Mechanical contractor invests in laser cutting equipment to support new business structure

After decades of success and growth, mechanical contractor H&S Industrial’s facility has outgrown its size and is ready for action.When it moved to a new location, the executive team created a new business model to integrate contract manufacturing.H&S Industries
To the uninitiated, the term metal fabrication may sound like one thing, but of course it’s much more than that.Large stamping companies have little in common with two-man outfits that focus on railings and gates.Manufacturers that can make a profit with orders less than 10 are at one end of the volume spectrum, and those in the automotive hierarchy are at the other end.Making pipe products for offshore oil extraction is much more rigorous than making pipes for lawn mower handles and chair legs.
It’s just between manufacturers.Metal fabrication also has a strong presence among mechanical contractors.This is the territory occupied by H&S Industrial of Mannheim, Pennsylvania.Founded in 1949 as Herr & Sacco Inc., the company specializes in industrial and structural manufacturing such as ASME compliant pressure vessels, process/utility piping systems; conveyors, hoppers and similar material handling machines and systems; platforms, mezzanines , catwalks and structural supports; and other large-scale projects supporting construction projects.
Among metal manufacturers, those with long-term contracts for parts produced by high-speed processes such as stamping tend to have the least mix and the highest volumes.That’s not H&S.Its business model is the definition of high-mix/low-volume, usually in batches.That said, it has a lot in common with companies that manufacture manufactured components and assemblies.Metal makers of all kinds are looking for growth, but could find themselves in trouble for a variety of reasons.When a manufacturer already has everything possible from its buildings, equipment or markets, it needs to change the status quo to move forward.
A few years ago, the president of H&S Industrial found a way to propel the company to take a big step forward, overcoming several factors that were holding back its growth.
In 2006, Chris Miller suddenly found himself in charge of H&S Industrial.He had been a project manager for the company when he received the shocking news that his father, the company’s president, was sick and hospitalized.He passed away just over a week later, and a few months later, Chris announced a bold plan to open a new chapter in the company’s story that showed he was ready for his new role.He envisioned more space, new layouts and access to new markets.
The most immediate concern is that the company’s facility in Landisville, Pennsylvania, has outgrown its size.Buildings are too small, loading docks are too small, Landisville is too small.The city’s tight streets weren’t built to host the giant pressure vessels and other large-scale industrial manufacturing that H&S focuses on.So the executive team found a plot of land in nearby Mannheim and started planning a new site.It’s not just an opportunity to get more space.This is an opportunity to use its new space in a more efficient way than before.
Executives don’t want a series of workplaces.Workshops are suitable for building each project in place, but efficiency depends on the scope of the project.As the complexity of the project increases, it makes more sense to move the project through the facility from one site to another.However, traditional pipelining will not work.A large, slow-moving project can get in the way of a small, fast project.
The executive team developed a layout based on four assembly lanes.With a little guesswork, it’s not hard to separate and isolate projects so that each can move on without hindering the progress of the projects that follow.But there’s more to this layout: the ability to account for slowdowns caused by unforeseen circumstances.This is a wide aisle perpendicular to the four lanes, providing overtaking lanes.If an item slows down in a lane, items behind it will not be blocked.
The second component of Miller’s strategy is more impactful.He envisioned a company consisting of several separate departments united by a single center that provided common resources to each department, such as executive guidance, strategic planning, human resources support, a unified security program, accounting and business development work.Breaking down each activity of the company into separate units will draw attention to each of the core functions offered by the company, which is now named Viocity Group.Each division will support the others and pursue its own customer base.
There are often not enough mechanical contractors to justify investing in a laser cutter.The investment by H&S to enter the metal fabrication market was a gamble that paid off.
In 2016, the company began rolling out a new structure.With this arrangement, H&S Industrial’s role is essentially the same as before, providing large-scale metal fabrication projects, blasting, painting and rigging.It employs more than 80 people and occupies 80,000 square feet for cutting, fabrication, welding and finishing.
The second division, Nitro Cutting, was launched in the same year with a fully automatic TRUMPF TruLaser 3030 fiber laser for cutting sheets.When H&S invested in the system a year ago, H&S’s confidence surged.This is a huge risk considering the company has no previous exposure to laser cutting and no customers interested in laser cutting services.Miller sees laser cutting as a growth opportunity and looks forward to enhancing H&S’ capabilities, transferring the machine to Nitro in 2016.15,000 square feet.The cutting department is now fully equipped and offers automated laser cutting and forming services.
RSR Electric was established in 2018.Formerly RS Reidenbaugh, it provides expertise in developing power and control systems with a focus on data and communications infrastructure.The fourth unit added in 2020, Keystruct Construction, is a general contracting firm.It provides project management for every step of a commercial or industrial construction project, from pre-construction planning through the design and construction phase.It is also responsible for renovations.
This new business model goes far beyond a rebrand, it’s not just a new organization.It highlights and deploys decades of expertise in each business unit, effectively delivering all of this knowledge to each client.It also provides a way to cross-sell other services.Miller’s intent is to convert bids for partial projects into bids for turnkey projects.
When Miller’s strategic vision came to fruition, the company had already invested in its first fully automated laser.As Miller’s vision developed, executives realized that a tube laser might be a good fit for Nitro.Pipe and plumbing has been prominent at H&S for decades, but it’s just one small piece of a huge puzzle.As a result, the company’s tube cutting has never been subject to any special scrutiny prior to 2015.
“The company works on many types of industrial projects,” Miller said.”Hoppers, conveyors, tanks, containment systems and platforms are typical items, and even if they’re not heavy in pipes or pipes, many of these things require pipes for mechanical or structural reasons.”
It invested in a TRUMPF TruLaser Tube 7000 fiber laser, which, like the sheet laser, is fully automatic.This is a large format machine capable of cutting circles up to 10 inches in diameter.and squares up to 7 x 7 inches.Its infeed system can handle raw materials up to 30 feet long, while its outfeed system can handle finished parts up to 24 feet long.According to Miller, it is one of the largest existing tubular lasers and the only one locally.
It might be a stretch to say that the company’s investment in tube lasers brings the whole program together, but the investment is a scaled-down version of the company’s business model, showing how Nitro can support itself and other divisions.
“Switching to laser cutting has really improved the accuracy of the part,” Miller said.“We get better components, but just as importantly, it draws on our other resources, especially our welders. No one wants a skilled welder to struggle with poor assembly.It takes time and effort to figure out a solution, and this is best used for soldering.
“The result is better fit, better assembly and less welding time,” he said.Laser cutting also helps alleviate the need to find welders with deep expertise.If installed properly, a less experienced welder can easily handle the assembly.
“The use of tabs and slots also helps improve efficiency,” he said.“The label and slot approach allows us to eliminate fixtures and eliminate assembly errors. Sometimes, a welder will put components together by mistake and must be taken apart and reassembled. Strategically placed labels and slots can prevent wrong assembly projects, we can offer it as a service to our clients,” he said.The machine can drill and tap, and is excellent for the myriad miscellaneous items a company needs, such as brackets, hangers, and gussets.
It doesn’t end there.The new organization, combined with tube lasers and other key investments, has allowed the company to go further and work outside the realm of mechanical contracting.Nitro Cutting employees now think and work like contract manufacturer employees.
“We’ve done a lot of steady, high-volume work with the new technology,” Miller said of its laser machine.”We’ve moved from a 100 percent job shop approach of doing one project at a time to a high volume job with contracts of six to 12 months,” he said.
But it’s not an easy transition.It’s new and different, and some employees aren’t ready yet.Projects undertaken by mechanical contractors offer something different every day, and most of the work is hands-on and labor-intensive.In the early days of nitro cutting, providing manufacturing with machines that produced large numbers of parts around the clock was a foreign concept.
“It was quite a shock to some senior employees, one or two of whom have been with us for 50 years,” Miller said.
Miller understands this.On the shop floor, the change is in how parts are made.In the Executive Suite, many other changes are taking place.Contract manufacturers work in a completely different business environment than mechanical contractors.Customers, applications, contracts, bidding processes, scheduling, inspections, packaging and shipping, and of course opportunities and challenges – everything is different.
These were big hurdles, but Viocity executives and Nitro employees cleared all of them.
The creation of Nitro brought jobs to the company in new markets—sports equipment, agricultural machinery, transportation, and mass storage.The company is also doing some work in making parts for low-volume, special-purpose transport vehicles.
Like many manufacturers with extensive manufacturing experience, Nitro doesn’t just make components and assemblies.It has a wealth of insights that can help simplify manufacturing, so it has partnered with many customers to provide value analysis/value engineering to simplify components as much as possible.This creates a virtuous cycle of reducing costs for customers, strengthening relationships with those customers and bringing in more business.
Despite any setbacks caused by COVID-19, by mid-2021 these machines will still be running at full speed.The decision to make these investments paid off, but that doesn’t mean the decision to bring laser cutting capabilities in-house was an easy one.Many manufacturers invest in equipment such as laser cutters after outsourcing their laser work for years.They already have the business, they just need to bring it in-house.In the case of Nitro and its first laser cutting system, it didn’t start with a built-in customer base.
“We have new equipment, but no customers and no orders,” Miller said.”I’ve had a lot of sleepless nights wondering if I’ve made the right decision.”
It was the right decision and the company is stronger because of it.Nitro Cutting initially had no external clients, so 100% of the work was Viocity’s work.Just a few years later, Nitro’s work for other parts of Viocity accounted for only 10% of its business.
And, since investing in the first two laser cutting machines, Nitro Cutting has taken delivery of another tubular laser system and plans to deliver another sheet laser in early 2022.
On the East Coast, TRUMPF is represented by Mid Atlantic Machinery and Southern States Machinery
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Post time: Jul-05-2022