February 3, 2014
After 60 years in business, Superior Tube Co. Inc. found itself at a crossroads. The recession of the early 2000s had taken a toll on U.S. manufacturing, and many companies feared the growing threat from newly industrializing, low-wage countries. The company’s management came up with a strategy to update its manufacturing practices, upgrade its equipment, and prepare its workforce for the challenges associated with global competition. The result, compressing about 15 years’ worth of changes into just two years, has propelled the company forward and earned it the 2014 TPJ Industry Award.
These days metal tubing, welded or seamless, is so commonly available that few give it much thought. Tubing, essentially everywhere, is used in all manner of manufactured goods, including machines, capital equipment, tools, sporting goods, and furniture. No modern vehicle, whether it travels over land, through the air, or in water, would be complete without tubing. In the construction industry, hollow structural sections provide an aesthetically pleasing alternative to wide-flange sections.
Although it is taken for granted today, metal tube manufacturing was in its infancy 100 years ago. Welded tube was available, but the big breakthrough in productivity was the Mannesmann process, patented in 1885, which used a mandrel to pierce a steel rod to make the first commercially successful seamless tube. Thomas Edison remarked that seamless tubing was the most impressive product displayed at the 1893 World’s Fair.
At that time, the heart of the U.S. steel industry was Philadelphia, a mere 65 miles southwest of Edison’s Menlo Park, N.J., laboratory. The American Iron and Steel Association was based in Philadelphia, and it was here that Ellwood Ivins became the first U.S. manufacturer to refine tubing by drawing it in 1890. The Ellwood Ivins Steel Tube Co. would go on to produce tube from brass, copper, tin, zinc, aluminum, and other metals, always in small diameters. Its largest products fed the bicycle craze and its smallest were used for medical capillary tubes.
Although Ellwood Ivins’ company didn’t last long, his legacy lives on. Superior Tube Co. Inc., Collegeville, Pa., founded in 1934, is a direct descendent of Ellwood Ivins Steel Tube and carries on in the same niche Ivins created, drawing tube for small-diameter applications in numerous alloys. The company’s recent efforts to improve its manufacturing processes, upgrade its equipment, and modernize its operations have positioned the 80-year-old company to continue to thrive well into the future, and have earned it TPJ’s 2014 Industry Award.
For many fabrication processes, tube exits the weld mill, extrusion press, or piercer mill and goes to the fabricator. For others, the tube has to go through an intermediate process, drawing or pilgering, to modify the tube’s ID, OD, and wall thickness. Drawing also can improve the surface finish and refine the grain structure. This was Ivins’ specialty in the 1890s and Superior’s domain today. The company makes some welded tube, but this isn’t a finished product for Superior.“We don’t sell any product as-welded,” said Director of Quality and New Product Development Bill Keohane. “We draw everything we weld.” The company also purchases seamless hollows from specialty metal producers as feedstock for its draw benches. It uses a combination of cold reducing and annealing to achieve final size.
This process conditions the weld zone of its welded-and-drawn products, making these products as close to seamless as possible.
“We use continuous hydrogen annealing between the drawing passes,” Keohane said. “The combination of cold-working and annealing recrystallizes the weld zone and by the time the tube is done, you usually can’t see the weld seam with the naked eye,” he said.
While drawing can be used to refine the tube’s size, changing it a small amount, Superior’s work often results in substantial dimensional changes. It trademarked the term Weld-Drawn decades ago to specify product that had undergone at least two drawing passes and a cross-section reduction of at least 40 percent, Keohane said. The largest tube it currently supplies is 1.25 in. OD; the bulk is less than ½ in. OD. The smallest is 0.010 in. OD with a wall thickness of 0.003 in. The company has equipment for conventional pilgering, cold rolling, cold drawing, finishing, straightening, grinding, cutting to length, and nondestructive testing.
While many tube and pipe manufacturers do a respectable business in a few varieties of steel, this isn’t Superior’s niche. The company makes products from more than 50 alloys, and all of these are specialty metals—heat-resistant, corrosion-resistant, lightweight, refractory, and so on. It makes no products from carbon steel and none from low-grade stainless steel.
As such, the company’s success isn’t based solely on its equipment or its ability to use that equipment. One more critical asset is its metallurgy knowledge. It had a metallurgy department in the 1930s, and continues to dedicate significant resources to metallurgical testing and research to enhance its expertise and assist its product development efforts. This knowledge has positioned Superior consistently to take advantage of many technologies over the decades: The development of radio in the 1920s and television in the 1950s; the modernization of aircraft as the U.S. entered World War II in the 1940s; the advent of nuclear power and the nuclear navy in the 1950s; space exploration in the 1960s; and the use of medical stents in the 1990s and other implantable devices in the 2000s.
Although Superior continued to amass metallurgy knowledge and metalworking expertise as the decades progressed, in the early 2000s the executive team knew that the company wasn’t operating at its full potential. Located in its original location, the facility had its original layout and was still using some of the equipment purchased in the 1940s and 1950s. Incorporating practices such as lean manufacturing and wringing some of the inefficiencies out of the processes required the company to rethink how it does what it does.
Although the draw benches, some now more than 60 years old, are perfectly capable of drawing tube, a chief constraint was in material handling, specifically, the use of overhead cranes to move tubing from station to station throughout the plant.
“Moving a load of tubing from Station A to Station B isn’t very efficient when the crane is at Station Z,” said Director of Operations Ben Huber. “Moving the tubing with carts would make more sense.” Switching from cranes to carts sounds easy enough, but in reality it was like peeling an onion, uncovering one layer after another, roadblock after roadblock. The draw benches would have to be moved to accommodate the carts’ turn radius. Moving the draw benches meant installing new draw bench hardware because they still had the original drives and controllers, which were no longer available, and even a small amount of damage during the move would render them useless. Furthermore, upgrading the drives and controllers wouldn’t make much sense without adding supervisory control and data acquisition (SCADA) equipment to monitor equipment uptime in support of its continuous improvement efforts.
In addition to reviewing how the product moved from one draw bench to another, this was also an opportunity to rethink product flow throughout the entire plant, reducing inventory idle time, the number of handlings, and the distances it traveled through the plant. In extreme cases, some inventory spent 90 percent of its time idle or in transit, was handled more than 100 times, and traveled 4 miles.
In other words, relocating the draw benches would do much more than accommodate the turn radius of the transportation carts. It was a chance to open the floodgates, releasing a multitude of changes that would modernize the company’s manufacturing practices and provide hard data on cycle times, equipment productivity, and other metrics.
With the plans in place, the company began to execute. Although it’s a work in progress, the company already has seen many improvements.
“This work isn’t finished, but these changes are underway,” Huber said. “Several of the draw benches have been upgraded [with new drive and SCADA systems], and the company already has seen cycle times drop and on-time delivery rates improve.” It’s not only carrying out its operations much more efficiently, but it’s now capable of collecting hard data so it can measure its operational efficiency. It’s not an exaggeration to say that its data-collection capability went from nonexistent to state-of-the-art in a single step.
Some strategic changes also have taken place recently. The company made some key changes to its executive leadership, taking on a new director of engineering and a new manufacturing director, with the intention of taking the company to a new level of productivity and growth. Also, in 2012 the company caught the attention of an investment firm, The Watermill Group, and the purchase took place later that year. Watermill has encouraged closer collaboration between Superior’ and Fine Tubes Ltd., a British firm in a similar niche and an affiliate of Superior’s since 1953. The two companies product offerings bear many similarities, and recently they have been putting more time and effort into sharing best practices; leveraging sales opportunities; and cooperating to think and work like a single, global supplier rather than two independent companies. The two companies also have worked together with Watermill to develop a strategic plan for entering new markets.
Another big change at Superior in recent years is the relationship between company management and the bargaining unit, United Steelworkers Local 9455-0. Conventional contract negotiations in unionized shops tend to be contentious, each side fearing the others’ demands. Several years ago the bargaining unit and management took a creative approach toward the Collective Bargaining Agreement (CBA), seeking a cooperative rather than combative mode of discussion.
The year was 2006. A federal mediator suggested a negotiating technique called interest-based bargaining (IBB), and both sides agreed to give it a try. The U.S. economy had recovered from the 2001-2003 downturn, but the memories of the recession were fresh. It was an uncertain time—growing global competition had been eating into company revenue, and the sudden decline of the U.S. manufacturing base caused some to wonder about the company’s future. The biggest threat wasn’t on the other side of the negotiating table, but across the Pacific.
Management drew up a list of big-picture concerns and bargaining unit representatives did the same. The similarities were striking, and comparing lists was the turning point for the negotiations. IBB allowed management and labor to focus on areas where they agreed and set the stage for a constructive dialogue on challenges, opportunities, and strategies to move forward. This level of cooperation didn’t end when the contract was signed. The management team takes a daily walk through the plant and stops at each station for a short discussion with each station leader, a union member, for a discussion of issues. This level of communication keeps management informed and prevents small issues from turning into substantial problems that lead to grievances.
“We don’t get a lot of grievances,” said Kevin Heaphy, general manager. “When a union representative brings an issue to our attention, we discuss it in detail. The result usually is a lot more productive than the union issuing a grievance and the company responding to that grievance,” he said.
“We have gone from about two grievances per month 10 years ago to about two per year these days,” said Keohane. “Many people in the steel industry view a union as a hurdle, but the union has been a big asset in making the cultural changes we have made over the last five to 10 years,” he added.
“Management and labor will always have disagreements, but these days we can talk about our disagreements,” Heaphy said. “We talk, and we usually get union support.”
Superior’s executive team went a little further to reduce the us-versus-them mentality when it made the bargaining-unit employees full team members by including them in a share of the company profit. The incentive plan measures quality, service, and productivity every day and compensates every employee quarterly.
A third aspect of the way Superior has been changing in the last few years is a sustained effort to educate its workforce.
“For the last five years or so, we have been providing internships for engineering students, providing training for our workforce, and fostering an environment of opportunity and promotion from within,” Keohane said.
The company also has embraced lean manufacturing and is in the process of weaving lean thinking into the fabric of the company. Its Kaizen Promotion Office has been the primary resource for continuous improvement efforts. It consists of five permanent positions, two salaried engineers, and three union employees. While the Kaizen Promotion Office has gotten the company off to a good start, the executive team realizes that a staff of five is too small to be responsible for sustaining every lean initiative. These days the company is working to educate its entire workforce in lean manufacturing principles, and about 65 percent have been involved in continuous improvement activities so far. The management team includes three Six Sigma black belts and more are in the pipeline, and it has plans to make lean manufacturing practices and the continuous improvement mindset an integral part of the company culture. Most newly hired employees, especially engineers, are assigned to continuous improvement activities before being deployed to a specific department.
“Continuous improvement is an excellent toolset,” Huber said.
The company’s efforts to educate its workforce and upgrade its equipment aren’t two separate activities; Superior’s management sees them as a single program.
“We can’t make our capital investments successful without making our workforce successful,” Huber said.
The upshot is a bright future for Superior—it has a compatible partner, a supportive owner, a forward-thinking strategy, and an educated workforce.
The tales of tinkers, researchers, and inventors are often the tales of discoveries made by accident. One of the most far-reaching accidents was an attempt to improve the light bulb. Early light bulbs developed a black coating on the inside of the glass, and Thomas Edison added a wire that he hoped would collect this soot. Edison noticed that the filament induced a weak current in the additional wire. This had no practical application at the time, but years later this device would become the vacuum tube and spawn the electronics revolution by making radio reception possible. Radio stations popped up all over the U.S. in the 1920s, and radio sales followed suit. Radios sales skyrocketed from $50 million in 1923 to $366 million in 1929, a 600 percent increase in six years.1 Every radio used a handful of vacuum tubes, so making them was a lucrative business. Vacuum tube cathodes needed small-diameter metal sleeves, and Superior Tube Co. was ready.
The company’s founding officers included Samuel L. Gabel, who had previous executive experience in the tube industry; his son, Richard Gabel, a recent graduate with a degree in mechanical engineering; and two financial backers, Clarence Warden Sr. and Clarence Warden Jr. Although the company wasn’t officially incorporated until November 1934, it received its first purchase order, which was for a quantity of cathode sleeves, in July. Superior didn’t know it at the time, but the civilian radio market was just the beginning.
Radio transmissions, first used during World War I, would transform military communications during World War II. Military radios were used for ships, aircraft, and tanks, and sales of radio components went through the roof. In addition, the federal government set aside more than a little money for R&D for all manner of new military gear. A chief project was radio position finding (RPF), later known as radio detection and ranging (RADAR). Radar transmitters and receivers needed vacuum tubes, waveguides, and magnetrons, all of which require small-diameter tubing. Superior’s business grew exponentially.
The company also did quite a bit of business in applications that weren’t quite as exciting—for example, making the tubing used in automobile radio antennas, fountain pens, and fishing rods—but lucrative nonetheless. Its tubing also was used for food processing lines, measurement instruments, and all manner of sensors. Whether by accident or by design, Superior’s tubing found its way into many applications that had both government and commercial purposes.
World War II came to an end, but Superior continued to grow. Vacuum tubes found a new application, television, while the advent of nuclear power, the space race, air transportation, and implantable medical devices brought new applications for Superior’s small-diameter, exotic-alloy tubing.
1. Thayer Watkins, “The Economic History of the Radio Industry,” www.sjsu.edu/faculty watkins/radio.htm
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