The largest independent gas manufacturer in the US seeks to leverage technology in order to reduce labour costs and increase safety. By Rob Cockerill.
Early in 2004 a quest began in Boise, Idaho US. The quest was to build the most optimal cylinder filling facility possible. Four years later, the quest ended with the ‘Start Up’ of Norco’s new state-of-the-art automated palletized fill facility.
One year later, gasworld decided to interview the key characters in this odyssey to see what they had learned from their journey and to see if they had indeed found what they were looking for.
“We had our production plant at the main office. Our success in growing the business was starting to be impeded by the limitations of the old pumping facility. In addition, our labour rates were completely out of step with the market,” explained Ned Pontious, President of Norco.
“Because of the lack of flow we were over-handling everything. The last straw was when we started to see a rise in workers compensation. We had always prided ourselves in running a sound, safe company. So we began to formulate a plan and a budget that Jim Kissler, our CEO, could get behind. The next step was easy – we made Jim Ross our Project Manager.”
Jim Ross, Norco’s Quality Manager and the Project Manager for the new facility, also added, “Ned made the overall goal very clear; we had to consolidate operations and improve efficiencies. We had three operations spread out over a 10 mile area. They were our Industrial and Medical cylinder filling facility, Norlab (our Specialty Gas fill facility/lab), and our cylinder maintenance division. Getting them all under one roof was a major goal.”
“The overriding goal was to make serious reductions in labour, transportation and handling costs. Savings in any of these areas, we knew, would immediately affect the bottom line in a positive way,” Ross continued.
Pontious affirmed, “Return on investment for any project is a key factor. This one was no different. We needed to assure substantial labour savings and to optimise inner company synergies that, at the time, did not exist.”
“Tapping in to those synergies was key to the success of this project. For the first time we were putting all of our pumping operations under one roof, but we were also changing our distribution process out to our branches. We had to get the layout and flow of the new facility right,” he added.
Getting it right from the outset was crucial to the whole operation. The quest would involve a great deal of information gathering, project meetings, site visits of fellow manufacturers and distributors, and a number of other obstacles to overcome.
Ken Goicoechea, Norco’s Plant Manager of the new Boise Fill Facility, explained, “Jim Ross and I spent two to three years visiting cylinder fill facilities, looking at possible sites to move in to or build on, and the entire time we were drawing and re-drawing what the facility would look like.”
“During that period Norco purchased 15 acres about a third of a mile from our corporate campus, to build our Fuel Gas facility. We built that facility first and then on the same property, we built the new automated cylinder fill plant.”
Goicoechea continued, “We knew several people who had been on similar quest as ours, so we asked them for advice and they were terrific. The good people at Mittler in Indiana, Cee Kay in Missouri and Linweld in Nebraska gave us great advice. They were very open about what had worked and what had not. They opened their facilities to us and allowed their people to have open, candid conversations with us.”
At this point, Ross adds, “In a way, the fact that we built the Fuel Gas facility first really helped us get primed for the move in to the new automated palletized facility.”
“The biggest challenge at that point was just how we were going to organise the move of three of our key facilities in to one building, while trying to run our day-to-day business.”
Twelve months down the line and it seems everything is indeed going well, with Pontious pointing out, “To give you an idea of the cost savings that we were able to attain in the new facility we have seen a 25% reduction in costs. In addition, when we compared 2008 to 2009, we discovered that our cost to fill per cylinder went from $2.68 to $2.01.”
Key factors of success
Just as getting it right first time was crucial to Norco’s success, so was choosing the right partner for the project. After discussions with many ‘smart people’ and fellow gas manufacturers, one word kept emerging and reverberating in Norco’s ears – Weldcoa.
The company’s experience with the litany of documentation required, its depth of knowledge, and technical expertise were all cited as key factors for success by a whole host of companies. It became clear that Weldcoa was the right choice of partner for Norco – and so the success story began.
Goicoechea enthused, “On a project this big there are a lot of variables. A lot of people were interacting and trying to get this thing off the ground. Having a good contractor and architect that work well together is very important. We had a great contractor who set-up a time line with very clear milestones and deadlines. Sticking to that programme, while communicating changes, was a major challenge.”
“That’s a good point. I would like to add that Weldcoa played an important role in that process. The Weldcoa people, with their commitment to high level planning, the depth of experience that they brought to the table and the information that I could share with the contractors, made this an extremely smooth running project.”
“Because of the detailed amount of documentation that Weldcoa generated, we were able to show them where the equipment would go, pipe runs, lengths and heights, work flow and how the equipment operated,” Ross added.
“As we mentioned before, we talked to a lot of very smart people who we respected that had gone through this process before, and the one name that kept popping up over and over again was theirs. Westair in California, in particular, had just finished a project similar to ours with Weldcoa and could not say enough good things about the experience,” said Pontious.
Goicoechea interjects and explains how the word-of-mouth respect for Weldcoa was certainly no hyperbole, as Norco soon found out for itself. He praised, “Their level of experience was unbelievable; their depth of knowledge and technical abilities was deeper and wider than everyone else we talked to. Competitors were not near the same level.”
“You could not help but be impressed. Once the equipment was here, the install was fast. Faster than we thought it could be and the training was just as fast. I can tell you that we have run this system now for just over a year, and the support has been first class,” he continued.
In closing our interview, Pontious is keen to impart some concluding words of advice gained from Norco’s recent experiences. He wraps up by saying, “My advice to anyone who is considering undertaking a similar quest, is to set aside capital, trust your instincts, work with the best possible people you can find, and invest in new technology to minimise labour costs and increase safety.”
“Do not spend new money on old ideas. If you do what you know is right for your business, you will see a positive return.”