Engineering a Fresh Start
108-year-old Omaha Steel Castings Company built a brand new facility and changed ownership to enable growth and survival in the decades to come.
Nicholas Leider, Associate Editor
(Click here to see the story as it appears in the October issue of Modern Casting.)
In an industry that prides itself on tradition and history, the Omaha Steel Castings Company (OSCC) of 2010 looked a little too much like the OSCC of 1970. The company was on the same land it had been since it opened in 1906. The facility, which included a green sand operation and two nobake molding lines, was spread out over six buildings on 10 acres. Once on the outskirts of downtown Omaha, the facility had been enveloped by the growing surrounding community.
But the Omaha Steel Castings Company of 2014 is something entirely different. The company recently opened a brand new 145,000-sq.-ft. facility on 20 acres of land in nearby Wahoo, Neb. The steel casting job shop that services a number of markets, including oil, natural gas and construction, has simplified its operations. The green sand line has been scrapped. All casting processes from molding to finishing are housed under one roof instead of a half-dozen. And the company is beginning to expand its 140-person workforce after completing a year-long relocation effort that included a change in ownership in early 2014.
“For management and our employees, opening this new facility has been a breath of fresh air,” said John Baines, general manager. “The environment is clean, we’ve got a well-lit building and our equipment is in substantially better condition. And we’ve been able to simplify our operations and build a facility that can accommodate us for the long term.”
At its Omaha facility, OSCC focused on components ranging anywhere from 1-1,000 lbs. As the company continued to diversify its capabilities, it grew into a single company that operated as two separate casting facilities. The specialty castings division had green sand line and nobake molding lines, while the large castings division had a single nobake molding line. The two operations shared heat treat services, pattern services and maintenance services, but had separate molding, melting and pouring operations. The company as a whole was somewhat fragmented in the Omaha site’s six buildings, which also increased necessary material handling as castings moved between departments.
These problems, in addition to the fact the company had simply outgrown its 100-year-old footprint, led the OSCC team to explore the possibility of moving operations in 2007. OSCC could not continue to expand at its present location in west Omaha. The economic downturn of 2008-2009 tabled the relocation idea for a few years, but OSCC management returned to the idea in 2011.
The options for existing facilities in the area proved difficult. Unlike many communities in other Midwestern states, Omaha is less of a manufacturing hub. Simply put, OSCC had limited options to find a new home near the city’s metropolitan center.
“We looked at all the remaining industrial sites in Omaha,” Baines said. “We are zoned as heavy industrial and there were virtually zero sites left. The infrastructure necessary—with electricity, water and gas—is pretty significant and that just did not exist. We were very concerned about a large cost to do something, and the size of the property for future expansion was important.”
Redirecting its efforts toward a newly built facility, OSCC management began exploring areas surrounding Omaha, including Wahoo, a small community of 4,500 people located 36 miles to the west. The potential site offered ample land and the necessary utilities, though relocating to a small town could present challenges in terms of retaining present employees and attracting new talent.
OSCC purchased 20 acres of farmland outside Wahoo in early 2012 and broke ground in September of that year after months of site preparation work.
Baines, who has been with the company since 1974, and the rest of the OSCC management group had plenty of experience with the idiosyncrasies of the Omaha facility. To that end, they were well-aware of improvements that could be made in planning a casting operation basically from scratch, though budget and space were still pertinent concerns.
“Our number one objective was to create a very workable, simple process flow for all our castings,” Baines said. “We wanted castings to move in a theoretically straight line versus the very complicated flow system we had in the old facility.”
The Wahoo facility planned to have a single production line with two nobake molding lines (large and small). A single melting system (with two 2-ton and two 0.5-ton induction furnaces) would support the parallel lines, while the green sand operation was scrapped entirely. Producing castings between 1-600 lbs., OSCC wanted to focus on quickly filling orders within a wide variety of industries.
“We moved away from the green sand operation and converted those patterns to the nobake,” Baines said. “We wanted to centralize our sand system to feed two lines. Green sand couldn’t be a part of that.”
The two molding and pouring lines feed a single shakeout system and four shot-blast machines. Finishing operations include heat treatment and a total of 18 finishing stations (including welding, grinding, plasma and arc booths).
A New Home & New Ownership
From the time work began on the Wahoo site in 2012, unexpected difficulties and expenses began to take their toll on OSCC’s original budget of $12 million.
“At the time, we didn’t know about new environmental regulations being placed on our industry,” Baines said. “We also had omissions in our planning. We did not have a complete full plan drawn up and ready to hand to the contractors when we started.”
Hoping to handle the additional expenses that pushed the final project cost past $17 million with revenue from the casting operations, OSCC watched the orders lag. By early 2014, the Lozier Corp., a local manufacturing business with additional investments in several other companies, was in negotiations to buy the company and provide the additional funding required to complete the move. The purchase was official March 27, just as the transition from Omaha to Wahoo was gaining steam.
“Once the change in ownership took place, we had the additional resources for the rest of the move and assistance with starting operations,” Baines said. “We also had help with planning and troubleshooting the areas that had started at Wahoo.”
This September, Wahoo’s molding and pouring lines were operational, though castings needed to be shipped to Omaha for cleaning, heat treating and finishing. Additionally, cores were still produced in Omaha and needed to make the 45-minute trip to Wahoo.
“The biggest challenge was to continue our operations at two different locations,” said Ken Moses, plant manager. “We had to maintain our customer base while allowing us to do a startup in one area at one facility and maintain the rest of the operation as you begin molding and pouring, of course that meant castings had to be transferred back to Omaha for process and shipping.”
In June, Kevin Brown officially took over as CEO of OSCC. Most recently the president at Omaha-based RD Industries, a manufacturer of plastic containers and dispensers, he had been working behind the scenes for months. The change in ownership provided additional resources, particularly in plant engineering and logistics, which allowed a significant amount of progress in the following three months.
“There was a lot of planning before I joined,” Brown said. “But we had more resources to handle such a large project. It wasn’t a major overhaul of plans, as much as adding to and streamlining what was in place.”
By June, the large melt, mold and core departments began start-up operations and were operational. In June and July, finishing equipment was brought online and work began in Wahoo. The blast equipment, arc and weld booths, grinding stations and inspection department also began operations. While the capabilities in the new facility expanded, the Omaha site closed more and more of its operations. The two molding and pouring lines were shuttered successively beginning in April 2014. The site officially closed when cleaning and heat treatment operations ceased on July 18.
“It was really a matter of pulling the plug at Omaha overnight and seeing if Wahoo could handle everything,” Baines said. “And, for the most part, we’ve been happy with how things have gone.”
Communication & Customer Service
OSCC faced two major challenges in the relocation effort: retaining customers and employees. Both of which depended on clear communication and additional effort. The relocation proved a challenge for an hourly workforce that was heavily based in the Omaha area and Council Bluffs, Iowa. But OSCC offered stipend programs and a bus service to retain as many employees as it could. To date, the company has lost only six of the nearly 150 employees who relocated from the old facility.
Additionally, as production at the new plant increases, additional hourly employees are being hired from a pool of candidates in the Wahoo area.
“We’re pulling people from Lincoln to Fremont,” Brown said. “As we grow, the key is working on our training methodology and development. We’ve been approaching it by teaming up new hires with those who have some tenure. We know it’s important to have a strong culture of retention for our employees. Their experience and knowledge is absolutely critical.”
Currently operating at 42% of an annual capacity of 4,800 metric tons, OSCC plans to add a foundry engineer, manufacturing engineer and quality control specialist in the coming months. The goal is to continue toward full capacity in the coming years.
“We are running two shifts now, so we could still add to that,” Brown said. “We want to increase our output and improve our capacity.”
During the transition, the sales force remained in constant communication with existing customers regarding delivery times and any other changes related to the move.
“Ultimately, where we want to hang our hat is high quality and exceeding customer expectation,” Brown said. “Communication is vital, so we focused on proactively communicating with our customer base during the transition.”
Now, as the OSCC digs in at the new Wahoo facility, the goal is to marry increased production with new orders.
“We want to get out in the marketplace to determine what the customers’ expectations are and make sure we meet and exceed those opportunities,” Brown said. “How do we go deeper in the marketplace? We must grow with our customers and in the market to fulfil our new capacity and goals to grow the U.S. castings footprint with OSCC.”