Structural fabricator boosts throughput, on a hillside

Peter Janes pulled up to SCW Contracting Corp., looked at the signage, paused, and double-checked the address. Janes, the California-based founder of equipment distributor JPS International, had spent decades in the structural and heavy fabrication business and, in all that time, had never seen anything like SCW. It’s a structural metal fabricator on a terraced hillside.

Janes met the operations manager, Steven Scrape, and got right to the point. For years Janes had preached the value of workpiece velocity, from the first cut until the fabricated plate and beams land on the delivery truck. Years ago he owned a company called REA Inc., which manufactured various types of material handling equipment as well as beam and pipe coping machines (he sold the company in the early 2000s, and the owner changed the name to EMS Equipment).

Achieving high velocity requires smooth material flow, which of course isn’t easy to achieve on a hill. Moreover, Scrape was looking to step up its fabrication with a new beam line, plate cutting table, and robotic plasma profile cutter. Fallbrook, Calif.-based SCW needed to increase its capability within limited space and improve material flow.

“[Janes] told us, ‘This is a gorgeous wedding venue. I think you should take all the money you were going to invest, buy property with flat land, and build a fab shop there. You have plenty of acreage here, but it’s terraced. Material handling is going to be difficult.’”

Scrape took a moment, shook his head, and said, “I never met you before, sir, but you need to know, this is our property. We own it, and we’re proud of it.”

Janes paused and then said, simply, “Fair enough.”

Soon after, Janes produced CAD drawings to suggest how material could flow through the fab shop, down a terrace to finishing, then directly onto trucks. SCW has little room for inventory of any kind. If raw stock is delivered, it can’t sit for long before being processed; and if work is finished, it has to leave. But despite (or perhaps because of) all these obstacles, this structural fabricator with virtually no steelyard is now one of the most successful operations in the region.

Limitations Spur Innovation

Lean manufacturing came to fruition in large part because Japanese manufacturers, doing business in a country destroyed by war, didn’t have a choice. Doing without spurred innovation, and the same could be said with SCW’s terraced hillside. But as the fabricator’s history shows, SCW has had to do without for reasons that have nothing to do with topography.

The company’s roots go back decades. “In 1980 our dad [Jeff] started this company with a welder on the back of a pickup truck. He had welding skills and a willingness to take on anything,” Steven said. “He started by going wherever the work was. He has that personality. He’d go to the doughnut shop at 5 a.m. because he knew the construction company owners were there. And he’d drum up work.”

Jeff specialized in pipe welding, then began doing pipe installation work. This planted the seed for SCW’s utility contracting business that now specializes in water infrastructure projects such as pump stations and treatment plants for local water and wastewater municipalities. From that the company started bidding small fabrication and erection jobs, which eventually took on a life of their own.

By the early 2000s, SCW began operating under two divisions, a water and wastewater utility contracting division and another division specializing in structural steel fabrication and erection. That said, SCW wasn’t a full-service fabricator back then, and for good reasons. It had good relationships with other processors and fabricators that could cut and drill. SCW took preprocessed material and performed the fitting, welding, and coating, then passed it on to SCW’s erection team.

The approach made sense at the time. After all, why take on the risk of capital equipment when the company could rely on other operations that had more room? Of course, no business is ever free from all risk, and ensuing events in SCW’s history prove this all too well.

Rebuilding a House of Cards

By the late 2000s Steven Scrape was attending California State University Long Beach, getting a degree in construction engineering management while working in the family business. Still, working on the shop floor throughout 2008 and 2009, he noticed something odd. It was the Great Recession, and construction investment in the area had plummeted. Why then was SCW busier than ever?

The problem, which culminated in 2011, stemmed from estimating. Besides taking part in some unethical practices, the shop’s main estimator had been grossly underbidding work. “And when I mean underbid, I mean underbid,” Steven said. “One job that was bid for $4 million should have been an $8 million job.” He added that the price didn’t even take into account travel time. SCW is in Southern California, between San Diego and Los Angeles, and the job was way up in Stockton, east of the Bay Area.

The company immediately fired the estimator, after which came a moment of reckoning. As Steven recalled, “Our father said, ‘We have no revenue. We have attorneys to pay, and we’re bleeding money. So, do you guys want an opportunity? There’s a shop full of welders and ironworkers. And we have some longstanding team members who are still with us. Do you guys want it? If so, great. If not, let’s sell off the fabrication equipment, rent out the building, and you can join the wastewater division.’”

Steven and his brother Andy considered the situation. They both had engineering degrees, and Steven was getting his MBA. He had already gotten offers from large construction firms to work in their finance departments. He could either sit at a desk in an office or …

“We finally said, ‘You know what? Family’s family.’” The first order of business was, as Steven put it, “to get back to basics.” That is, SCW needed to focus on relationships that built the business. A big part of that involved following through on promises made—even those that bled cash, including that $8 million job quoted for $4 million.

“We knew that we had to do whatever it took to finish the job,” Steven said. “My father, mother, brother, and I built stainless steel handrails inside our garage at home. That was cheaper than hiring people to do it in our shop. We did it for free. And we drove up to Stockton, my father driving one truck with the handrails and my brother driving another truck, with a crew behind us.”

After this Steven began doing time studies. Instead of bidding based on an average cost per ton, he wanted to uncover exactly how long it took to perform certain jobs. He would literally go to the floor and perform certain tasks with the shear, ironworker, and other equipment. Over time he developed a library that to this day forms the framework for SCW’s bidding process.

Bringing in Material Processing

Until three years ago, SCW relied on outside suppliers to process material, a strategy that makes perfect sense—until, of course, a supplier fails to deliver. And in 2018 that’s exactly what happened. SCW was set to accept 20 tons of processed plate, and the supplier couldn’t deliver. This represented a turning point. SCW needed to be in charge of its own destiny. It needed equipment.

On the equipment hunt, Steven met a processor that could deliver plate, so SCW could fulfill an order and deliver on promises made. The hunt also included Janes’ visit and subsequent plan to help streamline flow, tailor-made for a fabricator on a hill.

Years ago the Scrapes purchased the land from a nursery, which can operate perfectly well on a terraced hillside. Work trucks and tractors have no trouble transporting plants between terraces, after all. “But it’s not ideal when you’re carrying around 10,000 lbs. of steel,” Steven said.

The hillside property has three terraces, with administrative offices on the first. From there a road leads up to a 2.5-acre terrace with a shipping and receiving area. The road then continues up to the third terrace with an indoor and outdoor (under-canopy) fabrication shop totaling about 40,000 sq. ft. under roof.

In 2018 SCW was about to bring in its first beam processing line and burn table, all from Voortman. Where would it all go? This is where JPS’s proposed layout played a critical role.

SCW’s new fab shop layout consists of a classic U-shaped part flow in the outdoor, under-canopy portion of the facility. Beams travel on a 65-ft. infeed into the beam processor (a V808 robotic plasma system), then flow to the 65-ft. outfeed. They’re then offloaded and sent to layout/fit-up and welding. Plate processing occurs within the indoor portion of the fab shop.

The most notable aspect about the under-canopy area is what’s missing: a bridge crane. The indoor fab shop does use a small bridge crane to move plate material in and out of the area. That crane, 30 ft. wide with 80 ft. of travel, moves plate using hooks and magnets between the staging area and the burn table and brake. But that’s just the indoor portion of the fab shop. The beam line part of the operation has no bridge crane at all.

The U-shaped work flow is also why you won’t see conventional lift trucks. Before investing in plate and beam processing, the company relied on its 10,000-lb.-capacity reach lift to move material. It was doable, but highly inefficient.

“We need to transport up to 65-ft.-long beams, which require 70 ft. of clearance,” Steven said. “If we need to bring a beam from one side of the area to the other, we need to tell everyone to move away from their workstations.

“That’s why, almost immediately, Peter [from JPS] told us we needed a Combilift,” Steven continued. The multidirectional, side-loading truck eliminates the need to rotate long workpieces.

SCW’s material movement is highly choreographed. Material arrives in a staging area, where the Combilift retrieves between 8,000 and 10,000 lbs. of material at a time. The truck carries it up an 8% grade (hence the need for the high-torque truck model), then loads it to the infeed off the plasma cutting robot. The far end of the fab shop has enough clearance for the Combilift to rotate the material 180 degrees to take it to the layout/fit-up station.

“At this point the material gets shuffled between welders,” Steven explained, “and in most cases, we move people, not material.” This means that layout/fit-up and welding usually occur in the same station.

The stations themselves are designed with material movement in mind. Their current iteration came to fruition about a year and a half ago. Steven and his team observed just how often welders needed to wait for a fork truck to reposition or roll a beam so that the welder could easily access a joint. Around that time it just so happened that a recently shuttered fabricator in Arizona had an auction. Steven and Andy’s father boarded a plane and came back from that auction with 13 jib cranes.

Today every multipurpose fitting and welding station has a welding power source suspended from a boom mounted to a dedicated jib crane. Welders and fitters use those jib cranes to manipulate the work as needed—no more waiting for material to be repositioned. (The company keeps a reach lift at the ready for large workpieces.)

Once welds are finished, a Combilift retrieves the stock and transports it down an 8% grade to the coating area on the terrace below. From there it’s loaded onto trailers and shipped on-site.

Keep Material Moving

Steven recalled visiting a competing fabricator several years ago. “They brought material to a station where a fitter did the layout and the fit. They then transferred it via bridge crane 80 to 90 ft. away to the welding station. Why?”

Some of it is a vestige of traditional efficiency metrics. A welder provides value only when that arc is struck. So, obviously, the work should be brought to the welder, not the other way around, right?

Neither Steven Scrape at SCW nor Peter Janes at JPS see it this way. Flow is what matters. “I have seen so many fab shops in my time,” Janes said. “Some of them can have great machinery for processing beams, but they’re handling the material way too often. In the end, only two things matter: When material comes into your shop and when it leaves your shop. Whatever happens in between is man-hours per ton.

“And, unfortunately, most do the majority of material handling through the shop by crane, and crane handling is notoriously slow,” Janes continued. “There are times when cranes are necessary, of course, but there are other ways of moving material through the shop. Every time you pick a beam, you’re spending time on it, and time is money.”

At SCW, welders and fitters might walk to different stations, and they may even spend time using their dedicated jib crane to manipulate work. They might not be laying bead constantly all day, but everything they do helps work flow through the shop faster.

“We have 20 guys in our fabrication facility,” Steven said, “and our annual output matches competitors who have between 40 and 50 people.”

He added that SCW’s fab shop throughput is just a piece of a longer value stream that starts with lean material purchasing, buying only what’s needed for the job; again, SCW has no large steelyard at its disposal. The company also kits work strategically to ensure smooth flow all the way onto the truck and through on-site erection, which is handled by SCW’s erection operation managed by Steven’s brother Andy. Then there’s the software that integrates with the company’s office systems, streamlining work flow on the front end.

SCW isn’t free of operational challenges, especially when it comes to construction delays and material price volatility. Of course, considering recent material price hikes, 2021 has been a good year not to be awash in inventory. Regardless, increasing workpiece velocity remains core to it all.

“A 400-ton job, one that required assembly of different parts and components, often would take us 10 weeks,” Steven said. “Now we can do that job in four to six weeks. And this includes all the plate and beam processing we now do in-house. We’re adding a lot more value, and we’re doing it in less time.”