June 26, 2010 Thriving Under Pressure

Volume 13 | Issue 3

While automotive industry woes wreak havoc with domestic manufacturers, Peninsular Cylinder Company continues running on all cylinders.

Don’t put all of your eggs in one basket,” we’re advised. But who pays attention? Not Michigan manufacturers, apparently. They tied themselves too closely to the Detroit-based auto industry.

Results weren’t pretty. “Many companies failed. Those that remain struggle,” observes Peninsular Cylinder Company President Brent Paterson.

Peninsular Cylinder, however, is an outstanding exception. “We grew nicely in 2008, but like most manufacturers we took a big hit in 2009,” says Paterson. “However, we’re one of the few Michigan manufacturing companies that hasn’t significantly laid off its workforce. You drive around here and see the number of plants that have closed down and you can appreciate what an accomplishment that is.”

Several reasons explain why this maker of air and hydraulic cylinders remains pumped for success while others are not. It dates back to a decision made during the auto industry slowdown of the 1990s: The company would wean itself off of Detroit, and particularly the General Motors Corporation, which had been its bread and butter since the company’s founding in 1948.

EXTENSIVE DISTRIBUTOR NETWORK
Had it not done so, Paterson maintains, Peninsular Cylinder would have gone out of business. “We’ve seen this with so many companies tied to the automotive industry. The problem starts with the carmakers, but cascades to not only their suppliers, but to the suppliers of those suppliers, and the suppliers of those suppliers. You’ve got this vast linked chain that falls apart.”

Today, automotive remains a small market for Peninsular, and it’s only one of many. “One of the first things we did was develop a domestic distributor network to sell our products outside of automotive,” Paterson explains. “Since we sell to distributors, we don’t always know exactly who the end users are, but by tracking the ship-to addresses we know that we have diverse customers in the saw mill, paper mill and woodworking industries, foundries, steel casting, petrochemical, medical device, mining and OSB [oriented strand board] manufacturers, among others. We also provide products to the departments of Energy and Defense.”

LAND, AIR AND SEA
Indeed, the company’s cylinders are hard at work not only in OEM equipment and product manufacturing processes around the world, but beneath the sea and in orbit around the earth. “One of our cylinders is in a government satellite,” Paterson notes. “Also, after the recent oil spill in the Gulf, we have custom stainless steel cylinders at work a mile beneath the ocean as part of the containment systems that are trying to stop the leak.”

He adds that Peninsular also has cylinders in Siberia, where they have to perform in minus 40-degree Fahrenheit temperatures, and in ocean-going vessels and landing gear testing equipment for the F-35 fighter jet, an aircraft capable of making vertical take-offs and landings.

But just as you can’t rely solely on a single industry, you can’t totally depend on diversification, particularly during a general industry slowdown that affects all of your markets. Paterson says, “We make highly engineered cylinders and accessories recognized for their reliability, durability and performance under the harshest operating conditions. Moreover, we’re easy to do business with and have an experienced staff dedicated to addressing customer needs, with the quickest delivery time in the industry. Internally, we’re on top of our orders and our inventory on a daily basis. So we always know our break-even point. We can adjust quickly when things get out of balance.”

Peninsular’s steel and aluminum air cylinders, low-and high-pressure hydraulic cylinders, cylinder accessories, and pneumatic thrusters (slides and die lifters) are manufactured in either NFPA (National Fluid Power Association) or metric dimensions. About half of the product sold is standard off-the-shelf. The rest is custom-made to suit client applications.

“We have a staff of highly experienced engineers who consult with our customers to design a cylinder that meets their specific needs,” Paterson explains. “Customers can also go directly to our Web site and configure what they need.”

CYLINDER CONFIGURATOR
While online ordering has become commonplace, cylinders still present a unique challenge. “There are literally more than a million part numbers to build a single standard cylinder,” Paterson explains. “To begin with, there are about 24 different mounting styles that are attached to various cylinder bore sizes with a range of 1½ inches up to 24 inches, each with their own part number. Then you need to choose the specific bore size required, as well as the required stroke length that is made in quarter-inch increments up to 25 feet long. Then each piston rod has a variety of either NFPA or METRIC diameter sizes, and each rod diameter has a standard selection of different rod end thread sizes. On the cylinder end covers, you can have up to four ports that allow the attachment of either hydraulic or pneumatic supply lines that produce the energy to power the cylinders. Each of these ports needs to have a designated thread size and pitch.”

Further, the front and rear end caps may require an optional cushioning feature that extends cylinder life by preventing the piston from slamming into the inside surface of the cylinder end cover when it strokes in and out. “There are many more cylinder options as well as optional seal requirements to suit the customers application,” Paterson continues. “Every one of these cylinder variations requires its own part number to properly identify and construct the cylinder. The end result is a unique 16- to 18-digit alphanumeric part number that provides identification of all cylinder options specific to the cylinder that is to be manufactured.”

As you might imagine, looking up all these numbers in a product catalog gets to be an onerous task, even for engineers who might be used to it, says Paterson. “But we’ve simplified the process for a customer to order a NFPA or METRIC cylinder by using a cylinder configurator within Peninsular’s Web site that requires answering a series of questions about each feature. How many inches for the bore size? What piston rod diameter, thread size and mounting style do you want? And so forth. You select from a pull-down menu, and for each selection there’s a pop-up page of helpful hints, if you need more information about any cylinder feature. Everything is written in plain English. You can build your cylinder without needing to know a single part number. Once you’ve configured your cylinder, you can create a three-dimensional solid model that can be dropped into any type of engineering software, such as SolidWorks or AutoCAD, in its native format, so there’s no possibility of error in translation or compatibility. You can also get a two-dimensional blueprint quickly emailed to you.”

There’s another advantage: The Peninsular configurator makes it considerably easier to order accessories that can be attached to the cylinder once configured. The correct accessory part number is listed, along with the correct seal kit part number applicable to the cylinder configured. “Again, you don’t need to know the cylinder part number or the accessory or seal kit part number associated with any configured cylinder when you use our online configurator,” Paterson notes. “Once you’ve configured your cylinder, the system automatically generates what seal kit you need, if a seal kit is required.”

PERSONAL, KNOWLEDGEABLE SERVICE
As easy as the configurator is to use, some customers still prefer to speak with knowledgeable people, even if only to ensure that they’re using the configurator correctly. This points to anotherequally important facet of Peninsular’s easy-to-do-business model. “You’ll never get one of those recorded voice-answering systems when you call us,” he emphasizes. “You’ll talk to a real person, and we’ll get you to whoever it is you need to help you, and within 20 seconds. We have an inside sales staff and a staff of engineers who average 20 to 25 years of cylinder experience. They’re always available to answer customer questions.”

He adds: “We employ about 52 people who boast a combined 600-plus years of industry experience. Unlike some companies, we don’t view our employees as a mere variable expense. We don’t lay off labor when business is slow; instead, we reduce management and other salaries and eliminate overtime. When we hire people, we invest in their training and support. That results in a knowledgeable, loyal workforce with a low turnover rate and dedicated to quality customer service.”

Paterson also points out that Peninsular has always been a practitioner of lean manufacturing, even well before the term became widely used. “We know every day what our current orders and backlogs are, which enables us to control our inventories in cost-effective fashion,” he says.

TECHNOLOGY INVESTMENTS
Several years ago, the company invested more than $1 million in state-of-the-art CNC equipment and associated software for its ISO 9001:2008 certified business. Moreover, the company primarily uses Haas manufacturing equipment. “Unfortunately, here in Michigan, many other manufacturers went out of business. That provided us the opportunity to pick up used equipment at discount prices, but we have never done so because we want to maintain common tooling and computer programs within our manufacturing theme.”

That’s not easy to do if you try to mix and match different machinery, he says. “One thing that’s critical to manufacturing efficiency is the ability to change over your machines from making an end cap capable of weighing 700 pounds to an end cap that only weighs one or two pounds within a five-minute time frame and without disrupting your throughput.”

LEADING DELIVERY TIME
That’s one reason why Peninsular can accurately state that it can quote and deliver most standard cylinders up to eight-inch bore size within three days. “In this regard, we believe we are considerably faster than anyone else in our industry,” says Paterson.

How much faster? “Typically, the industry standard for quoting and then shipping cylinders runs approximately two weeks,” answers Paterson. “In addition, if there’s an emergency, we can usually repair or make a new cylinder within a few hours.”

Easy configuration, knowledgeable and experienced technical support, lean manufacturing expertise, top-quality equipment and a commitment to customer needs are how Peninsular achieves such unequaled responsiveness. But, ultimately, it’s the quality of the product—combined with the highly experienced customer service, manufacturing and engineering departments, along with the management staff—that determines the company’s success.

“The OEMs tend to look at cylinders primarily as commodity products, but end users know differently,” Paterson says. “While it’s true that we’re in a mature industry, and that the basic technology of a cylinder hasn’t changed much in the last 30 or so years, what separates us from our competitors is that our cylinders contain different internal engineering features.”

On the outside, cylinders may look alike; but, on the inside, a Peninsular air cylinder cushioning system is 100-percent air tight, which considerably extends the life of the cylinder within destructive applications, Paterson describes.

“In addition, we use higher quality sealing materials specific to the customer’s application, when we are made aware of the application. That means the cylinder is more durable and, in turn, longer lasting. If you don’t have to replace cylinders frequently, you’re not only saving money by reducing your cash outflow and purchasing costs, you’re also not disrupting your equipment and production processes, which costs both time and money because of manufacturing downtime.”

He underscores his point with an example: “We have one end-user customer who told us that our cylinders last considerably longer than those from other manufacturers. We were specifically asked to paint all of the cylinders we supply to them red. This way, their maintenance people could differentiate Peninsular cylinders from other models, as all cylinders look alike on the outside from most all of the manufacturers. The maintenance people at this company knew that the non-red cylinders had to be replaced more often than ours and, consequently, they only wanted those ‘red cylinders’ when cylinder replacement orders were requested from their purchasing department.”

Overall, Paterson attributes Peninsular’s standout success to “a terrific management team and a dedicated and experienced base of cylinder-knowledgeable employees in all segments of the organization. “We are truly blessed to have such a great group of people in the Peninsular family,” he comments. “Equipment is easy to get, but finding an employee base like we have is the key.”

In addition, Peninsular Cylinder Company sets a fair price and produces a competitive, high-quality product, and it’s a company that customers find easy to deal with. “They appreciate that,” says Paterson, “and that is why we’re able to succeed, even during a challenging economy.”

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