San Diego Business Journal Features QCMI Machining Business

San Diego Business Journal February 7, 2011
Machining Business Puts Quality Stamp on Its Work

MANUFACTURING: QCMI Begins Rehiring to Handle New, Larger Orders
Quality Controlled Manufacturing’s lean manufacturing practices have been recognized with a Supplier Gold designation from United Technologies Corp. for two consecutive years.
By Mike Allen

CEO: Bob Grande.
Revenue: Between $10 million and $11 million in 2010; estimated $14 million to $15 million in 2011.
No. of local employees: 80.
Investors: Privately held.
Headquarters: Santee.
Year founded: 1978.
Company description: Complex machining of components and assemblies mainly for defense, aerospace, and energy generation industries.

Quality is something Bob Grande takes seriously. His emphasis on making things the right way and not cutting corners is so essential, he put it at the very beginning of his business’s name: Quality Controlled Manufacturing Inc.

That relentless focus on quality was there from the outset when Grande began machining parts in his garage in 1978, and is still evident today in the 76,000-square-foot plant QCMI now occupies in Santee. Apparently, more customers are waking up to the fact that quality trumps all other factors when purchasing custom-made parts. During the past 15 months, the company had an uptick in orders, including four customers who returned after taking a mistaken detour to China.

“We’ve had four jobs that were transitioned from us to China a couple of years ago, and have recently come back to us,” Grande said.
In the Great Recession, as companies looked to cut costs and find inexpensive suppliers, they found out that “getting something a little cheaper, but not getting it right or not getting it on time cost you more money,” said Rick Urban, QCMI’s chief operating officer.

Managing Increased Volume
With a surge of new orders plus larger orders from existing customers, QCMI sales exceeded $10 million last year. This year it’s on track to surpass $14 million, Grande said.

To keep pace with the increased business, QCMI added about 25 new people to bring its total staff to 80 people, compared with 55 workers a year ago.

Among the jobs created in the past year are CNC (computer numerically controlled) machinists, quality control and clerical support staff. The biggest number, some 15 jobs, are the skilled machinists that run the computerized cutting, lathing and polishing equipment.

Grande said QCMI spends from $500,000 to $1 million on average each year, replacing older machines and getting new machines.
Business has been so good lately that he expects to add another 20 workers by year-end to bring the total to 100. The skilled manufacturing jobs pay in a range from $15 to the low $40s hourly, he said.

Things weren’t always so rosy. In the throes of the recession, as orders dwindled in 2009, QCMI had to lay off 16 employees but it could have been worse.

Lean Processes Implemented
Management assigned some employees to figure out ways to break down how they accomplish their jobs so that it could be done more efficiently. The process is the essence of lean manufacturing.

By getting more efficient and becoming “leaner” QCMI was able to reduce the time it takes to make products, so it could become more profitable and win even more work.

“In the recession, we actually made money,” Grande said. “We realized that as you streamline a system and define what it’s supposed to do … it didn’t cost money, but made us money.”

A big part of going lean is making sure tools are close to workers so they aren’t walking around looking for them, and getting away from production.

“That’s the whole key to lean manufacturing. You want a drill, a tool, a wrench — put it at their fingertips,” Grande said.

After the new processes were fully implemented, QCMI figured it was saving an average of 77 minutes per employee per day, he said.

Although the business had followed lean principles in the past, in the downturn QCMI took the practices to a whole other level, Grande said.
“We thought we were lean before, but we had just been scratching the surface,” he said. “Lean isn’t a place, or a destination. Lean is a journey.”

Recognition for Efforts
So well has QCMI adopted lean principles that it was awarded Supplier Gold status by United Technologies Corp., becoming the only complex machining company in the continental U.S. to achieve that designation for two consecutive years.

Brian McCarthy, vice president of sales for Precision Conversions LLC, a Portland, Ore., firm that converts passenger jets to cargo carrying jets, said QCMI has been producing the crew entry doors for its jets since 2003.

“They take this huge slab of aluminum, and machine it all out to the exact specifications into a single piece that is a lightweight, high-strength door,” McCarthy said. “I think they were a little bit ahead of their time (in terms of manufacturing processes), and their doors have stood the test of time.”

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