Diablo Precision Inc. • Hollister, Calif. • www.diabloprecision.com • Number of employees —5 • 2008 sales —$2.7 million • Market served — Medical, automotive, defense, space research, and consumer products

Conor Kelly and Bill Fixsen started Diablo Precision Inc. in 2004 with one machine the two of them didn’t know how to run – a slight setback that almost put the shop out of business even before shipping its first order.

The machine was a new Swissstyle screw machine. And, while both company president Kelly and CFO/ co-owner Fixsen had extensive machining experience, neither of them had actually run that type of machine. As a result, jobs were delivered late.

Kelly previously was the general manager and part owner of a shop and had a lot of high-volume production experience. He managed more than 50 employees and faced all the problems that go along with such a task. So when he started his own shop, he wanted to limit the labor part of the equation through automation. That is the reason that he purchased the screw machine and outfitted it with a bar feeder and part conveyor to keep it running automatically.

Kelly eventually mastered the Swiss style machine and won several more jobs machining complicated precision parts. But still, the shop ran into problems.

Diablo Precision
Diablo Precision gets the most out of its Swiss-style machines by running them fully automated with bar feeders, chip conveyors, part conveyors and high-pressure coolant.

Pressure from the machine’s ejector would bend some delicate aluminum parts, and the shop had to physically monitor the machine. So it couldn’t run unattended. The solution was a different brand of machine.

Diablo Precision purchased a Citizen L520 Type VII Swiss-style machine that used a servo-actuated ejector that did not constantly exert pressure on workpieces. Kelly also added a bar feeder, chip conveyor and part conveyor for a fully automated system.

Once the new machine was up and running, the shop easily met part precision and production demands without the difficulties inherent in the original machine. Diablo Precision finished its first year with $250,000 in sales, and business just got better.

In 2005, sales grew to $775,000, in 2006 to $1.36 million, and in 2007 to $2.06 million. For 2008, sales are expected to top out at $2.7 million, and the shop plans to build a new facility within the next few years.

Diablo Precision now has five employees working in a 3,000-sq-ft. facility that houses five Citizen Swissstyle machines, a MAG Fadal vertical machining center, Zeiss CNC CMM, hardness testers and a Gravograph CO2 laser engraver.

“My philosophy has always been to do better than the customer is asking for, which is why we have the high-end inspection equipment. When a customer’s print reads +/- 0.001-in. tolerances, I treat them as +/- 0.0005 in. because potential quality issues can cost me the job,” Kelly said.

The shop’s markets include medical, automotive, defense, space research and consumer products. Lot sizes run from 1 to 5 prototype parts to jobs with 15,000 parts made out of such materials as 440, 420F, 416, 303 and 304 stainless steel and some brass and bronze.

Diablo Precision, as a medium to high-volume shop, puts out about 63 jobs per month, totaling about 2 million parts. It keeps track of all its jobs using EZ Shop management software.

In the case of machining with fully automated Swiss-style screw machines, Kelly has become expert at getting the most out of the machines. All of his machines use 2,000-psi high-pressure coolant to keep thermal problems in check and to control chip configurations — the direction they come off at and when they break off.

“We need our processes to be consistent. If you don’t have high-pressure coolant on a Swiss-style machine, you’re throwing money out the door. After about a month or two without it, tools start breaking more often and part quality suffers,” warned Kelly.

According to him, chip conveyors, part conveyors and bar feeders are vital, but they must easily integrate to the machines. And, because these automation components keep the machines running nonstop, the shop does not skimp on tooling.

Quality tooling in combination with high-quality oil and highpressure coolant has allowed Diablo Precision to run machines for three 24-hour days cutting stainless steel parts before needing to change inserts. Just upgrading its type of oil has doubled tool life for Diablo Precision.

To gage production efficiency, Kelly often conducts informal measurements. He’ll compare the number of employees to how much is received from payroll count to determine manufacturing per individual. He also does manufacturing density studies to calculate the amount of manufacturing/ sales that each square foot of the shop floor generates.

Fixsen Kelly
Diablo Precision owners Bill Fixsen and Conor Kelly always strive to deliver parts that are above and beyond customer quality requirements.

For the day-to-day business of running a shop, Kelly and Fixsen offer a few basic principles to keep in mind. These can help keep personnel focused, maintain business growth and boost employee loyalty.

“Every 5 minutes, mentally ask yourself if what you are doing or thinking about is helping the company. This will eliminate distractions and keep yourself and your employees focused on the business at hand and not wasting time.

Most people go through the day assuming things will be taken care of and don’t give any thought to how their actions will affect the shop,” Kelly said.

When it comes to growth, Kelly said that shops just starting out often fall into a comfort zone when the business is meeting current revenue needs and paying the bills. That, he said, can stall the push to further grow beyond the initial growth phase.

However, for the most part, shops are not in charge of their growth. Instead, growth happens as opportunities arise and how well prepared, ability wise, a shop is to exploit those opportunities, explained Kelly. So shops must make sure they are always driving hard enough and always prepared to take advantage of opportunities.

“As customer loyalty is important, it pales in comparison to employee loyalty. And the only way to gain employee loyalty is by constantly demonstrating that you are right there with them,” Kelly said.

“If I have to lay someone off, I see it as being my fault. It’s my job to make sure there’s enough work no matter what the market conditions may be.”

Kelly believes that a motivated individual will make a shop so much more money than what shops would spend on them for good benefits such as healthcare, so he advises not to be selfish and greedy when it comes to taking care of employees.