DEMAND for tank trailers has been exceptionally strong in recent years, driven in large part by North America’s booming energy industry.
For Heil Trailer International, a major manufacturer of tank trailers, it has been full speed ahead for quite a while. Even with the company’s multiple manufacturing facilities, management knew the company needed additional capacity to be able to introduce new products and serve new market niches.
Heil Trailer has addressed that by opening a new plant in Juarez, Chihuahua, Mexico.
“At over 350,000 square feet, the Juarez plant adds much needed production capacity to enable Heil Trailer to execute core growth strategies that include both product line extensions and geographic expansion,” says Randall Swift, president. “Among the key projects are entry into the stainless steel tank trailer market and exporting into the rapidly developing Middle East region.”
By opening the plant this past year, Heil Trailer has a facility that is complementary to its flagship plant in Athens, Tennessee and its production facility in Rhome, Texas.
The Juarez plant enhances Heil Trailer’s ability to supply global customers with its established product line as well as introduce (or reintroduce) new types of trailers.
One example—stainless steel tanks. From the very beginning, the intent was to equip the Juarez plant with all the necessary equipment and training to build stainless steel trailers—a product that Heil Trailer used to build in Lancaster, Pennsylvania, but has not produced in several years.
“Heil Trailer is a market leader, but our production has been almost exclusively aluminum,” Swift says. “We have great relationships with our customers, but many of them also haul chemicals or food grade products – materials typically carried inside stainless steel tanks. With only an aluminum product, we weren’t able to fully support these customers with all their trailer needs. It was really thru their support and insistence that we knew this was the next logical direction for the company to take.” In addition to the stainless steel product, Heil Trailer has dedicated lines to produce petroleum tanks and crude oil tank trailers—another product line benefitting from the strong growth of the domestic energy industry.
“This enhances Heil Trailer’s global leadership position,” Swift says. “Our company has a presence in the United States, Mexico, Thailand, Australia, Saudi Arabia, Argentina and Brazil. Anywhere our customers operate in the world, we now have a manufacturing presence in that region to support them.”
A recent tour of the Juarez plant showed a number of trailers with specifications that were atypical for use in the United States, evidence that they were destined for use outside North America.
Heil Trailer had been considering opening a plant in Mexico for years. The project moved to the front burner almost immediately after American Industrial Partners acquired Heil in January 2012.
“AIP recognized that we needed to grow, and they made the commitment to make that happen,” Swift says. “We looked all over Mexico for a site before deciding to locate in Juarez.”
Management selected Juarez for several reason reasons.
• It is convenient to key Texas oil and gas regions.
• Proximity to the border. The plant is just a few miles from El Paso in far west Texas, giving Heil Trailer easier access to West Coast markets. Located at the western tip of Texas, El Paso is closer to San Diego, California, than it is to Houston, Texas.
• A location in Mexico puts Heil Trailer closer to markets in Central and South America.
• Available labor pool. More than 1.5 million people live in Juarez. Across the border in El Paso are an additional million people.
Heil Trailer signed the lease a mere 19 months ago, yet in August the company will be celebrating the one-year anniversary of the first trailer built at the Juarez plant.
“It’s amazing what this team has done in a short period of time,” Swift says. “But the level of quality also has been amazing. From the beginning, it has been our objective to achieve the same level of quality of any plant in the U S. We told the team from Day One, we’re not going to give the product built in Juarez a different brand name or sell it at a different price point. It’s going to be a Heil Trailer, so you have 113 years of history and a quality reputation in the industry to live up to . . . and they’ve done it”
Several factors enabled Heil Trailer to begin production quickly.
• Computerized plant layout. “The beauty of this startup was that we didn’t have to convert an existing facility over to a lean manufacturing footprint.. We were able to start from scratch, laying out the plant on the computer and then double-checking to make sure our designs worked properly,” Swift says.
• Support from personnel back in Athens and Rhome. Experienced plant personnel scrutinized the three-dimensional computer drawings, offering suggestions for improving the plans and making the work flow more smoothly.
“We taped off the floor to represent where everything was planned to go. We had a good plan to start with, but we have had more than 12 kaizen projects that have made the plant even better,” says David Cox, vice-president of operations.
The plant layout also helped the plant’s new workforce to learn their jobs quickly.
• Simplified assembly. “The good thing about this building is its length,” Cox says. “It gives us the opportunity to stretch out the assembly line. That means that we have more stations, with fewer functions performed in each. We break down each section into operations. With fewer tasks to perform, we were able to get up to speed quickly.”
Heil Trailer equipped the Juarez plant with the same types of jigs, fixtures, and machine tools that the company uses in its U S plants.
“Everything that we are doing in our other plants is done in Juarez, too,” Swift says. “The Juarez facility is equipped with state-of-the-art fabrication and manufacturing equipment that is unique to the tank trailer industry. This investment allows Heil Trailer to continue to exhibit leadership for quality, durability and resale value with solutions built for our customers.
For example, from one end of the petroleum tank assembly lines to the other, a series of rotating fixtures enable welders to work in the most convenient position possible. And for those who work on the labor-intensive top of a tank, hinged wooden platforms swing into place to provide a flat work surface where welders can maneuver safely.
Major machine tools include a laser cutting and a separate plasma cutter. The plasma does for most jobs, but the laser is particularly effective when accuracy and the ultimate clean cut are necessary. The laser has no wear parts to affect the machine’s ability to hold tolerances. As a result, the first part cut on the laser is exactly the same as the most recent.
“The laser is great,” Cox says. “Once it makes its cut, we are done. The cut is clean and requires no grinding.”
The Juarez facility is close to being fully self-supportive. The final piece, a press used to fabricate heads, will be operational shortly.
“The payback for the head press will be very quick,” Swift says. “The first thing it will do is free up some production at our Athens plant. Beyond that, we will have the ability to produce heads when we need them, which translates into better production control. Plus, we won’t incur the expense of shipping them here from Athens. And it gives us more flexibility and redundancy among our plants. The Juarez plant will be able to provide backup for our Athens and Rhome plants if necessary, just as they do for each other today.”
Two machine tools are giving the Juarez plant capabilities not found in other Heil locations.
First is a 750-ton press that the plant uses to form one-piece frame rails. The other is a pyramid roll capable of rolling 28-foot sections.
“The press allows us to eliminate the need to weld sections together to produce these rails,” Cox says. “That’s a real advantage, and we believe will translate into the first one-piece frame rail in the entire industry and alleviates misalignment issues and stress points.”
The same principle holds true for the plant’s ability to roll 28-ft sections. Heil Trailer currently can roll market-best 25-foot sections at its Athens and Rhome facilities, but the 28-foot roll takes it to another level by allowing new 53-foot trailers to be built with just one girth seam.
“Our vision is to have a state-of-the-art fabrication shop in Juarez,” Cox says. “That would enable us to build a lot of the parts and pieces that we currently are buying from suppliers.”
While labor rates may be lower in Mexico, manufacturers there incur other costs that companies in the United States do not have. Perhaps the most prominent are food, medical, and transportation costs for employees—some of which manufacturers are required by law to provide and others are offered to provide competitive benefits with the market.
• Meals. Heil Trailer operates a spacious cafeteria that provides two hot meals per day to its employees. Personnel tend to arrive around 6:00 a.m. to enjoy a leisurely breakfast and one another’s company.
• Medical. The plant has an infirmary staffed fulltime by a nurse and part time by a medical doctor. The doctor is present during the first shift and is on call during the second shift. In the United States, employees call in sick. In Mexico, they come in sick in order to receive medical care.
• Transportation. Some of the employees have their own cars. The company provides transportation to and from work for those who do not.
The medical services that Heil Trailer provides cover routine ailments and injuries. However, the staff nurse also helps provide preventative care.
“We have a full safety program under the direction of our nurse,” Cox says.
Safety training is a constant effort at Heil Trailer. The company identifies a safety topic each month and then makes that topic the subject of its weekly safety meetings. Sessions include the use of personal protection equipment, climbing ladders and stairs properly, and how to protect against falls. Safety sessions held five minutes each morning and about 30 minutes once a week.
“The goal is for our employees to leave work in the same condition that they arrived each day, just maybe a little more tired” Cox says.
Management is pleased with the plant’s fast start.
“This plant will build nearly 1000 trailers in its first year of operation, which is incredible,” Swift says. “It’s gotten us back into the stainless steel tank business, and it has cleared the way for us to offer other types of tank trailers in the future as we continue to look for new growth opportunities. This project has really been a total team effort from the support of our ownership group, AIP, to the State of Chihuahua and their training division, Cenaltec, the city of Juarez, our shelter company, Intermex, our project management firm, TriVista and many others, but the real tip of our hat goes to the Heil Trailer management staff, key support individuals from both Athens and Rhome and finally the team here in Juarez that quickly became part of the Heil Trailer family.” ♦