Super Steel spins off new company, jumps ahead of competition with nimble profile

September 2014 - Momentum. Physics explains it as “mass in motion.” Webster takes it a step further, defining the expression as a force that grows stronger or faster as time passes. Both are apt descriptions of Super Steel LLC, which celebrated its 90th birthday in 2013 and spun off a new company in April. The Milwaukee metal fabricator is now the primary customer of its former machining division, newly named Tower Machining. The third-party company is incubating in space leased from Super Steel, which itself has grown from 40,000 square feet to 450,000 square feet and more than 400 employees over the last four decades.

When asked about the secret to Super Steel’s longevity, President and CEO Dirk Smith gravitates to one word: people. “We’ve created a culture of winners here,” he says. Working primarily with carbon steel but also aluminum and stainless, Super Steel produces parts and components for such end markets as agricultural and construction equipment, industrial machinery, transportation and defense. Its expertise includes new product development, engineering, complex fabrication and assembly, painting and welding.

More than metal and paint

“At the end of the day we build other people’s products. We’re selling a service and service is people,” Smith explains. “What separates us from other fabricators is that we’ve built an infrastructure that helps employees make the best use of their skill sets to be successful.”

The innovative approach also gives Super Steel the flexibility it needs to adapt to changing customer expectations. “Technology makes the marketplace very dynamic,” he continues. “Now it’s requirements like shorter delivery timeframes and cost downs. You have to constantly be changing and re-inventing yourself to stay competitive. But that’s also the fun of job shop manufacturing. No two days are the same.”

Super Steel’s fluid evolution is the catalyst behind its steady growth and events like its spin-off earlier this year. “We try not to be everything to everyone,” Smith says. “Instead we focus on giving customers value beyond metal and paint. For example, traditionally an OEM might source a range of services from different job shops for a project—anywhere from 25 to 1000 different SKUs. With Super Steel a customer only has to order one number. We do it all.”

The contract manufacturer also helps mitigate the steel market’s ups and downs. “When the market is volatile it creates friction costs,” he says. “OEM customers don’t like it. Our steel sheet prices remain pretty stable because we buy from suppliers on contract which gives us fixed pricing and next-day delivery.”

Super Steel consumes between 1.2 million and 1.5 million pounds of steel a month. “We buy a lot of steel so we’re pretty competitive,” Smith notes.

“Our value proposition is the services we’re able to offer beyond fabrication. “It’s a strong niche for us.”

Like Super Steel, Tower Machining is also looking to build business by adding value. The fledgling company primarily machines blanks and components for weldments for it parent and its customers. With an eye toward expansion, the machine shop is reaching into markets outside its host’s customer base that range from weapons to government contracts. 

“Our value adds are taking shape in the form of giving customers options for cost reductions through services like product design optimization and cost downs,” says machining manager Scott Pease.

Delicate balance

The makeup of an efficient machine house is a balance act between production volume work and smaller piece work. “Super Steel is 95 percent piece part work so the capability to add production volume work is a nice complement, helping to fuel our growth,” explains Pease.

With plans to add horizontal machining capabilities to its vertical machining expertise, Pease says quote activity is increasing, poising the company to complete its transition from a machining division to a standalone machining company. “It really illustrates the vision of Super Steel,” he says. “Most companies would want to keep such an operation internal even if it was detrimental to the company’s overall bottom line. By spinning us off, Super Steel can remain nimble and lean and we can work on developing our own methodology and quality standards.” 

The opportunity to incubate under its largest customer also gives Tower Machining access to detailed information about customer requirements.

“In our world it’s all about the customer/supplier relationship,” says Pease. “The more information we can gather the better. Because we’re able to feed off Super Steel work that is already in place, we have the freedom to develop the information we need to grow independently.”

At some point Tower Machining will break out of Super Steel’s walls. Pease comments, “We’ll have our own footprint but we’ll retain close proximity to our current location.” 

Smith sums up the progress and philosophy of both companies: “You are either growing or you are dying.” MM