Becoming A Better Supplier
Ingadale Industries is a precision machine shop capable of working to tolerances of just 1/1,000th of an inch or less but also offers a diverse range of services including welding, spot-welding and assembly, as well as finishing services such as passivation and painting. It was founded 51 years ago by Bill Mosgol and Rudy Hoevelmann and now employs about 80 people.
Michael Porter said that supply chain management strategy defines the connection and combination of activities and functions throughout the value chain in order to fulfill the business value proposal to customers in the marketplace.
It could be argued that the most important elements of supply chain management relate to timing and cost. Ingadale Industries began to move towards control of these elements at a time when procurement was just beginning to evolve into supply chain management.
A few decades into Ingadale’s history the shop began to get jobs that were more complex such as those from Canadian Marconi that was doing some defence contracting. Co-Founder and General Manager, Rudy Hoevelmann began examining invoices looking for ways to cut costs to be more competitive. He also found work sent outside for painting and passivating was incurring additional costs as well as time. It meant that a job requiring these services took some weeks whereas if they were done inhouse, the work could be completed in a couple of days. Some parts for orders had to be welded and so Hoevelmann sought certifications for steel and then aluminum welding rather than sending the work out. More services began to be provided in-house and Ingadale was reducing lead time (time from order to delivery). They were also more competitive in quoting on jobs because of the cost savings afforded by doing more work in-house. So, painting and passivating was added to the list of services.
A by-product of adding services was that down time in the with painting, passivating and chem film treatment could be reduced by offering these services to other shops.
More Defence Work
Ingadale began to get more complex defence work such as antennas and military boxes. Parts for jobs that Ingadale was working on for Indal Technologies were being sent back to Indal and then out to other suppliers for more work and then back again to Ingadale. It was to both Indal’s and Ingadale’s advantage to cut down on this back-and-forth process and Ingadale stepped up to the plate. Over the last year Ingadale has added four new CNC machines capable of operations that previously would have had to be sent outside to complete.
Ingadale has multiple sources for their basic raw materials—steel and aluminum and almost all materials are procured domestically. Some services are not practical to bring in-house since they are very specialized. Plating and heat-treating is now only available from just handful of highly skilled providers. This can be a vulnerability in the supply chain not just for Ingadale but for other companies in need of this work. Both Bombardier and Boeing recently established manufacturing facilities in Mexico but had trouble sourcing heat treating and plating. In the end they had to send parts back across the border for these processes incurring more time than had been experienced when their facilities were located in Canada and the United States. Ingadale has multiple suppliers of these services and they are all domestic.
Diversity of Services
One good example of the diversity of work Ingadale can now perform is the Dead Load Test Vehicle (DLTV) made for Indal which simulates a helicopter, undergoing several manoeuvres under the control of the ASIST aircraft handling system. This entire complex system was completed by Ingadale entirely in-house with the exception of the hydraulic components and the military spec. tires (the same tires used by the helicopters).
Ingadale General Manager, Greg Holdsworth said, “We didn’t think of what we were doing as supply chain management and we didn’t get there by formulating a policy. We did it by looking at separate elements of improving quality, cutting costs and reducing time to completion.”
Human Resources As Part Of The Supply Chain
One aspect of the supply chain not often considered is the human resource and yet lack of skilled workers is probably the greatest vulnerability for any precision machine shop. Most of Ingadale’s work force is highly skilled and more than half have been with the organization for more than 25 years. Recruitment has been mainly word-of-mouth to date but a succession plan has been formulated for the most senior positions and a more organized approach to recruitment is in the works. Ingadale’s website went live just over a year ago and there is a careers section.
Indal Technologies is an internationally recognized supplier of engineered systems and products for advanced naval, marine and aerospace applications. They are one of Ingadale’s biggest customer and have been for some time. Indal has approximately 500 suppliers, a large number for a manufacturing facility of their size. This is because of the amount of custom work they do. Some of Ingadale’s work for Indal falls into the category of Critical Safety Items which have the most stringent requirements. With Ingadale adding more services the result has been lower cost, reduced lead time and better quality control for both Ingadale and Indal. This has further cemented the relationship between the two companies. Indal’s, Jeff Mulligan, Manager Purchasing says that Ingadale is one of just a few top-level suppliers considered as partners. This means cultivating a long-term relationship and viewing Ingadale’s supply chain as a critical component of their supply chain.