April 26, 2013 Modern Alchemy: How Does Acme Turn Iron into Gold?

Volume 16 | Issue 3

Acme Foundry specializes in high-quality grey iron castings, a focus that has made this Kansas-based company enormously successful. Dan Harv

Some areas escaped the brunt but still suffered damage; others areas were punched straight in the face. Recuperation will be extensive and expensive.

In retrospect, this disaster provides a suitable metaphor for the “perfect” economic storm suffered by US and global economies in the so-called “Great Recession” – wherein converging factors (collapsed housing and credit bubbles, a US mortgage crisis, stock markets sucked into a maelstrom, the weakening US dollar, slowdown in the once-vibrant BRIC economies, and rising oil and commodity prices, among others) provided a harsh reminder that business is as vulnerable as a protective sea wall set up on an Atlantic Coast barrier island during hurricane season.

As with the “Sandy” cataclysm, some industry areas were hit harder than others, but no one was left untouched. Look to the foundry industry for an apt microcosm of recent economic events.

Weathering the Storm
“We were fortunate; other foundries weren’t,” relates Scott Tatman, sales and marketing manager for Acme Foundry Inc., a global leader in the production of grey iron castings that effectively serve several industrial segments (fluid power, petro-chemical, transmission machinery, among others). “Our growth was steady until 2008 events.”

Acme has since rebounded.
“We have been around a long time; we know how to weather a storm,” adds Mike Northup, Acme’s foundry manager. “That’s because we have carved out a niche. The hydraulic control valve represents a specialized market. During the recession, that kept many of our customers from going overseas.”

It’s a complex picture. “When companies shut down, work spreads out,” says Tatman. “That enabled us to attract new customers, some from Europe, who set up operations in the United States and started making domestic purchases. What was once exported to China is coming back home.”

That relates to quality – and as companies and customers realize, the farther you go overseas, the more reduction in standards. “I’ve been in this industry for more than 35 years, and I’ve seen that the trend – especially in the last few years – leans toward a higher quality standard. That suits us very well,” says Northup, about this Coffeyville, Kan.-based enterprise.

Employee Contribution
As a recognized world-leading casting producer, Acme well understands how continuous improvement contributes to its cause, and this encompasses employee involvement. “This organization likes to nurture home-grown talent, instead of hiring from the outside. As a rule, that’s how we operate,” says Northup. “We dominate a niche market with our hydraulics. Not many foundries do that. Within our niche, and over the past 50 years, we have developed a culture based on quality. It’s hard to go outside and find talent. That means that we are heavily involved in training. We believe that it’s best done within. Now we have a good mix of young and old, a mix of experience and ambition.”

As the company reports, much of its success it attributable to a management team and loyal workforce that’s as innovative as responsible. Enter the company facilities, and you will find employees who have been with Acme from 10 to 50 years and have no interest in going anywhere else, thanks to the educational and professional opportunities provided. So, Acme not only invests in equipment and processes but in people.

Adds Tatman: “That’s important, as we have raised the industry bar, from the simplest to the most complex castings. We need a well qualified workforce, and we will take care of our people. That provides us the stability necessary to navigate the difficult current business terrain.”

Quality Commitment
Today, the company enjoys high output, but it won’t sacrifice quality upon the altar of quantity.

Underpinning quality control is ISO 9001-2008 certification.

“In the hydraulics industry, we rank among the best, and it is our quality that placed us there,” says Northup. “It’s the reason we are still alive after all that has gone on with the economy. We witnessed how everyone went overseas because of cost considerations; but now we are seeing things fall back this way, because of quality considerations.”

And things are falling toward Acme Foundry, which has established a quality control program that ensures all manufactured castings meet customer requirements. According to the company, each casting is produced according to customer specifications, drawings and patterns. Further, incoming pattern equipment is vigilantly reviewed to verify compatibility of the equipment with Acme Foundry’s production practices. In addition, during each production process state – melting, molding, core, shakeout, final grinding, internal cleaning – stringent controls assure the highest quality final product.

Customers who benefit from such diligence reside throughout the United States and include both small and large manufacturers (its clients include big names such as John Deere and Caterpillar) that operate in a diverse group of industries. Breaking down Acme activity into percentages, about 65 percent of its parts are used in the fluid power industry, while 10 percent are used in transmission machinery, and another 10 percent in the petro-chemical industry. The remaining 15 percent is directed toward various other industries – Acme is as diverse as it is innovative. By training its staff, the company can meet the highest levels of quality while offering the lowest cost manufacturability. At the heart of the process is the most advanced computer software technology (i.e., Pro-E, CAD, and solidification modeling).

Ever-expanding Enterprise
“Acme has always been a growing, state-of-the-art organization, but in the last 10 years, we’ve invested as much as $20 million into expansion, toward extending capacity and installing automated equipment,” reveals Northup.

That results in considerable output. “In at least one facility, located in Coffeyville – where we employ 350 people – we produce 2,000 tons of grey iron castings a month,” indicates Northup.

In the last decade, Acme Foundry has experienced significant increases in production requiring multiple expansions of facilities, purchase of new equipment, and the hiring of additional employees. Two years ago, it ventured into Six Sigma territory. “I don’t want to be premature, but I feel that this will have a significant impact,” says Tatman.

“Also, we are straight shooters. We don’t play a game,” says Northup. “We’ve been complimented about our integrity. But to get right down into the weeds, our iron is very high strength and very machinable, which makes it – and us – very attractive to existing and potential customers.”

Tatman adds: “Meanwhile, we continue to remain on top of the curve – through training, promoting from within, fostering the highest quality levels, and deploying efficiency-enhancing programs such as Six Sigma.”

As far as the future, the company is exploring new directions. “With the type of hydraulics we deal in, demands for higher pressures continue to rise, so to speak,” says Northup. “So, we’re looking to add another material to our mix.”

That would be ductile iron.

“Right now, it’s in the planning stages,” points out Tatman. “But it would be a major expansion that could double our capacity.”

Stay tuned. It should get very exciting.

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