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January 08 91 More than six years ago, Hardinge Inc. began an internal lean journey, seeking ways to simplify, speed up and shorten the manufacturing and assembly process used to produce its family of turning, grinding, milling machines and workholding products sold to manufacturers around the world. As improvements began to materialize, it became clear that in order to maximize those gains, the supply chain would need to be improved as well. “We realized we had to optimize the supply end so the assembly team could realize the gains that the lean efforts have given it over the years,” said David Bassett, the global sourcing manager for the Elmira, New York machine tool division of Hardinge. At the same time, Hardinge came to believe that having a finely tuned and efficient global supply chain could become a powerful competitive weapon, particularly when combined with the improvements in both labor efficiency and the continuous improvements achieved through its lean manufacturing operation. And the company believes it is especially well positioned to take Hardinge Inc, a global supplier of metal cutting solutions, believes a tightly run global supply chain can be a powerful competitive weapon. Keith Regan learns how it’s using its worldwide footprint to make that idea a reality Hardinge Theglobal supplychain

92 Janurary 08 advantage of the globalization trend. In addition to its domestic plant, Hardinge— which traces its history back to 1890 when it fi rst began producing turning machines—operates manufacturing facilities in the UK, Switzerland, Taiwan and China to produce its family of turning, milling, grinding machines and workholding product. Hardinge customers include machine shops and manufacturers who use the tools to shape metal, composites and plastics into automotive parts, medical equipment and agricultural products out of metals, composites and plastics. While each plant specializes in making different products—the China plant services the China market only, for instance and most of the company’s high-end machines are built in North America—the overlap in supply chains creates abundant opportunities, says Bassett. Because each plant has a supply chain point person, Bassett can quickly get price quotes from around the world. At the same time, when the company can bundle together purchasing for several plants, it can often get more favorable pricing. “There’s a lot of savings to be made by optimizing the supply chain,” he adds. “You can chase the almighty labor dollar all you want but the real bang for your buck comes when you can leverage your supply chain against the competition.” A host of factors go into determining where to source supplies from and many of those considerations are a moving target, creating a dynamic supply chain situation. For instance, recent spikes in fuel costs mean how far an item must be transported can have a major impact on the true fi nal cost of that component. Likewise, the recent weakness of the US dollar has made it more costly to source supplies from domestic vendors; even tax and duty opportunities are taken into account. “For years, Brazil was one of most economical places to source castings, but because of the declining value of the dollar combined with transportation costs, it’s not as attractive today,” Bassett says. “Now we’ve got a foundry that supplies castings to us from Wisconsin. When you consider the total landed cost, they’re the cheapest in the world and they’re made in the United States. When you consider actual material costs, shipping costs, inventory carrying costs based on total lead-time, and the many soft costs associated with managing a supplier and factor all that in, the best vendor is right here in the US, only a 16-hour drive away.” Hardinge considers all those factors and others as part of a constant review of its vendor base. “We’re not necessarily setting out to pit suppliers against one another, but they are constantly being reviewed and evaluated,” Bassett declares. Another factor is where in the value chain a supplier rests. For instance, Hardinge has long sourced the CNC components for its more complex machines from GE Fanuc. “If you chose to, you could go down the path of spending tens of millions to build your own facility or you could go with the best in the industry, and they’re considered the best. That’s what the market drives us toward,” says Bassett. Fanuc also works with Hardinge on inventory control. Where the company used to buy all the components it might need based on forecasts, Fanuc now stores components at Hardinge’s facility but releases the inventory as it is needed. “They ship based on our forecasts but we don’t own it until we take it out of their cage.” Other key suppliers have also worked with Hardinge to deliver more components, as they are needed, enabling the company to reduce inventory and the footprint needed to assemble its products. For instance, Japan’s NSK, which supplies what Bassett calls “extremely high quality” spindle bearings used in the machine tools, has consistently worked on just-in-time deliveries and has developed a kanban system for some of the most heavily used parts, keeping them in stock domestically. NSK is also an example of a supplier that is available to work “You can chase the almighty labor dollar all you want but the real bang for your buck comes when you can leverage your supply chain against the competition” NSK has been a leader in the anti-friction bearings and linear technology sector for decades with much success in spindle bearings for machine tools. Machine spindles in machining centers, lathes and milling machines are key elements which determine the performance capabilities of the entire machine. NSK Robust Series technology delivers signifi cant advantages. Upgrade to NSK today! NSK