July 26, 2016 Hot for Innovation

Volume 4 | Issue 4

State Industries, a manufacturer of residential and commercial water heaters, built its reputation on product and manufacturing innovation.

We all look forward to that nice, hot shower every morning to get us started. That invigorating wake-up call comes courtesy of one of the most reliable and least appreciated appliances in the American home: the water heater. Chances are, this appliance was made by one of the world’s largest and most progressive water-heater manufacturers, State Industries Inc.

Established in 1946, State Industries is the youngest major water-heater manufacturer in the United States. At the time of its founding, the roster of water-heater producers numbered roughly 160. Today, only five major domestic water-heater producers remain. State has grown into one of the world’s biggest, providing residential and commercial gas and electric water heaters for a wide variety of applications: single-family homes and apartment buildings, hotels and motels, restaurants, office complexes, hospitals, schools and universities, among others.

Branded Leadership
There’s no better testimony to a company’s manufacturing prowess than to be invited by other market leaders to make products under their nationally recognized brand names. Not only does State make water heaters under its own namesake label, but the company is also the exclusive licensee of Maytag® brand residential and commercial water heaters. State sells these products, along with the State line, to plumbers through its network of approximately 500 wholesale plumbing distributors nationwide. State also markets Maytag® water heaters to various home-improvement and hardware stores — most notably Lowe’s, True Value, Ace and United Hardware — and to Maytag’s® own home-appliance dealerships nationwide.

In addition, State has been the exclusive provider of residential water heaters to Sears for more than 46 years. Kenmore® gas and electric water heaters are all engineered and produced at State’s main production plant in Ashland City, Tenn. The company also markets the Reliance line of residential gas and electric water heaters to the home-improvement retail channel.

State’s residential water heaters range in storage capacity from 2 gallons to 120 gallons. The bigger sizes can handle the demands of most commercial applications, such as restaurant kitchens. “Our commercial units can produce water temperatures up to 180 degrees Fahrenheit,” says Ken Naglewski, executive vice president and chief operating officer, “which is required in many applications such as dishwashing and other cleaning functions.”

For more than two decades, State has set the standard of excellence in this arena with its Sandblaster® commercial line, the industry’s first and only Self-Cleaning™ water heater. Each Sandblaster is equipped with the patented Turbo-Force Ring, which creates a vigorous but controlled turbulence at the bottom of the storage tank as it feeds fresh water to the heater. This turbulence keeps potentially harmful minerals and sediment suspended in the water, rather than letting these substances accumulate at the bottom of the tank — thus sustaining the water heater’s energy efficiency and extending the life of the unit.

The Power of Innovation
Self-Cleaning™ is just one of many industry firsts for State Industries, which has more than 100 product patents. The company’s state-of-the-art product technology reflects the quality and experience of State’s strong design, development and engineering group. State’s innovations permit a homeowner to significantly reduce his/her energy costs and receive the benefits of a cleaner and safer environment with a new State, Maytag®, Kenmore® or Reliance unit. “Our testing and certification processes allow our products to meet all national and international requirements,” says Naglewski. A sampler of State product innovations through the years follows:
• Superior insulation: State was the first to surround the water-heater storage tank with blow-in polyurethane foam, an important advance over fiberglass insulation in cutting heat loss and saving energy costs.
• Dual-watt elements: State led all manufacturers in offering dual-watt elements in its electric water heaters, permitting a single heater to be converted from one voltage to another at the time of the installation.
• PEX power: State pioneered the use of PEX (cross-linked polyethylene) in heat traps, cold-water inlet tubes and hot- and cold-water pipe fittings. No other polymer withstands high water temperatures over time better than rugged PEX, thus helping to prolong the life of the entire water heater.
• Low-emissions burner: State’s latest innovation is a gas-fired burner that cuts water-heater nitrogen oxide (NOx ) emissions by more than 30 percent. It’s now used across State’s entire residential product line (Maytag®, Kenmore® and Reliance, too).
• Safety valves: State was the first manufacturer to install a properly rated temperature and pressure safety valve on every water heater it makes. The valve ensures that all State, Maytag®, Kenmore® and Reliance water heaters are installed with the right safety equipment and according to codes.

State has spent more than $25 million in the past few years on new equipment and process improvements. That means making more high-quality water heaters in less time with fewer plant inventories.

Flex Time
State can now produce 11,000 to 12,000 units per day in Ashland City. Behind this impressive capacity is a highly flexible system allowing the company to respond quickly to the ever-changing demands of the market.

“State’s manufacturing stresses flexibility as a core competency,” says Naglewski. “We can expand or contract the number of manufacturing lines we run, based on current market demands. We can also mix and match products throughout the lines, enabling us to produce electric and gas water heaters at the same time. We can also run different sizes so we don’t have to have long runs of just one model. That’s especially important if market demand doesn’t warrant the quantity.

“We also have built a high degree of automation into our product design and manufacturing, including automated raw tank production and a fully automated painting system. Many of these processes are patented, further setting us apart from the competition. Our ‘product configurator’ allows the company to make changes on products and design new products in days, compared to the months it would take in the past.”

Over the past three years, State’s Information Technology Group has completely overhauled the company’s communications. Its resource-planning software provides the facts and figures State managers need to make quick and timely decisions. Electronic data interchange speeds the processing of purchase orders, and helps State and its customers track these orders anywhere in the system. As a result, State products are ready and waiting when the customer needs them. This capability, along with its planning and forecasting system, enables order-to-shipment lead times of less than 12 days.

Rich Germek, director of marketing, says, “We also have the industry’s best performance levels for on-time delivery, order-fill rates and lead times from order to shipment. Our order-fill rates are well in excess of 99 percent. Our goal is to be the market leader in all categories.”

Size Matters
State’s ISO 9001-certified facility in Ashland City is the largest water-heater manufacturing facility on the planet, with about 1.4 million square feet (more than 30 acres) under one roof. Its operation in Charlotte, N.C., produces expansion tanks for space and water heating applications, as well as pump tanks used for residential wells. The company’s Valence, France, production facility manufactures electric water heaters for the European market.

Nearly every one of the components that go into a State residential or commercial water heater are made in Franklin and Cookville, Tenn., by the company’s subsidiary, APCOM. This ISO 9001-certified operation produces more than 10,000 items — from small, routine parts to highly specialized, custom-made components. APCOM also makes these components for other water-heater manufacturers. In fact, the subsidiary manufactures parts for about 70 percent of all water heaters made in North America.

State is equally proud of its 2,200-person work force and its more than 30 independently owned and operated manufacturers’ representative agencies. This “family” eases the smooth and efficient operation of State’s various manufacturing facilities and provides outstanding sales and service to its distribution network. “We enjoy a very loyal and long-term employee and partner base,” says Naglewski, who notes that more than 60 percent of State’s employees have served the company more than 10 years.

After 55 years, the company is still owned and operated by the founding Lindahl family. Herb Lindahl, one of the original founders, continues to be active as president and chief executive officer. Brother and co-founder John R. Lindahl recently retired. His sons John Jr. and Kent Lindahl are active in the company. “It’s a business with a strong tradition of care and concern for its workers,” Naglewski continues. “State has always fostered a true family feeling among its people.”

“We serve multiple channels of distribution and focus on multiple marketplaces,” says John Lindahl Jr., senior vice president of sales and marketing. “We intend to build on our market leadership by entering new markets overseas and by expanding our product line and our market coverage in the United States. There isn’t a water heater manufacturer in the world with more to offer the customer — whether it’s a professional contractor, an original-equipment manufacturer or retailer, domestic or international — than State Industries.”

Maytag® is a trademark of Maytag Corporation and is used under license to State Industries, Inc. Kenmore® is the property of Sears, Roebuck and Company.

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