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Monday | 01 January, 2007 | 3:00 am

Consolidating creates efficiency

By Lauren Duensing

January 2007 - Some fear change, but change is an important part of growth. However, Prolamsa (Productos Laminados de Monterrey) Inc. has no trepidation when it comes to change. It recently evaluated its business and is streamlining its operations to become more efficient and improve customer service.

For many of us, moving homes is a cleansing experience. There are cabinets and closets that are empty and waiting to be organized and old stuff to be given away. For the first few months, after everything is in its place, a new home is more efficient than the old one.

That's the position Prolamsa is in after consolidating its operations. "We have had two plants," says Jean-Marie Diederichs, president of Prolamsa USA. "One is 450,000 square feet, and that's what we call the "old" plant, the one that we created 50 years ago. We built a new plant five years ago that was about 800,000 square feet. We now have expanded this plant to about 1.2 million square feet and have consolidated both plants into it."

The company decided to make this move because with "all the growth that we have had and the range of products that we are manufacturing, it was becoming more difficult to provide the lowest cost possible working from two plants," says Diederichs. He notes that transferring products between plants was very costly, and "many customers wanted some products from one plant and some from the other plant. We had to consolidate the order before we shipped it. Now we can ship everything from the same place no matter what parts an OEM or service center wants."

Adding value
Becoming a one-stop shop is convenient for the company's coated products, as well. "We have two large coil paint lines," says Diederichs. "We apply a primer on the coil, and after that we slit and roll the coil into tubing or metal building components. Before we consolidated we had to transfer the coils or painted coils between plants. That cost us both time and money, especially since we have been growing so rapidly."

The company continues to make improvements in the production and value-added arenas. "We have also bought a new structural tubing (HSS) mill that will start to produce in about a month and a half," he notes. "We have also added new CNC-programmable laser-cutting equipment, which allows us to make complex cuts and perforations that take several conventional machining steps. The laser-cutting equipment enables us to go from design to finished parts in minutes. It's ideal for automotive, electrical, aerospace and other applications where accuracy and precise tolerances are critical. We also have a new cut-to-length line, and we've added new equipment that deburrs and scarfs so we can offer a cleaner product to our customers."

Prolamsa is focusing on value-added services because the global economy has created an environment where there is more competition and an increased pressure to survive. "Imports are here today, and they will be here tomorrow," he says. "That won't change. So we're trying to be more creative and work with our OEM and service center customers to provide value-added products that allow them to compete successfully."

Diederichs says that Prolamsa's products will never be as cheap as Chinese manufactured products. However, the company has some advantages over overseas competition. "Our goal is to work with our customers and provide them with competitive products and services so they don't have to look to China or other places," he says.

Logistically speaking
The expanded plant and consolidation will allow Prolamsa to streamline its logistics. "We have installed two new rail spurs inside the plant so we can receive coil, as well as ship out finished products. We import coil from all over the world so we can always be competitive," Diederichs notes. "We have a large supply of coil and have always had the ability to keep an adequate inventory, even in tight supply times. That's been a big advantage for us," he explains.

Another logistical advantage for the company is its depot in Laredo. "When you cross the border at Laredo, usually you have to transfer from the Mexican trucks to the U.S. trucks," he notes. "That is usually handled by brokers or other people. Now that we have a depot in Laredo we are able to do our own transfers. That makes us much more efficient and we don't lose time transferring trucks at the border."

Gaining that time back is extremely beneficial in regard to some of the company's product lines. "You don't want to leave painted products or UV-coated products outside for long periods of time," Diederichs notes. "Now we make the transfer inside our depot."

Sticking with the right customers
"Prolamsa has built its strategy around serving the right customers," says Diederichs. "Our strategy is to target the right customers and to satisfy them 100 percent of the time."

"One of our goals for 2007 is to reduce lead times. A part of our strategy to do that is to service our customers with information in real time over the Internet. Our new SAP system is up and running. It was a huge undertaking," he notes. "We now have the startup under our belt, and we're beginning to see the results that the SAP system can provide. In 2007, we'll be able to provide our customers with a full range of new services in this area."

Improvements like the ones Prolamsa is making are necessary to stay competitive and be a good partner. The company's goal is to be one of the lowest-cost producers in the market, not just in Mexico, but also in the United States and Canada, as well, which will allow it to compete against imports coming from countries such as China and Turkey. "In order to be successful, we have to not only be efficient, but we also have to be able to provide something our competition can't. And that goes for competition that comes from anywhere in the world," says Diederichs. MM

By Lauren Duensing, from the January 2007 issue of Modern Metals.

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