APPLIED PROCESS’S POSTHAVEN

After 36 years in the metals industry I am honored to be elected to the ASM International Board of Trustees.  ASM is the Materials Information Society, home of the much-referenced Materials Handbooks and part-owner of Granta Design, famous for material property bubble charts.  ASM conducts extensive training and the local chapters attract insightful speakers to meetings worldwide.  Applied Process employees have benefitted from training, resource materials, technical networking and leadership opportunities offered by ASM and its chapters.

The ASM Board regularly reviews its strategic plans to align the organization for continued growth.  To that end, for some time the Board has included student members to assure that the input of the next generation of leaders is considered in ASM's strategic plan.  So, it is with great interest that I attended my first strategic planning meeting in Cleveland this past week.  During strategic brainstorming it was apparent that our student members hold social responsibility as a duty separate from their avocation in materials engineering.  I was alarmed by the apparent disconnect.  I can only assume that it is a result of our educational system teaching the children, from a very young age, that you can either do good, or do well.

Our experience is that doing good and doing well are NOT mutually exclusive.  In fact, materials engineering offers the perfect opportunity for engineers to positively affect society and the environment.  Materials engineers work with designers to choose the material/process combination that most efficiently accomplishes the task at hand.  Developments in material science have reduced the mass of our means of transportation, increased the efficiency of our engines and motors, increased the durability of our metals, ceramics and polymers (and the recyclability of all of them), and improved the thermal efficiency of our buildings.  This has led to lower costs for products, lower cost of operation, reduced energy consumption and environmental improvements......all societal advantages.

At Applied Process we are passionate people providing innovative Austempering solutions.  95% of our business comes from replacing one material/process combination with a better, faster, cheaper one.  In each case we have reduced the mass, met or improved the strength or durability and reduced the cost of an application.  In every case we have reduced the energy embodied in the component and provided a solution that is 100% recyclable.  Those innovations are accomplished in clean, safe, good-neighbor facilities that use 15% less process energy than the industry average and employ 100% recycling of all quenchants, process water and consumable fixtures.  Our employees take their technology, community and leadership experiences gained at Applied Process and use their energies in leadership roles with their families, communities, and places of worship.  These are people doing good and doing well.

The engineering and manufacturing communities need to make clear to our future leaders that good engineering and good conscience are not mutually exclusive.  In fact, material science, applied efficiently to human need, is a truly worthy cause.  The people at Applied Process are proud to be part of that journey.       

In the Austempering business we are constantly amazed how limited the engineering community’s general knowledge of material/process selection really is.  Often, engineers make material selection based on the incumbent products or the guy with the most voluminous editorial or advertising material.  Or they can be pushed to lower density materials believing what they've heard, that low density = lightweight = green.  Ladies and gentlemen, The Stuff Matters.  I can’t blame the engineers.  Everybody’s being asked to do more with less and every engineer is expected to know everything about everything and they just can’t. 

So we found it mildly amusing when Ford announced a few months back (Automotive News August 2012) that they intend to reduce the mass of the US’ #1 selling vehicle, the Ford F-150, by 750 lb. (340kg).  The mass reduction will be accomplished by converting steel and iron components to aluminum in:

-The cargo box

-The tailgate

-The hood

-The chassis

-The suspension.

The mass reduction is expected to 1) increase the fuel efficiency of the vehicle by 8% and, 2) increase the cost of the vehicle by $3,000.  Hmmmm.  If one drives their F-150 10,000 miles (16,130 km) per year and gasoline sells for $3.50/gallon, this modification will pay for itself in 10 years.  In other words, it will be like buying $3,000 worth of gasoline IN ADVANCE.  (That energy is embodied in the aluminum that is substituted for ferrous alloys that require much less energy to extract from the earth).  It sounds green……a lighter vehicle, 8% better “fuel efficiency”…..but is it, really?  You decide.

To help engineers and buyers make better material/process decisions, Applied Process Inc. recently held its inaugural “AP University” in Livonia and Ann Arbor, Michigan.  31 attendees representing 16 companies participated in a 3-day seminar focusing on engineering conversions.  They learned how to design a casting, the metallurgy of ductile iron and Austempered Ductile Iron (ADI), solidification and 3-D modeling, machining and all aspects of converting steel and aluminum castings, forgings and weldments to ductile iron and ADI castings.  For the capstone events the attendees toured Applied Process’ Livonia facility and participated in mold making and a ductile iron pour at Joyworks Studio in Ann Arbor…..each taking home a rather snazzy looking Hostile Duck Iron, wall-mount bottle opener.

The AP University attendees asked great questions and learned much.  One attendee, an engineer with a purchasing function, working for a Tier One supplier summed it up the best: “There were things that I did not think would be (candidates) for the Austempering process…..so I would not have considered it before.  Moving forward, I can apply this knowledge to more new applications”.  THAT is the point of AP University.  Oh, by the way, one of the AP University attendees was a Ford engineer.  We hope he’s working on the F-150.

AP University could not have happened without the hard  work of Vasko Popovski, Kathy Hayrynen, Justin Lefevre, Henry Frear, Chad Kelsey, Ryan Breneman, Cindy Duman and the teams at Applied Process, AP Tech, Magmasoft and Communica.  Thanks to the lot of ya. We're growin' the pie here at Applied Process.

It is election season and here in the US we’re all about picking the right person for the job.  One group has a vision of a fixed-size pie and work hard to adjust the size of the pieces and distribute them.  Some, and we include Applied Process in this lot, envision a growing pie with enough for all, where less attention is paid to the individual pieces and more attention is paid to building a bigger pie.  You have a clear choice this November.  Exercise it.

So, speaking of picking the right person for the job, with this blog I am pleased to announce that AP’s COO, John Wagner, will add the title President to his business card.  John, a former Marine, with a sheepskin from the University of Wisconsin and decades of heat treat experience will  now lead the heat treat industry’s A-Team (or should I say AP Team?).  I will support John and his team as Chairman (and executive middle-linebacker).  We’re loaded for bear, having expanded our capacity by 50% in the past 18 months we’re all about growing the pie for Austempering.

 Some heat treaters are great vendors.  They wait patiently to take orders for existing business and compete aggressively to continually increase their share of the existing business.  At AP we grow the pie.  If you’ve got a six-piece steel weldment, we’ll help you convert it to a one-piece ADI casting.  If those fat aluminum structural components are costing you a bundle, perhaps we can replace them at equal weight with thin-walled ADI castings.  Troubles with imported ground-engaging parts.  We might be able to help you convert to CADI™.  Are you being torqued off with your carburized or induction hardened shafts?  Perhaps we can solve your long nightmare with Carbo-Austempering™.  Are you paying an arm and a leg to hog large parts out of steel bar stock?  Perhaps our Monster Parts™ furnace will allow us to replace that machining nightmare with a near net shape ADI casting.  We get paid to heat treat people’s parts.  But what we really do for a living is help our customers to replace one material/process combination with a better, faster, cheaper one.

 John Wagner and the AP A-Team stand ready to help you grow the pie.  Check ‘em out……and remember to vote for pie growth, not redistribution.

The Applied Process group of companies is a commercial heat treating company specializing in the Austempering process.  We get paid to heat treat people’s parts, but what we really do for a living is help customers convert from one material/process combination to a better, faster, cheaper one.  Our laser-like focus on the Austempering process has lead us to healthy market growth in North America and a world-wide network of customers and licensees.  It’s easy for a business owner to get so tied up within his/her own business as to lose sight of its performance relative to the rest of the industry.  So when external benchmark information is available I am a hungry consumer of it.

 Applied Process has been a member of the Metal Treating Institute (MTI) since its incorporation in 1984.  The MTI is a network of heat treaters and suppliers to the industry that work together to advance the business and science of heat treatment.  MTI heat treat members are the best in the industry.  Amongst the activities of the MTI are certain (anonymous) benchmarking activities that allow participating heat treat members to compare things like sales and costs in their business to the industry.  So it is with great interest that we were just able to review MTI’s 2012’s Operational Cost Survey (covering calendar year 2011).

 My mother always told me not to be prideful, but I have to say that the operational performance of the AP team simply ROCKS.  Here are some of the highlights:

 -AP people deliver nearly twice the sales per employee as the MTI industry average.

-Due to our manpower efficiency, self-insuring and proper management, our health care plan costs us 28% less than the industry average.

-Our attention to safety and a safe workplace has driven down our workers compensation premium to one-quarter of the industry average (and lost-time accidents are scarce).

-The AP Team’s relentless pursuit of efficiency (year in and year out) has resulted in AP’s energy consumption being 37% LESS than the industry average....with more improvements in store.

-Our commitment to preventive and predictive maintenance allows us to keep our maintenance costs down to about half of the industry average and keeps our equipment running reliably.

-AP’s quality bests the industry average by AN ORDER OF MAGNITUDE.  (We speak in single-digit PPM….most of the heat treating industry doesn’t).

Applied Process’ policy is to deliver the highest quality Austempering services available ANYWHERE, on time and at competitive prices.  We continually strive to live up to that policy.  The AP Team, working with our customers, has built us into a heat treat industry leader and the leading supplier of Austempering services on the planet.  Many thanks go to our team and our customers.  We will continue our relentless drive for excellence.  I’m REALLY proud of our team.  I hope my mom will forgive me.

Fifty years ago this month, Bob Keough, a 45-year old engineer, banked on his previous 20 years of thermal processing equipment and heat treating experience and took an entrepreneurial risk.  With a couple of his brothers and some partners, in a former food warehouse on Idaho Street in Detroit, Michigan, he started Atmosphere Furnace Company and a commercial heat treater aptly named Controlled Atmosphere Processing Company (CAPCO).

 In March of 1962 Detroit had, perhaps, the most competitive heat treat market on the planet.  Commercial heat treaters were in great abundance.  One seasoned heat treater commented that, “In those days Detroit had a heat treat on every corner”. Bob Keough needed a niche if his businesses were to survive……so he invented one.

 Conventional quenching and tempering, carburizing and hardening, and nitriding were all well established in the area.  Austempering, however, was essentially a process that was restricted to the highest value applications.  Small, salt-to-salt processing lines (more often used for tool hardening) were the primary processing systems in use. These systems worked well for tooling and armaments, but when used for processing small, medium carbon, steel stampings the price for was prohibitive for high volume applications like automotive stampings.  Larger cast-link belt furnaces with controlled atmospheres and oil quenches were used to harden steel parts cost effectively, but these same controlled atmosphere furnaces could not be used with a molten salt quench due to the risk of explosion associated with a carbon and nitrate salt mixture. 

 Mr. Keough saw his opportunity.  He integrated a 1,500 lb/hr (680kg/hr) continuous, cast-link, atmosphere controlled furnace with a nitrate/nitrite salt quench using a clever combination of a quench curtain and a gas eductor that mitigated the risk of explosion.  Overnight, this development dropped the price for Austempering of steel stampings by an order of magnitude.  This continuous, atmosphere-to-salt process became the cornerstone of the Keough businesses and created a minor revolution in the light-weight steel stamping business.  It allowed for thin, complex stampings to be bright hardened to Bainite with little or no distortion, good ductility and resistance to hydrogen embrittlement, even at hardnesses exceeding Rc40.

 Bob Keough wasn’t done.  The continuous mesh-belt Austemper and the fully integrated batch atmosphere-to-salt (UBQA) types of equipment followed in the next two decades.  These developments have moved Austempering of steel and iron into the mainstream of thermal processing.  AFC-Holcroft, Austemper Inc., Atmosphere Heat Treat Inc. and the Applied Process family of companies can all trace their roots to these developments and they continue to innovate in Austempering.  With the introduction of the 10-ton Monster Parts™ UBQA line at AP Westshore in Oshkosh, Wisconsin, the legacy lives on.  But it all began 50 years ago in a little food warehouse in Detroit when Bob Keough took a risk and acted on an innovative idea.

Big is the operative word right now at Applied Process.  Big changes.  Big plans.  Big opportunities………in fact, MONSTER opportunities.

At AP we have increased our capacity by 40% in the last two years and, by golly, we filled it.  Thanks to our customers for their business and, at times, for their patience while we worked through BIG backlogs.  We are hitting stride now and helping our (very busy) customers to thrive .  Our foundry customers know that they make higher margins on Austempered Ductile Iron (ADI) than they do on regular ductile iron so they are happy to work with us to sell ADI conversions.  What’s not to like about replacing an imported welded-steel forging with a domestic ADI casting?  We think that’s a BIG win.

Speaking of BIG, our Monster Parts™ division is on track to be commissioned in Oshkosh, Wisconsin, USA within a few weeks.  It’s BIG news.  It’s a BIG furnace and we’re looking for BIG opportunities for it.  How much fun is a furnace with a 400,000lb nitrate/nitrite salt quench?  Big fun.  After all, at Applied Process we are passionate people providing innovative Austempering solutions.  With our new tool we’re talkin’ 10 tons BIG.

AP is working with Joyworks Studio on a developmental project that could have a BIG impact (pun intended) on its market.  When there’s a commercial problem to be solved the AP team sees that as a BIG opportunity.  We don’t just talk about ‘em.  We solve ‘em.  That’s what makes us a BIG player in the world of Austempering.  Just keep looking for BIG things from the AP team……the next one is, literally, right around the corner.

Energy. Green. Sustainable. Energy Independence. Carbon footprint.  Climate Change.  Greenhouse gases.

 The previous terms have been brought to you by the educational system and the media.  We’ve all heard them over, and over, and over.  So let’s have a rational discussion.  Perhaps as mere mortals we can, in fact, affect positive change.  But what IS positive change?  There is energy in everything we do, consume and utilize.  

We require energy to breath, to walk, to think and to do any function we perform.  It takes a lot of energy to heat us, cool us, feed us, water us and transport us.  We’ve heard that we need to have a smaller carbon footprint.  What the heck!? ….we ARE a carbon footprint.  All organic matter: humans, animals, plants are made of various carbon molecules and water.

 We’ve been told that CO₂ is a “greenhouse gas” that settles into our upper atmosphere and reflects heat back to the earth causing climate change.  Although millions of years ago CO₂ was higher than it is now, CO₂ content in the earth’s lower atmosphere is higher now than it is has been in thousands of years leading some to conclude that humans are to blame…..but then what’s with the much higher CO₂ millions of years ago?  Who caused that?  And what happens if CO₂  goes to zero?  What we used to learn in school is that plants take in water, carbon-based nutrients from the soil, CO₂ and sunshine to make cellulose and grow…..and give off oxygen.  If CO₂ in the earth’s atmosphere were to go to zero all plant life on earth would quickly perish, and so would we.

 At a recent Western Energy Alliance conference in Colorado author Robert Bryce, Senior Fellow at the Center for Energy Policy and Environment at the Manhattan Institute, cited statistics that world-wide energy consumption in 2010 increased 28% to the equivalent of 210 million barrels of oil per day, 87% of that from hydrocarbons (oil, coal, natural gas and their derivatives).  That’s a LOT of CO₂ being produced by burning hydrocarbons. 

 I could be a little cynical here and say that perhaps we should just plant a bunch of trees….which would grow like weeds in the CO₂-rich environment and provide additional carbon-based fuel and useful cellulosic materials.  But let’s just suppose that it’s a rational, sustainable solution that can’t POSSIBLY work.  So what’s left?  Conservation.  What is conservation?  It is doing the same amount of “stuff” with less energy or doing more stuff with the same amount of energy.  In manufacturing it’s what we call increasing productivity…..producing more with the same or less…..less man-hours, less materials, less space…..all things that embody a certain amount of energy.

 Speaking of sustainability, what about wind, solar and nuclear?  Nuclear provides clean, efficient power…..and low-level nuclear waste that must be safely stored for thousands of years.  Wind and solar power are conceived as sustainable but the reason they are so expensive is that they consume huge amounts of energy to produce the wind turbines and the solar panels.  That up-front energy cost is the barrier to entry and in some cases their lifetime energy output never equals the energy input to build and maintain the devices.  So, are these methods “sustainable”?  We hope that engineers and scientists can make them so in the future.

 Recent natural gas and oil finds in North America make the prospect of us becoming energy independent a near-term possibility.  At a recent meeting of the Kentucky Oil and Gas Association, Brian Havacivch reminded the attendees that five years ago we expected to be importing large quantities of liquefied natural gas (LNG) and we capitalized facilities in the Gulf States to receive those imports.  With the oil sands of Canada and fracking technology allowing us to reach huge fields of natural gas in the north-central and Appalachian regions of the US those facilities will be put to use soon but for EXPORTING instead of importing LNG.  The current US natural gas price of about $4/MMBTU makes the export of LNG to Europe at $10/MMBTU or Korea at $12/MMBTU very desirable to producers.  This same new upswing in, now accessible, reserves will keep the price of natural gas low for a long time going forward……but not forever.

 So, this is all very good news for the US.  We’ve got lots and lots of natural gas which produces less CO₂ than coal or oil when burned.  These reserves stand to make us energy independent.  But in the end it brings us back around to us…..we consume the energy.  We can argue about mankind’s effect on the climate but what we can agree on is that we need to continually increase our productivity and energy efficiency which, by definition, both require us to do more with less energy.

 At Applied Process Inc. we are doing our part.  As Austempering experts, a principal process of ours is Austempered Ductile Iron (ADI).  ADI, with its high strength-to-weight ratio can replace steel or aluminum castings, weldments or forgings at equal mass.  When you then add that ADI embodies far less energy per unit of mass than steel or aluminum technologies, ADI is a green alternative……and that’s just the material/process consideration.

 Applied Process Inc. is committed to continually increasing productivity.  In our fiscal year 2011 we increased our output per man-hour by nearly 11%, our output per furnace hour by nearly 6% and we reduced our energy consumption per unit sale by nearly 6%.  These improvements did not happen by accident.  They were the result of aggressive employee training, demanding internal quality systems, fervent preventive maintenance, focused capital expenditures and implementation of new technologies.  Our customers, our stakeholders and our communities expect it, and AP is delivering.

The Applied Process family of companies just concluded a record fiscal year.  It didn’t happen by accident.  It took the focus, energy and commitment of our employees and licensees worldwide.  Excuse me for waxing sentimental, but I’m certain that we’ve got the best team ON THE PLANET.

Now, if you think I’m just blowing smoke, consider this.  During a recent in-person customer survey the quality executive at a major international axle and suspension company stated “it is clear from the efforts that the folks at AP have made that they are focused on being a value-minded supplier”.  You couldn’t phrase it any better.  The customer has high praise for our AP Livonia team and makes no bones about sharing it.  That is not just a satisfied customer.  That is a loyal customer, and AP works 24-7 to continually earn that loyalty.

Recently, Henry Frear, one of our Sales Engineers, teamed up with one of AP’s foundry customers and engaged a prospective component supplier.  They defined a serious life problem with the incumbent consumables used in certain large recycling machines.  Henry saw the opportunity to help this customer solve this problem and he ran with it.  He consulted with the customer on the part design and the target material/process combinations.  Henry returned to his alma mater, University of Wisconsin- Platteville, and with the help of students Joe Gray and Philip Aliota, they modeled, machined and finished a multiple cavity pattern and produced 200lb chemically bonded sand molds.  With the assistance of the AP Tech R&D crew, the molds were poured in alloyed ductile iron at the Joyworks studio in Ann Arbor, Michigan.  The parts were then cut off, cleaned and sent to Oshkosh, Wisconsin.  Faced with a testing deadline, the AP Westshore team got the numerous iterations of parts Austempered and shipped to the test site on the west coast.

As I write this blog the parts are on test.  The customer explained to us that the regular life of those parts is 3 days.  The parts currently on test will soon enter their third week of testing.  The customer also indicated that the superiority of this new Austempered product could have them (happily) increasing their production plan by over 10 times……so much so that he questions if the casting supplier will be able to manage the volumes.  (That’s the kind of problem that particular foundry would LOVE to manage).  AP’s Technical Sales Group Leader, Vasko Popovski described this as “a total team effort”.

Each of these stories is unique, but together they form the character of Applied Process.  We are passionate people providing innovative Austempering solutions…….and, BOY, am I proud of our team.

Hundreds are expected to attend the 5^th China ADI Conference 7-9 August 2011 in Changchun, Jilin, China.

This week marks the 5^th gathering of the China ADI Conference.  The venue is the city of Changchun in the Chinese province of Jilin.  (If you are looking for it on the map just look a few hundred miles north of the Korean border).  Loosely translated, Changchun means “long spring” but the winters here are none too short and right now the summer is quite hot.  The conference will feature dozens of papers presented by authors from several countries.  (Sorry for you non-Chinese speaking people, the language of the conference is exclusively Mandarin).  It will include an Open House at Jilin ADI, a new commercial heat treating shop (and an Austempering licensee of Applied Process Inc.) that has as its centerpiece an 80”x80”x56” Universal Batch Quench / Austemper furnace, currently the largest integral salt quench batch furnace on the planet. 

A large turnout of the hometown First Auto Works (FAW) crowd is expected.  FAW already incorporates some ADI designs in their vehicles but they are busily designing components from differential gears to multifunction suspension brackets to axle components.  To give you an idea of the scope of FAW’s importance to this town, 2011 is a down year for truck production here and they’ll still produce about 120,000 heavy trucks……one company, in one city.

China is the worldwide leader in the production of ductile iron.  In recent years the quality and capability of the ductile iron producers in China has improved markedly.  In tandem, world-class Austempering capabilities have been capitalized and ADI production in China is climbing rapidly.  Heck, they’ve even got their own, brand spankin’ new ADI standard.

If you’re so inclined, hop a plane (or two, or three) and come on out to see what’s shakin’ with ADI in the Middle Kingdom.