Atkore International emphasizes customers are the core of its business
September 2011 - Learning from past experiences and adjusting to business conditions in the present ensures a company builds the knowledge needed to take on future challenges. Allied Tube & Conduit, Harvey, Ill., has been a part of the steel industry for 52 years and has grown from a company with one tube mill to part of a global enterprise comprised of 3,100 employees and 23 manufacturing and distribution facilities worldwide.
Allied Tube’s growth trajectory includes both expansion and acquisition. In 1987, Tyco Laboratories Inc. acquired the business. It later became Tyco International with U.S. headquarters in Princeton, N.J. The relationship came to an end in December 2010, when Tyco completed the sale of its majority stake to private equity firm Clayton, Dubilier & Rice LLC. The new company was renamed Atkore International and began in 2011 as a standalone entity.
However, despite the name change, the company’s well-known brands still exist as part of Atkore—even including a nod to the company’s history in the choice of name.
“We are still Allied Tube & Conduit and Tectron Tube in our product and market,” says Dan Kuzniewski, director of marketing, communications and branding. “Customers can expect the same things out of us, even though we’ve gone through this change from an ownership standpoint.”
“Years ago, we used to be ATCOR,” adds Edward Kurasz, president of pipe, tube and conduit. “When the business became public, it was ATCOR, which was traded on the NASDAQ. When we separated from Tyco, we needed a name that represented the global corporation we are today, yet was universal enough to account for future expansion. We also knew Allied Tube & Conduit would face challenges for incorporation in other world geographies.”
“The name Atkore primarily emphasizes that the products we manufacture are core to our customers. There’s a nod back to the fact that Allied represents the largest part of the portfolio,” Kuzniewski says. “AT can be seen as a nod to Allied Tube and the past history of how the company has grown.”
Striving for operational excellence
The organizational changes have allowed the company to refocus its strategies. Instead of looking just at internal operations, it has adopted an external strategy that is highly customer and supply-chain oriented.
“From a long-term perspective, we’re trying to focus on our customers and are looking at strategic positions where we can be reactive to the market,” says Kurasz. “The steel business is very dynamic right now and has been since 2004. Because steel is a global business today, we have to focus more on the supply chain. Steel didn’t fluctuate much prior to 2004. Today, steel fluctuates quite a bit. The cycles are shorter and they’re deeper. We have to be very lean and flexible on our supply chain side to make sure we are the low-cost producer. That’s very important in our business because we have some strong competitors out there.”
Adapting to the steel market cycles requires flexibility, and Atkore has become more agile as a company since its separation from Tyco.
“Today, we might be able to make a strategic move from a supply chain perspective to position ourselves to be a continuous supplier to our customers,” Kurasz adds. “We can maintain that steady flow of inputs and raw material and maybe take advantage of a certain swing in steel and go long at any particular time to cover our customers.”
“We now have a vice president of supply chain; we have a lot of operational and supply chain power that helps us be as lean as possible, without sacrifice to the customer,” Kuzniewski adds. “I think that’s definitely something that’s a challenge in these times, to not only be lean but to be lean and still effective in supporting and servicing your customers appropriately.”
The management team includes John Williamson as CEO and president and James Pinto as vice president of global operations and supply chain management. The whole group works together to ensure Atkore stays competitive.
Reduce costs for success
The service centers and OEMs that are buying from Atkore are striving to keep inventories low, which places similar demands on a manufacturer to produce its products using the most cost-effective methods.
“Pipe hasn’t changed much in the last 100 years,” Kurasz says. “We’ve worked very hard to come up with labor savings, cost savings and total solution savings in our pipe and tube products and our pipe and tube business model.”
Approximately 60 percent of the company’s orders are tied into nonresidential construction, with the other 40 percent headed into OEM-based applications.
“Nonresidential construction is down considerably, and it is still soft this year versus last year,” Kurasz says. “It’s a moving target, and we’re looking into 2012 to 2013 before seeing any real improvement. That does impact the way we operate. We need to take cost out of the business to operate at those reduced levels. We need to maintain our competitive nature to participate in a softer-demand business. There is no question that it has changed our behaviors. We have made some improvements, and are looking at new opportunities in our mechanical tube and structural business. We are trying to enhance our position there to help offset some of the deductions in nonresidential construction.”
However, with this type of roller-coaster economy, long-term relationships and brand equity bring some measure of stability.
“I think the big challenge today is that you want to be the first call [and] last call with both your strategic distributors and your partners, and you balance that with your working capital requirements,” Kurasz says. “You don’t want to have excessive inventory during these dynamic situations, which is why distributors have gone from three months to two months. It’s no different on the manufacturing side. We want to maintain that service so that when we get the call, we can turn that order around very quickly, versus if we don’t have everything, that customer might have to call somebody else. We need to be very flexible on our manufacturing side. We need to have strategic agreements with our steel suppliers for our reaction time. We’re trying to overcome the dynamics but improve the flexibility and turnaround time for our customers, and that’s where the focus on supply chain is a big change for our organization over the last three to four years.”
“From a customer-facing standpoint, we’d like to stress that with the build of the Atkore entity and brand, Allied Tube & Conduit and Tectron Tube are still big parts of the family,” adds Kuzniewski. “When we launched Atkore, we didn’t want to have customers concerned with the continuation of the Allied Tube & Conduit and Tectron brands. We want to assure customers that Allied Tube & Conduit, that business, that brand, everything that it has meant and stands for both from a history and a future perspective, is healthy.” MM
Interested in purchasing reprints of this article? Click here