Extreme Tool and Engineering, Inc.: Embracing Change

This shop—never content to rest on its laurels—combines lean initiatives and the latest in technology to be a one-stop shop for its customers and win the MoldMaking Technology 2008 Leadtime Leader Award: Small Shop.
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Extreme Tool and Engineering, Inc. (Wakefield, MI)—a manufacturer and turnkey provider of a full range of services including mold design; product design; moldmaking; mold validation and inspection including FAIR, CPK and PPAP; mold process development including scientific molding, EOAT design, build and validation; and low volume/pilot production injection molding—has experienced a lot of “extremes” since the company opened its doors a decade ago. Rapid growth netted them the magazine’s Leadtime Leader Award: Large Shop two years ago. Then, they experienced a time of uncertainty, which resulted in President Mike Zacharias and his key employees downsizing and then reinventing the company. Fortunately, Extreme Tool survived—and thrived—once again emerging a market leader in industries like medical, electronics, automotive, packaging, and consumer goods.

Now 37 employees strong, the company experienced $7.2 million in sales last year and increased its sales per man by 64 percent, which Zacharias attributes to a combination of lean initiatives and process refinement.

The company also believes in heavily investing in technology. “We strive to be completely self reliant,” Zacharias explains. “We have invested in excess of 3.5 million in state-of-the-art design, moldmaking and molding equipment.” (See Equipment List in Sidebar.)


Just The Beginning

Back in July 1998, Extreme Tool and Engineering was born when the assets of its former employer—Global Tool and Engineering—were purchased and Extreme Tool opened its doors. Zacharias recalls that many have questioned the reasons behind the company’s unusual name. “To us, Extreme means many things,” he explains. “Our location in far northern Michigan is extreme.”

The way Extreme entertains its customers also can be considered extreme. “Once our customers visit here, they usually want to come back,” Zacharias notes. “Snowmobiling to dinner after a successful mold sample, an evening business meeting/strategy session while fishing, or a having a drink around a campfire take the place of the more traditional golf outing.”

The company’s growth also can be seen as extreme—as high as 55 people in 2005. Then, Zacharias had to make a difficult decision to downsize and reinvent Extreme Tool.

“Using a tool called Hoshin Kanri—and with the guidance of MSOE Business Excellence Consultants—we completed a short- and long-term strategic plan and made many organizational changes and employed lean initiatives,” he notes. “We have rebounded strongly after an uncharacteristic 2006 financial performance. Our company sales for 2007 will show an increase of $500,000 with 15 less people. I believe one of the true/best tests an individual or company can make is how they respond to adversity, and the people that work for this company have responded admirably.”


Maintaining Leadtimes

Extreme Tool’s average leadtime on a project is five to six weeks of actual design and build time. To maintain this leadtime, the company has adopted a “very detailed, component level shop management and scheduling system,” according to Zacharias.

Since its inception, meeting delivery requirements has been the company’s singe focus. “We have completed numerous molds in excess of 1,000 hours/exceed $100,000.00 sell price in four to five weeks,” Zacharias notes. “We rarely ever get more than six to eight weeks to build molds. We have forged strong strategic relationships with many customers who now award us business and allow us to queue it for four to six weeks before we start due to the relationships we have established. We are deeply indebted to the customers we serve.”

On average, the company builds 125 molds per year. “Our year-to-date, on-time delivery is 97.5 percent,” Zacharias states. “We have had three jobs in the calendar year 2007 deliver late each by one day, or three days total. On the balance of jobs completed, we are 116 days early total. The mix is 60 percent of one- or two-cavity molds, 30 percent four- to eight-cavity molds; and 10 percent more than eight cavities.


The Automation/Software Link

Zacharias cannot emphasize enough what a vital role automation has played—and will continue to play—in Extreme Tool’s success in meeting stringent leadtimes. “I believe in automating every process possible and will invest in the same,” he states. “We use tool changers on all of our CNC equipment. We also have servo robots on three of our molding machines for End-of-Arm Tooling (EOAT) development, and employ automated CMM and vision systems in our QC Department. In our CNC machining area, we have a fully automated work cell with two Roeders HS machines—including laser tool setting/inspection, and a robot which handles all tool changes, workpiece changes (steel and electrodes), pallet changes and fourth axis indexing fixture machining as well. We also have successfully employed a Haas HMC with a pallet changer in our insert roughing area. We can now complete 90 percent of all insert and component roughing in this automated cell.” In addition, the company has purchased and will install a fully automated EDM cell with two Mitsubishi EA12V Machines coupled to a 3R Workmaster Robot for lights-out/unattended EDM operation this month.


Joining Forces

The China issue is a hot topic in the moldmaking industry, and one that Extreme Tool has tackled head-on. “Our new moldmaking facility in China (Cosmos Tooling Solutions, Ltd.) will be fully operational this month, and we are already taking on work in design here for that facility now. The facility will be owned by us with two U.S. partners and three working partners/owners in China, all of whom have considerable industry experience. We have many existing customers who currently build a portion of their molds in China, and we plan to offer them a better solution than they currently have—a fully integrated, seamless, global solution tapping the positives that each of us bring to the table.”

Extreme’s goal will be to provide a quality imported mold at a reduced price without any of the normal challenges customers experience due to design, communication, language barriers, and time zones normally experienced, Zacharias notes. “Additionally, we feel that this will be a 100 percent true partnership with open communication and cooperation between the U.S. and China facility. I do not feel I could accomplish this without a vested, owner’s interest in this facility, and I also will personally be president of this new venture.”

Zacharias adds that the molds produced in China will be warrantied, revised, and repaired as/if required by Extreme Tool. “This will be an easy transition since we designed, managed, validated, debugged and tweaked them to begin with,” Zacharias comments. “Not every mold or part will be a candidate for Cosmos, but we feel our project management team can help our valued customers make good decisions on what’s the best fit. Extreme’s mission will remain highly complex or speed tooling, and Cosmos will just add to that where needed.”


Exceptional Employees

Zacharias continues to think outside the box when it comes to recruiting—and retaining—a dedicated, talented workforce. “Our new employees are a bit non-typical,” he emphasizes. “I rarely look for experienced help or to traditional machinists for new employees, but rather at engineering types who fit and support where we want to be in next five to 10 years. The needs of the shop have changed as technology is employed and future moldmaking will be more hands-off than hands-on.

“We try to create an aggressive yet family-oriented culture,” Zacharias continues. “I believe in taking care of my people—personally and financially—to the best of my abilities. I believe in paying for performance versus paying for just showing up or seniority. Our employees have seen consistent financial increases over the last five years as they have developed additional skills to combat trying times for many mold shops. We also do a lot of things together as a company outside of work. We do a ton of hunting together—including out-of-state hunts, fishing, snowmobiling, skiing, and ATVs.”


From Start to Finish

Extreme Tool’s future plans center on the company evolving into a turnkey solutions provider. “We want to become an extension of our customers’ facilities and take work off of their plate and put it on ours,” Zacharias notes. “Organization wise, many new employment opportunities will exist for current employees as this transition occurs.”

Part of this plan is supplying fully validated and debugged tools and systems, Zacharias asserts. “We now have many customers who ask us to take tools from start to finish,” he elaborates. “We accept responsibility for all tool tweaking to meet print requirements, mold all of the initial samples and sometimes pilot production, complete FAIRs, CPK runs, and PPAPs in-house on the customer’s format, build the end-of-arm tooling and inspection fixtures required, and then complete rigorous mold tryouts and process development.”

To make all of this happen, Extreme Tool just completed the purchase of an additional new 12,500 square foot building that will house all of the company’s molding, quality control, and an additional tool room dedicated to post-sample tool work. “This will allow us to further streamline the mold build process in our original facility and enable us to dedicate specific resources to the post-sample requirements,” Zacharias notes. “Along with the change in building, we also purchased an additional new molding machine—our largest yet—a 400-ton electric. This will enable to offer the same services we have on smaller tools to customers requiring the same on 400-ton work.”


Forward Thinking

Extreme Tool’s innovative approach to mold manufacturing combines forward thinking with the very latest in technology and equipment. Under the leadership of Zacharias, this company is not going to sit on its laurels and simply exist. “We embrace change and never sit back and celebrate,” Zacharias comments. “We know that what is good enough today will not be tomorrow, and we have created a culture of change and continuous improvement. And—quite simply—we do what we say we are going to do. If we make a commitment, we keep it. I have no tolerance for excuses. This is a performance-based industry and we need to perform.”