November/December 1989
Straight
talk with Midwest America's simple-and-strong equipment builders, Al-jon.
By Gerry Romano
Gerry Romano is editor of
Scrap Processing and Recycling.
"We're real pleased with the market. We're confident that it's going to be there for a while, and we're ready for it."
So asserts Al-jon President Ken Kneen without a trace of uncertainty. Backed by a corporate commitment to quality equipment and customer service, Ken can indulge the business aggressiveness so common to this manufacturer if not to its location, Ottumwa, Iowa. Out of this small town come continuous news releases spreading Al-jon's message. "Keeping it simple, building it strong," boasts the company, begging the option, How so?
Simply Listening to Customers
"A good many of our ideas come about from the close communication that we have with our customers," says Jon Kneen, chairman of Al-jon. This practice has been in place since Jon founded the firm with chief engineer and principal designer Al Sharp 26 years ago. "We started the company with virtually no money, no customers, and no products," says Jon, adding that he and his partner banked on the two assets they gained through work at other companies: ability and contacts.
Through one of those contacts they received a scrap business in Iowa. This led to more contacts within the scrap industry, including a customer who's partly responsible for Al-jon's trademark, the car crusher.
"This customer kept telling us he wanted to buy a 'car squeezer,' remembers Jon. He and Al went to work (which included a test squeeze on Al's station wagon when he wasn't looking). The resulting product is still in operation today, and the basic concepts of it design are still in effect in Al-jon's No. 20 car crusher.
Strengthening the Product Line
Other products tailored to the needs of the scrap industry followed, so that by the time Ken, Jon's son, joined Al-jon in 1984, the company had in addition to the car crusher the No. 550 shear baler, the No. 400 log baler, and the No. 1100 hydrostatic loader. But, says Ken, the company was experiencing severe peaks and valleys in sales. "When scrap markets were up, our sales were up; and when they went down, we rode the roller coaster right along with them."
To smooth out the ride, the company decided to diversify through a combination of developing new products and targeting existing products for acquisition. "Where there was a good product out there and we had a better marketing capability, we acquired the product line or got marketing rights for it," says Ken. The first effort of this type was with a wheel crusher manufactured by Multitek in Wisconsin. "I think in their best year of sales they only sold 15 or 20," says Ken. "We took the product over and sold well over 100 in the last couple of years. It proved to a lot of people what our marketing power was."
One company convinced was Italy-based Vezzani, which subsequently contracted the U.S. marketing rights for its shear line to Al-jon. Aside from advancing Al-jon's efforts to get into additional large scrap plants, Ken says Vezzani has benefited from representation by a company building equipment with a similar concept. The Vezzani is totally automatic machine, like Al-jon's crushers and balers.
Another company recently drawn in by Al-jon's marketing power was United, a sweat furnace manufacturer in Topeka, Kansas. Acquiring this operation, run by Kelly Petit, gave Al-jon access to incineration technology, which the company could apply to other products. And since the acquisition, United's sales are up..."so it's been a real good thing for both of us," says Ken.
As Al-jon has looked at outside products with acquisition potential--a strategy the company plans to keep following--it has also continued internal product research and development. The results over the past few years have included the No. 2026 baler, a tire slicer, a lid crusher, and support equipment such as grapples, dozer blades, and fork extensions.
Products in the works include, according to Ken, "one of the neatest new developments"--an automotive "manipulator." Estimated to be complete in 6 to 9 months--18 months have already been invested--this piece of machinery will remove about 15 recyclable items from a car, in a confined area, trapping all fluids. Just released was portable, automatic tire shredder.
Like the products before them, these two incorporate Al-jon's simple-and-strong engineering philosophy. Explains Al: "I guess the design of equipment is a little bit like art: simplicity is beautiful. ...It's nice not to have moving parts--the fewer you have, the fewer problems you have." While the company stocks parts for every machine it's made, it designs machines with a many common, buy-them-at-you-corner-hardware-store parts as possible, says Al. "The point is to keep the customer's equipment running."
To support this point, Al-jon has a service engineering that department that not only provides input for product design but also offers problem-solving at the customer site. Says Jim Kaldenberg, head of the department, "If the customer gets into a situation that we can't solve by phone, we'll go out there. ...We may even show him how to change his whole yard operation to make the equipment work and do a good job for him."
A new customer service is demonstration videos. Public Relations Manager Don Thompson is in process of developing the first, which will feature members of the service department taking the tire cutter through all the start-up to shut-down steps.
Market Power through Regional Sales Managers
Much of Al-jon's increased ability to market products and address customer needs is attributed to a recently expanded region-based sales force. Says Jon, "The difference between us and many equipment manufacturers is that we work directly with the customers--there's no intermediary." At the fingertips of each regional sales manager is a new data base containing extensive sales information, so calls from customers regarding their equipment can be handled quickly and efficiently.
The calls come in from all over the U.S. and throughout Europe, where a tremendous amount of equipment is distributed, according to Al-jon's Jim Langland. Increasing sales overseas is a major objective, he says, with Al-jon and Al-jon/United products.
Between this objective and the sales goals for the U.S., Al-jon anticipates a 20-percent-higher gross for his year over last. The company doubled its sales in the last four years and, Ken believes, it has a good market to look forward to for next year. And again he says, "We're ready."
Straight talk with Midwest America's simple-and-strong equipment builders, Al-jon.