July/August 1995
This Midwest recycler has become one of the leading wire choppers on the country, thanks to its efforts to be known as a high-quality, “aggravation free” company, as well as its personal touch with its customers and employees alike.
by Kent Kiser
Kent Kiser is an associate editor of Scrap Processing and Recycling
Larry Mallin’s office walls are covered with small plaques bearing inspirational and humorous sayings. One says, “If it is to be, it is up to me.” Another states, “Success lies in doing not what others consider to be great but what you consider to be right.” And yet another says, “Those with the courage to act find their horizons unlimited.”
These plaques are more than mere office decorations. They are clues to the character and business philosophy of Mallin Brothers Co. Inc. (Kansas City, Mo.), a ferrous and nonferrous scrap recycling firm with a focus on wire chopping. This is one old-school scrap company that really seems to subscribe to the values touted by the plaques--values such as honesty, fairness, self-reliance, faith, service to others, and more.
But the plaques are only one clue. Another surfaces when Larry, the firm's secretary/treasurer, talks of his involvement in the Boy Scouts, readily reciting the group's pledge to be "trustworthy, loyal, helpful, friendly, courteous, kind, obedient, cheerful, thrifty, brave, clean, and reverent."
It quickly becomes clear that Larry and son Jeff, the company's vice president—and an Eagle Scout—have adopted this pledge not only in life but also in business. And that helps explain how Mallin Brothers has managed to claim a secure and elevated position in the competitive wire chopping field.
Finding One’s Niche
Mallin brothers traces its beginnings to the industry’s horse-and-wagon days of the early 1900’s, when Harry Mallin—the firm’s 93-year-old president and patriarch—and his father would scour the Missouri countryside for scrap in a covered wagon.
Harry continued working with his father until1928, when he founded his own firm, Mallin Junk Co., in downtown Kansas City . Operating out of a yard that measured 42 ½ feet wide by 125 feet long, Harry—aided by his wife and a truck—solicited industrial and retail business under the slogan, “We are not undertakers, but we deal in remains,” which brought in rags, bones, bottles, tires, paper, and metals. “We handled everything imaginable,” Harry recounts.
The company assumed its present identity--Mallin Brothers—in 1946 when Joe Mallin. Harry’s younger brother, joined the firm after returning from service in World War II.
Larry, Harry’s son, came aboard in 1952, already a seasoned scrap industry veteran, having played and worked at the firm from the time he was 5 years old. In those early days Larry says, things were pretty basic. “I remember having to go to the corner to get water because we didn’t have running water or bathroom facilities in the place. And we would burn scrap tires to keep warm in the wintertime.”
In 1964, Larry began lobbying his father to enter the then-new and unpopulated wire chopping niche. “The only way to recycle wire before then was to burn it, which is a very hard way to process material,” Larry notes. With the emerging chopping technology, “I felt we could enhance the values of the material and make processing it a lot easier.”
And so, in 1968, Mallin brothers became one of the first scrap companies to become a wire chopper. The venture “took off running,” Larry says, and hasn’t slowed. Augmenting its original single chopping line, the firm added a second in 1971 and a third in 1978. The company had found its niche, and today wire chopping accounts for 80 to 90 percent of its business.
Quality ‘Fanatics’
With 24 employees and a single 7 1/2 –acre plant, Mallin Brothers would probably be described as a small-to-medium-sized scrap recycling company. But as an operator of three large automated chopping lines, it qualifies as a big fish in the wire chopping pond. “We’re certainly one of the larger choppers in the country, and we have a market share disproportionate to our size,” Larry boasts.
And, based on its processing volume, it’s getting larger all the time. In 1990, for example, Mallin Brothers chopped around 12 million pounds of wire, whereas today it’s processing at least three times that amount, Larry says. One reason for this rapid growth, he notes, is that the firm has “acquired some large customers that are supplying big volumes”—such big volumes, in fact, that the company recently had to add a second processing shift for the first time.
But perhaps a bigger reason for the firm’s growth—and its staying power—is its focus on providing quality service and products, the Mallins assert. To them, service means many things, including listening to customers’ needs, making pickups and deliveries when promised, and—since toll-processing accounts for about 65 percent of its business—processing customers’ material quickly. The company’s rule, in fact, is to process tolling customers’ material ahead of its own. “We don’t put our customers material aside to take care of ourselves first,” Jeff remarks. “It gets frustrating sometimes because we can have a lot of money tied up in our material that’s sitting there, but we’re adamant about taking care of out customers first.
And when it comes to product quality, Larry states confidently, “with no disrespect to other choppers, I think we’re the highest-quality wire processor in the country. We’ll put our finished product up against anyone’s.
Achieving quality in the wire chopping business is no easy feat considering the myriad types of wire that choppers recycle—most of which are serious contaminants to each other. So how does Mallin Brothers Ensure quality? For starters, notes Jeff—the firm’s designated quality control “fanatic”—“We’re very careful about what goes into our machines because what goes in is what comes out.”
To avoid the garbage in/garbage out problem, all incoming wire undergoes rigorous screening and sorting. “Everything that goes into out primary granulators has been touched by human hands and visually checked,” Jeff explains. “We don’t dump boxes onto a conveyor and away they go.” This fastidious front-end quality control slows the form’s throughput, but there’s more at stake than lost production. “Our finished product is clean and we save on maintenance by not having a chunk of iron go into a granulator,” Jeff notes.
The company is equally religious about quality control when it comes to checking its finished product, Jeff says, noting that the firm’s employees—including himself—inspect the finished chops 20 to 30 times a day. “I spend a lot of time in the plant, walking back and forth, checking quality,” he says.
And as an additional guarantee of its finished product quality, the firm requires meticulous cleaning of its lines whenever different grades, or even just material from different customers, are processed. If the company wants to process No. 1 chopper on a line that just ran No. 2, for example, two to three employees will spend four to six hours cleaning equipment. “It may sound inefficient and uneconomical, but that’s the old school,” Jeff states. “That’s what makes us different from everybody else. When we deliver No. 1 copper, our customers can be absolutely sure that’s what they’re receiving.”
Mallin Brothers also applies its quality control checks to the byproduct generate by its chopping lines, which consists primarily of plastic, rubber, and paper insulation. “You can really tell how a company is run by looking at what it throws away,” Jeff says. “We constantly keep track of our byproduct to make sure there are no metallics in the plastic. By doing that, we create higher yields for our toll customers as well as ourselves.”
In the wire-chopping business, product quality also depends on the quality of the processing equipment used, since the equipment has a direct effect on efficiency, yields, and purity. And in the equipment area, Mallin Brothers believes it has some of the best around, with lines that it has put together combining the best features of different chopping lines produced by leading manufacturers. “We’ve configured out lines a little differently, and we’ve done our own design to fit our needs rather than buy packaged systems,” Larry says.
Having good equipment is one thing, but keeping it in peak operating condition is another, which explains why the company has what Jeff calls a “fantastic” preventive-maintenance program. “About 20 percent of our production time is downtime for preventive and required maintenance,” Larry observes. These efforts have netted some rather impressive results. The firm, for instance, maintained its 1968-model chopper so well that its original bearings lasted 26 years. “We practically sacrifice some profit by spending so much time on this,” Jeff asserts, “but we feel we have to do it.”
When you ask the Mallins why they go to such lengths in the areas of quality and services, they explain that their goal is to be an “aggravation-free” company for their customers. “Our customers tell us that they enjoy doing business with us because we’re aggravation-free,” Larry remarks, “and I thing that’s the name of the game.”
A Conservative Approach
When Jeff was in college, studying business administration, he was taught that companies have to borrow money to make money. But that hasn’t been the case at Mallin Brothers. Thanks to its “fairly conservative” financial approach, the firm has managed to grow, yet still maintains “zero indebtedness” “Everything you see here is ours,” Larry says, gesturing toward the company’s plant. “We operate solely on our own money, and any growth that we’ve had has been internally funded.”
Though Mallin Brothers is now “Pretty well-fixed financially,” Harry understates, the Mallins remain conservative because they view that approach as the best way to ensure a stable, secure work environment for all. And there’s another reason, “I lived through the Depression and have never forgotten it,” Harry points out. “So, under no condition will I go into debt in this business.”
Aside from their debt-free philosophy, the Mallins also steadfastly believe in leaving the company’s profits “in” so the money can create more profits. “Everything the business makes goes right back into the business,” Jeff states. “We feel that our best investment isn’t necessarily treasury bills or equities, but Mallin Brothers.”
While the company’s conservatism has certainly helped it, has it also restricted it from expanding or grabbing new opportunities? “On the contrary,” Larry asserts, “I think it’s prevented us from making serous mistakes.” Instead of taking risks and losing, the company has opted to grow slowly, steadily, and surely. “We realize our limitations, and we don’t want to bite off more than we can chew,” Jeff says. “We’re not going to get to the point where we have some huge company that we have no handle on.”
And make no mistake: The Mallins have a firm handle on their company, thanks in large part to the firm’s virtual lack of corporate hierarchy. Rather than relying on several layers of managers to tell them what’s happening, the Mallins have a firsthand grasp of the firm’s day-to-day operations. Larry and Jeff, in fact, spend 99 percent of their office time sitting at the company’s “control center,” which affords a ground-level view of the entire plant. Even nonagenarian Harry still reports to the office four days a week to peruse the Wall Street Journal, talk on the phone, offer advice (occasionally), and generally “sit at the desk and look smart,” he says. Jeff asserts: “We’re not out of though. Rather we’re very much in touch with our employees and operations. We’re hands-on.”
And when Jeff says hands-on, he means hands-on. It’s not unusual, for instance, to see him dash out the door in a tie and slacks and jump into a truck or forklift to help out. And it’s even more common to see him engaging in the practice of what he calls MBWA—management by walking around—as he examines material qualities or checks out what’s going on. “You can’t lookout a window or sit in an office and know if things are running properly,” he says. “I feel I have to get out there with the employees to know what we’re doing right and what we need to improve.”
Managing Family Matters
In the world of family businesses, the going can sometimes be rough. There can be in-fighting, personality clashes, power mongering, succession problems—all of the problems of business, only magnified because they’re that much more personal.
Yet the Mallins have largely avoided these problems instead managing to “get along beautifully,” as Harry remarks. How have they done it? One answer lies in the firm’s practice of making every new family an equal partner—with an equal voice—from the day they enter the business full time. “I’m a great believer in being fair and square with my children and grandchildren,” Harry says. “When your salaries are different, that can create bad feelings. So we never draw a penny more than each other, and everybody’s happy that way.
Larry also lauds the wisdom of the equal-partner concept, noting that “from the day you start, you can’t get any higher than you already are. If you have no higher position to attain, then you’re interested in making the business improve, not your personal situation. We don’t have any power struggles.”
Jeff, the most recent Mallin Brothers inductee, became an equal partner after graduating from college in 1981. Being given the equal-partner distinction not only flattered him, but also gave him confidence and enabled him to “learn more and faster than those who enter the family business as an underling. I was given a lot of responsibility at a young age.”
Though the Mallins know their equal-partner philosophy isn’t the only approach to family management, they feel it’s the best one. “The biggest shame is when a father owns a business and his sons work for him,” Larry says. “My son doesn’t work for me. He works with me, and I think that makes all the difference in the world.”
The Mallins have also been able to make the family aspect of their business work by dividing responsibilities fairly and sensibly among the principals, enabling each to focus on an area of interest and strength. While their responsibilities inevitably overlap, Harry and Jeff have focused on administration and management, while Larry—and Joe before him—has concentrated on sales.
One other key to family business success, the Mallins note, is constant communication with each other. Though Larry and Jeff sit only feet away from each other at the office, they also have breakfast every Tuesday morning so they can “sit and discuss things calmly,” Larry says. “Jeff and I do a lot of talking. Probably our strength is that we’re different, and we still talk.” Or, as Jeff explains the phenomenon, “We try to have understandings so we don’t have misunderstandings.”
The Personal Connection
When the Mallins talk about their family business, they count their 24 employees as part of their family, and they strive to establish and maintain a personal connection with all who work for them. “We tell people when we hire them that Mallin Brothers is a family and they’re going to be joining it,” Jeff says.
The firm shows its caring for its employees thorough such benefits as interest free loans, fully paid health and life insurance, a safe workplace, and stable, secure jobs. “In the history of this company,” Jeff says, “we’ve never laid anybody off because conditions were slow.” The firm also looks out for its employees by cross-training them and offering a “rotating cycle of jobs” to minimize boredom and broaden their job skills, Jeff says. “We want our employees to improve themselves. We depend on them to make a living just as they depend on us to make a living. It’s a two way street.”
The company’s personal approach helps explain its many long-term employees and its couple of second-generation employees. “Once we have employees who have been here for awhile, it’s not just an employee-employer situation anymore, it becomes a relationship,” Jeff notes. “We truly care about the people who work for us.”
This desire for personal connection also makes it clear why the company thinks twice about growing too large. Growth often requires more layers of management, which can separate executives from the business’s front lines and can make them “lose some of the close contact with employees and lose touch with what’s happening on the floor,” Jeff says. We know there are some good and bad aspects to growth, but we focus on continuing to maintain the personal relationships with every customer, both large and small, and with all of our employees.”
Improving the Business
When the Mallins look at the challenges—both present and future—facing their business, they point to the growing burdens of the industry’s ever-changing environmental, legislative, and tax challenges. Keeping up with these demands, Jeff notes, requires significant outlays of time and—usually—money.
About five years ago, for instance, Mallin Brothers installed an in-line system to chemically treat its wire chopping residues to prepare the material for disposal and prevent it from leaching potentially toxic elements. “You have to do this sort of thing if you want to stay in business,” Jeff says, noting that this costly system protects both Mallin Brothers and its customers from potential downstream liability under superfund.
Though necessary, such investments drain energy from and add cost to the business, Jeff admits, noting that “the cost of doing business is what hurts. It just costs more to do the same thing, and it gets frustrating.”
While the future will certainly contain more challenges, it also seems set to offer opportunities. For instance, the Mallins see their business becoming increasingly mechanized and automated. If I could figure out a way to do robotics, I’d do them in a New York minute,” Larry asserts. “The problem is you need robotics with brains when you’re sorting wire. But it’s coming. It’s just a matter of time. And when it comes, we’re going to buy it.”
In the nearer future, Mallin Brothers might install its fourth chopping line and establish an operation to recycle its plastic wire chopping residue, in part because disposal costs for this material are expected to escalate and, in part, to fully close the recycling loop. “We couldn’t be any more serious about plastic recycling, but we just haven’t been able to do it yet,” Larry sates, concluding “We just keep trying to improve the business. We want to do it better at less cost. That’s out goal.”
This Midwest recycler has become one of the leading wire choppers on the country, thanks to its efforts to be known as a high-quality, “aggravation free” company, as well as its personal touch with its customers and employees alike.