July/August 1991
For 58 years, ASKO has thrived in the shear knife business--and others--thanks to its emphasis on hard work, quality products, and technical innovation.
By Kent Kiser
Kent Kiser is associate editor of Scrap Processing and Recycling.
When the American Shear Knife Co. was starting out 58 years ago, it only sold Shear knives and tinning machine rolls to a few Pittsburgh-area steel mills and metallic scrap processors. Today, the company--now named ASKO Inc.--sells a range of products encompassing many industrial knife applications, and its customers include integrated steel mills, minimills, nonferrous mills, steel service centers, chemical processors, the electronics and petroleum industries, and processors of scrap metals, plastics, tires, and textiles- In addition to shear knives, ASKO now sells steel and carbide slitting knives, plate mill knives, wear plates for rolling mills, knife seats, liners, bolts, shims, gibs, and saw blades for pipe, tube, and steel.
A History of Hard Work
The American Shear Knife Co. was born at an unlikely time--during the Depression, a time when many other businesses were struggling or folding. But founders Benjamin B. Weinberg and H. Stanley Rogers had the optimism, work ethic, and engineering expertise to gamble on the venture. So they pooled their savings, managed to raise $25,000 from investor-friends, and, on Dec. 4, 1933, set up shop in an old carbarn in Homestead, Pa., a mill town located 6 miles southeast of Pittsburgh on the banks of the Monongahela River.
In the early years, Weinberg and Rogers served as the company's executives, salesmen, engineers, office managers, and plant supervisors, with the help of only one employee/laborer. World War II gave the company its first big boost in production, enabling it to expand its workforce and purchase new equipment. The company has thrived ever since.
ASKO President William H. Rackoff, Weinberg's grandson, began working for ASKO 27 years ago, when he was 15. He recalls fondly the four summers he spent in the company's shear blade manufacturing shops, operating a grinding machine, sweeping the floor, and learning about the ground-level work that makes a company successful. "We have a family tradition of being involved in the business in a shirtsleeves, hands-on way, he says.
If you ask Rackoff to summarize what ASKO is all about today, he answers, "I think our reputation is one of engineering expertise, reliability, on-time delivery, and technical innovation. I think we're generally acknowledged as the leader in the shear blade business.”
Expanding Into New Markets
American Shear Knife grew during the post-World War II readjustment, when Weinberg started marketing the company's products outside the United States for the first time. In 1960, the company established ASKO BV in Amsterdam, a 50,000-square-foot facility that continues to produce shear knives for the European metals industry and is one of ASKO's three main operating units.
By 1969, American Shear Knife had diversified its product line significantly through innovation and acquisition, such as its purchase of the Hunter Saw and Machine Co. in Pittsburgh. The company soon realized that its name--American Shear Knife--was becoming a marketing hurdle, Rackoff says. Customers outside the United States questioned the company's commitment to their markets, and customers buying products other than shear knives wondered about the company's expertise. Therefore, in December 1969, the company changed its name to ASKO Inc., while still maintaining an American Shear Knife Division, which continues to be a major operating unit.
The American Shear Knife Division encompasses several operations, including the 70,000-square-foot Homestead manufacturing plant, two knife service centers--CKC Inc. (Rock Hill, S.C.) and the South Holland Division (South Holland, Ill.)--and ASKO Automation Systems, which makes computerized inspection and control systems for rolled steel products, and operates out of the Homestead plant.
ASKO's third main operating unit is SinterMet Inc., a 45,000-square-foot plant in Kittanning, Pa., that produces tungsten carbide wear parts for the steel industry. In addition, ASKO has joint ventures with Soldadura Tecnica, a shear knife manufacturing and service company in Mexico City, and American Grinding & Machining Co., a knife service center in Detroit. Rackoff says the company has no immediate plans to acquire new companies or divisions, though it is always seeking new niches for its products. "Our approach isn't to seek acquisitions for diversification," he clarifies, "but rather to seek internal growth to enhance our technical and engineering strengths and our financial strength.”
ASKO is a privately held company, so Rackoff is hesitant to divulge its sales figures. He does note, however, that the company's sales have increased approximately 50 percent in the last decade. No wonder: Not only does ASKO have the three major operating units and two joint ventures mentioned above, it has approximately 55 “sales engineering" representatives around the globe promoting its products. The sales engineers are not engineers per se but engineers of solutions for customer problems. Rackoff notes: "Our sales engineers talk with customers about their problems and opportunities for improvement and attempt to engineer solutions that will provide better performance.” ASKO's sales force is a combination of company-employed, factory-trained salesmen and manufacturers' agents, with the former selling in ASKO's major markets such as Pittsburgh, Chicago, Houston, and Europe, and the latter working smaller and other overseas markets. "The bulk of our sales are made by our own salesmen," Rackoff explains, "but we're represented in many other marketplaces."
Europe remains the company's strongest foreign market. ASKO BV has been in business there for 31 years, prompting Rackoff to watch bemusedly as other companies scramble to take advantage of the emerging European open market. "When people ask us, 'What does 1992 mean to you?' we say, 'Not much, really, because we've been there.' It will mean we'll be able to ship our products back and forth throughout Europe more easily." Rackoff says he keeps a constant eye on ways to reduce ASKO's costs to help it remain competitive in foreign markets, in which production costs are often much cheaper than in the United States.
Seeking Diversification and Innovation
Product diversification has been a longtime goal at ASKO, but the company has kept an equal emphasis on product quality and the search for technical innovation. As one example, Rackoff points to the company’s development of tungsten carbide knives and wear parts as a significant product improvement. Kenneth H. Rusnica, sales manager of scrap yard products, asserts, "We're diversified, but we're the leaders in every field."
ASKO's products are wrought, not cast, using proprietary steel chemistries that the company provides its suppliers, Rackoff says. "We're always looking for the best raw materials and mating them with the end-use application to provide maximum efficiency and production for our customers," he notes. The suppliers must certify that they have met the specifications, using whatever scrap or virgin materials they deem appropriate. "After that, we are fully integrated,” Rackoff says. "We have control of all the operations under one roof-machining, heat treating, grinding, engineering, purchasing, and shipping."
Rackoff notes that the shear knife industry is a custom business and he often uses the word "tailoring" to describe how ASKO develops products to fit specific markets. "No item is too large or too small for us," he says, "no shape is too difficult or too exotic, and we stock most of the popular models of shear blades." Custom-engineering orders account for approximately 80 percent of ASKO's business, he estimates. ASKO's staff metallurgists, including Rackoff, help develop new metal chemistries for new applications.
"We're always in research and development," says Harold Levy, senior vice president. "We're always looking to better the product or get into a new application." One growth market in the last five years, he notes, has been the mobile shear used in scrap and demolition work. Rackoff says that ASKO works closely with mobile shear manufacturers to "tailor a knife for their equipment that will make it perform to its potential capability
In addition to new product sales, ASKO also offers reconditioning services, though some customers maintain their own reconditioning equipment for regrinding their shear knives. "We like to recondition our products," Rackoff says. "We understand how to do it, how to select the right grinding wheel, how to avoid grinding wheel bum, how to avoid the deterioration in a product that can come from improper reconditioning." Though new product sales represent the bulk of ASKO's revenues, servicing customers' products is a vital part of the business, he notes.
To save its customers the considerable costs related to reconditioning and regrinding, ASKO created the Hydro Hercules ThroWay knife. Customers use all four sides of these knives, then scrap them and install new ones. The disposable knives reportedly not only save customers reconditioning costs, but also freight charges, downtime, and the expense of having replacement knives in inventory. "It all came down to this," Levy asserts: "You would buy more knives but spend less money in the total picture and have maximum production." Rackoff adds, "There are pros and cons to this practice, but it eliminated the need for customers to supervise the maintenance of their knives and pay to maintain them."
When asked what other advantages ASKO products afford scrap processors, Rackoff puts delivery at the top of his list. "We look at delivery as just one other aspect of the total quality of our product, " he says, explaining that ASKO doesn't want its customers to suffer any downtime for lack of its products. "We have to be able to serve their delivery requirements," he says. "We pride ourselves on being able to offer delivery from stock, in most cases, or on extremely short lead times.”
Employees and Family: The Roots of Success
When Rackoff talks about the importance of customer satisfaction, he immediately mentions ASKO's employees, who now number approximately 400. Satisfied customers result from quality products, which come from quality employees, he asserts. "You have to look at not only the products but the people and the process behind them," he says. "People in this valley really understand the machine trades and the steel industry, and we've benefited from being able to draw on their resources and skills over three generations of our family."
To encourage its employees to seek continuous quality improvement, ASKO initiated a "Winning Edge" program. The program relies on team-based problem-solving in which the employees review the company's processes and develop methods to improve problem areas. "It's our effort to shift the responsibility for quality out of the 'quality department' and top management and into the hands of the employees," Rackoff says. “They know their jobs best and are closest to the production process,” so they can best make improvements.
Each year, the company holds a dinner to hand out service awards. The employee of the year is selected based on his or her contributions to quality improvement, attendance record, and other points. Other employees are recognized for their length of service. "We have people who work here for a lifetime," says Levy, a 29-year ASKO veteran. "We don't have a lot of turnover. There are people out in the shop whose fathers worked here. It's really a family company.”
Rackoff knows personally the benefits of being in a family business. Not only is he the grandson of one of the founders, but his brother, John M. Rackoff, is vice president and general manager of the CKC Inc. division and his father, S. Raymond Rackoff, is ASKO's chief executive officer. That continuity of family leadership has helped the company develop its traditions of honesty, integrity, quality, and technical innovation, Rackoff claims. He also enjoys the flexibility that the business's family nature gives him. "We don't have to put up with the bureaucracy that you'd find in a larger company. So we can react to opportunities, we can solve problems, we can react to customers' needs very quickly without having to go through a lot of layers," he explains.
Striving to Be Better
Several years ago, a company publication said that Rackoff's two top priorities were to search for the next superior generation of materials and manufacture knives to 100 percent of specification. Today, he is still pursuing those goals. "I don't think you ever achieve 100 percent," he says. "I think you are always striving to do better. But those two issues are still central to our mission."
As ASKO approaches its 60th anniversary in 1993, Rackoff notes how rare it is for a company to thrive so long in such a competitive business. "There's a constant change in our competition from year to year," he notes. "The one constant aspect in this marketplace has been ASKO." Rackoff credits his father with much of ASKO's current success. "He has not only brought us to where we are today," Rackoff says, "but he has spent a lot of time training the next generation of leaders for the business, so we are malting a smooth transition through the generations to the future."
And what vision does William Rackoff have for ASKO's future? "I'd like to see us stay at the point where we have the opportunity to address new and exciting market niches," he answers, "to be able to have the technological, manufacturing, and financial resources to respond to opportunities as they arise.”•
For 58 years, ASKO has thrived in the shear knife business--and others--thanks to its emphasis on hard work, quality products, and technical innovation.