As supply chains become more complex and OEMs scour the globe for partnerships that give them the competitive edge, suppliers (including those responsible for thermal processing) are under increasing pressure to meet their commitments without any surprises.
While no one can guarantee faultless production 100% of the time, the lack of a backup plan if something goes awry during thermal processing can be devastating.
That’s why contingency planning is paramount (in fact, many OEMs’ quality systems require it). This is a two-way street: Manufacturers must fully understand what could trigger emergency or overflow situations and have a plan in place to address them. And thermal processors who hope to win this work must have the available capacity to take on the work and an accessible, flexible team.
Planned & unplanned furnace outages
There’s not a manufacturer in business that hasn’t had an equipment or facility outage impact their work.
Heat treating equipment outages can arise from any number of circumstances: Maybe a furnace must go offline for regular maintenance. Perhaps a furnace malfunctions, requiring an immediate shutdown for repair. Or, an external facility issue could prevent the use of furnaces.
Some outages—like those for equipment maintenance or replacement—can be planned for. Others cannot. In either case, what’s your backup plan? If you don’t have one in place, or if you’re not satisfied with what’s on the books currently, consider partnering with a third-party thermal processor to develop one right away.
What to look for in an emergency / overflow thermal processor
Ultimately, the ideal partner has the right equipment, enough capacity, an adequate labor force and relevant process knowledge to do the work exactly the way you’d do it. At Paulo, we demonstrate this with what we call “walking the process.” We’ll bring your team on-site to follow the journey your parts will take, from initial receipt at the loading dock through thermal processing and lab testing to packaging and shipment.
We’ll also digest your specs, review any applicable industry certifications or approvals and even run test treatments on sample parts to guarantee we can complete your work as specified. It’s methodical work your customers will be glad you did in advance.
But what happens if an unplanned problem takes your in-house heat treatment capacity out of commission?
Ideally, you already have a plan in place and all you need to do is call us to put it into action.
But if you don’t, this is where our team shines. Open communication, accessibility and the ability to marshal resources and knowledge from across the company quickly make Paulo different.
In this case study, we discuss how the team in Paulo’s Murfreesboro Division helped a Pennsylvania customer maintain its production schedule after a fire damaged their facility and left their heat treating equipment unusable for months.
Sometimes, external factors that have nothing to do with your in-house heat treating capacity can still put production at risk.
Rapid increases in production volume can easily overwhelm in-house operations. Higher demand for products is typically a good problem to have, but it’s still a problem. If manufacturers have no plan in place to absorb the resulting overflow, they fly past unmet deadlines and become the supply chain’s bottleneck.
In other words, if manufacturers are confronted with a sudden uptick in volume with no contingency in place, they surrender their ability to capitalize on what should be a success story.
Evolution of overflow relationships
Sometimes, what starts as an emergency / overflow relationship can evolve into a regular production partnership.
For instance, one of our long-term customers, a major manufacturer of fasteners, initially sent us heavy truck and railcar parts for heat treating only when production volume exceeded their in-house capacity.
But as the relationship matured, two factors emerged indicating it made business sense to treat Paulo as an extension of their production chain.
First, their logistics scheme was large and unwieldy, making it difficult to coordinate timely delivery of parts back and forth between our Murfreesboro plant and their Texas facility. Our setup was leaner, so we agreed to take on shipping. It lessened the burden on the customer and ensured speedier transit.
Second, by treating our plant as an extension of their own facility, they could redirect capital and maintenance costs they would have incurred by purchasing and maintaining additional furnaces.
Quality or approval issues
Maybe your in-house capacity is sufficient to process variable production volumes. And maybe your furnace maintenance regimen keeps your heat treating equipment in top shape.
But what if quality issues emerged? What if too many parts failed inspections? Or, if you already do business with a third-party heat treater, what if they consistently fail to meet your specs? What if they lose key customer approvals that force you to move your work elsewhere quickly?
Whether quality or certification issues emerge in in-house or outsourced heat treating operation, the cost of persistent delays and high scrap rates is measured in more than just lost dollars.
Having an emergency heat treater on stand-by should be part of every manufacturer’s contingency planning. An obvious advantage is that your backup heat treater can ensure production schedules stay intact and your obligations to customers are fulfilled.
But another, not-so-obvious advantage comes into play if your backup heat treater doubles as a troubleshooter.
That was the case when an automotive supplier contacted us during a quality crisis at one of their facilities. The part failure investigation we initiated resulted in the adoption of a corrective measure during heat treatment that eliminated quality concerns.
How we do it
If you’re vetting potential emergency / overflow heat treatment partners, you’re probably wondering if they really can follow through on the claim that they’ll always be ready to take on extra work—even on very short notice.
For us, it’s baked into how we do business:
- We do a lot of forecasting, which involves frequent communication with existing and potential customers. What does demand look like in their industry this year? Next year? The year after? Will you need us to process the same amount of parts over time? More? Less? Getting answers to those questions helps us understand how much furnace time and space we have left over for emergency and overflow work.
- In addition to conducting company-wide utilization rate surveys on the corporate level, our plant personnel keep close tabs on utilization rates in real time to help us understand what schedule or equipment adjustments we need to make to take on surprise projects.
- Paulo works hard to keep critical positions like furnace operators and quality personnel fully staffed; additionally, our HR department has processes in place to redirect corporate- and plant-level personnel or add new staff when demand increases.
- For decades, Paulo has continually expanded its facilities and invested in new equipment to continually meet customer demand.
Choosing the right emergency and overflow heat treating partner can be daunting. There’s a lot riding on the decision. If you think Paulo is a contender for your business and want to start a conversation, contact us now.