The questions are simple. The answers, however, are far more complex.
How does a Canadian machine tool builder grow and prosper in Canada today?
How do you export the majority of your products when faced with the rapid increase in the value of the Canadian dollar, increasing costs and increasing global competition?
Peterborough, Ont.'s Quickmill Inc., is one Canadian company that has been able to navigate the complex world of machine tool manufacturing in today's global market place with considerable success.
The company was started 22 years ago by Vice President of Technology, David Piggott, by specializing in designing and developing software for machine shops.
Adapting to Challenges
Over the last three years, the net revenue from each export sales in US dollars has eroded. At the same time, other foreign currencies have yet to increase by the same amount. This means that some international competitors are enjoying a relative currency advantage when compared to their Canadian counterparts.
These are the challenges that Canadian manufacturers from coast to coast have been most concerned about as a result of the increase in the value of the Canadian dollar. Adding to this challenge is the increasing costs for steel, components, and energy.
So, how did Quickmill adapt to these challenges?
According to Quickmill's president Joseph Lipsett, there has been no quick and easy answer, but a solution based on a broad, multi-dimensional approach to customer service, quality, exceptional value, and market development.
"While the US market is still the company's primary target, it was becoming more of a challenge each time the Canadian dollar went up," he explained.
Quickmill broadened its targets to other international markets in order to promote growth and maintain margins. A recent initiative involves staffing with nationals from within international target markets. Knowledge and awareness of specific local markets outside the US are proving to be the key in international growth.
"In order to be successful in the international market you must understand and adapt to that market, not just use the Canadain yardstick," said Lawrie Lipsett, Director of International Sales. "Our success is based on supplying the value, service, and engineering needed for the local market that a competitor does not often recognize."
By leveraging R&D as well as strategic partnerships, Quickmill not only broadened the geography they served but also their product line and markets.
New Technology is Key
By continually advancing their spindle and software technology, Qucikmill has successfully moved into the aerospace market, with new machines for the processing of large aluminum parts for space and aircraft applications.
Their economical, large-area gantry machining center is ideally suited to large aluminum part processing. Quickmill also recently announced a completely new line of bridge-style (moving table) machining centers to complement and expand on their line of gantry machines. These new product offerings are made offshore to Quickmill specifications.
"In addition to providing a lower price entry point, the structure and design provide a broader application profile for mold, die, and automotive part processing," said Joseph Lipsett. "The new bridge mill line also provides an outstanding value proposition for the job shop market."
Leveraging their long tradition of engineering excellence, Quickmill can offer its customers significant value through 'turnkey specials' and creative integration and machine configuration.
"A prime example is the creation of a new machine to specifically process fabricated beam structures for a large bridge builder in South America," explained Lawrie Lipsett. "The system design was completed in close cooperation with the end-user."
This unique machine features both horizontal and vertical spindles equipped with an electronic probe and software. The machine is 25 feet wide and 75 feet long. By using this type of system, the bridge builder avoids assembly on-site for fit, thus providing exceptional value.
Also, on many occasions, the company will develop special tooling, fixtures, rotators, loading systems and unique software routines for customers.
Customer Service Excellence
Quickmill believes that exceptional customer service cannot be underestimated in today's market.
"It is the great differential," said Director of Service, Peter Ernst. "The consistent, daily delivery of excellent customer service is fundamental to our corporate mission. Over the past 20-plus years, exceptional customer service has been a 'top of mind' core value at Quickmill.
Quality products and exceptional service are really the foundation of the company. When you factor in the added value of application training, process engineering and a full suite of professional product modules it results in a key differentiator in the market.
There's nothing better than a happy customer," said Ernst. "One real key to our future is to further expand and develop our customer service offerings. Exceptional customer service to ensure that our customers are successful in mandatory."
Costs are not going down but successful companies will find ways to drive them down.
"We also have a unique opportunity to bring the best components and products to our customers around the world," said Joseph Lipsett. "Applying our engineering knowledge along with the best available components and products from other world markets means that we can significantly improve the value for our customers."
One key element will be effectively engineering costs out of the system and process. By packaging technology, service, education, and program delivery more effectively Quickmill plans to deliver a more cost-effective solution to the end-user.
Effective sourcing from lower-cost markets through a network of international suppliers will also strategically support this cost improvement goal.
"We have the staffing and experience to deliver on this important element of our plan," he said.
Where does the company go from here?
Everyone at Quickmill believes that this is just the beginning.
"The dollar isn't going to drop, costs are not going down and competition is not going away. In addition to continuing our commitment to R&D, engineered specials, product expansion, and international marketing, Quickmill is committed to finding more innovative ways to deliver incredible value to our customers and continue to grow," he added.
This cover story from Canadian Industrial Machinery magazine, October 2006