Anatomy of a greenfield plant
In March 2017, HarbisonWalker International (HWI) announced plans to build a $30 million manufacturing plant in South Point, Ohio, near Interstate 64 and along the Kentucky/Ohio border. A U.S. manufacturer of refractory products, HWI expects to open the new facility in 2018 at The Point Industrial Park, a location where the state of Ohio invested $4.5 million to build a port on the Ohio River capable of handling the water transportation needs of area manufacturers.
So what goes into the decision to build a plant from the ground up in 2017? Plant Engineering discussed the advantages of their new facility in terms of location, logistics, and operations with Carol Jackson, chairman and CEO, HarbisonWalker International and Douglas Hall, senior vice president for integrated supply chain at HWI.
Plant Engineering (PE): Your press release talks about “reinventing how the company will produce and deliver” monolithic refractors. How specifically will this plant be different than your current manufacturing facilities?
Douglas Hall: From a production perspective, building a new facility enabled HWI to design the production process from a clean sheet perspective. Value stream mapping and other Lean manufacturing techniques were used to ensure optimum material flow and process efficiency within the boundaries of the plant.
In addition, the plant will incorporate the latest technologies used for monolithic production. This equipment will enable HWI to introduce new packaging technology into the North American refractory market, increasing our product consistency, weather resistance, shelf-life, and ease-of-use for our customers.
From a delivery standpoint, the supply chain for monolithic refractory production has changed over time. Historically, plants were located next to large deposits of refractory clay that was used as raw material for the production process. Now, a large percentage of raw material is imported, so the most efficient processes will be located with access to ports or river transportation, which also has the benefit of improving our ability to ship product globally. For domestic shipments, a location near ports or waterways is also typically near highways, so outbound transportation costs are also improved for domestic shipments. All of this is true for our new South Point plant location.
PE: How would you assess your current manufacturing strengths and weaknesses? How does this knowledge inform what you want to do in the new facility? How do you take those ideas and migrate them to your other North American plants?
Hall: HWI has held a leadership position in refractories for over 150 years. Our understanding of our products, from a technical standpoint of how they will perform in a furnace, is exceptional. However, from a manufacturing point of view, we have not always focused on driving improvements in the basic SQDIC (Safety, Quality, Delivery, Inventory, Cost) metrics of manufacturing excellence. This has changed over the last few years, not only through capital investments but also the capability development of our people.
Included in this capability development is the implementation of a HarbisonWalker Business System (HBS) throughout our North American plants. HBS is the foundation system that has introduced tiered accountability across all manufacturing metrics, along with bringing leader standard work, visual management, and 5S to our workplaces. We talk safety, quality, delivery, and cost every day now, engaging our people like never before.
HWI will be taking HBS to another level at our new South Point plant, incorporating Rapid Problem Solving and continuous improvement into the program as well. This will enable HWI to accelerate learning across the network and increase the pace of our Lean journey.
PE: What was the thought about building a greenfield site vs. retrofitting an existing manufacturing facility? What does building from the ground up allow you to do that retrofitting wouldn’t accomplish?
Hall: Location was a major factor in the decision to move forward with a greenfield site. Also, while value stream mapping can be and is utilized at other sites in the HWI network, building from the ground up provided the opportunity to use other tools and techniques to optimize material flow and reduce other wastes such as travel time, over-processing, etc.
Perhaps even more exciting in building a new facility is the opportunity to look at and improve all aspects of the manufacturing process on an immediate basis. This includes everything from outsourcing raw material grinding and sizing to a nearby supplier to improve efficiencies, while reducing transportation costs to even internal processes like plant planning and scheduling, autonomous maintenance, process control, etc.
For example, the South Point plant will start up utilizing another Lean technique, a Product Wheel scheduling tool, to identify the optimum production sequence resulting in lower changeover costs and improved capacity.
While many such activities will eventually be leveraged to all sites across the HWI network, a greenfield site provides the opportunity to establish a benchmark site for others to learn from.
PE: Why South Point, Ohio? What does this site provide in terms of logistics that made it especially appealing?
Carol Jackson: Unlike any other location, The Point offers unique transportation, logistics and business amenities that combine to create an ideal and cost-effective match for the requirements of the new facility. The intermodal transportation features at The Point will ensure efficient delivery of raw materials from nearby suppliers and finished products to customers. The site offers efficiencies that are simply not possible elsewhere.
Further, the close proximity to suppliers, a supporting infrastructure, incentives, and the potential for long-term partnerships in the area led to the location selection.
The site is strategically positioned to provide HarbisonWalker International with the capability to move its monolithics from the southern-most point in Ohio to any location around the globe.
PE: Ohio has a strong reputation as a state that supports and provides incentives for business development. Talk about the process of working with the state and regional economic development teams as you made the decision to locate in South Point.
Jackson: The State of Ohio and regional economic development teams such as the Lawrence Economic Development Corporation, Appalachian Partnership for Economic Growth, and the Southern Ohio Agricultural & Community Development Foundation have been very accommodating, helpful, and professional. Their ability to answer questions and provide information throughout the vetting process gave us a comfort level, not only with the initial phase of this project, but for future opportunities as well.
It was very important to us that we developed a partnership with the state and region to grow both our business and the local community.
Back 2 Basics: So what are monolithic refractory products?
Refractory products have a unique ability to retain their strength at extremely high temperatures. Monolithic refractories can be molded or shaped for a variety of requirements and are packaged in bags, boxes, or buckets of various sizes. Like concrete, they take shape during installation.
Because they can withstand not just high heat, but also mechanical abuse and chemical corrosion, monolithics are used extensively in a wide variety of industries including iron and steel, aluminum, and glass manufacturing. Refractories are involved in the making of everything from cars and planes to paper, windows, concrete, and cookware.
Monolithics typically can be installed faster than brick or other shaped refractories. As a result, they are used for furnace linings requiring rapid repair and turnaround. Installation requires proper mixing, placing, curing, and drying according to the product installation guidelines.
Source: HarbisonWalker International.