Issue: December 2001
Publication Name: Modern Metals
Written By: J. Neiland Pennington, Executive Editor
A wide range of products, dimensions and processes, lean manufacturing, an emphasis on high quality and creative marketing are carrying this cold finisher through tough times.
Twenty years ago, during another steel industry recession, Northlake Steel Corp. was a single-machine, single-product line company producing turned, ground and polished (TGP) steel bar. The prospects, acknowledged William K. Bissett, chairman and CEO, weren't encouraging.
"I vowed back then that this would never happen again," he declared. "I would always have more than one product and service to sell."
Today, Bissett heads a Valley City, Ohio firm that is at once a focused specialist and a wide-ranging generalist. It produces only round bars; don't look for hexes, squares or other shapes. At the same time, Northlake can do, according to Bissett, "anything that's possible on a hot-rolled round bar."
To TGP, Northlake adds cold drawing, shot blasting, straightening, selective induction heat treating, chrome plating, machining - including 1 ½ -in. diameter X 154-in. deep gun drilling - and bundle demagnetizing. Its diameters range from 12 mm (just under ½ in.) to 13 in. Capacity of the 82,000 sq.-ft. operation is 15,000 tons per year for cold drawing, running three shifts, and a monthly output of 1,500 tons for TGP, depending on the size mix.
The plant is operating nowhere near capacity now; it is down to one shift five days per week. "A year ago, we were running three shifts, six days per week," Bissett reported. "That changed last May."
Cold drawn sales up
In spite of some layoffs, the diversification strategy seems to be working well. "Our cold drawn bar sales have actually increased this year; cold drawing is growing as we speak," he continued. "We picked up more new customers in the last 10 months than I've gained in any 12-month period in my career with the company, which goes back to 1978.
"Cold drawn bar is sold to screw machine houses, and service centers are also a large market. We have picked up several new OEM customers, but they aren't buying lavishly."
Lean manufacturing has kept costs competitive during the down market. "For the last seven or eight years, we've been growing very fast," said Rick Ressler, company president. "This slowdown is a good time for us to regroup, to refine our methods.
"Customers today don't always want to buy 20,000 lbs. of one size; they are likely to want only 5000 lbs. We have to figure out how to manufacture 5000 lbs. as cost-effectively as 20,000 lbs., and reduce the size of the minimum profitable order. We are reviewing all of our processes to make them more efficient, to make us competitive in tomorrow's market."
You can't make it up in volume
"Everyone in the steel industry has bought into the big lie: 'We'll make it up in volume,"' stated Bill Bissett. "No, you won't. You have to learn how to make money on every order. If you make money on the first pound, you'll make money on the 10,000th pound. But if you lose money on the first pound, chances are you'll lose on the 10,000th pound also."
Lean techniques at Northlake focus on eliminating material handling. Bars are removed from the stacker racks to the various operations manually, but most loading and unloading at the machines are automatic, and production is continuous. One operator, for example, can run two centerless grinders simultaneously.
In any business conversation with either Bissett or Ressler, the word "quality" is inevitable. "We try to be the highest-quality producer first," Bissett said. "Only then do we try to make more quantity. Our focus is on value-added bar and high-precision applications, not the commodity markets."
Northlake's business breakdown confirms this. Seventy percent of its shipments are to original equipment manufacturers, with the remainder sold to distributors. The majority of Northlake's sales are more engineering oriented and less price-sensitive.
The pickier the better
"The pickier the customers, the better we like them," Bissett asserted. "We have one long-term customer that can't get other cold finishers in the area to supply it. This company has a reputation for being a pain. But we did in excess of $2 million with them last year, and I don't believe we had $1000 worth of problems. We've supplied them for years, and we know what they need."
Rick Ressler listed some of Northlake's diameter tolerances, which exceed AISI standards. "The total tolerance for TGP bar up to 13-in. in diameter is 0.004 in. For low-carbon drawn in small diameters, we hold 0.002 in., and maintain 0.005 in. for 6-in. diameter. Six-inch medium carbon cold drawn runs 0.006 in. Those are minus tolerances; they are all plus zero."
Straightness tolerances are 0.001 to 0.002 in. TIR per linear foot. But 0.010 in. TIR is never exceeded, regardless of length.
"We spend a lot of time straightening and restraightening if we have to," Ressler pointed out. "Without straight bars, it's very hard to hold close diameter tolerances."
Northlake runs two-roll straighteners, two #1s and one each in #2 through #5. For diameters from 6 in. through 13 in., there are straightening presses of 125, 200 and 500 tons.
A favorite fussy market
Carbon and stainless linear shafting is one of Northlake's favorite fussy markets. Its induction hardening capability - two lines of 200 and 150 kw, for diameters up to 12 in. and 6 in., respectively - makes linear shafting a natural. According to Bill Bissett, it's a market with relatively few suppliers. "Not many service centers stock linear shafting because it's a very specialized product," he said. "It's sold primarily through bearing distributors."
For linear shafting, the diameter tolerances are in the ten-thousandth range. Small diameters down to 12 mm run a total of 0.0002 in., and it's 0.0005 in. for the maximum diameter of 4 in.
Toll processing is another revenue stream that Northlake promotes, from full bar preparation to single operations. "We do toll processing with any of our capabilities," Bissett related. "If a customer wants just shot blasting or demagnetizing, for example, we will do that. We can demagnetize entire bundles at once, which is more cost-effective than one bar at a time."
Until the recession hit, Northlake was planning an expansion that would double its manufacturing space, add two draw benches, enlarge the heat treating and machining capabilities, and create a quick-response manufacturing cell. The plans have been drawn, the land is cleared and the company is ready to roll.
"We'll probably get underway in six to 12 months after business starts to gear up," Bissett reported. "If we see a good, consistent business level in front of us, we'll resume our expansion plans.
"When business was good, we definitely needed the additional capacity. With the automation we're adding, our plant capacity will grow geometrically."
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