Outsourcing is a fad

Chambersburg, PA--Tour the foundry of TB Wood's in this historic Civil War town, and you'd swear you're in the heart of Rustbelt America. Thirty-ton channel furnaces glow with fiery molten iron, while molding machines and CNC milling centers churn out finished parts like giant drive wheels for coal crushers. You would never guess that the same company also makes products as diverse as AC and DC drives, softstarts, brakes and clutches, V belts and synchronous drives, and a full line of couplings.

In an era when many OEMs and OEM suppliers are farming out design, TB Wood's prides itself in creating a growing line of power transmission products and exploring new technologies, such as the patented Dura-Flex(R) coupling that won Plant Engineering's Product of the Year award this year. It's an ambitious philosophy for a comparatively small company that went public early in 1996.

"Outsourcing is a passing fad," says TB Wood's President Michael Hurt, who came to the company in 1991 after 23 years with Torrington. "We believe we must control our core manufacturing in-house." Over 30% of sales come from internally developed products introduced since 1992.

With strong roots in the mechanical side of power transmission dating back to 1857--the company produced some of the nation's first drive belts for factories--TB Wood's didn't flinch from designing its own line of motor drives five years ago. Now that product line accounts for 30% of the company's sales, which totaled $102 million in 1996. Three years from now, Hurt expects electronics to represent half of the sales volume. In the process, the company has made heavy investments in equipment for surface mount components, testing, and printed circuit board coating applications.

Why all the vertical integration? "It insures quality and speeds time to market," says Executive Vice President Michael Iversen.

Yet, true to its heritage, TB Wood's prides itself in approaching customers for its electronic products from a mechanical engineering perspective. The company designs its drives to be rugged (many are NEMA 4 rated), easy to install, and easy to maintain. The company's design and application engineers start with the motion to be controlled. For example, with the Power Mod line of inverters, Wood's can remove excess functionality--say, a heat sink--to meet the specific needs of OEMs. That means more horsepower at less cost.

In another example, the company has just introduced a product that integrates the inverter into the end of a motor--instead of on the top as in many designs today. This concept changes only the length of the motor, leaving the standard frame size unaffected. Another benefit: better motor life by eliminating long wire runs from the controller.

Meanwhile, the line of inverters has expanded to range from micro designs for 20 hp motors all the way up to high-performance models with ratings up to 700 hp. Wood's also has developed inverters targeted for special niche markets, such as heating, ventilation and air conditioning.

What do engineering customers think about TB Wood's broad-based approach to providing power transmission solutions? Sales have doubled in the last five years, and Hurt is predicting another doubling in the next three years. Acquisitions will deliver some of that growth, but Hurt believes strongly in leveraging the strength of the company's home-grown talent to develop, produce, and market its new products.

Rather than have its employees "chase rainbows elsewhere" the focus is on providing them with incentives to stay. Like the man said, "Outsourcing is a fad."