Original Date: 09/20/2004
Revision Date: 01/18/2007
Best Practice : Equipment Investment Strategy
Forest City Gear begins replacing machines after three to five years and reinvests capital into its shaping, hobbing, form grinding, and inspection equipment machines. This Equipment Investment Strategy has established the company as the premier supplier in the gear cutting industry.
Forest City Gear’s (FCG’s) extensive experience in shaping, hobbing, and form grinding provides flexibility to meet its customers’ needs. With state-of-the-art machines and highly qualified personnel, the company can perform almost any job on any material. Customers can send a gear blank and FCG will perform the machining and inspection operations, or FCG can receive a mid-level machining order, cut the gears onto it or grind it, and send it to the next phase of manufacturing. The average age of gear cutting equipment in the U.S. is 25 to 40 years old; in Asia and Europe, it is 12 to 18 years old. At FCG, the average is approximately six years. Machines are typically offered for resale as early as after five years of use. The company’s oldest machine, still in operation, was procured in 1986. There are four gear grinders, five shapers, and 25 hobbing machines, plus ancillary equipment for secondary operations and inspection.
During the 1950s and 1960s, an initial investment of gear machines and secondary equipment yielded operations in milling, drilling, and tapping with highly skilled personnel. Other skilled personnel within the Rockford, Illinois area assisted FCG in re-building older machines to make them production quality. During this time, a new machine was procured at least once a year. As a new and updated machine went into service, FCG’s customer base grew as well. During the 1970s, FCG continued periodically to add new machines, including Barber Colman hobbers, which were manufactured in Rockford. These hobbers operated at higher quality, and offered exceptional repeatability for cutting gears.
During the early 1980s and continuing to today, approximately 25% to 40% of FCG’s revenue is reinvested in new equipment to expand its capabilities. Word spread quickly throughout industry that the Koepfer hobber had exceptional capabilities. Koepfer was widely respected in Europe, having 100 years experience that began with clock and watch movements. FCG’s president toured the Koepfer factory in Germany and ultimately purchased two automated hobbers with substantial tooling and a Hofler gear checker, which is used to inspect the involute profiles and leads of gear teeth. FCG procured a Koepfer 6" diameter hobber, which made an immediate, positive impact to the company and its customers. The hobber’s speed and feed could be varied, obtaining a more accurate cut and finish; it cut worms without changing the cutter head, another time saver in production; and it performed crown hobbing, something that not too many companies were doing at that time. With the machine’s advantages, FCG’s customer base again expanded.
During the 1990s, FCG continued to reinvest the money it received from a 17% to 20% depreciation value on the equipment. This Equipment Investment Strategy resulted in the company’s policy to replace its machines after three to five years. With 10% of its customers having gear cutting equipment themselves, competitors still wanted FCG to cut some of their jobs. Since 2000, FCG’s policy to sell its old equipment and make room for new equipment has allowed the company to expand its customer base further.
For more information see the
Point of Contact for this survey.