July/August 1988
Scrap processors talk about practices and equipment that put them--and keep them--on the competitive edge.
By Madelyn R. Callahan
Madelyn R. Callahan is a Washington, D.C., writer who specializes in business issues.
On a business trip abroad two years ago, Barry Schuchman, president of Kasle Recycling Metallic Resources Corp. in Indianapolis, Indiana, saw shredders smaller than his produce more tonnage with "short" material. That gave him an idea. Once home, he took bulky items he'd been cutting and selling as foundry grades, shortened them to under three feet, and started shredding them with sheet iron and auto scrap. His tonnage doubled, yielding a denser, higher quality product.
Schuchman and other processors interviewed for this article agree that investing in change is well worth the return. For some, the change meant replacing older systems with "better mousetraps" for processing and handling scrap; for others, it involved new operational methods and programs. The result: improvements that made an impact on product quality and company reputation, as well as the bottom line.
Change the System
Peter Wallach, president of Wausau Steel Corporation in Wausau, Wisconsin, described their new "flow-through" baling system. A new infeed for balers has replaced the old steel belt conveyor.
Redesigned as an oscillating conveyor with a dirt screen, it's installed in a pit and feeds a cleated rubber belt, which makes it possible to add a magnetic head pulley for separating ferrous items before material enters the baler.
Working in conjunction with this baling system is another new system, one for pre-sorting.
According to Wallach, Wausau Steel spent approximately $40,000 in engineering alone for the much-needed systems. "We knew our old systems were cost-ineffective to the max and if we didn't do something, we wouldn't be able to hang on to our customers."
Says Wallach, "The whole process is so much faster using mechanical means. We can do 10 times the production, and the finished product is clean and homogeneous. You get a much denser, heavier bale. Whereas years ago, on a big trailer we might have sent out 33,000 pounds of aluminum bales, today we can send 45,000 on that trailer. And the cost per unit pound of processing, sorting, sizing, and loading this material is immeasurably cheaper."
Why aren't other processors doing the same? Schuchman answers, "Honestly, I think they don't know about it." Wallach agrees: "Some just haven't become aware that there are better ways of doing things." But he adds, "Some don't have the necessary volumes to warrant spending the money-and some don't have the imagination."
To be imaginative or innovative doesn't require having the inside scoop on research and development, indicates Wallach. "We've engineered a unique system using a lot of existing technology. We have nothing revolutionary. Everyone knows what a conveyor can do. There have been pan conveyors, rubber conveyors, belted conveyors, pleated conveyors, oscillating sorting tables. None of that is new. It's the way we've put it together and utilized it in our own program to suit the materials we get."
No Sweat
Markovits & Fox in San Jose, California, favors processing aluminum by shredder rather than sweat furnace. Larry Fox, vice-president of nonferrous sales, says the company s 500 and 1,500 horsepower Hammermills make what is often a cleaner, denser, and more uniform package than would be produced by either a baler or a sweat furnace. Avoiding the furnace method also reduces pollution, he says.
Another advocate of shredding is United Metal Recyclers in Kernersville, North Carolina. The company is assistant to the president, Frank Brenner, says, "We've found it's a lot more cost efficient because you're able to decrease your waste factor. Depending on the material you're running, the loss in a furnace can be a minimum of 10 percent."
According to Brenner, though a good shredding system may cost considerably more than a sweat furnace, it saves man-hours and boosts both production and quality. "We can process four times as much by shredding, with the same amount of people, and produce a very homogeneous, controlled density."
Going With Gravity
A chute instead of the traditional crane loads barges at Steiner-Liff Iron & Metal Company (a division of Steiner-Liff Metals Group) in Nashville, Tennessee. This atypical process is reflective of a firm taking advantage of its riverfront location.
Where the property line for Steiner-Liff ends, there is a natural 8- to 15-foot drop, depending on the water level, Executive Vice-President Adam Liff explains. "We back in dump trailers, loaded with finished product, which are secured against tipping or in any way coming in contact with the water. The trailer lifts the load, [sending it] into the barge chute. Then we allow gravity to take it from that point and drop [the load] into the barge." Positioned with hydraulic cylinders, the chute can be adjusted to the changing water level.
Despite the large investment in dump trucks and trailers and the time spent securing Corps of Engineers permits for the installation, the new loading facility has paid off, Liff says. The chute loads a barge of shredded scrap or busheling in four to five hours, he explains, whereas a crane can take two days to do the same job. The chute also requires fewer employees than does the traditional equipment.
A state-of-the-art dumper improved handling efficiency at Sloan Metal Company, Inc., in Chicago, Illinois. President Robert Hausman believes his company may be the only scrap operation in Chicago using a sky dumper, a platform that raises a complete semitrailer into the air, causing the contents to slide out.
"The descent of the material can be controlled by the ascent of the platform or deck, which can go as high as 45 degrees," he says. The material flows out of the trailer onto a conveyor system that takes it to a computerized baling press.
According to Hausman, the sky dumper has special space and facility requirements. His plant's five and one-half acres provide ample room for the new handling equipment plus the conveyor system and baling presses needed to accommodate such high-speed unloading.
More than these requirements, the sky dumper's price is likely to make many processors hesitate, Hausman says. The system's installation and accessories cost his company nearly one-half million dollars. But, he says, the equipment is efficient, fast, and safe. "What would normally take three hours now takes less than 10 minutes." He adds that the sky dumper eliminates risk of damage to suppliers' semitrailers and large trucks.
Beyond the Bottom Line: Improving Service
Ongoing facilities planning is one of the keys to providing quality service, says Larry Fox. "When we moved into this facility 25 years ago, a great deal of planning went into the layout. We're able to get deliveries in and out efficiently so that our customers are able to unload quickly with little delay. With every new piece of equipment, we look at the overall plant arrangement to maintain a smooth and efficient flow of traffic."
Customer service was also the focus of a 1985 marketing analysis by Annaco, Inc., in Akron, Ohio. Findings spurred the company to establish Harry's Metals, a new division and facility dedicated to the peddler trade. Annaco's executive vice-president, William W Lowery, said the new plant's namesake and boss, Harry Grebelsky, is well known in the trade and respected for his knowledge of nonferrous metals. "Harry gives peddlers the service they expect. Now they deal with one man, the boss, and they're paid on the spot. Before, in our larger plant, they had to deal with three or four people."
The marketing report also recommended tighter quality control, Lowery says. "Before 1985, our quality was above average, but that wasn't good enough. Our aim was to establish a reputation for quality because that's where we felt our future was. We're not a high-volume [operation] with a shredder that produces tens of thousands of tons per month. We deal with a number of consumers, some of them very small."
To better service their steel mills, foundries, and nonferrous consumers, Annaco established procedures to prepare materials specifically for those groups. "Nearly every load is custom-made for the consumer," Lowery says.
For example, to prepare No. 1 grade material, Annaco employs six sorters--almost double the number used elsewhere, he says. Two sorting stations along the conveyor system evaluate every piece of material, and if there's been a problem with the load, the company may pad sort before loading. With a final walk-through in the railroad car, a sorter catches anything that may have slipped by on the belt.
Part of the payoff for increased quality control, Lowery says, came when one steel mill showed Annaco's material to other processors as an example of high quality.
Another part of Annaco's new program directly involves the consumer. With every load, the company sends a postage-paid evaluation card. Consumers comment on such items as the load's cleanliness, whether it met specifications, the timeliness of the delivery, and whether the driver was courteous.
The card includes Annaco's toll-free number. If a consumer calls to reject material, Annaco brings it back for a redo. "We'll lose money on a load, but we'll make [the consumer] happy--whatever it takes," Lowery says.
What sometimes looks like a bottom-line loss may actually be a gain for the processor, the customer, and the consumer alike--which is the value of business innovations. Says Fox, "We try not to forget that above processing we're servicing our local industry and community." And, he points out, every aspect of that service counts. "We try to keep that in mind so we don't lose the edge."
Scrap processors talk about practices and equipment that put them--and keep them--on the competitive edge.