Brillion Iron Works’ Rejuvenation
Once bankrupt, Brillion Iron Works is now a lean, profitable iron casting facility, thanks to the “Fix and Grow” strategy of parent company Accuride Corp.
Shannon Wetzel, Senior Editor
(Click here to see the story as it appears in the October issue of Modern Casting.)
When Accuride’s board of directors brought in Rick Dauch to lead the company as its new president and CEO in 2011, the objective was to turn the wheel business into an international company. Six months later, after touring the various machining, assembly and metalcasting plants, Dauch approached the board with a hard truth: The company was not in shape to go global.
“I said, let’s put that talk on hold, because our current operations were substandard, especially at Brillion Iron Works and Gunite,” he said. “The board’s reaction was silence. Some of the members at the time were creditors from the bankruptcy and had not done a deep dive into the organization or operations.”
Dauch, who came to Accuride with 16 years’ experience in automotive supplier companies, had taken the closer look, and he was dismayed with the iron casting facilities in Brillion, Wis. (Brillion Iron Works), and Rockford, Ill. (Gunite).
“Brillion had tired equipment, an ineffective layout and a challenged operation,” Dauch said. “Both Brillion and Gunite were losing money.”
After considering each metalcasting facility’s role within the company, Accuride determined the units were core to its business. They were incorporated into the organization’s new “Fix and Grow” strategy. For Brillion Iron Works, this meant a $23 million investment over three years to address roof repairs, an air management system, building repairs, casting line upgrades, new coremaking equipment and upgrades in the grinding and finishing department. Along with the financial investment, Brillion Iron Works was infused with new management, resulting in the implementation of lean manufacturing that streamlined operations and considerably reduced lead times.
“The last two to three years, we have been working diligently to fix the business. And the culture of the management team has been to invest to make sure the technology is right,” said David Adams, president, Brillion Iron Works. “We are now in the growth phase.”
Dauch admits he initially viewed Brillion Iron Works as a noncore asset that required significant investment. It was a gray and ductile iron casting facility with some machining operations. It sold cast wheel-end components within the company to Gunite, while also producing components for outside customers in the construction, oil and gas valve and fittings, medium/heavy truck, and farm machinery industries.
“The financials were pretty poor,” Dauch said. “The motivation of the salaried workforce was poor. Capabilities were poor. On the floor, the workforce was capable but ignored. They were working as hard as they could with equipment that was broken down.”
Part of Accuride’s strategy was to sell off its noncore assets. When Dauch arrived, the company consisted of five business units, including Wheels, Gunite, Brillion Iron Works, Imperial Group (a stamping business), and Fabco Automotive (axle manufacturing). Accuride had sold Bostrom (a truck seating manufacturer) the day before Dauch arrived. Within18 months, Imperial and Fabco were sold so that Accuride could reinvest the proceeds in its core business. Brillion Iron Works could have been next, but a closer look at the financials changed Dauch’s mind.
“Part of Brillion’s business was castings sold to Gunite.” he said. “When we pulled the two units’ financials apart, we found that Brillion was selling castings to Gunite at lower than market pricing and machining parts for Gunite, losing 30%. After looking at that, Brillion’s performance wasn’t as bad as we thought.”
The Accuride management team began looking at what needed to be done to improve Brillion. All machining was removed from Brillion and shifted to Gunite, where the company was significantly investing in the machining operations. This left Brillion to focus solely on making castings. Its cost and pricing structures were re-evaluated. Money from the sales of Imperial and Fabco helped fund repairs and capital investments at Gunite and Brillion. Between 2011 and 2014, almost 65% of Brillion’s managers were replaced.
“The management team that is now in place is focused on profitable operations utilizing modern manufacturing practices and satisfying our customer’s requirements,” said Brad Rolfe, vice president, sales and marketing.
The new management, comprised largely of engineers, quickly and steadily implemented lean manufacturing throughout the operation.
“We were put in a mindset to have an organized, clear mind for the business,” Adams said. “The process wasn’t in control, and we used a structured process to identify where we needed to invest.”
Profitability Through Lean
As part of the lean process, Adams and the Brillion management team reorganized the facility’s four loosely coordinated buildings on site into two business units with separate profit and loss statements. Operations management of each business unit, or plant, is accountable for operational effectiveness and discipline. Plant 1, or Plant Peters as Brillion calls it, melts 20 tons/hour, and Plant Gabler melts 40 tons/an hour. A third building, Plant Larson, houses maintenance and raw material. The Peters and Gabler plants, or business units, have their own melting, coremaking, molding and finishing operations.
Using value stream mapping, the team identified areas in the process that were causing the biggest issues.
“The team developed action plans and have realized fantastic results which include, but are not limited to, improving lead time by more than 30%, reducing days inventory on hand, increasing overall equipment effectiveness, better quality through improved process capability and increased productivity,” said Greg Neumeyer, Brillion campus lean manager of manufacturing strategy and Plant Peters manager.
Brillion implemented a schedule wheel in which production control sets the schedule, which smooths and levels production on the mold lines in a sequence that allows for the most efficient operation of the unit.
“It’s critical to the foundry that you don’t jump chemistries to move a customer in the schedule,” Adams said.
Applying lean principles to production scheduling freed up staff time that had been used to figure out when to pour a job.
“We have also used lean for transactions, from order entry to request for quote, and for safety and environment activities,” Neumeyer said. “Lean allowed this American company to recover.”
By stabilizing scheduling, reducing overtime usage and achieving more uptime on the lines, Brillion reduced its break-even point by 30%. With sales down in 2013, the company was still profitable, despite the lower revenue.
“Lean doesn’t mean anything if it doesn’t show up in financial performance,” Adams said. “Because of lean, we are a viable business, and now, as the market comes back and we remain lean, you can imagine the implications.”
In conjunction with implementing process control and lean manufacturing, Accuride invested a total of $23 million at Brillion Iron Works from 2011 to 2014, with more still to come in the next two years for coremaking and finishing equipment.
“Twenty-five percent of that first investment was simple—fixing roofs, drainage, safety-related issues, lighting,” Dauch said. “Some of the first investments were to clean up the lunchroom, break rooms and bathrooms so people can have a good working environment.”
Next, Brillion began investing in repairing its equipment, section by section. This included about $10 million to the DISA molding line and 1980s-era BMD molding line. Another $8 million was invested in increasing finishing capacity, adding automatic grinding machines and replacing coremaking equipment.
“Since we have added automatic grinding, our production has doubled and injuries are down,” said Troy Wendling, finishing coordinator. Brillion currently automatically grinds 20% of its castings.
Over the course of the next three to four years, Brillion will invest $5-$7 million a year to replace 35 existing coremaking machines with 14 new machines that will result in increased capacity and higher quality. Another $6-$10 million is planned to streamline grinding and shotpeening.
“We benchmarked some of our competitors here and overseas,” Dauch said. “We see that we need to make these investments. You can’t expect to be globally competitive if your workforce doesn’t have capable equipment, good tooling and a real, true lean manufacturing system.”
Other Brillion priorities for 2014, according to Adams, include improving safety metrics by 25-50%, growing revenues with $10 million or more in new business wins, achieving long-term agreements with customers, and continuous operational improvement and lean system implementation.
“The order of importance for focus is 1) safety, 2) quality, 3) delivery and 4) financial performance,” Adams said.
Support of Union Contract
In 2013, Brillion also ironed out a five-year contract with its union that gives a sense of workforce stability for both management and its more than 400 hourly employees. One of the negotiated items that became effective was a pay-for-performance program based on scrap, productivity and safety. Company savings in these categories are shared 50/50 with employees, up to a maximum payout of $1,000 per employee per year. Results are posted on company bulletin boards.
“Right now, the employees are really improving scrap performance,” said Thomas Burke, vice president, operations.
Another part of the contract stipulates that Brillion can add work crews as the market dictates for capacity reasons.
“The contract addressed an overcomplicated classification structure and is now competitive,” Dauch said. “I give the union leadership kudos for working with the company.”
According to Rick Konrad, president of the United Steel Workers at Brillion and maintenance repair technician, the staff at the iron casting operations are responding positively to the changes taking place.
“Relations are a lot better now than they have been,” he said. “We had some issues when times got slow on how things were handled. But the relationship has gotten a lot better; we are working together to solve problems. I think people are starting to see that some of the changes have paid off.”
With so much changing in a three-year span—new management, new flow of operations on the plant floor, separating into Plant Peters and Plant Gabler, implementing lean manufacturing—engaging the hourly workforce was critical.
“The people need to hear why these changes need to be made,” Konrad said. “Once they understood, I don’t think the transition was quite so hard. That’s the biggest hurdle. If they don’t know why, they want to buck it.”
When Dauch first started at Accuride, he recognized the casting facility’s failings were not due to the plant workers, and he understood clear communication would help convince them to fully participate in the upcoming changes.
“If you give people all the information, they can come to the logical decision we made, as well,” he said.
Time to Grow
After seeing profits in 2013 and a healthy increase in sales through the second quarter of 2014, Brillion is transitioning into the grow phase of its “Fix and Grow” strategy.
“All the work we have done across Accuride in the last three years has put us in position to be competitive in quality, delivery, safety and cost,” Dauch said.
As part of its fix phase, Brillion Iron Works had re-evaluated its pricing structure. It raised prices based on supply and demand in 2011 and 2012 and raised prices on jobs where the operation was selling at a loss. Using this mentality, the organization will seek organic growth through profitably winning market share against its competitors and filling its current capacity of 140,000 tons. At Brillion, continued growth will require additional investment in the core room and grinding operations and eventually in another casting line.
Accuride has committed to making continued investments to enable Brillion to become a globally competitive casting facility. Brillion Iron Works is in a better position now than it was five years ago, when Accuride filed for bankruptcy. With stronger financials, better process control and flow, and upgraded equipment, the iron casting facility is in a much better position to compete in an ever consolidating foundry industry and positively contribute to Accuride Corporation’s bottom line.
“The management team brought process discipline and standardization of processes across our plants,” said Timothy Weir, Accuride director of public affairs, communications and marketing. “This stems directly from the human beings who drive it and those who support that vision. They are technically strong people, and what they’ve accomplished has been transformational.”