S&C Electric Co. John R. Conrad Industrial Complex

Driving down Ridge Blvd. in the Rogers Park neighborhood on Chicago's north side, one could hardly imagine the industrial activity taking place on the other side of the wrought-iron fence. Such was John R. Conrad's vision when he began operations there in 1949. And it has been successfully executed by S&C's plant and facilities engineering function ever since.

12/10/2004


Sections:
Operating philosophy
Heavy community involvement
Committee management that works
Outstanding practices
Goal setting
Capital project planning
Project execution
Maintenance organization and planning
Training
Succession plans
Facilities Procedure Bulletins
Top Plant

Sidebars:
Plant Engineering Top Plant 2004


Driving down Ridge Blvd. in the Rogers Park neighborhood on Chicago's north side, one could hardly imagine the industrial activity taking place on the other side of the wrought-iron fence. Such was John R. Conrad's vision when he began operations there in 1949. And it has been successfully executed by S&C's plant and facilities engineering function ever since.

Just as the S&C Electric plant has been integrated into this quiet, residential area, the facilities function has been integrated into nearly every facet of the company's and the plant's operations. A high priority on facilities and maintenance is part of the S&C culture.

For its utilization of the plant engineering function as a strategic partner in S&C's success, the John R. Conrad Industrial Complex (JRCIC) has been named one of PLANT ENGINEERING 's two Top Plants for 2004.

Operating philosophy

One reason for this total integration has its roots with S&C's second-generation owner John R. Conrad, who worked as the facilities manager for Douglas Aircraft in Long Beach, CA, before returning to run the company for his father in 1945, three years before the move to Ridge Blvd.


He brought with him his "avocation" of facilities management and some basic principles regarding his company's assets:

  • You don't run your assets to death

  • You don't use something and throw it away as soon as it's depreciated

  • If you're going to do something, you do it right the first time.

    • These principles still influence the facilities function at S&C, according to John Blumenshine, vice president-facilities.


      Operations at the present location began shortly after the company bought 4 acres of land in the Rogers Park neighborhood in 1948. More than 50 land purchases later, the plant occupies 45 acres and 1,125,000 sq ft of buildings in the middle of a residential community.

      To do that, Blumenshine explains, you cannot have a short-term operational-type mentality. Things like noise, pollution, appearance, lighting, and parking lots all take on an importance beyond the applicable codes and regulations. "So, he [Conrad] developed a belief that he was going to become a friend, an ally, of the community," Blumenshine continues.

      Conrad "always held the facilities management position in high esteem," Blumenshine says. "He really moved the position of plant engineering manager into a position of prominence in the business in the early 1960s. That's when this site (Ridge Blvd) really started to grow, and he gave plant engineering direct access to the corporate office by making the manager of plant engineering report directly to the President & CEO. Over the years, the president has always held the facilities as an integral and important part of S&C. They're important to how we exist in the community, they're important to how we operate, and they're important to our longevity."

      That's not to say that plant engineering gets carte blanche on everything it wants to do, Blumenshine cautions. "It's painful at times. You have to fight for the money just like everyone else. Some years you have to cut back on capital spending. While I always get what S&C needs to maintain the site — I don't always get what I want. You have to be prepared to put the justification in writing; you have to be prepared to sell it to your peers; you have to be prepared to stand up and fight for it."

      Economic value created (EVC) is the primary metric used to evaluate facilities capital spending. This is an evaluation of how the investment pays back using cost of capital against the savings being described. While some "facilities sustaining" investments must be made for the ongoing viability of the business, all investments must eventually meet with the approval of the company leadership. Facilities cost as a percentage of total sales is also used to track and evaluate Facilities performance and justify annual expenses. In addition, required equipment uptime and reliability as well as future business levels are used to forecast potential needs for increased spending in maintenance for the business.

      Heavy community involvement

      S&C has become an active participant in many civic affairs, and much of that activity centers in the facilities function.

      "Basically, the facilities manager has to interface with a lot of the city departments — Dept. of Planning and Development, zoning, building, fire, police — so you wind up being chief liaison with those groups simply by virtue of your job," Blumenshine says. "I kind of became the point man because I was already dealing with so many individual community departments, and now it's become integral to the job."

      While Human Resources deals with being a good resident of the Rogers Park community, Facilities takes the lead in working with the city and state. Among the business and civic groups on which Blumenshine represents S&C are the North Business and Industrial Council (which deals with industrial retention and expansion in the City of Chicago), the Illinois State Chamber of Commerce Economic Development Committee, Chicagoland Chamber of Commerce Board, aldermanic zoning and oversight committees, the Executives Club of Chicago, and numerous other committees and task forces.

      Committee management that works

      S&C uses an unusual, if not unique, organization by adding a committee structure to the familiar line and staff organization (see accompanying organization chart). Many of the policy and operational decisions come out of these committees. In addition to the corporate-level committees, there are numerous other committees at all levels down to the plant floor. In addition to their advisory, policy, and operating roles, these committees form an impressive communications network.

      Perhaps the most important of these committees are the "Minding the Store" (MTS) committees. The MTS committees are charged with determining how to carry out the strategy and direction of the business. They deal with matters pertinent to day-to-day business issues and concentrate on their short-term impact.

      There are MTS committees from the president all the way down to the hourly people. The top managers sit on the Corporate Minding the Store (CMTS) committee. Each one of these managers has a departmental MTS committee made up of his direct reports. They in turn have their own MTS committees and so on down to the supervisors who meet with their hourly people.

      Each MTS committee meets every two weeks — the CMTS committee meets every other Monday morning. Top managers from other S&C facilities attend by teleconference. By Thursday afternoon, all MTSs have met. Absence of the group or product division leader is not an excuse for not holding these meetings, and anyone who is absent is required to send a substitute.

      The MTS committee system is a primary communications network. Audits show the meetings are 95% effective in getting important information from top management all the way down to the plant floor.

      Basically, the advisory committees set policy, and the control committees implement the policies. Here's an example of how the system works. As vice president-facilities, John Blumenshine sits on the Safety & Environmental Policy Control Committee. More than a year ago, this committee decided to implement NFPA 70E, the new standard for electrical safety. Blumenshine took the decision to the Facilities Safety & Environmental Practices Committee, which is part of his organization, to develop an implementation plan. The Safety and Environmental Affairs Department (part of Facilities) is now in the process of training all affected S&C employees and S&C is well on the way to full compliance.


      Outstanding practices

      From personnel practices to project management, facilities management and plant engineering at S&C's JRCIC exhibits a number of outstanding practices.

      Goal setting

      Goals for the facilities organization are set through meetings with the president and CEO, John W. Estey. These goals are generally classed into operational goals and discrete goals. Operational goals, such as budget, safety, and quality, are set each year to manage costs and the performance of the facilities organization. Individual discrete goals are usually set as shared goals with other top managers to accomplish specific business needs. These might be related to property acquisition, equipment performance, productivity enhancements, or new-technology implementation. The shared goals create the continuity between operating divisions and the support organization to provide unified goals for the entire company.

      Capital project planning

      Capital needs for S&C are established on an annual basis. Facilities, along with the product divisions and other support organizations meet in October to establish capital priorities for the upcoming year. Once the priority list is established, a level of capital spending is provided from Finance & Accounting in line with sales and profit projections for the coming year. The CMTS meets to discuss and approve the projected capital expenses. The sponsoring organization for each capital project is then responsible for preparing the project scope, justification, and benefits for final approval.

      Project execution

      Facilities Engineering is responsible for all capital improvement and construction projects. This group coordinates with the operations groups through the Production Equipment Standards Committee and the capital planning meetings to ensure properly scheduled implementation of work.

      An example of their capabilities was the replacement of the plant's old zinc plating line with new zinc/nickel technology. In 2002, the company decided to replace the old line with the higher capacity, more energy-efficient process. During the year-long project in which the existing plating line was completely removed and replaced, the supplier encountered financial troubles, material costs spiked well over the established budget, and output requirements increased as business levels rose. Even so, Facilities completed the project on time and within budget with no production losses.

      Maintenance organization and planning

      S&C's maintenance organization is equipment focused, with responsibilities broken into Facilities, Services, and Production Equipment areas. Production Equipment is further broken into geographic areas (north, center, south). Leaders for each group are responsible for maintaining an ongoing daily interaction with their counterparts on the operations side. The Maintenance Engineering and Operations leadership teams have many shared goals.


      Uptime goals are defined each year for all production equipment assets. These assets are evaluated each year for past performance, reliability, expected performance, and actions needed. Such actions might include preventive maintenance revisions, predictive maintenance activities, minor repairs, upgrades, major overhauls, or replacement.

      Training

      Maintenance trainees complete a 4-5-yr training program that includes experience in production areas to operate the equipment they will eventually maintain. Other training includes inhouse courses, on-the-job training, and outside education, generally at a trade school or community college.

      Voluntary training is also available, with many courses conducted by volunteers from among the employees.

      Training needs are assessed for each individual as part of their annual review schedule, with each employee having development goals every year.

      Succession plans

      Each operating division and support group throughout S&C is responsible for a succession plan from the top manager down to the highly skilled technicians. As part of the annual review process, every leader must identify the potential next position for each of his employees, and the training and education needed to attain it. An analysis of these needs is used to determine courses offered, and expenses to be budgeted.

      Facilities Procedure Bulletins

      The Facilities organization produces a series of bulletins that detail policies, responsibilities, procedures, and in some cases, detailed equipment specifications to assist other groups in meeting the goals and requirements of the company. A recent "Facilities Guideline for Production Equipment," for example, describes in detail all of the facilities-related considerations an operations group needs to address before making an equipment purchase. Standards, layout, utilities, safety, and environmental concerns are all addressed in detail.

      Top Plant

      For its outstanding integration of the plant engineering function throughout its organization and for its demonstrated ability to contribute to the business of the enterprise, S&C Electric Co. John R. Conrad Industrial Complex has earned recognition in the PLANT ENGINEERING Top Plants Program for 2004.



      Plant Engineering Top Plant 2004

      Name : S&C Electric Co. John R. Conrad

      Industrial Complex

      Location : Chicago, IL

      Operations started : 1949

      Employees : 1675

      Plant size : 1,125,000 sq ft

      Total plant site : 45 acres

      Products : Switchgear, circuit interrupters, and reliability systems for high-voltage transmission and distribution

      Facilities organization - 124 members

      Management - 8

      Mechanical/electrical/other engineers - 8

      Maintenance/reliability engineers - 2

      Maintenance planners - 3

      First-line supervisors - 10

      Materials management/stores - 5

      Administrative support - 2

      Direct maintenance (leads, crafts, etc.) - 86



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