Don't let Leo Louis' mild manners fool you--he has the heart of a fighter. Since Leo and his brother, Cecil, bought the family business from their father in 1973, they've taken Louis Industries from a one-man blacksmith shop to a thoroughly modern service center and fabricator. The lasers and CNC press brakes humming all over the floor represent the brothers' forward thinking, in addition to their commitment to contest the offshoring and decline of skilled workers threatening every service center and fab shop in the country.
Louis Industries has, in fact, found a weapon to fight both of those battles: automation--and the more, the better. The company's latest capital equipment investments, twin 4,000-W LVD Axel lasers, testify to Leo Louis' belief that the way to beat China at its own game is to trim down, partner up and increase efficiency at every turn.
"We're trying to lean ourselves down, so we're trying to eliminate a number of steps," says Louis, who employs 30 people at his shop in Paynesville, Minn. "Any place that it looks like we can increase our efficiency, that's No. 1. We see that if we're able to increase our efficiency, we're able to bring in new accounts. That's the bonus. Then we have to look at automation so we can multitask and run two or three pieces of equipment at a time.
"We've basically done this without adding employees. One operator can run four machines," Louis notes. That's a whole lot of difference. Quality goes up, efficiency goes up and everything else goes with it."
Automation is your friend
There's a debate as to whether automation has decreased the need for skilled workers or a decrease in skilled workers has forced companies to automate.
It's a false debate. Overseas competition and the natural progression of technology have converged over the North American manufacturing industry to make automation both achievable and eminently necessary. The skilled worker shortage happens to make automating all the more attractive to small companies such as Louis Industries. What's more, "our customers are demanding it of us," Louis says. "We're lucky to have a customer base that's doing expansion, and we're expanding with them."
Eleven years ago, Louis Industries used no automated equipment. The company bought its first laser in 1995, a 1,000-W machine that it still uses for short-run jobs ill suited to the big boys across the floor. "It was the thing that was going to come," Louis says of the company's take on laser technology back then. "Where it was going to go, we didn't know. We went from no technology to a laser. We skipped everything in between."
Since then, the company has made a significant capital purchase every year, including two LVD PPEB press brakes in the past two. The shop's centerpiece of automation is an LVD Omega flexible fabrication and blanking center that comprises a 30-ton, 38-station turret punch press; dual sheet storage tower; right angle shear; separator; and stacker. "It really gives us the flexibility to increase our competitiveness," Louis says.
That flexibility is knitted together by the LVD Cadman software package that the business purchased almost three years ago, just as it was finalizing the purchase of its first PPEB press brake. "We put the new software program in as we bought the equipment so we could be ready for the next step," Louis says.
The Cadman package interacts with the two Axels, a 3,000-W Impuls laser with an 80-inch by 120-inch bed, the blanking center and the two press brakes and has helped Louis keep his programming staff to three employees--two full-time and one part-time. Besides making each individual machine easier to program, Louis says the ability to program many machines on one software platform has increased back-office productivity and was one reason he stuck with LVD for his latest equipment.
"Before we put the two Axel lasers in, we had one programmer who had a hard time keeping up with the programming of two lasers," Louis says. "With the Cadman program we put in, one programmer is able to program four lasers and have spare time. Our efficiency has picked up."
That increase has come at just the right time. Louis Industries endured flat years in 2001, 2002 and 2003 before doubling its business in 2004. The company grew another 30 percent last year and tried to focus on the half dozen or so markets it's strongest in, including recreational vehicles, construction and store fixtures. "We understand those industries fairly well, and they've been good to us," Louis says.
While the company"s business is split almost evenly between the service center side and its fabrication operation, Louis sees the future resting squarely on the fabrication side and the automation it can offer customers.
"If we could maintain it [the parity], that would be great, but the real increase is probably going to be in the automated equipment," Louis says. "We're just going to have to continue to do the automation to make it happen."
The company's decision to purchase the Axels, a direct reaction to the expansion of a key local customer, is a prime example. The fully automated Axels feature three sheet-loading stations and one unloading station apiece, giving them the material handling capacity to run all weekend, which the company has written straight into its business plan. Including lights-out time, adding the Axels boosted the shop's laser cutting capacity by 12,000 hours a year.
That added capacity gives the company the ability to take on new accounts. During MM's tour of the shop, Louis said the shop had taken an order requiring 400 hours of laser time the previous week, followed by another worth 125 hours on Monday of that week. Louis even has to outsource some of the work to some of his customers. "We were able to do that because we run weekends," Louis says of the new work, which left him overbooked for the month of December. "We're able to handle it because we're able to go lights out and work the weekends and have people come in and just change the bundles and clean up."
Using the buddy system
Perhaps more important than new accounts, expanding its offerings and capacity helps the company build and maintain the distinctive customer partnerships that keep it afloat.
The service center side notwithstanding, Louis Industries looks and operates much like many other metal shops: It processes cold-rolled, hot-rolled and pickled carbon steel, mostly from 18 gauge to 3/8 inch, as well as some galvanized, stainless and aluminum. The shop goes through three truckloads of material a day, about 120 tons, and processes about 30 million pounds of metal a year.
That's about where the similarities stop, though. Instead of battling against customers over price and quality, the company has chosen to do battle against the world alongside them. "Most of our customers have been with us, in some form, between 10 and 25 years," Louis says. "They have grown during that time, and we've grown with them. Most of our accounts are long-term accounts--we know where they are, and they know where we are.
"We've had to grow with them, or they aren't going to survive. It's the other way with some customers: We've shown them how they can do some things so we both can survive. So our not-so-sophisticated accounts have had to change along with us or neither of us would survive. We've got a strong supplier base and a strong customer base. If we don't have that strong base, we don't have anything."
During MM's visit, one Axel had a 60-hour job running on it, and the other had a 48-hour job running. The 1,000-W laser was cranking out parts, as was the Impuls. The idea is to "place the job on the machine that works the best," Louis says. "That makes it advantageous to us, and we've been pretty successful at it.
"I guess our customers come to us because we eliminate some of their hassles," he says. "That's what people are looking for: What do we do for them that they have a hard time doing?"
Rather than look enviously across the Pacific, Louis has traveled extensively across the Atlantic to see how the Old World is faring in the New World Order. "We can learn more from the Europeans: They have had to work with imports, they've had to work with tight spaces, they've had to work with high labor costs and all this over the years," he says. "If you really want to learn what's happening, you have to look at the Europeans and see how they're working with it and learn how they're competing with the rest of the world."
Taking the offense
As closely as he watches technology trends and foreign peers, Louis apparently couldn't care less about his domestic competitors. "I don't worry about the competition," he says. "They have to worry about me. They can spend their time on the defense.
"We're raising the bar on ourselves; and along with that, we're raising the bar on our customers," he says. "We share a lot of information with our customers. If they get stronger or get better, why should we worry about losing [them]? We're helping them out.
"We also work well with our suppliers. We take care of them, they take care of us; it's all partnership. If you don't work with partnerships, you're spending your time on the defense. It's easier to be on the offense." MM
By Lincoln Brunner, from the February 2006 issue of Modern Metals.