top
Shops

Other
Shops

Continuous
improvement program

62%

46%

5S workplace
organization

60%

34%

Cellular manufacturing

33%

18%

Value stream mapping

33%

18%

Kaizen events

25%

15%

mmsonline.com/topshops October 2015 MMS 9

FEATURE

which the benchmarking group has a longer

median setup time than the other shops (90 minutes compared to 68 minutes). It could be that
the Top Shops are machining more complex
components with higher profit margins that simply
take longer to set up compared to more straight-

forward parts. That said, a higher percentage of

Top Shops use quick-change workholding devices
(56 compared to 38 percent) to enable fast setups
and fixturing to enable multiple workpieces to
be machined in a single cycle (81 compared to
54 percent).

SPOTLIGHTING TOP SHOPS TRENDS

Because we now have five years of benchmarking survey data to review, we can identify trending tools and practices that Top Shops have been

increasingly using over recent years. Here are

four Top Shops trends spotted in each of the
survey categories.

Machining Technology:
High-Pressure Coolant Use

Shopfloor Practices:
Use of Machine-Tending Robots

100%

100%

80%

80%

60%

60%

40%

20%

33.3%

10.8%

15%

40.4%
22.6%

40%

20%

0%

22.2%

17.5%

16.1%

2011

2012

10.8%

0%
2010

2011

2012

2013

2014

2010

Business Strategies:
Social Media for Sales/Marketing

Human Resources:
Annual Review/Pay-Raise Programs

100%

100%

80%

80%

60%

60%

40%

20%

24.5%

33.3%

10.8%

15%

40.4%
22.6%

2013

85%

87.1%

88.9%

2011

2012

2013

2014

90.2%

75.7%

40%

20%

0%

0%
2010

2011

2012

2013

2014

10 MMS October 2015 mmsonline.com/topshops

2010

2014

FEATURE

As the chart on the previous page illustrates,

the Top Shops use of machine-tending robots
has increased in each year weve offered the
survey, with nearly one-quarter of the 2015 Top
Shops reporting theyve integrated this type of
automation into their processes compared to 11
percent in 2011. Given the recent advancements
in collaborative robot technology, next years
survey will ask about shops use of those devices,
many of which have force-sensing capability to
detect when contact has been made with a
person and automatically stop arm motion.
These shops use other forms of automation
to realize stretches of unat tended machine
operation, too. This includes the aforementioned
FMS, as well as turning center bar feeds (44
compared to 34 percent) and bar pullers (37
compared to 21 percent). Bar pullers are particularly interesting, because they provide a
low-cost means to enable turning centers to run
unattended. They install in a machines turret
station and mechanically grip the end of a bar
with the turrets Z-axis motion bringing the bar
out of the spindle for the next operation.
Top Shops also tend to be more focused on
lean manufacturing and have cultures of continuous improvement. Related to the latter, 62
percent of these shops have developed a formal
continuous improvement program compared to
46 percent of other shops. Common lean manufacturing tools Top Shops are more apt to use
include 5S workplace organization (60 compared
to 34 percent), cellular manufacturing (33 compared to 18 percent), value stream mapping (33
compared to 18 percent) and kaizen events (25
compared to 15 percent). In addition, 62 percent
of Top Shops have earned quality certifications,
such as ISO, AS and NADCAP, compared to only
39 percent of other shops. Sometimes this is
demanded by the customer, but in other cases
it is a result of a shops own efforts to ensure
quality, safety and efficiency.
BUSINESS STRATEGIES: HIGHER CAPITAL
EQUIPMENT INVESTMENT

There are a few metrics that highlight the extent

to which this years Top Shops are more effective
overall businesses compared to the other surveyed shops. A couple relate to sales produced

TABLE 3KEY BUSINESS METRICS

(MEDIAN VALUES)
Top
Shops

Other
Shops

Business
growth rate

17.5%

7%

Profit margin

13.5%

8%

Sales per employee $185,000

$112,334

Sales per
CNC machine

$123,864

$277,000

by a shops two primar y assets. The median

sales per CNC machine for Top Shops is $277,000
compared to $123,900 for other shops (average
values are $763,900 and $516,900, respectively).
The median sales per employee is $185,000 for
To p S h o p s a n d $112,3 0 0 f o r ot h e r s h o p s
(average values are $212,300 and $115,900,
respectively).
Of course, the biggest indicator of business
health is profit margin. Top Shops report a median
profit margin of 13.5 percent compared to 8
percent for other shops. Top Shops are growing
at a faster pace, too. The median growth rate
from 2013 to 2014 for Top Shops was 17.5 percent
compared to 7 percent for other shops.
The Top Shops also invest more in capital
equipment as a percentage of gross sales at 9.5
percent compared to 3.5 percent. In 2014, the
median amount Top Shops spent on capital
equipment was $190,000 and the average was
more than $745,000. For other shops, those
values were approximately $48,000 and $449,000,
respectively. Therefore, it isnt surprising that
the average age of machine tools used by Top
Shops is only 7 years versus 9 years for other
shops, as leading shops either add new equipment to increase capacit y or replace older
machines with fresh models.
Leading shops are also investing in their
business in other ways. For example, 46 percent
of Top Shops offer design for manufacturability
(DFM) engineering ser vices to customers to
refine product designs to simplify machining and
lower production costs compared to 27 percent
of other shops. The key for leveraging this is to
mmsonline.com/topshops October 2015 MMS 11

FEATURE

grow a relationship with the customer so shops

can provide DFM input early in the product
development cycle. Similarly, Top Shops are
more likely to per form protot yping work for
their customers. Nearly 20 percent of Top Shops
have additive manufacturing equipment for
rapid prototyping, compared to 13 percent of
other shops.
Every Top Shops benchmarking survey has
asked about the use of social media (Facebook,
Twitter, LinkedIn) as a sales/marketing tool. The
benchmarking group has consistently been more
apt to use social media than the other surveyed
shops, and that percentage has increased by
nearly four times since our first sur vey, from
approximately 11 percent to more than 40 percent
(see graph on page 10).
HUMAN RESOURCES: USING BENEFITS TO
ATTRACT/RETAIN EMPLOYEES

Each survey weve conducted has revealed that

there isnt much difference in the amount that Top
Shops and other shops pay their employees. This
year, the median hourly wage for CAM programmers is $25 and for setup personnel is $20 for
both groups of companies, while Top Shops pay
their machine operators $16 per hour compared
to $17 per hour for the other shops.
TABLE 4ANNUAL AMOUNT OF
FORMAL TRAINING PROVIDED
Top
Shops

Other
Shops

Fewer than 8 hours

40%

47%

8 to 20 hours

42%

39%

21 to 40 hours

12%

8%

More than 40 hours

6%

6%

However, as in past surveys, this years Top

Shops cite other ways to reward and retain their
good employees. For example, a higher percentage of Top Shops offer annual review and payraise programs (90 compared to 48 percent),
paid medical benefits (75 compared to 43 percent)
and bonus plans (71 compared to 30 percent).
This years survey also asked about the age
and experience of shopfloor employees. The
12 MMS October 2015 mmsonline.com/topshops

median age is essentially the same for Top Shops

and other shops (39 and 40 years, respectively),
but Top Shops are succeeding with personnel
having less experience on the shop floor. The
median number of years of experience for shopfloor employees at Top Shops is 10 years compared to 15 years for other shops. However, Top
Shops are more willing to invest in growing the
skills of their employees. More than half of the
Top Shops provide education reimbursements
for classes that are relevant to their employees
career compared to only 30 percent of other
shops. Plus, 45 percent of Top Shops have a
formal training program compared to only 18
percent of other shops, and theyre also are more
likely to provide supervisor development programs
(35 compared to 17 percent) to cultivate a new
crop of potential managers and leaders.
JOIN OUR TOP SHOPS LINKEDIN GROUP

Our goal in offering our annual Top Shops benchmarking survey is to cull and present the type of
information that enables shops to see how they
rank against others, determine what their deficiencies might possibly be and then decide what
actions to take to become better overall machining businesses. As a complement to this survey,
weve also set up an exclusive Top Shops LinkedIn group to enable you to share ideas, offer
opinions and pose questions to other group
members on a range of topics. I say exclusive
because it is open only to decision-makers in
machining facilities, including shop owners,
managers, engineers, programmers and other
senior personnel.
Weve limited the group to only these people
(as well our magazines editors, of course) because
we believe this exclusivity is part of what makes
this LinkedIn group different and helpful. The
group now has nearly 1,800 members sharing
ideas, offering opinions and posing questions on
a ra n g e of to p i c s. Yo ull s e e th at so m e of
the threads have spurred multiple comments
and interesting exchanges. Email me at
dkorn@mmsonline.com if youd like to join, and
Ill promptly send an invite your way. In addition,
keep your eye out for next years online Top Shops
benchmarking survey, which goes live in January
and runs through February.

Apply Now

Deadline: December 7, 2015

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FEATURE

Benchmarking Side Beneft:

Gaining a Customer
An aerospace company that read about a 2013 Top Shops Honors Program
winner received eventually became a new customer for that shop.
BY DEREK KORN

Matthew Wardle, president of JD Machine, understands the importance of

comparing his shops performance against others via benchmarking and
considering the business- and technology-related strategies other successful
companies are leveraging.

14 MMS October 2015 mmsonline.com/topshops

FEATURE

e launched our Top Shops benchmarking

survey in 2011 so shops could see how
they stack up against industry leaders vis--vis
an elite benchmarking group we establish from
survey responses.
Another element of Top Shops is an Honors
Program that highlights successful participating
companies in each of the surveys four primary
sections: machining technology, shopfloor practices, business strategy and human resources.
Honors Program winners are profiled in the pages
of Modern Machine Shop, on our website and in
Digital Editions such as this one. Ogden, Utahs

JD Machine was a winner in 2013, and Matthew

Wardle, company president, explains that the
resulting exposure helped net a nice contract
from a new customer.
Later that year, Mr. Wardle received an unex-

pected call from a supply chain manager with

an aerospace company that was looking to
expand its supplier base to support a sizeable,
new program. The manager suspected his companys current parts suppliers lacked the capacity and capability to support such a big program.
Therefore, the manager sought to identify key
traits that potential new parts suppliers for this
program should have, including sufficient size,
machining capabilities, quality systems, sustained
investment in technology, the ability to measure
performance and so on. In fact, Mr. Wardle says
the manager used my 2013 Top Shops benchmarking results article to help refine the list of
key characteristics. Because JD Machine was
mentioned in that article, the manager reached
out to the shop.
After completing questionnaires and hosting
site-evaluation visits from a few representatives
of the aerospace company, JD Machine was
awarded a multi-year contract to produce 13
different part numbers. The contract also spurred
the shop to add capacity with a high-torque VMC
to machine some of the programs challenging
titanium components.
Im not sure how many other former Honors
Program winners have similar tales to tell, but I
do know many have used the exposure as a sales
and marketing tool. Of course, the information
provided to all survey participants is valuable in
and of itself, Mr. Wardle says. Some of the survey
information he and his management team closely
review include profit margin, sales per employee,
spindle utilization and the lean manufacturing
practices leading shops apply. They use the
benchmarking data as par t of their strategic
planning and SWOT (strengths, weaknesses,
opportunities and threats) analysis as they set
their annual goals.
The following pages profile the Honors Program
winners for each of the four main sections of the
2015 survey. Consider participating in our sixth
annual Top Shops benchmarking survey (which
runs from January through February 2016) for
your chance to be profiled like these shops, and
perhaps realize a side bonus like JD Machine.
mmsonline.com/topshops October 2015 MMS 15

BENCHMARKING YOUR MACHINING BUSINESS

Top Shops
Applied Engineering
2008 East Highway 50
Yankton, South Dakota
Phone: 605-665-4425
Fax: 605-665-1479
appliedeng.com

COMPANY DESCRIPTION
WEBSITE

appliedeng.com

END MARKETS SERVED

Aerospace
Archery
Defense

Medical
Military

WORKPIECE MATERIALS
COMMONLY MACHINED

Aluminum alloys
Stainless steel

16 MMS October 2015 mmsonline.com/topshops

Applied Engineering, which specializes in machining precision aluminum components, is this years
Top Shops benchmarking Honors Program winner
in the machining technology category. Led by Tom
Bohnet, company president, the shop with more
than 90,000-square-foot of floor space uses a
variety of multiple-machine flexible manufacturing
systems (FMS) as well as single machines fitted
with pallet pools for around-the-clock machining.
Toms son and company project manager, Brad,
recently spearheaded a transition to an improved
tool-crib system, which has resulted in a 62 percent
reduction in scrap and an 18 percent reduction in
tool costs during a yearlong period. The new
system improves process consistency in three
ways: ensuring every new tool is identical to the
one it replaced, calling attention to potential problems and limiting tool changes.
Brad says the shop has also reviewed results
from previous Top Shops surveys and turned them
into specific objectives, including finalizing a 6S
program, conducting more customer tours, and
increasing book-to-quote ratio, sales dollars per
employee and R&D investment.

BENCHMARKING YOUR MACHINING BUSINESS

Applied Engineerings
core machining equipment
consists of 36 HMCs and
two five-axis machining
centers integrated into
multi-pallet FMSs. The
multi-pallet systems with
dedicated fixtures support
jobs of 1 to 10,000 pieces
with no additional set-up
required after the first
piece is completed. They
support 1,600 machining fixtures, creating
extensive part number
capacity and the ability to
run lights-out.

The shop worked to modify the default data input fields for its tool vending system to collect the
type of information necessary to provide deeper insight into tool performance for more effective
process planning and troubleshooting.

Toolholders are now tracked throughout the shop via passive RFID tags.
This system provides traceability and
automatic purchase order generation for
toolholders and facilitates a toolholder
recertification and recycling program
that dramatically reduced the need to
order new toolholders.

mmsonline.com/topshops MMS October 2015 17

BENCHMARKING YOUR MACHINING BUSINESS

Top Shops
Chapter 2
305 South C.P. Avenue
Lake Mills, WI 53551
Phone: 920-648-8125
Fax: 920-648-8298
chap2.com

COMPANY DESCRIPTION
Chapter 2 Incorporated is this years Top Shops
benchmarking Honors Program winner in the
business strategies category. Original owners
George and Marilyn Lohman opened the company
in 1973 as a tool and die shop. This was the basis
of its operations until 1989 when they sold
t h e c o m p a n y to c u r r e n t o w n e r s T i m a n d
Tracy Johnston.

WEBSITE

chap2.com

END MARKETS SERVED

Lawn and garden

Medical equipment
Automotive
Military

Construction
Agriculture
Food packaging
Renewable energy

WORKPIECE MATERIALS
COMMONLY MACHINED

Aluminum
Cast iron
Copper
Steel

Plastic
Powder metal
Titanium
Zinc

18 MMS October 2015 mmsonline.com/topshops

After taking over thecompany operations, Mr.

and Mrs. Johnston added a new dimension to
Chapter 2s ser vices by of fering automation
machine design and build services. Here, the
company specialized in building automated
machines and equipment. This strategy of diversifying the business continued by adding capabilities for high-volume production, precision
machining, product assembly, fabrication and
painting. That said, the company still offers the
tool and die services it was founded upon, having
a full-service tool room with journeymen tool
makers creating jigs, fixtures, dies and molds.

BENCHMARKING YOUR MACHINING BUSINESS

This machining cell

at Chapter 2s
facility consists of
multiple turning centers
having Y-axis, livetooling capabilities to
perform multiple drilling
and tapping operations.
Additional operations
within the cell include
light assembly, key
cutting/broaching and
date code engraving.
There are also multiple
dedicated inspections to
verify the quality of a part
that requires machining
tolerances as tight as
0.0015.

The company machined and assembled the case and

components for this sod cutter gearbox. After manual
assembly, the gearbox was transported to its custom
painting facilities and painted to the clients specifications. Finally, the product was tested for functionality using a heavy-duty chop box/gearbox test stand.

Chapter 2s tool and die shop runs on a multi-shift

schedule producing a variety of products, such as
stamping, forming and shearing dies; checking,
welding and assembly fixtures; and PLC-controlled
and automated equipment.
mmsonline.com/topshops MMS October 2015 19

BENCHMARKING YOUR MACHINING BUSINESS

Top Shops
LeanWerks
2767 Industrial Drive
Ogden, Utah 84401
Phone: 801-621-2134
Fax: 801-689-1550
leanwerks.com

COMPANY DESCRIPTION

WEBSITE

leanwerks.com

END MARKETS SERVED

Aerospace
Medical

Automotive
Oil exploration

WORKPIECE MATERIALS
COMMONLY MACHINED

Aluminum alloys
Inconel
Steel alloys
Stainless steel

20 MMS October 2015 mmsonline.com/topshops

LeanWerks, led by Reid Leland, company founder

and president, is this years Top Shops benchmarking Honors Program winner for the human
resources category. One of the shops mottos is
Wehavebetter people becausewemakepeople
better, and it supports that notion in a few ways.
For example, LeanWerks offers motivated employees its proprietary Technical Excellence Training
(TExT) program, enabling them to achieve any
often levels of professional qualifications from
trainee to senior engineer.
In addition, the shop routinely invests in external
employee leadership training and human development. It enthusiastically endorses and uses an
open-book management (OBM) philosophy that
provides every employee insight into company
financials and key performance indicators. Plus,
shop principals are members of local college and
university advisory boards, giving them a voice to
influence curriculum that will qualify future machinists and engineers for the skills and knowledge its
advanced shop needs.

BENCHMARKING YOUR MACHINING BUSINESS

LeanWerks open-book
management (OBM)
approach consists of
three fundamental
elements: training,
feedback and profit
sharing.

Having AS9100C, ISO 9001:2008 and Directorate of

Defense Trade Controls (DDTC) registrations means
LeanWerks is production-ready to support customers
in multiple industries, including aerospace, defense,
fluid power, high-speed manufacturing and oil/gas.

LeanWerks creates parts for use in demanding

environments, including drilling, pumping, pressing,
high-speed automation and heavy loads. More than
a machine shop, the company applies lean manufacturing and engineering expertise to help make its
customers processes and products better.
mmsonline.com/topshops MMS October 2015 21

BENCHMARKING YOUR MACHINING BUSINESS

Top Shops
Protomatic
2125 Bishop Circle West
Dexter, Michigan 48130
Phone: 734-426-3655
Fax: 734-426-2725
protomatic.com

COMPANY DESCRIPTION
WEBSITE

protomatic.com

END MARKETS SERVED

Aerospace
Alternate energy
Automotive

Medical
Military

WORKPIECE MATERIALS
COMMONLY MACHINED

Aluminum alloys
Magnesium
Plastics
Refractory materials

Steel alloys
Stainless steel
Super alloys
Titanium

22 MMS October 2015 mmsonline.com/topshops

Protomatic is this years Top Shops

benchmarking Honors Program winner in the
shopfloor practices category. The company
primarily specializes in prototype and short-run
work for the aerospace and medical industries,
but it has developed machine-tending solutions
that combine affordability and flexibility to
enable it to apply automation in a high-mix/
low-volume manufacturing environment.
Protomatic was founded in 1971 by the late
Bill Wetzel. Mr. Wetzels son, Doug, is the
current managing director of the Dexter,
Michigan, company. The shops lighting and
climate-control capabilities in its 30,000square-foot facility have been designed to
provide the consistency required for the
precision machining the company performs.
Protomatic offers a free digital book providing
advice for choosing a prototype shop and a
blog with advice on various prototyping topics.

BENCHMARKING YOUR MACHINING BUSINESS

Protomatics medical
work focuses on
orthopedic, cardiovascular and related
components, and
devices such as this
knee impactor. The
company is registered
to both the general
ISO-9001:2008
standard and the
medical
ISO-13484:2033
standard.

Doug Wetzel, Protomatics managing director, says

robotic automation has become more affordable in
recent years, making the ROI for that equipment
much shorter. Robotic automation is also attractive
to counter the rising cost of labor and new-employee
development. In addition, fitting a machine with
a robot and enabling it to run 24/7 eliminates
problems, such as thermal drift, that are possible if
machines dont run continuously.

Protomatic offers machining capabilities such as

three- to five-axis CNC milling and two- to eight-axis
CNC turning, as well as laser marking, finishing and
other specialized processes.
mmsonline.com/topshops MMS October 2015 23

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