Investing in Ceramics: Machining for the Future
Four years ago, Manufacturing Technology Inc. (MTI), Ventura, Calif., seemed poised for enormous success. Founded by Michael I. Cromer in 1979, the supplier of high-performance, ultra-precision machine systems for slicing, slotting, dicing, grinding and lapping operations had grown into a $50 million company with 285 employees. Cromer was certain that the company had the potential to reach $100-200 million in sales—but he also believed that to achieve those goals, the company would need more support than he could provide. In June 1999, he sold the majority of his shares in MTI to a high-tech investment group experienced in building organizations with tremendous growth capability. Although he remained a member of the company’s board of directors, he was eager to let the new owners work their magic.
Over the next several years, however, MTI’s sales dropped more than 80%. Cromer watched in dismay as the company quickly became a shadow of its former self. “The new management team was too focused on making MTI a public company and took its sights off the daily operation. Additionally, the economic downturn began about a year and a half after the acquisition, and we lost our leverage with the bank due to the buyout. Those three situations made it hard for MTI to remain successful,” explains Cromer.
By early 2002, the company had shrunk to $6-8 million in sales and 60 employees. Determined not to let MTI go bankrupt, Cromer began negotiating to buy back the company. On September 30, 2002, Cromer officially returned as MTI’s president and CEO with a renewed vision for the company’s future success.
“I really believe in the company and employees. The level of our technology and our slicing, dicing and machining capabilities are not surpassed by any other company worldwide. I am confident that if we can weather the storm with the economy, MTI can be rebuilt into a successful organization,” Cromer says.
Developing New Technologies
According to Cromer, one of MTI’s key strengths is its ability to tailor its products to the needs of its customers. “Our number one goal is to recognize what our customers need and try to provide that to them,” Cromer explains. “We make every effort to find out what type of options or capabilities they would like to see on our machine tools, and then we develop those options accordingly.”A number of new technologies have resulted from these efforts. For instance, based on customer feedback, MTI recently developed an on-machine truing system that can automatically true the diamond wheel during the machining process. Since the operator doesn’t have to turn the machine off for truing, manufacturers can achieve greater efficiency, better quality cuts and higher throughput in their cutting operations. The company also developed a diamond wheel breakage detector that can identify breakage or out-of-balance conditions, preventing parts from being chipped and damaged during the machining process. Other innovations include automated handling systems for both loading and unloading the machines, and new rotary tables that feature higher accuracy and faster rotational speeds.
“We’re always in an ongoing R&D process—especially in our abrasives and diamond wheels, where we’re on the ‘cutting edge’ of technology,” Cromer says. “We offer sintered, electroplated diamond and resinoid products, often with customized diamond shapes/sizes, fillers, grit sizes, bond hardnesses, and other characteristics to ensure optimal cutting performance in a given application. Some companies might want high throughput and they’re not as concerned about chippage, while other companies might be extremely concerned about chippage because of the brittleness of their material. We can customize abrasives to these specific requirements.”
According to Cromer, however, it’s MTI’s ability to provide a complete package of products and services that really sets the company apart. “We provide the engineering, the tooling, the consumables engineering (diamond wheels, etc.) and then the machine itself. It’s the whole package. Our customers can come here and know that they have a turnkey process,” he says.
Reaching out to Customers
For companies that need access to precise slicing, slotting, dicing, grinding or lapping operations but aren’t ready to invest in new equipment, MTI also provides a contract manufacturing service. “We operate out of a 120,000-square-foot, fully air-conditioned, temperature-controlled building, and our manufacturing floor is full of our own slicing and dicing equipment, so we can handle just about any size job. We also have a tremendous amount of expansion capability—for an extremely large job, we can easily take machines out of inventory and put them on line for manufacturing,” Cromer says.
However, MTI is focused on more than just meeting companies’ machining needs in the short term. It’s also prepared to continue supporting its customers in other capacities once the economy recovers. “When our contract manufacturing customers are ready to move into their own manufacturing capabilities in their own facilities, we can support them in their manufacturing endeavors by providing the equipment, tooling and consumables they need for a successful operation,” Cromer says.
Achieving Mutual Profitability
Over MTI’s 24-year history, the company has provided machine systems, tooling and machining services for a wide range of aerospace, computer, semiconductor, pharmaceutical and general industry applications, including magnetic recording heads, integrated circuit (IC) packaging, package singulation, rare earth magnets, ceramic components and wear parts, optical glass, dental products, fiber optics, cutting tool inserts and ceramic knives. With potential for future growth in these areas, Cromer is confident that MTI will again reach—and even surpass—its 1999 sales levels. But his ultimate goal isn’t just to improve MTI’s business—it’s to improve the business of the companies MTI serves.
“MTI’s mission is to provide our customers full system solutions that optimize their production efficiencies, throughput and profitability. There’s only one reason for anybody to do business with MTI, and that is if we can help them operate more profitably,” Cromer says.