QUALITY concerns. Manufacturing issues. Supplier problems. Financial constraints. All of these were hurdles that EverLite Inc management had to address in order to resurrect a struggling company and restore production of Alumatech aluminum dump trailers.
The key to the comeback, however, was simply fabricating a better product.
Alumatech Inc, the original company that produced Alumatech trailers, was in dire circumstances when new ownership acquired the company five years ago. The firm ceased production in March 1995, and the bank that acquired what was left of the assets put them up for bid.
Meanwhile, Gary Baas was looking to buy a rendering trailer for his Columbus, Ohio, family business. Upon hearing that the assets of Alumatech had gone on the auction block, he sent a representative to Longview, Texas, to investigate. Baas put in what turned out to be the winning bid.
In July, the new owners began breathing life back into the company, hiring production workers and installing a general manager. By October 1995, the company was producing trailers again.
Warren Wilson was parts manager and materials manager during the company's dark days of 1995 and was retained by the bank to service existing customers during the period that the company was not producing trailers. He now serves as general manager.
"The first thing we had to address was warranty issues," Wilson says. "From that point on, we concentrated on improving our quality."
The first step in that area was to implement new welding procedures.
"Until we did, the company had no real employee training program," Wilson says. "Employees were told what to do, but not how to do it."
Longview has a big oilfield industry, and a lot of people know how to weld. But the oilfield values strength, not weight savings. Welders typically work on heavy steel structures - not aluminum products that must balance strength and weight. Alumatech had been hiring welders with experience, but not necessarily with the type of experience required to produce aluminum trailers.
"When you weld aluminum, you have to do it properly, or it will develop cracks," Wilson says. "When we began producing trailers again, we had to develop specific welding procedures. For example, when we clamp our pieces in the main assembly fixture, we don't just run a weld bead. To reduce expansion and contraction, we weld the trailer in a pattern that is like the one used to tighten head bolts on an engine."
New hires at EverLite now undergo a training program that includes watching videos and working alongside an experienced EverLite production worker. Furthermore, a welding test is now part of the job interview.
Road to Recovery EverLite identified four general areas in which the company must succeed in order to compete successfully in the dump trailer market.
- Quality issues.
- Manufacturing procedures.
- Financial constraints.
- Supplier relationships.
One quick step EverLite took to improve the quality of its dump trailers was to switch to air-ride suspensions.
"We found that steel springs were tearing up the rear of our previous design," Wilson says. "Until we had a chance to analyze what was happening, we decided to equip our trailers only with air-ride suspensions. Since then, we have modified our design to manage the stresses associated with aluminum dump trailers equipped with steel suspensions. We now have a proven design that works with steel-spring suspensions, and we offer them to our customers who prefer them."
Modifying Manufacturing Changes in the way the company manufactures its trailers went a long way toward improving the financial picture. Those changes, however, were made possible only by improvements in employee training. The old Alumatech produced 25 to 40 trailers per month with 118 employees. Today the company is building 23 to 25 trailers monthly with 47 on the payroll. The difference is cross-training.
"Eighty percent of the employees in our plant can do two or three different jobs. Some of these jobs take eight hours, yet we work four 10-hour days here. Because our guys can do different jobs, they can move on to another job when they finish the first one. Under the old system, employees had specific jobs to do. When they finished those jobs, they were finished."
EverLite has smoothed production by making sure all the pieces are in place before the company begins production of a trailer. Once a trailer hits the assembly jig, it should move smoothly down the line. Wilson attributes the implementation of better manufacturing control systems to helping make this possible.
"We know the labor hours we need as well as our component and material requirements," Wilson says. "Our old system really wasn't adequate to enable us to forecast what we need."
Reducing Costs The company further reduced costs and improved efficiency by consolidating production under one roof. At one point, the company operated two separate plants. One plant fabricated steel components and produced aluminum subassemblies. These products then were shipped seven miles to the company's primary assembly plant.
"It was bad," Wilson says. "We had the overhead of two buildings plus the cost of shipping. When the lease came up for the other building, we consolidated everything into one location."
Combining the two buildings, however, required that some things had to go. EverLite began farming out some of its fabrication. One of these was a CNC burning table that could accommodate five gas torches or plasma cutters. The company also owned a mill and lathe that it used to produce tailgate latches and hinges.
The decision to sell the burning table, mill, and lathe was relatively easy. The company never had enough volume to utilize this fabrication equipment fully. It sold machine tools it could not justify and contracted with outside fabricators to produce parts and components it could not as effectively produce in-house.
"We are trailer manufacturers, not contract fabricators," Wilson says. "We decided to concentrate on our core business."
To get back in production, management also had to re-establish relationships with vendors.
"We bought the assets of Alumatech, not the liabilities," Wilson says. "We are not the same company that we were before 1995. At first we had to pay cash for everything. It took two years to establish ourselves with our suppliers."
Wilson says the company now makes it a point to pay its invoices within 10 days to capture the discount its vendors offer.
"We look at our purchasing department as a profit center," he says. "Getting our discounts is one more way we can reduce the overall cost of our trailers."
Wilson points out how difficult it is to re-establish a reputation.
"The original company was in business from 1992 to 1995," he says. "This company is now in its sixth year of operation. We have worked hard to overcome the image that we as a company will not be here when the customer needs us."
Keeping the Name EverLite chose to keep the Alumatech brand. Since the new ownership took over, the company has introduced other designs. But Alumatech will continue to be the flagship brand, Wilson says.
One of the new designs EverLite has introduced is its SureFoot frameless dump trailer designed to keep all wheels on the ground throughout the dumping cycle. The company also has introduced a frame-style dump trailer and plans to introduce another model that Wilson cryptically says "will compete with lower-priced trailers." The trailer, slotted for official introduction at the Mid-America Trucking Show in 2001, will be customer-tested before it is unveiled.
"We are not a company that jumps on the bandwagon," Wilson says. "Our trailers must perform to our customer specifications and our expectations."
Slowdown Is Over As is commonly the case now among trailer manufacturers, EverLite has seen a slowdown in sales recently, but one that has been moderated by a shift to dump-body production.
"Trailers usually represent 85% of our production, but we produce a higher percentage of dump bodies during the last part of the year," Wilson says.
Wilson believes the slowdown is over for EverLite. The company saw a 75% drop in production in early autumn, leading to a workforce reduction in October. But sales are on the upswing, and the company is hiring again.
"We noticed a sharp increase in quotations about the middle of November," Wilson says. "I think some people who had been holding off because of the election lost patience and decided to move ahead with their plans for next year. Others had money budgeted and needed to buy trailers before the end of the year."
Based on the year-end flurry of interest, Wilson is optimistic about 2001. But even if the sales increase is short-lived, he is confident about the ability of EverLite to be ever-living.
"Either way, we are prepared," he says. "We have had our reins on this company since the day we owned it. We have made a lot of changes here. For us, the key ones involved labor and quality. When you take care of those areas, the financial issues seem to fix themselves."