Reinvention: How TimkenSteel, a 100-year-old manufacturer, is innovating with new products
Resource from: Cleveland Plain Dealer Likes:246
Mar 11,2015
CLEVELAND, Ohio -- Research, investment and innovation aren't usually associated with a 100-year-old steel company, but that's why 30 percent of TimkenSteel's products didn't exist just five years ago.
With a recent split, TimkenSteel has been in the news for making its debut on the New York Stock Exchange in July, formerly part of a combined company that retained the Timken name, and now makes bearings.
What's not as well-known is that this fifth-generation run company spent $225 million in 2012 to expand a steel mill and erect a giant caster that can turn molten metal into fresh steel more quickly and at a lower cost. Now the Faircrest Steel plant is expected to help the company to offer a broader range of large-diameter bars.
Rising 180-feet above ground and submerged 90-feet below ground, the caster is the most modern steel-making technology in the industry. At about 18-stories high, it's the only one of its kind in North America. In October, the manufacturer started making steel with its new ladle refiner and caster that will eventually end up down in holes in oil drilling rigs, in heavy machinery and some military applications.
"It not only substantially increases our capacity and efficiency, it also enables us to produce steel that has industry-leading purity," said Ray Fryan, vice president of technology and quality.
Following the split, TimkenSteel posted $1.7 billion in sales in 2014, from steel made in six plants throughout the country, including three in Canton. The company has 2,800 employees.
Fryan said even before TimkenSteel became an independent company last July, top managers took a close look at their business model.
Never be happy with where things are. Always look for where you can improve."
"We decided we wanted to be the best problem solver for chosen customers in chosen markets," he said. "We are very efficient as a manufacturer, and want to be the best customer problem solvers in the world."
Timken is a company that got its start by continuously improving steel for bearings, one of the most demanding applications. Throughout the decades, instead of just focusing on production and filling orders, the company's focus on and innovation led to a business that created customized solutions for many industries.
Here's a closer look at how Ray Fryan describes TimkenSteel's efforts to reinvent and expand to new markets.
Q. How did you go about renewing your product portfolio?
A. We adopted best practices in product development that are used by industrial market leaders. We also invested in research and development. We're opening a new $5 million technology center this spring at our campus in Canton. The center gives us a competitive advantage in developing new steel grades and new steel performance features. No one in North America making high-end steel - what's known in the industry as special bar quality steel, or SBQ - has anything like it.
Q. For a 100-year-old steel business, it's interesting that 30 percent of your products are five years old are newer. How does that happen?
A. TimkenSteel's new products are the result of us asking our customers about their needs, listening to those needs and providing a solution to address those needs. This means our communication between sales, technology, engineering and manufacturing is completely open, and focused on what is needed to bring new products to commercial reality. We need to know what problems our customers need to have solved, and what we need to change in our products and processes to solve them. Our variable pay plan reinforces behavior that consistently focuses on the customer and their needs by rewarding a high product-creation rate.
We've focused on our ability to fulfill "boutique" special steel orders - customization and optimization for niche customers - by expanding our information and manufacturing infrastructure flexibility. Think of a low-cost warehouse club store infrastructure but with a unique store product, customer and service model. That's what we offer.
Q. Can you give me an example of a new product that you didn't have five years ago?
A. A customer of ours that provides oilfield metals to oil and gas manufacturers challenged our engineers to come up with a lower-cost alternative to stainless steel production liners in 30,000-foot deep offshore wells. Developing offshore oil wells at increasing depths often means passing through corrosive layers and extracting even more corrosive hydrogen-sulfide laced oil and gas product. TimkenSteel engineers set to work on an engineering alloy steel with a customized recipe. We've melted more than 30 heats on this new customized alloy with great success, and the steel is in use in large drilling projects in the Gulf of Mexico. The cost is significantly less than stainless, and it's truly a breakthrough that will enable a leap forward for the customer. It took about four years to make it happen.
Q. Reinventing a small business is much easier than trying to change the culture of a major corporation. How long did it take and how did you go about communicating that change was necessary?
A. Once we knew our strategy and business model was, at its core, solving customer problems in niche markets, the culture change was much easier to accelerate. By focusing all of the company on customers and their challenges, we had better solutions, and more of them. This fed into a growing new sales rate that helped profitability, and the culture saw the reward of adopting this new model. We don't want to go back to where we were 10-15 years ago. We also know now that getting these solutions to market takes time and perseverance.
Q. How did you get your customers to start sharing issues that your company might be able to help them with?
A. Our reputation as a high-quality, high-performance producer brings a very strong trust as a supplier. In reality, our customers have been sharing issues with us for a long time. The difference is the rate at which we have focused on solving those issues with them. If we solve more problems, we build greater trust, and we get the access to talk about the next set of issues. A larger portion of our organization supports these problem-solving efforts than ever before because we've crystallized our operating model and our performance rewards reflect that.
Q. Is customization new for TimkenSteel?
A. No. We've always had customization, and we've always been responsive. We've not always had a good measurement that shows how well we're doing that. Our new product sales volume metric is a great high-level indicator of whether we are doing what we believe we should be doing - turning over the product portfolio. It's our GPS for how well we innovate as a company, because it takes the entire company to deliver new products.
Q. Can you offer one piece of advice about reinvention?
A.Never be happy with where things are. Always look for where you can improve, and don't overlook those core skills that made you successful in the past. Learn from them, and reinvent yourself in areas that are historical strengths. See where that reinvention applies in new markets, new capabilities, and new customers.
We're constantly looking at new spaces and challenging existing paradigms. Are there always going to be an abundance of customer problems worth solving? Absolutely. The challenge of going after those with our customers as a team defines the TimkenSteel DNA. Everything can be made better. We can always do better. This challenge always keeps us excited about making our world better. It's awesome.
Similar to The Plain Dealer's former column called "My Biggest Mistake...and How I fixed it," I'm now interested in sharing what drives a person or company to make a drastic change that led to success. I am looking for Career-changers - from millenials to retirees- and companies, from start-ups to major corporations, who want to share their stories. The focus: people who have drastically switched careers in the past five years and businesses that have found new ways to survive in a changing and ever-evolving marketplace. If that sounds like you, please contact me, Marcia Pledger, at (216) 470-7324 or send an email to mpledger@plaind.com.
(Cleveland Plain Dealer)
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1.The news above mentioned with detailed source are from internet.We are trying our best to assure they are accurate ,timely and safe so as to let bearing users and sellers read more related info.However, it doesn't mean we agree with any point of view referred in above contents and we are not responsible for the authenticity. If you want to publish the news,please note the source and you will be legally responsible for the news published.
2.All news edited and translated by us are specially noted the source"CBCC".
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