Czech firm thrives in free market

Czech firm thrives in free market

Although TOS Varnsdorf has seen huge growth under privatization, it's looking to broaden profit potential by expanding marketing efforts in the U.S.

Although TOS Varnsdorf has seen huge growth under privatization, it's looking to broaden profit potential by expanding marketing efforts in the U.S.

The WHN 130 MC, to be shown at IMTS '98, is performing a facing operation in the Varnsdorf plant.

The factory in Varnsdorf grinds its machine's boxways up to 6 m in one pass.

The recently formed TOS AMERICA INC. walked away a winner from an awards luncheon for importers. From left to right, Lubor Svejnar TOS AMERICA Technical Director and Lee Walker, president of TOS AMERICA, stand with partners Jan Rydl, president and CEO of TOS Varnsdorf, and Frantisek Dlask, commercial director.

The W 100 A manual, horizontal boring mill has been in production since 1964 and continues to be a popular seller.

The WH 105 is an affordable, up-to-date, NC mill that can be easily retrofit with CNC.


Business has been good for TOS Varnsdorf, a manufacturer of horizontal boring mills based in the Czech Republic. Unlike some former Soviet-bloc manufacturers, privatization has led to phenomenal growth with TOS quadrupling sales revenue in three years and expecting to sell at least 230 machine in 1998.

In 1994, TOS' total sales revenue was 374,116 Czech crowns. Within two years, that number topped a million, and in 1997, revenue reached approximately 160 million crowns.

TOS' success in the free market can be attributed to a strong corporate foundation and smart new business practices. The company has been operating since 1903 when Arno Plauert, a German engineer, founded TOS to make lathes and forming and drilling machines. The firm's production took off throughout the '20s and '30s, and in the following decades, new product designs earned many international awards.

In the years when TOS was a Czechoslovakian, government-owned company, it actually sold more machines then it does at present—mostly due to government-guaranteed East-ern-bloc business.

But, in those days, profits were much lower since machines were inaccurately priced and often used as bartering tools with the Kremlin for oil and other necessities. Profit margins were also slim from supporting an over- staffed factory of more than 2,000 employees. Between 1989 and 1993, TOS began to streamline operations. It cut the workforce in half and then continued to trim. The leaner, meaner TOS now has 680 workers at the plant, and it managed to double the average wage between 1993 and 1996.

The business of exporting
In the '70s and '80s, the selling focus turned to export, and it has remained a priority ever since. Of the 1,074,117 crowns made in 1996, 872,026 of them came from export sales. Only 9.9% of the machines were sold domestically with the rest being exported predominately to Canada, Germany, the U.S., and Italy. In 1997, the U.S. market's contribution to those figures grew significantly, and that trend is expected to continue for 1998. The company has shown its commitment to that growth by forming a joint-venture company, TOS AMERICA INC., the importer based in Oakville, Ontario. TOS is also planning to increase its exposure in the U.S. by having a strong presence at IMTS '98. Marketing and product specialists at the company feel it is important to consider how the relationship with the U.S. market differs from the already successful relationships with markets like Canada. Marketing manager Rudolf Waclawic explains, "Canadian firms tend to buy smaller, simpler machines, and when ordering, their primary focus is quick turnaround. Often, they buy the 4-axis versions of our mills. But U.S. customers go with our complex 5 and 6-axis models. While delivery time is important to U.S. companies, it is not the driving force. For them, each machine is more of a careful investment." These market demand differences, according to Waclawic, help define product design and marketing.

Horizontal boring mills
TOS manufactures its machines in series and bases its decisions about how many of each model to produce on market fore-casts. The company builds before receiving orders to cut down on delivery time—about four months for an NC machine and six for a CNC. Orders are received from distributors four to six months before each machine is completed, which gives the company plenty of time to customize it.

Waclawic says this arrangement does not compromise flexibility because the company knows where the machines are going and what each market wants. "We can usually predict needs. But, if there is some unexpected customization, it is never a problem," he says. "If custom work is ordered close to the machine's completion, there is just a slight delivery delay compared to the normal four to six months. We have to be versatile and flexible to keep customers happy."

The company's horizontal boring mills—4, 5, and 6-axis manual, NC, and CNC—are all assem-bled and machined in Varnsdorf. Castings for the machines come from within the Czech Republic, motors and drives are supplied by Siemens Inc., CNCs are predominately from Heidenhain, and most electronic components are ordered from Germany. The hardened and ground boxways, which go in all machines, are ground on-site 6 m at a time. Most horizontal boring mill models at TOS have the option of an automatic tool changer (ATC) with standard 60 tool slots and/or an automatic pallet changer (APC).

The company reports one of the hottest sellers in the U.S. is the WHQ 13 CNC, a T-type bed horizontal boring machine with traveling column and cross-adjustable rotary table. Waclawic says American shops like the machine because, "They see it is well designed and efficient."

According to Waclawic, the mill is ideal for machining box-section, flat, or intricate workpieces of cast iron, cast steel, or steel weighing up to 12,000 kg. Half of all the machines sold at TOS are this 5-axis model with a 60-station tool changer. The standard model, WHN13 CNC, comes without the tool changer.

Another popular mill is the WHN 110 MC with cross-bed arrangement and longitudinallytraversing column. This machine, also 5 axis, comes in three versions: the WHN 110, a standard version controlled by a Heidenhain TNC 426 contouring CNC; the WHN 110 Q which is the same as the standard version but equipped with the ATC; and the WHN 110 MC, a "machining center" version with an APC in addition to the ATC.

TOS' newest machine is nowhere near the company's most technologically advanced work, but its development was in response to intense customer demand from the Canadian market. The WH 105 is a 4-axis machine that is available as an NC or CNC. According to the manufacturer, the system is touted as "offering efficient productive cutting at favorable prices" and is suited to short-run production and roughing and finishing operations.

The machine has a sliding spindle, fixed column, and cross-travel rotary table. When asked why they would make a modern version of a simple NC machine, the company emphasizes that the market is demanding an inexpensive, up-to-date NC that can fill immediate job needs.

TOS also stresses that the machine is unique because adding on a CNC is simple—all the required ballscrews and components for CNC retrofitting are part of the basic design. The machine can also be immediately fitted with a CNC, if desired. According to TOS, the NC version of this machine is extremely popular in Canada and India, while the Americans tend to order the CNC version.

Another one of TOS' simpler mills is also in high demand. The W 100 A is a rigid, simple, 3-axis manual machine the company has been making since 1964. The firm has sold over 5,000 of the machines and was looking to discontinue the line. But the announcement of those plans was met with protest, so TOS decided to continue production.

The system can machine workpieces with weights up to 3,000 kg. The guideways and slide are lined with hardened steel ribs, and the system has digital position readout for three coordinates.

For IMTS '98, however, TOS will be showing off one of its most technologically advanced machines. Its WHN 130 MC—a 5-axis system with ATC and APC— has two pallets that shuttle between the machine pallet base and either of the stationary bases. The system has a cross-bed arrangement with a longitudinal moving column, transverse traveling table, and traveling spindle.

The machine also has options like varying length in travel coordinates, several table sizes, two head-stock variants, and varying degrees of automation. The WHN 130 is the standard model, the WHN 130 Q comes with ATC, and the WHN 130 MC has ATC and APC. The system can also be expanded to have up to three to four pallets.

TOS has other model offerings for buyers including a system for oversized workpieces. The WPD 130 Q, floor-type horizontal boring and milling machine with ATC has a traveling ram and rotary table option. The clamping area can also be comprised of a number of floor plates for clamping very large workpieces. It is a 4-axis machine that, with added options, can become 6-axis.

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