APPLIED PROCESS’S POSTHAVEN

Applied Process Inc. was incorporated in 1984 to build on its parent’s cornerstone; Austempering.  Atmosphere Furnace Company, now AFC Holcroft, founded in 1962, was one of the original companies of Atmosphere Group.  In the late 1970’s AFC embarked on a developmental project to improve the quench speed and efficiency of salt quenches.  Eventually  AFC’s Universal Batch Quench Austemper (UBQA) furnace was born.  UBQA technology integrated an atmosphere controlled furnace with a sealed salt quench.  The UBQA’s quench was revolutionary in the application of ambient pressure, water addition and quenchant flow rate to produce a quenching rate that rivaled that of fast oil systems.  This made the processing of larger forgings, weldments and castings a commercial reality.  The original UBQA furnace was a 36 in. x 48 in. x 30 in. (914mm x 1219mm x762mm) with a two ton gross load capability.  Applied Process Inc. was founded to exploit the capabilities of the UBQA furnace and to commercialize the Austempered Ductile Iron (ADI) process.

UBQA technology advanced over the next 20 years.  36 in. x 72 in. x 36 in. (914mm x 1829mm x 914mm) UBQAs with 3 ton load capacity followed.  54 in. (1372mm) high units and units with a footprint of 72 in. x 72 in. (1829mm x1829mm) followed…..all with 3-ton load capacity.  Then, over a McDonald’s lunch about ten years ago, the concept of a double-wide, high-capacity UBQA line was conceived.  Finally, in 2012, the Monster Parts™ UBQA came to life.

Built at AFC-Holcroft in Wixom, Michigan, USA, the furnace made its journey to Oshkosh, Wisconsin, USA for installation in a new, purpose-built shop; the Monster Parts™ Division of AP Westshore.  The journey of the Monster™ from conception to delivery is captured in a video that can be accessed below: 

Today the Monster Parts™ furnace is exceeding all expectations.  Its 84 in. x 96 in. (2134mm x 2438mm) footprint and 10-ton gross load capacity make it the largest integral quench batch furnace on the planet.  What makes it exceptional is its performance and capabilities.  Capable of carburizing or neutral hardening atmospheres and a high-speed quench with a mere 10ºF quench temperature rise when quenching a 10-ton load, the unit is unmatched in its attributes. 

Carbo-Austempering™ of large steel gears, bearings or shafts, Austempering of large steel or ductile iron components for gearboxes, material handling, structural, pump and compressor components, processing of Carbidic ADI (CADI™) wear parts, and Austempered Gray Iron (AGI) components…..the Monster Parts™ line does it all.  It is, hands down, the most capable, precise, efficient, salt-quench furnace on the planet.  How can the Monster™ help you to reduce the cost and/or improve the performance of your large components?  Watch the video and then visit us at www.appliedprocess.com so we can collaborate on a Monster™ success story with you.

You can also visit our friends at Gear Technology and read more in their February newsletter:

http://www.geartechnology.com/newsletter/0213.htm  

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.

If we could tell you all the good stuff we’ve got going on your head would explode.  But there’s PLENTY of good stuff we can report.  With our aggressive capacity increases we have now worked our backlogs back down to historical levels.  In fact, we caught up so quickly that we happily surprised some of our customers who had dialed in extended turn times.  It’s good to see some concrete around the bins again!

 Just this week an OEM truck manufacturer gave AP Westshore the second highest quality audit score ever and the highest score ever awarded to a heat treater.  The auditor was effusive in his praise.  Well earned, Oshkosh.  Our customers know that for the highest quality Austempering services available anywhere the AP companies are the benchmark.

An international producer of critical pressure vessels is successfully testing ADI components.  A major tier supplier of heavy truck suspension components is forecasting a 30% increase in orders for critical ADI structural components that replaced expensive, heavy, steel forgings.  A major bearing manufacturer just cut AP Livonia the largest single purchase order ever.  Railcar production, and production of the critical ADI components on them, is skyrocketing. New ag, mining and turf care consummables are being converted to ADI and CADI™ weekly.  US light vehicle production is climbing and Austempered iron and steel components are included in their suspensions, engines and transmissions.

The Monster Parts™ Division is soon to be commissioned and we’ve already lined up major OEM’s and tier suppliers with components as large as 7 tons and two meters in diameter.  With our new Monster Parts™ capability we will be opening markets up to ADI and Austempered and Carbo-Austempered™ steel that heretofore were the sole domain of pearlitic and martensitic steel forgings, castings and weldments.

On a lighter note, just today, truck traffic into AP Westshore was blocked by a disabled truck.  Ironically, a cast aluminum wheel hub on the trailer had failed, shearing off the bolts and locking up the axle.  John Wagner and the APW crew were quick to point out to the driver that if he had been equipped with a lightweight, Walther EMC Duralight® ADI hub the failure would never have occurred.    

We’re here.  We’re energized.  We’re doing our jobs, making stuff in the USA……. and no amount of headwinds from Washington are going to stop us now. 

We get paid to Austemper people’s steel and iron parts.  What we really do for a living is help current (and potential) customers replace one material/process combination with a better, faster, cheaper one.  Very often, that solution includes Austempered Steel, Carbo-Austempered™ steel, Austempered Ductile Iron (ADI), Carbidic Austempered Ductile Iron (CADI™), LADI™ or Austempered Gray Iron (AGI).  US manufacturers are discovering the benefits and thriving with the results.

According to an article in IndustryWeek.com (www.industryweek.com) by Carlos Cardoso, President, Chairman and CEO of Latrobe, PA based Kennemetal (www.kennemetal.com ), manufacturing is leading the recovery and our elected officials are finally starting to take notice.  Mr. Cardoso shares a long held belief of this author when he says, “To grow our economy, we have to make something or grow something, plain and simple”.  Amen. 

Jobs result when wealth is created.  Jobs created by governments or handouts are gone when the budget or stipend ends.  Jobs resulting from wealth creation are self sustaining.  In fact, in 2009 the average manufacturing worker made 17% more than a non-manufacturing worker.  According to the same article, manufacturing supports 18.6 million jobs in the US, and employs 12 million workers (9% of the workforce) directly in manufacturing.

In a recent conversation with this blogger, Brian Beaulieu, CEO of the Institute for Trend Research (www.itreconomics.com ), an economic consulting firm, indicated that we can expect continued growth at least into the first half of 2013.  After that, the jury is still out.  Recent talk about an imminent “double dip” recession is not helping peoples’ confidence.  Brian exhorted us to, “Keep the faith…no economic bust for the next 22 months”.  There, Brian, it’s in writing, ready or not.  Readers of this blog will be looking back in June of 2013 to see how you did!

It’s also easy to get a little depressed when high profile, big wigs like Donald Trump say things like, “We don’t make anything here anymore”.  I like his moxy but he seems to be a bit of an economic idiot.  According to IndustryWeek.com the US is the world’s largest manufacturing economy, producing 21% of all manufactured goods worldwide…..and doing it with under 6% of the world’s population.  You wouldn’t know it to listen to the news, but the US produces about 1.5 times more manufactured goods than China with about one fourth the population.

As to the notion that manufacturing is declining and we are becoming a “service economy”; don’t you believe it.  According to the IndstryWeek.com article, US GDP and US manufactured goods have both grown by about seven times (in inflation adjusted prices) since 1947.  Look around.  Our manufacturing plants are humming and backlogs are sizeable.  Construction equipment production is up by over 60% this year.  Heavy truck production is up by 50% and there is a 115,000 unit backlog for Class 8 tractors.  Class 8 trailer manufacturers are working through a 100,000 trailer backlog.  Railcar orders will double this year and there’s a 12,000 car backlog.  John Deere could sell an additional 19 combines per week if they could just get the parts and build them fast enough.  In manufacturing, there’s plenty of good news to go around and Applied Process Inc. is glad to be working with our manufacturing partners to grow the pie.

Strap in.  If Brian Beaulieu is right, we’ve got plenty of work to do.  Like Mike Rowe of popular show "Dirty Jobs" says, "We Make America".  So do we, Mike; so do we.

Our Mission is to Grow the Pie for Austempering……and BOY is the pie growing!  Demand for Austempering remains at record levels.  Producers up and down the supply chain are straining their capacity, resulting in a flattening out of US manufacturing growth.  With certain parts of the economy still in recession, manufacturers have been slow to pull the trigger on capacity-expanding capital expenditures.  Orders in the capital equipment business have now increased, but the entire US manufacturing industry is the bottleneck right now……Applied Process Inc. included.  It will take several months to right-size capacities with demand but accelerating growth in US manufacturing is expected in 2012.

In a longer-term view, SAE Off-Highway Engineering magazine reported on recent comments by John Deere’s Chairman and CEO, Samuel Allen.  Mr. Allen stated that, “A steadily growing population will result in at least 30% more people to feed, shelter and clothe in the next 40 years.  This must be done with basically the same amount of land, water and other inputs such as fertilizer”.  Just think of that….a 30% increase in per-acre productivity.  Mr. Allen further stated that, “Largely as a result of productivity advances, the typical US farmer today feeds over 150 people; six times more than in 1960”.  In the 1930’s approximately 40% of the US population was directly employed in the production of our food.  Today, less than 2% of the US population is feeding the US and exporting food worldwide.  So dramatic productivity increases are not new to US farmers and ranchers.

John Deere is the leader in the US agricultural equipment industry.  The Agricultural equipment industry, worldwide, will play a central part in future productivity gains in food production.  But whether the equipment is green, red, yellow or blue; Austempered Steel, Carbo-Austempered^sm Steel, Austempered Ductile Iron (ADI), Carbidic Austempered Ductile Iron (CADI^sm), Austempered Gray Iron (AGI) and Locally Austempered Ductile Iron (LADI^sm) processed by the Applied Process companies and our affiliates will be getting the job done.

The quadrennial metal casting exhibition, GIFA, was held in Dusseldorf, Germany June 21 through July 2.  Coincident shows included NEWCAST, THERMPROCESS and METEC.  This massive show covered 12 convention halls with 900 exhibitors (54 from North America) and 53,000 visitors from all over the world.  The European technical organization CIATF sponsored 54 technical papers.  Applied Process Inc. and its affiliates ADI Treatments, ADI Engineering, HighTemp, AP Suzhou and Jilin ADI sponsored a booth in the NEWCAST pavilion.  Hundreds of visitors stopped by our stand to discuss potential applications of Austempering, with specific interest in ADI and CADI.  (They’re discovering that Ausferrite is AWESOME).

The worldwide mood in metal casting and related manufacturing is one of cautious optimism.  European markets have recovered to over 80% of their pre-recession business levels, the US and India are experiencing best ever business levels.  Australian manufacturing is suffering.  Chinese manufacturing has recovered fully in sales levels but is being hit with a high currency valuation, high energy prices and double-digit wage inflation.

We were pleased to announce at NEWCAST the upcoming commissioning of the production Austempering line at Hightemp’s Pune facility.  Pune is the automotive manufacturing capital of India and scores of Indian visitors to our booth expressed unvarnished optimism for the near-term growth of manufacturing in India.

ADI Treatments (UK) hinted at the commissioning of their planned German sister operation, ADI Technik, perhaps in 2012.  This would put leading edge Austempering technology in the heart of Europe where demand remains strong for high-tech conversions to ADI from steel and aluminum castings, weldments and forgings.  

The feedback from Washington this week was grim, with very few new jobs being created (overall) and national unemployment rising to 9.2%.  In contrast, since the recession, US manufacturers have added hundreds of thousands of jobs and all the feedback from North American manufacturers points to growth at least through the middle of 2013.  That’s good news for Austempering, which is already breaking new records.  We are fulfilling our mission to “Grow the Pie” for Austempering…..and we’ll continue to do so.

On another note: Hat’s off to our Australian friends for another fantastic Aussie Boat adventure on the Rhine River near Dusseldorf’s Alt Stadt (Old City).  They sure know how to work and play hard.  They are now even more familiar with Hostile Duck Iron and our www.appliedprocess.com website.  Several Australian foundries have, in fact, joined the US-based Ductile Iron Society (www.ductile.org ).  They include: Graham Campbell Ferrum (parent company of ADI Engineering), Intercast & Forge and Trigg Brothers Foundry.

At Applied Process we’re all about Austempering.  In fact, our mission is to “Grow the Pie” and we appear to be succeeding.  Here in the US, while those working in construction and government are still seeing the worst of times, many of us in manufacturing are currently enjoying the best of times.  Times may be too good.  Up and down the manufacturing supply chain everybody is adding shifts, adding machines and STILL falling behind current demand.  The demand for Austempered Ductile Iron (ADI), Carbidic ADI (CADI), Austempered Steel, Carbo-Austempered™ Steel and even Austempered Gray Iron (AGI) has accelerated right past the pre-recession level.  Manufacturers in nearly every segment are finding demand that is outstripping capacities.  Right now agriculture and manufacturing are carrying the US economy.  Let’s hope for a good dose of political gridlock so our elected officials can’t jump in and “fix things”.

I sometimes hear people complaining about today’s work ethic.  When I look at our workers at Applied Process I see people who are kicking butt and taking names 24-7….and I’m really proud of them.  I wouldn’t trade them for a million bucks and 10 first-round draft picks.  At Applied Process we are passionate people providing innovative Austempering solutions.

This past week I had the good fortune to visit P.F. Markey in Saginaw, Michigan ( www.pfmarkey.com ), a supplier of industrial tools, inserts and machining supplies.  Jim Terry and the crew at P.F.Markey have a unique business proposition.  They guarantee you that you will save 10-20% on tools if you install their tool vending machines.  No crib. No crib attendant. Complete traceability and custom reporting.  Awesome.

One of life’s truths: “You miss 100% of the shots you don’t take”.  Wayne Gretzky.

Just a thought: if life expectancy in the US is increasing by one year per decade and we have a pending demographic and economic train wreck with our social programs, why don’t we just raise the eligibility age for Medicare and Social Security by one month per year….forever.  No change in contribution, no change in benefits, problem solved…….or is that too simple?