We all remember that last family vacation by car to a distant state. One of the things we might have pointed out to our children is the extensive highway network that carries us effortlessly from our front door to the hotel. Of the nation’s 4 million miles of roads, about 2.7 million miles are paved with either asphalt or concrete. But we often might have wondered who is responsible for building and maintaining this network of roads — these vital links of people to people and businesses to businesses.
Look no further than to Astec Industries, Inc., of Chattanooga, Tenn. — the premier manufacturer of equipment for aggregate processing and asphalt road building. Astec manufactures more than 140 products including asphalt plants, asphalt pavers, materials-transfer vehicles, milling machines, rock crushers and handling systems, hydraulic rock breakers, underground directional drills, asphalt testing equipment and trenchers. “We offer the broadest spectrum of specialized equipment meeting the specific needs of our customers in the construction and rebuilding of infrastructures. In many respects, we are the only single-source solutions provider to our customers of the specialized products we manufacture,” says Richard Bethea, executive vice president.
This impressive range of products gives Astec (the name comes from ASphalt TEChnology) its enviable position in the industry. “This is particularly important when you consider that our industry is undergoing a number of changes, especially in terms of consolidating customer bases,” Bethea says.
Today’s road builders are becoming more vertically and horizontally integrated. “So this kind of customer would be interested in buying mobile equipment for paving roads, for taking up the old roads and for putting down new roads, for example,” Bethea explains. These customers also need asphalt plants, rock-crushing and screening equipment, and conveyors to move raw materials from quarries. “Our competitors tend to compete with us on a product-line-by-product-line basis rather than competing against all of our product lines. This is what makes us unique in the industry,” Bethea says.
Roadmaps to Innovation
Astec’s driving innovative force is its founder, J. Don Brock, Ph.D., who still serves as chief executive officer and chairman of the board. “He is a prolific inventor, developing new solutions to old problems,” says Bethea. The company has numerous patents on its products. Brock “created a culture of continuous innovation, and this is why we’ve produced a steady stream of innovative new products over the 30 years we’ve been in business,” Bethea adds.
Not only do Astec’s products give the company a competitive edge in garnering market share, but they also make roadwork easier on the public. “We can now build roads that are smoother, safer, longer-lasting and more cost-effective,” Bethea says. “And we can do this faster so that it reduces the inconvenience to the driving public.”
Asphalt roads are the most cost-effective to construct and maintain, and they are the most durable and most economical to reclaim and renovate when required. Astec’s primary customers are asphalt road-paving contractors, aggregate and hot-mix asphalt producers, and open-mine and quarry operators.
Astec builds and maintains close relationships with each of its customers, which is part of its recipe for continued success. “We are the leader in customer support in the industry, and we spend a lot of time listening to our customers. We learn from them as well as teach and support them in their efforts,” Bethea says. In fact, many of Astec’s successful product innovations resulted from carefully listening and responding to customers’ specific requirements.
About 75 percent of the company’s sales are direct to end users, which deepens the close relationships Astec has developed with its customers. “So we are hypersensitive to responding to our end users,” says Bethea. “Their day-to-day problems become our challenges, and we owe a lot of credit to our customers because of this.”
Another element of Astec’s success is the breadth and depth of customer training the company provides. “We train about 2,000 of our customers’ employees every year,” Bethea says. The company operates a training program under the umbrella of Astec University. Training for customers’ senior management personnel includes focusing on the dynamics and trends of the industry, as well as improving profitability and quality. Middle management and operational personnel (including plant superintendents, paving crews and quarry operators) learn techniques to help improve productivity and cost-effectiveness.
Knowledge is a real driver at Astec. The company’s materials-research lab supports continual mix-design research. “The roads you drive on are made up of particular recipes, and the hot-mix asphalt is a sophisticated and complex design involving rock in various types and sizes and in specified amounts,” explains Bethea.
Mix design is based on a variety of factors — including the locale of the new road, since climate plays an important role in the design of the mix. Other considerations include available local raw materials and the specific application, since mix design for country roads differs from that of superhighways.
Astec also designs and builds equipment to test the performance and durability of its mix designs. “We can design a brick of a prospective new mix and test it in our testing chambers. In about three hours, we know how that mix will perform over a period of 15 years before ever spending the money to apply the mix to the road,” says Bethea.
The company shares its knowledge through published technical bulletins. The two trade magazines it publishes depict actual case studies in which Astec equipment was used to solve particular customers’ problems. The high level of Astec direct field service and support assists customers in maintenance and troubleshooting problems.
Strength in Numbers
Astec began operating in Chattanooga in 1972. Today, through a series of acquisitions and start-ups, it operates a family of 17 companies. Sales are about $500 million, which “is quite significant, especially in the specialized products area,” notes Bethea.
The company’s 19 facilities (totaling 2.1 million square feet of manufacturing space) are managed in accordance with a central core value “to preserve the entrepreneurial spirit and skill and product focus of each company through a decentralized approach,” explains Bethea. About 3,000 employees work in these facilities, which include two plants in South Africa and Canada. Each subsidiary operates autonomously with its own management teams and profit centers. Bethea explains, “We pool the collective power of each company with shared services to get the benefit of a larger company without giving up the benefit of working within a smaller company.”
Federal spending on the nation’s roads has been on the rise, and is expected to rise in the future “because the country’s infrastructure is so important to the state of our economy. Money spent at the federal level tends to prime the pump because of the matching requirements at the state and local level,” says Bethea.
Astec plans to “stay true to our core values by continuing to offer the broadest spectrum of products, by continuing to be the innovator in the industry and by continuing to lead the industry in customer service and support,” he says.