Allis Tool & Machine Corp.
647 S. 94th Place, West Allis
INDUSTRY: CNC machining
Peter Rathmann’s philosophy for Allis Tool & Machine Corp. is to run the business like a ship. The message is simple: There is no one else coming to help so everyone has to work together to get the job done.
Rathmann, the company’s president, chief executive officer and co-owner, also is a fan of the pirate Blackbeard and there is a pirate flag hanging over its shop floor, a small reminder of the reward program that everyone participates in based on company performance.
“We’re very horizontal on mission,” Rathmann said. “These guys don’t work for me. They do things for the guy next to them.”
Allis Tool’s history dates back to the 1950s. Rathmann took over in 2017 after several years building his own sales-focused consulting business.
Rathmann has invested in having apprentices at the company, believing the company will only grow by growing its people and acquiring talent is best done through the business equivalent of drafting and developing.
Allis Tool’s work is spread across three shifts, including two groups working four 10-hour shifts per week and a third working three 12-hour shifts on weekends, something Rathmann said was the result of employees seeking work opportunities that matched their own lives.
“We try to do a flexible schedule based on needs,” he said, adding he has also emphasized cross-training across roles and equipment so the company does not lose out when someone needs to take time off.
Allis Tool provides a variety of services, including milling, machining, turning, wire EDM and complex assembly for around 17 industries. The business is further diversified by making new parts, repairing older systems and building prototypes. The defining characteristic is the size of the components, anywhere from 20 to 20,000 pounds.
“I don’t do a lot of small stuff. We’re not good at small,” Rathmann said.
What the company is good at is taking on the projects other shops can’t or won’t try their hand at. Rathmann pointed to a project with a $20,000 casting that required 16 weeks of machining as an example.
“We do a lot of vetting and co-development with the R&D space,” he said, noting the company had recently set up a dedicated room to bring customer engineers, machinists and other team members together to collaborate.
Taking on the challenges that others pass on doesn’t mean saying yes to everything. Rathmann said the organization has spent a lot of time over the past two years defining what it wants to be as a company, learning to say no and then helping customers find other suppliers who might be a better fit.
“As an organization, now we’re careful to protect our time and understand what could go wrong,” he said.
Allis Tool has a total of 26 work centers in its 40,000-square-foot facility and Rathmann said he has invested $1 million in equipment over the past 10 months.
“We constantly listen to the marketplace,” Rathmann said, noting the company’s investments are driven by demand, not a desire to add the latest new features.
Most of the company’s customers are within southeastern Wisconsin, but with the amount of diversity in industries served, Allis Tool sees a different business mix every year. The top 25 customers are constantly changing and around 30% of customers will be replaced in a given year. As a job shop, Allis Tool typically has a backlog of around 60 days.
“The biggest drivers of the market right now are timeliness and quality,” Rathmann said.
To meet those market needs, Allis Tool has emphasized being agile, responsive and accessible, including bringing machinists into planning conversations to help address cost and identify potential issues early on in the process.
Rathmann said customers are increasingly looking for faster turnaround of work, suggesting the ability to quickly receive items from Amazon has changed expectations. While it can be tempting to move work up for significant customers, he said he has emphasized processing work in the order it was received to avoid complicating operations and causing issues for other customers. Plus, when you are machining massive pieces of metal, there are certain limitations involved.
“The realities are there are physics that have to be respected,” he said.