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New Tube

How a veteran U.S. jewelry manufacturer built a better business model

By Paul Nordt III

John C. Nordt Rings

Editor’s Note: In the early 2000s, the management team at John C. Nordt Co. did something that can be uncomfortable for a jewelry manufacturing firm that’s been around for over a century: They made a serious commitment to change.

As competition from cheap imported jewelry continued to intensify, the Roanoke, Virginia–based manufacturer of precious metal wedding rings made from seamless extruded tube realized that its traditional business model wasn’t going to cut it. To remain competitive and prosper in the changing jewelry marketplace, the company—which takes great pride in making 100 percent of its products in the USA—was going to have to get leaner and meaner.

“It’s hard to compete with labor costs overseas, so we had to concentrate on productivity, inventory control, and waste reduction,” says Paul Nordt III, the company’s chairman and CEO. “We had to find a way to keep inventory in all forms—raw material, work-in-process, and finished goods–at a bare minimum, and tightly control losses.”

Compelled to take a closer look at its manufacturing process to see what could be improved and streamlined, the Nordt management team began what would be a multi-year-long endeavor of changing its operation by implementing new technology.

The following is Paul Nordt’s summary of the changes made to the company’s production methods, the challenges faced along the way, and the ramifications of those changes on productivity and profitability. John C. Nordt’s efforts serve as an example of how U.S. companies can ensure they continue making products on American soil. For the full research paper, see “Modern Manufacture of Seamless, Wrought Wedding Bands—An Engineering Approach” in the 2011 Santa Fe Symposium Proceedings Book (riogrande.com).

In the most basic terms, we start our manufacturing process at John C. Nordt by making seamless tubing through a combination of hot extrusion (pushing a billet of metal through an orifice to produce the tube) and cold drawing (pulling that tube through draw plates fitted with tooling and dies to achieve various ring diameters). This process works well, and when we reviewed our procedures, we found it to be very effective.

It’s the method used for turning the seamless tube into rings that required modification. Specifically, we had two major issues.

To manufacture wedding rings from the extruded tube, we were using the standard method of cutting identical size rings from the end of the tube and shaping them with CNC lathes. This required us to produce at least four sizes of tube for each of the 30 alloys we carry, which include gold, silver, platinum, palladium, and numerous two-tone and multicolor styles. Consequently, we had to keep large quantities of tubing in stock—and the associated carrying costs weighed heavily on our balance sheet.

In addition, while there are many advantages to using seamless tube—a symmetrical microstructure, uniform hardness, and high dimensional accuracy—the biggest disadvantage to the process is the precious-metal waste produced. An unacceptably large percentage of the weight of each tube was turned into scrap, resulting in very poor yield factors, typically less than 50 percent.

We had to find a new way.

John C. Nordt

Near Net Shape

To reduce inventory-carrying costs and increase yields, we implemented a major effort to improve the way we make rings. Looking to other metalworking industries for inspiration, we replaced the conventional method with a near-net-shape approach. This forming process—the same method used to make such common objects as nuts and bolts in heavy industry—generates no scrap. It also enables us to form the metal mechanically and change the aspect ratio of the ring to suit our needs, requiring fewer stock sizes from which to work.

Here’s how we do it now:

• Tubes continue to be produced by hot extrusion and cold drawing, but in only two sizes (finger size 5 and finger size 9) that best accommodate lighter-weight rings and heavier-weight rings, respectively. This change has dramatically reduced our inventory carrying costs by over 25 percent.

We also adjusted the wall thicknesses of the tubing: Rather than having tubes with an identical thickness of 3.2 mm (as had been our practice), we reduced the walls of the lighter-weight tubes to 1 mm and of the heavier tubes to 2.6 mm. That helped greatly to reduce scrap during the final machining process.

• Rather than cutting the tubing into identical lengths, we now adjust the cuts to match the weight of the finished ring (plus a machining allowance). Also, rather than using a saw or a lathe to cut the tube, we use a precision tube shear that we adapted to suit our needs. The shear snaps off each ring without generating any scrap—no dust, chips, or fine particles, which are common with saws and lathes.

Reducing our inventory to only two sizes proved critical here. The shear is designed for the high-speed cutting of large quantities of base metal parts from the same size tube—up to 7,000 pieces per hour. However, we needed to be able to cut as few as a handful of rings from one tube before switching it out for another tube of a different alloy and diameter. Because each switch required a 20-minute die change, shifting to just two tube sizes per alloy allowed for better efficiency.

While acquiring and modifying the tube shear required an investment of $150,000 in equipment and engineering, it paid for itself in less than a year. Using the shear has reduced our annual cost of scrap production by almost $200,000.

John C. Nordt

• To form cylinders into the desired ring sizes with the correct inside diameter, outside diameter, and width—again without any loss of metal weight—our engineering staff designed and built a hydraulically powered, computer-controlled press-forming machine. The machine, based on the design of equipment used in other metalworking industries, took about 10 months to build and cost $150,000 for the equipment and engineering. A year later, with the kinks worked out, we built a second machine for slightly under $100,000.

To understand how the machines work, picture a roll of cookie dough. Someone has cut off a piece and asks you to form a hoop-shaped pastry out of it with your fingers. This is exactly what is done with the precious metal, except the mechanical “fingers” of specialized machinery are required to do the shaping. A cylindrical bushing is ultimately generated that can be stretched or ring-rolled to increase its diameter.

While the initial investment in these two machines is steep, we feel the elimination of metal loss by the forming process will help to recoup the investment in less than five years.

• The resulting ring is then machined individually using CNC lathes and mills to achieve the final design details, with only minimal generation of scrap. And our CNC tools last twice as long because we have reduced the volume of metal they need to cut.

New Net Yield

Our new business model no longer supports keeping an extensive inventory of ready-to-use tube in multiple sizes for all of the alloys we carry. We can now manufacture specific products as needed from a greatly reduced supply of stock. Depending on the ring design, we can now achieve yield factors of between 50 and 100 percent—a major improvement over our previous method.

Most important, by changing our manufacturing process we are now better able to service our customers. Due to current trends in the jewelry industry, our order quantities are smaller and more frequent, and the demand for a variety of alloys and metal combinations has increased. The new method enables us to offer a much wider variety of product without the need to increase the capital requirements for inventory.

But it doesn’t stop here. Making this major change to our process has demonstrated just how critical it is to constantly question manufacturing methods and strive for improvement. There’s no doubt that effecting change has its challenges. And while the financial and cultural commitments are significant, so too are the rewards.


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