It's the same the world over

Three successful British laser sheet-metal cutting shops, although similar in scope, exhibit subtle differences

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Th 110953
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Through the offices of the UK Association of Industrial Laser Users Job Shop Committee I had the good fortune to visit three successful laser job shops located in the "Heart of England."These shops, arranged in a neat triangle just northeast of Birmingham as shown, are headquartered in lovely rolling-hill countryside, which, not too long ago, was part of Britain's mighty industrial engine. Today, driven by a diverse light-manufacturing industry sector, it is in the process of recovering from decades of economic downturn. The point I've made in the past, that laser-cutting shops around the world are pretty much the same, is true, but this occasion allowed me to see subtle differences between these three shops.

All three companies started as laser shops at least 20 years ago. That is, their only business was laser cutting, primarily of metals, a technology that got its start in the UK with the development of gas-assisted laser cutting of mild steel. Their current existence and state of success is a testament to the astuteness of their management and ownership.

Black Country

David Lindsey, founder and managing director of Laser Process Ltd. (Cannock, Staffordshire), started his professional career as an architectural estimator, moved into industrial cleaners and, while attending a trade show in 1989 saw his first laser cutter, prompting him to convince an investor to back a laser cutting shop. On the day I visited, Laser Process was in the third week of moving into a new, purpose-built, 15,000-ft2 building about a mile from its original home. It is a handsome building, with a water feature at the front door below a laser-cut stainless-steel balcony, located in a brownfield that was composed of tailings from the many coalmines that gave this locale the "black country" nickname.

Three Trumpf laser-cutting systems were in place, a Model 2530, the first twin-head Nd:YAG cutter (HSL 2502), and a new, 5-kW Model 3050. Two remaining units, both 2530s, were finishing up jobs in the old plant prior to moving. If you get the picture that Lindsey is sold on Trumpf, you're right.

With an annual turnover around $5 million, Laser Process runs 24/5, serving a total customer base of about 4000, with an active list of 200 companies providing orders in quantities of one to tens of thousands. Customers range from fabricating shops to large OEMs such as JGB, a tractor manufacturer. Lindsey prefers to hold his largest customer to about 8% of annual sales so that the company has freedom of independence.

A staff of 24 people keep orders flowing though the laser cutting machines on a three-shift-per-day schedule. Only recently has Lindsey employed a full-time sales person, preferring to enjoy word-of-mouth advertising to keep his shop running at capacity. A sign of increasing competition, however, is the recent advertisements the company has begun running.

Job estimating is done by 11/2 people, with quotes being sent by fax, as the UK is slow to adapt to e-mail quoting. An in-house-developed order-processing program tracks orders and controls production. Lindsey tried a commercial program, which, although good, just wasn't tailored to his needs, and also provided him with too much unnecessary information. This more modest in-house program neatly tracks orders that range from a few parts to thousands.

A large stock of sheet metal keeps orders flowing, although metal deliveries are received every day. Forklift trucks move all metal because Lindsey thinks an overhead crane wouldn't work with his shop floor layout.

Mild steel is the dominant metal being cut, although the new Trumpf 3050, with a 5-kW CO2 laser, is attracting more customers with stainless-steel orders, in thicknesses up to 15 mm.

With ample floor space, Lindsey plans to add more laser-cutting capacity in the near future, leaning toward tube-cutting capability. He does not have visions of running lights-out. In fact, he is very negative about the economics of this mode of operation, saying that cut part retrieval is the main sticking point with him. Laser Process has shown a profit almost every year since it was founded and, as a member of a five-shop consortium could, if necessary, handle overcapacity from the other shops.

Even more competition from stock holding companies (steel service centers with laser capability) has not caused him to drop his current £110-£120 per hour cutting charge. This rate, on the whole, is sufficient to show a monthly profit, the way Lindsey prefers to measure success, even though he does not use profit per job as a strict measure of performance.

Among the daily problems of running a successful shop, Lindsey has added the move and all the problems this brings. While I was there, a part of the new telephone system went down, drawing his attention and several cell phone calls for assistance.

Robin Hood Territory

In 1993, John Powell wrote the first practical book on laser cutting. He has a PhD in physics, but you'd never know it, because he runs a very successful laser job shop in Nottingham, where he is a hands-on guy, immersed in his customers cutting applications. He, and two partners, started the company, Laser Expertise, Ltd., 17 years ago with two used lasers—one of them mounted on an old two-axis Vero motion system that, ironically, had been sold off by the owner of the third shop we visited. More on this later.

As a scientist, a title he drops casually when explaining laser-processing phenomena, Powell perhaps has more interest in the technical aspects of his business, referring most of the business discussion to a partner. This is subtly conveyed to the public arriving at his 10,000-ft2 facility where the sign reads "laser cutting and consultancy."

In the early days at Laser Expertise, a major portion of the job-shop work entailed nonmetal processing, because the company only operated low-power CO2 lasers. In fact, Powell used this experience to write many first-of papers on this subject, as well as incorporating them into the aforementioned book on laser cutting.

Over the years, as laser power capacity increased, Powell installed leading-edge laser-cutting equipment. Today the company operates four laser cutters, three of them from Bystronic and one an old system, built in-house, which is used for prototype work.

Laser Expertise maintains a customer base of 2000 companies, with about 600 of these active over the course of a year. This leads to a plenitude of small-quantity orders, which, on the day I visited, was evident as the current order rack held job tickets predominately calling for cutting times of less than three hours. Confirming this, the shop floor was covered with skids holding small stacks of variously shaped cut parts, mainly in mild steel, awaiting shipment. Crossing the floor required carefully treading one's way through the skids, which were scattered like jigsaw puzzle pieces. It's not pretty and definitely not high tech, but it seems to work.

The company's quarters are a rabbit warren of work halls, offices, and other rooms, lending credence to the company's 17 years of growth. There is little room for expansion. A sister company, with fabrication, bending, and welding capabilities, occupies about a third of the facility, but is now being integrated into Laser Expertise. One joint job, notable from the number of cut-part skids on the floor, was a laser-cut stainless-steel oval mirror frame with two welded hangers, waiting to be shipped out to have a flange shape pressed in.

Laser Expertise has a rudimentary, simple-but-effective, in-house-developed production control software program. Powell impishly points out, while perusing the job rack with tickets manually moving left to right, that this is the real production control, and "it works."

The company's annual turnover is in the $5 million range, done with 50 employees, about one-third of which work in the fab shop. Times are pretty good in the job-shop business as the year comes to a close, so Laser Expertise has been able to hold its hourly cutting rate charge to £120 per hour.

Most of the cutting work is in mild steel, with stainless-steel representing about 10% of the cutting volume. The company won't turn away any cutting job, so nonmetals also help to keep them cutting 24/6. Yet no single customer represents more than 4% of sales.

For the future, the company will add new, higher-power laser cutters, replacing the old as laser power continues to ramp up. Powell says it's all about power, the more you have the more you can cut at an incrementally small investment increase. And as he says, contemplating retirement in the future, investors look at new equipment when they are considering a company purchase.

Powell juggles a lot of company duties. While being guided, by him, through the shop's maze, his attention was diverted by a demand to get some heat into the adjacent company's space. "Just another day in the office," he grimaced.

England's Heart

Dennis Kent, managing director of Carlton Laser Services (C.L.S.), and this writer share a common heritage, laser cutting. He started this Leicester-based company 25 years ago with a Ferranti MF-400, the original 450-W CO2 laser for metal cutting. He bought serial number 001 and mounted it on a Vero X/Y motion system (the one Powell now runs at Laser Expertise). And, in 1972, I was running Ferranti serial number 004 here in the U.S.A.

C.L.S. started life as a laser cutting shop and through the years has morphed into a single-source shop offering CNC punching, fabrication, finishing and quality control, in addition to running two Bystronic laser cutters. What really sets C.L.S. apart from its competitors is that it is the only known UK shop offering "lights out" cutting services. A Bystronic Bystore sheet metal storage tower, with automatic loading, feeds sheet to the newest Bystronic laser cutter. And on the opposite side is a Pullmax turret punch that can also be fed automatically from the tower.

The only thing lacking is an automatic cut-part retrieval capability, soon to be implemented. So Kent runs counter to prevailing UK opinion that lights out is not economically viable option. It seems a major cause for this pessimism was the recent failure of a large West Midlands lights out operation that had received heavy promotion before failing.

Like Laser Expertise, C.L.S. has another company, Peachmay Sheet Metal Ltd. that provides fabrication and finishing services, which is now being blended into C.L.S. Both of these companies realize that service diversification is a key to holding off competition. The day I visited, C.L.S. was feeling the impact of the sudden death of the vice president of Peachmay, which cast a pall over the two companies. This caused Kent to be in a highly reflective mood, as the weight of running the combined companies was just beginning to be realized.

Nevertheless, Kent sees combining the two companies as a must to offer customers more service. The company maintains a 2000 customer base, with about 400 active at any one time. A typical job moving through both companies was an order for stainless-steel automatic coin-changing machines, which are laser cut, formed, and welded. With 55 people C.L.S. turns over about $6 million per year from a 17,000-ft2 facility. Future expansion will include an automatic parts-retrieval systems and a higher-power laser cutter.

C.L.S. may well be the oldest laser cutting company in the UK, and perhaps in the world. As a testament to astute management and adherence to quality control procedures, it recently installed a Virtek part profiler, which has proved so successful it is now selling time on it to competitors.

C.L.S. employs three female sales persons who, when trained, Kent says became top performers. Along with one inside female sales person they generate the quotes that keep the company running 24/5. A Radan software system, developed in Australia, controls order and production flow, also producing the management information that Kent finds so necessary.

Commonalities

After visiting the three shops, certain common attributes are obvious, in no specific order. All the shops mostly cut mild steel, with stainless representing about 15%–20% of cutting output. The shops process orders from small quantities, less than 50 parts, to annual orders running into the tens of thousands. These orders emanate from customers located within a 50-mile radius of each shop, although orders from all over Britain are now more common. The shops maintain a total customer base of 2000–4000, and active customers number from 250 to 600. To prevent dependence on one customer each does not allow an individual customer to represent more than 4%–8% of sales. Generally the shops estimate cutting at about £110–£120 (about $165–$180) per hour.

These shops have been in business for more than 10 years, and each is prepared to expand its services to meet new customer needs. To accomplish this they have increased their sales activity and added state-of-the- art equipment to facilitate fast processing and quick order turnaround time. All run at least 24/5 on multiple laser cutters. Each shop prides itself on being customer friendly. This shows, as all the shops have been profitable. And they all average about $5 million–$6 million per year.

The differences are minor. Mainly in the way orders are processed electronically and how production is controlled. Also, only one places emphasis on commercial management control software for cost tracking. Only one shop runs lights out, the other two are adamantly opposed to doing so.

Even though the shops are profitable and successful, the founders and owners are deeply involved, hands-on managers. This is illustrated by the extracurricular activity they each were experiencing when I visited.

On the whole I found these shops to be representative of other UK shops. I was fortunate to take part in a job-shop seminar, where I met owners of at least 18 other shops from all over the UK. With few exceptions the observations I made at these three shops were quite similar to those I gleaned from discussions with the others.

Currently the laser job shop cutting business is strong in the UK, even though increasing competition is putting the squeeze on margins, a fact of life in shops in other industrialized locales. Through their membership in the AILU, UK shops have an opportunity to discuss technology, markets, and general business activity, in an open and public forum. Germany has a similar organization. It's too bad the USA hasn't followed suit.

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