Keys to success may vary for each gear manufacturing business, but Southern Gear & Machine has found the right formula that works for them. It’s how they’ve become an experienced, well-trained, financially strong, and cutting-edge gear manufacturer meeting the demands of well-known aircraft and military customers. It’s a formula for success that started 60 years ago with founder Joseph Arch.
While living in Boston, Massachusetts, Arch began escaping from the cold winter months to the sunny climate of Miami, where he later established Southern Gear in 1957. Today, the company has been run by Joseph’s son, Allan Arch, president of Southern Gear, who has continued the spirit of a family-operated business.
“Employees tend to love it here; they stick with us, and we treat them as part of the family,” said Alex Perdomo, Southern Gear’s vice president. “I have been here since 1985, and my case is similar to many others in the company, even second generation, as my dad worked here for 15 years. I started working at Southern Gear in high school, went to college and came back, and I’m still here. We have a lot of stories like that where employees have been here long-term because they value what the company stands for: high-quality standards, employee and customer satisfaction, and empowering team effort, and we treat our customers the same way. When we get a customer, we look at them as a customer for life.”
Some of Southern Gear’s customers date back 30 to 40 years, which Arch attributes to building strong relationships, helping them with new product development, supporting demands, and meeting their requirements.
“We work on partnering with customers and servicing their needs without the turnover that big companies go through,” Perdomo said. “We understand their demands, their needs, their requirements, and their quality, and we develop a relationship with them where, I like to think of it as, we are their gear-cutting department. We are an extension of them, and we treat them like that. So if you have a quality problem, you are not going to call an outside vendor; you are going to call Southern Gear, and we will work together to fix whatever quality issue comes up.”
“If a customer calls us and says, ‘My program is behind schedule, and I need you to turn the shop upside-down for a quick delivery,’ we respond to those requirements,” Perdomo said. “One of our customers came through in 2014 and placed a series of 32 different gears for a new program where standard delivery would have been 20-26 weeks for delivery and asked us if we could do it in a 12-week time frame because they needed to get it to market for testing. These were aerospace gears for new aircraft, and we ended up doing it in a 10- to 12-week time frame for them. We adapted our production, worked closely with their team, and delivered in a short time frame so they could successfully get their program running and in full production. The result is that we now have a five-year LTA contract for those parts, and we are their go-to vendor.”
Being able to achieve this type of fast delivery means the company must stay up-to-date on its equipment. In the late 1990s, Southern Gear began modernization of all its manufacturing machines and continues that today. Its capital expenditures on new equipment have averaged $1 million per year for the last eight years. Also, according to Perdomo, the company has been financially smart about buying equipment, paying it off as fast as it can, and updating each department systematically.
“I don’t know how we would be manufacturing today — with the products that we make based on customer requirements and demands for high-level machining — without conscientiously making the decision eight years ago that we needed to invest in new equipment,” Perdomo said. “We have completely turned over our shop to modern CNC equipment in every department: gear cutting, grinding, milling, and turning. I can’t remember the last manual conventional machine that we bought in the last five years, with the exception of two Bridgeports, because every good machine shop needs good Bridgeports.”
Southern Gear has over 50 CNC lathes, CNC mills, and gear-cutting machines for complete gear machining performed in-house under the control of its engineering and quality machinists.
“One of the things that differentiates us from other gear houses, is the fact that we control and have the capability to do complete machining in-house,” Arch said. “We start with the raw material; we do all the turning, grinding, milling, gear cutting, wire EDM — all processes for gear manufacturing — and we do it all in-house. We don’t subcontract out any work. It’s all engineered here at Southern Gear. The engineering layout, we control it. For our capabilities, we can go from very small 1/16 inch in diameter all the way up to 72 inches in pitch diameter, but our niche, where we really excel, is 24 inches and smaller, again doing all machining processes in-house. We also work with approved Nadcap suppliers for heat-treating processes, non-destructive testing, and plating requirements.”
With state-of-the-art equipment and complete manufacturing capabilities, Southern Gear also can handle full gearbox assemblies. For example, the company worked on the design and development of a sophisticated gearbox from the ground-up for a customer in the defense industry.
“Our customer redesigned the gearbox to make it more powerful and stronger, and we built the first five prototypes for them in order to make the gearbox that is able to move faster and shoot down oncoming missiles,” Perdomo said. “The old one wasn’t powerful enough or fast enough to do that. We were the vendor of choice to do the complete manufacturing of that redesigned gearbox — right from housing, covers, etc., we did the complete assembly and all of the machining of the gearbox in-house.”
Southern Gear also has made a lot of new gears for the F-22 and the F-35 Joint Strike Fighter, as well as gears for NASA’s space program and other high-tech projects, although Perdomo says the company hopes to have the opportunity to do more complete gearbox assemblies for customers as a value-added process.
“With our experience of complete assembly for some of our aircraft and military customers, we are soliciting more and more of these; so, instead of buying five gears from us, the four housings from another vender, hardware from their hardware supplier, and bringing it in-house for assembly, we can do the whole assembly for them in a one-stop shop.”
The company also ensures the parts manufactured go through a stringent quality control process.
“Because of the products and the industry we serve and being an AS9100 company, we are very demanding in our processes and very demanding in our machining steps in order to achieve the high quality that our customers expect; therefore, our employees have to be willing to follow those procedures and be active participants for process improvements but within the scope of the procedures we have established, and that is another key aspect of our success,” Perdomo said.
Those successful improvements in efficiency are a result of Lean training, and all of the company’s 85 employees received extensive training three years ago. This year, all employees will receive refresher training on all Lean concepts as part of their ongoing process improvements. Improved processes have allowed Southern Gear to continue and sustain its growth. Every process gets reviewed to see where departments can eliminate waste, be more efficient, or improve speed time in setup reductions to satisfy customer demands.
The company also offers blueprint training for all of its machinists, whether they are a new employee or someone with 30 years of experience to stay ahead of new changes in the industry. To further push education and a skilled workforce, Southern Gear works with the Mechanical Engineering program at Florida International University (FIU), where Arch is on the engineering board.
“The company has a scholarship that is funded annually for engineering students,” Perdomo said. “It’s a true partnership — they send us interns for the summer months where we put them in engineering or machining work. We have hired three of them over the last five years. Sebastian Fajardo is one of our lead manufacturing engineers who worked as an intern and was hired after graduation. He later pursued a Masters of Science in Engineering Management, which we funded. We also hired another FIU graduate, Michael Tran, who is tasked to develop a paperless shop floor control system in which all our machinists will have access to online shop travelers, blueprints, inspection reports, and setup pictures.”
In addition to the training and scholarship program, another benefit to employees is that Southern Gear is employee-owned.
“Mr. Arch started an ESOP [Employee Stock Ownership Plan] in 1987, and that is certainly a big highlight of the company,” Perdomo said. “The employees have a stake in the company, and they get their annual stock report. If the company did well, they see their stock value go up. It is part of profit-sharing for their retirement. And that has helped us retain employees.”
Perdomo says employee retention is also due to promoting from within the company.
“Although we have been around 60 years and our employees tend to stay (the average tenure is around 17-18 years), we still have a young workforce,” Perdomo said. “Most of our front-line managers are 20-year employees who started at the entry level — gear-cutting operator, deburring bench, grinding operator — and they slowly moved up to where they are today, supervisors running their departments.”
For the future, Southern Gear keeps its sights on moving forward in the industry, following its formula for success and “steady-as-we-go” approach. While Perdomo says they are still a young company in the industry, Southern Gear is leading the way in custom precision gear manufacturing.
Visit Southern Gear at its booth at the upcoming AGMA Gear Expo 2017.
For more information, go to www.southerngear.net.