August 26, 2012 Turning Up the Heat

Volume 15 | Issue 3

Since it began operations in 1887, Industrias Peñoles has played a leading role in Mexico for its mining, metallurgical & chemical operation

In the manufacturing arena, necessity not only mothers invention; it leads to business creation. Consider the St. Louishead-quartered Paulo Products Company.

Founders Ben and Pauline Rassieur (grandparents of the current company President Ben Rassieur III and Executive Vice President, Terry Rassieur) started the company in 1943, when they recognized the need for a commercial heat treatment facility, one that could serve as a heat treating outsource resource in the St. Louis area. But in starting the local enterprise, the marital and business partners confronted their own business needs. “During wartime, materials and equipment were difficult to come by,” relates Vice President of Sales and Marketing Jim Heman. “You couldn’t buy the necessary furnaces and equipment. The Rassieurs had to fabricate much of their own equipment.”

This personal need (and the Rassieurs’ resourceful response) provided insight about market needs – top to bottom – and that helped foster ongoing development. “From a downtown St. Louis storefront, the company prospered during the war years and expanded in ensuing decades,” says Heman.

In 1950, the founders moved the company to its current headquarters in mid-town St. Louis, where Paulo evolved into a leading figure in the heat treating industry, one that introduced innovative new technologies and continually refined its processes to meet and exceed its customers’ specific requirements. This privately owned company – it remains family owned and operated – doesn’t like to divulge revenue figures, but this much Heman can say: “From a sales standpoint, we’ve become North America’s third-largest heat treatment operation.”

And for good reason: Paulo’s customers experience the most efficient and closely controlled heat treating processes, which translate into superior metallurgical results. The company has a firm grip on process control, which enables it to meet its own stringent quality requirements as well as industry standards. The company also applies these advantages to brazing and metal finishing processes.

MAIN AIM: HEAT TREATMENT
The three aforementioned capabilities represent Paulo Products’ core competencies, but heat treating of metals is primary. It’s a critical component to the manufacturing of many products and is core to a great deal of product creation, according to the Heat Treating Society.

As the Society describes, heat treating’s tightly controlled heating and cooling improves properties, performance and durability of metals. The process can soften metal to improve malleability, or it can make parts harder to improve strength. It can place a hard surface on soft components (to increase abrasion resistance) and create a corrosion-resistant skin to provide an invulnerable character to parts that might suffer corrosive vulnerability. Brittle products are toughened to endure the harshest applications.

Paulo’s heat-treating services include continuous heat treating, batch heat treating, austempering, pusher furnace, continuous hydrogen, vacuum heat treating, induction heat treating, and ferritic nitrocarburizing, all of which add value to a client’s parts.

According to the Heat Treating Society, heat treating adds about $15 billion per year in value to metal products by imparting specific properties required for successful part function. The Society adds that heat-treated parts prove essential to operation of automobiles, aircraft, spacecraft, computers and heavy equipment.

In Paulo’s first two decades, the company focused on automotive and aerospace applications. Not much has changed as far as the industries served. “Automotive and aerospace remain our two major markets,” reveals Heman. “They drive our business and comprise about two-thirds of our current revenue, even though we serve the tool and die market and do some work in defense, agriculture and general hardware.”

But whatever the market, advantages are all service related, indicates Herman. “We’re not a company that provides a product,” he clarifies. “Rather, customers send us their product. From there, we improve their product’s properties.”

That makes Paulo Products essentially an extension of its clients’ manufacturing process, Heman points out. “Many of our clients can perform heat treating and finishing in their own facilities, but we provide a higher level of process sophistication and reliability, as heat treating is our main focus,” he says. ”Customers send us their overflow or the work they’re currently incapable of doing. We can do things they can’t do or imbue their product with higher level of quality, because we have the right equipment, technology, and people.”

Equipment availability, efficient scheduling and twenty four hour operation means that Paulo can often provide faster results than if customers did the work themselves.

MANUFACTURING FACILITIES
Economy of scale is the benefit of possessing five manufacturing facilities. Paulo’s plants are located in St. Louis, Cleveland, Kansas City (Mo.) and in Nashville and Murfreesboro, in Tennessee. These total about 500,000 square and are staffed by a roster of nearly 350 employees.

The St. Louis plant dates back to the company’s war-time beginnings (1943). One of the Midwest’s largest and best equipped heat treater and metal finishing operations, it offers numerous customers services that include heat treatment, brazing, cryogenic processing, blasting, straightening, and fluid bed processing. The operation is validated by ISO/TS 16949 certification and by being a Ford Preferred Supplier. Quality standards can’t get higher than that.

The Cleveland plant – ISO 9001:2000-certified – is equally hi-tech, specializing in aerospace processing and other critical heat treating and brazing activities. One of the largest and best-equipped vacuum heating plants in the US, it boasts unique capabilities related to computerized control and high temperature processing. It is well equipped for high-volume continuous hydrogen atmosphere furnace brazing and component assembly. Further, it’s NADCAP certified (meaning that the National Aerospace and Defense Contractors Accreditation Program certifies it with AS9100).

In Kansas City, Paulo has one of the Midwest’s leading heat treat facilities. The ISO 9001:2000-registered plant was established in 1973, as a vacuum tool and die shop but grew into a large facility with extensive capabilities and capacity, according to the company. “Before 1973, we only had the St. Louis plant,” recalls Heman. “The Kansas City operation was a first step to significant expansion.” It’s also NADCAP certified (meaning that the National Aerospace and Defense Contractors Accreditation Program).

In Tennessee, Paulo has two plant locations. The Murfreesboro facility provides the mid-South and Southeast with continuous heat treating and automated metal finishing – a unique combination, according to the company. This facility is equipped with some of the largest, most productive metal finishing equipment capabilities. “Along with heat treating, metal finishing is one of our core businesses,” says Heman. “This includes zinc plating, zinc phosphating and black oxidizing. In this area, we have some of the best equipment in the country.” It’s ISO/TS-16949 certified and a Ford Preferred Supplier.

The Nashville facility is a full-service heat-treat plant that has a large batch heat treat line, and an advanced vacuum heat treating department that features 10-bar quench capability, an induction heat treating department, as well as blasting, straightening, packaging and extensive testing capability. It’s also TS-16949 certified and a Ford Preferred Supplier.

VIBRANT PROJECTIONS
Paulo Products is a robust organization, even given economic circumstances. It has experienced recent substantial growth. “Last year we witnessed double-digit growth, and for this year [2012], we projected a10-percent sales increase,” says Heman.

By summer 2012, Paulo Products was running far ahead of that projection. So, is it immune to current economic circumstances? Heman answers: “No way are we recession-proof. But one of the things that helped us is that, even in the economic downturn, manufacturing – particularly metal manufacturing – has grown tremendously.”

STEELED AGAINST THE RECESSION
He explains the circumstances: “Even in this down economic period, many foreign companies made investments into the United States for a number of reasons. They build facilities and we gain from what we call ‘transplant’ business.”

More and more international companies find it attractive to manufacture in the United States. Further, these “transplant” companies, as Heman calls them, are “localizing” production. “They want to manufacture in the United States instead of Asia and Europe,” he indicates.

In addition, there is the “reshoring” factor. “We’re witnessing companies moving back from Asia and manufacturing their product here,” he adds. “That’s an additional benefit for us.”

GROWTH-ORIENTED ORGANIZATION
Paulo is taking advantage of all trends – but not exploiting. “We’ve been in a growth mode, and we’ve heavily invested in equipment and expansion,” Heman reports. “We recently added about 40,000 square feet to our Cleveland facility, and we have plans to expand and/or improve all of our plants.”

There can be only one assumption one could make about this activity. Heman voices it: “Paulo Products is confident about our future and the future of manufacturing.”

But it’s not about just about serendipitous circumstance governed by fate. Paulo Products is shaping its own future, through innovative customer service, underscored by its PICS technology, a software system the company developed. All work instructions, processing data is contained in this advanced system, which fosters traceability and data accessibility throughout the entire organization. “All of our plants use the system,” reports Heman. “All critical data is stored electronically and is readily accessible. Processes stored are easily uploadable.”

This development came in response to current market circumstances. “The available software that we evaluated just didn’t meet our needs and our standards,” comments Heman.

CUSTOMER FOCUS = COMPANY GROWTH
The company didn’t just develop this technological approach to make its life easier. Software development focused on the customer. “Customer service is our mission,” says Heman. “You may have heard this kind of thing before: you can’t be successful unless you make your customers successful. But we truly believe that.”

As such, Paulo Products has set some pretty tough, self-imposed goals. “With our next annual customer survey, we expect 40-percent or our customer responses to reflect that we’re doing better than last year. The next year, we’ll expect the same 40-percent reflection of improvement.”

What Heman is saying is that, with each year, the company intends to set its bar higher and higher. So far, it has leaped self-imposed and industry challenges. There’s no reason to believe it can’t meet new goals – however rigorous.

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