How a Successful Livermore, CA Job Shop
Wins Against Low Offshore Pricing.
Story and photos by
C. H. Bush, editor
A MAM 72 cell system supported by a Haas vertical mill. On the left is machinist
Mark Wilson. On the right is machinist-programmer Larry Westervelt.
Alloy Metal Products operates mostly palletized equipment that run 24 hours lights out.
In one way, Livermore, CA’s machining job shop, Alloy Metal Products—a dba of Fred Matter, Inc.—might be compared to the proverbial salmon, best known for swimming upstream against the current. Why?
Because during 2009 and 2010, two of the worst years of the recent recession, the company successfully swam upstream against the powerful downhill economic current and significantly increased sales.
“In 2009, we increased by 25%,” says company founder-president Fred Matter. “In 2010 we increased by almost 23.5%. And we did this by adding only two or three people to our staff of 20. We’re proud of our achievement and our people for helping us do that.”
What’s Matter’s secret?
Swiss-style Efficiency
“I was born and raised in Switzerland,” he says, “where I served an apprenticeship as a machinist. And, as most people probably know, Switzerland is known for its ability to produce high-precision products, which is where such expressions as ‘Runs as smoothly as a Swiss watch,’ come from. Well, that reputation is really a result of the way we’re trained. During my apprenticeship, precision and efficiency were stressed heavily, and that’s stuck with me.”
Matter came to the U. S. at an early age, and immediately got a job as a tool and die maker.
“I was fortunate to work for a company that was into production machining,” he recalls. “We designed the tools and the fixtures for machining, and all the different departments, including milling, turning, punching and drilling. That gave me tremendous experience building fixtures, and because I could see first hand which fixtures worked and which didn’t, I learned the best ways to do things.”
Matter also applied his Swiss training to the job, he says.
“It became a matter of efficiency,” he says. “About how efficient we could make a fixture for the operator to make the parts the quickest way and with the least amount of effort and moving around to get the production done. I took that experience with me when I started out, and that was a big help.”
Mark Per Due, lathe supervisor, left, and Fred Matter, discuss a new project to be
put on one of the company’s 3 8-axis, live-tooling turning centers.
Machine is a Mori Seiki NL2000SY.
Founded Alloy Metal Products
By 1977 Matter was ready to bail out on his own.
“I rented a 1700 square-foot industrial bay in Hayward, California” he says, “and when I first started, I was building several kinds of dies, including compound and progressive. But I quickly went over to machining. I bought one of the first CNCs, It was a Bridgeport.”
Like many other young entrepreneurs, Matter paid his dues the hard way.
“I worked two jobs for eight months,” he says. “I started at six in the morning and went to work for my employer, then went to my shop where I had a couple of part-time employees working nights. I left my shop at eleven o’clock or midnight every night. Then I did it again the next day. I worked weekends, too. It was a tough schedule, but it paid off.”
Matter’s business grew steadily over the next three years.
“We ran out of room and moved into a 10,000-square-foot facility,” he says, “and we bought more CNC machines because we were already into making computer parts and were doing more and more work for disk drive manufacturers.”
That building sufficed until 2001 when the company once again made a move, this time into its current 30,000-sq-ft Livermore facility.
“We kept growing and at the same time traffic got more and more congested in Hayward, so we decided to move,” Matter says. “I bought this building and spent the next six months personally preparing it for our move. I wanted to move fast and get back into production with minimal delay.”
Today, Alloy Metal Products does precision 5-axis milling, 8-axis turning and wire EDM machining for an impressive lineup of customers in the aerospace, medical and optical devices industries. Its sales per employee are almost triple the numbers generally reported for the industry.
“At the risk of sounding like I’m boasting, we didn’t achieve all this through luck,” says Matter. “We’ve been able satisfy our customers and grow by being extremely efficient and cost-effective in every aspect of our operation. We look at everything we do with an eye to efficiency.”
Matsuura cell system supported by a Haas vertical mill. In this system 17 pallets feed 2 machines.
On the right is operations manager Gary Pardini. On the left is 5-axis supervisor Jim Lemos.
Efficiency Above All
Matter carries his desire for efficiency into every nook and cranny of his business, but he aims most of his efforts in several specific areas:
1. understanding internal costs and quoting;
2. listening to his customers and helping them achieve their goals;
3. automating his shop with highly reliable, well supported equipment capable of running lights out.
To achieve all of that, Matter, in a way, thinks of his business as a fine Swiss watch.
“You have to know everything that’s going on and what can go wrong,” he explains. “I don’t leave anything to chance. You can’t, if you want to compete with the low-cost overseas competition.”
Sophisticated Quoting System
To keep his finger on the cost side of things, Matter installed a software package called ShopKeeper, and then had it customized to do exactly what he wanted.
“That package is awesome,” he says. “It gives us all the information we want. We know how much each machine costs for each project and by operator. A lot of guys don’t really know their costs, but we do, down to the penny. The result is when we quote, we don’t use a blanket shop rate or even a shop rate per machine. Instead, we look at which man will do the job and on which machine, then quote the job based on the rate for that man/machine combination. The system lets us stay competitive and accounts for a lot of our success.”
Sophisticated Equipment
When it comes to equipment, Matter is no piker. He operates three 8-axis live-tool turning centers, 7 vertical mills, 5 horizontal mills, 2 Agie wire EDMs, 2 Zeiss Contura CMMs, and four palletized Matsuura 5-axis vertical milling centers (2 MAM72-35Vs, 2 MAM72-63Vs). The 35Vs have 32 pallets each and the two 63Vs share 26 pallets.
“We’ve been palletized since the ‘80s,” he says. “We only have a few machines that are not palletized. We run 24 hours lights out. It’s the only way I know to beat the overseas competition and be profitable at the same time. Of course, with that much unmanned operation, the machines really have to be reliable and they are. Those machines allow our customers to create many new unibody structures not possible before, structures previously only possible via welding, brazing or sheet metal techniques. With these machines you can build beautiful parts out of one piece with greatly improved strength, stability and precision.”
Matter says he probably purchased 70% of his CNC machines from Selway Machine Tools.
Matter: “A machine tool is worth nothing if you don’t have support when you need it. We’ve stayed with Selway over the years because they have a network of people to help me when I’m down. So far, the Matsuuras haven’t been down much.”
Machinist Robert Love prepares to set up a Mori Seiki NH4000 DCG horizontal mill.
The machine is equipped with 6 pallets and is part of Alloy Metal Product’s ongoing effort
to maximize lights-out manufacturing.
Future
Where to from here?
“We’ll keep growing, of course,” Matter says. “If you don’t grow, you die. Right now my biggest struggle is keeping my employees and my customers happy. We don’t argue with our customers. We listen to them. I know guys who win an argument and lose the customer, which is foolish. At our shop, the customer is always right.”
