Manufacturing Case Study: Shape Up

By Anne Cosgrove
Published in the August 2011 issue of Today’s Facility Manager

Photo: Peerless
Photo: Peerless

With a year of operations in its new building under its belt, Peerless-AV, designer and manufacturer of products that support audiovisual technologies, has ramped up efficiencies in multiple areas of its business. Having brought the manufacture of its television mounts back under one roof in Aurora, IL (some product had been made in China for about five years), the global company revamped its production processes, implemented energy saving strategies, and improved interaction between its employees.

Since 1979, Peerless-AV, a Peerless Industries, Inc. company, had been headquartered in nearby Melrose, IL, and over the years, the company’s production lines and related warehousing evolved to occupy three adjacent facilities plus another building in the area.

Meanwhile, the company’s manufacturing operation in China added a different element. But in 2009, company leadership decided to cease manufacturing there in an effort to increase control and decrease costs. So the less than ideal facility layout in Melrose, coupled with the decision to expand domestic production capabilities, prompted Peerless to seek a new facility for manufacturing and distribution. Additionally, this site would also be the company’s global headquarters—as the Melrose location had been.

A Chat With
John Potts, Senior Vice President, Peerless-AV

What are your responsibilities at Peerless-AV?
As senior vice president, I am responsible for all aspects of the business except for finance, product design, and our UK operation. On the facilities side, the company’s director of operations and maintenance manager both report to me. I help to oversee plant operations as well as the facilities maintenance activities such as the grounds and roofing.

How long have you worked for the company? In July 2011, I will have been at Peerless for 16 years. I’ve been involved on the operational side of the business for a long time, and maintenance has reported to me in one form or another for the past 12 years.

What is your favorite aspect of the new building? This is a modern facility that shows very well. When we bring in high-end clients (a lot of OEMs), it’s impressive to take them on a tour. They can view all of our manufacturing operations, and to showcase the facility and our skill set is very important to us.

John Potts, senior vice president at Peerless-AV, oversees facility operations, and he was the point person for the relocation. Having been with the company for 16 years, Potts had seen the evolution of the facilities in Illinois and explains that both quality and quantity of the space needed to be improved.

“The three buildings used for manufacturing were connected,” he says, “but they were not configured for streamlined production. We wanted to improve the way our manufacturing plant was laid out, and we also needed more space.”

In searching for a new site, members of the Peerless executive team focused on finding an existing facility within a 15 mile radius. “Basically, we were looking for a building with about 300,000 square feet,” explains Potts, “with the potential to expand another 100,000 square feet. We needed a nice, big, square building with 30′ clear ceilings. Our previous facilities had ceiling heights varying from between 14′ to 20′, and that had limited us. Higher ceilings would allow for more vertical storage, for instance.”

Potts adds, “We also were looking for a site that would accommodate parking for 500 cars.”

The short list came down to three sites that offered all the main criteria. In the end, Peerless chose a site in Aurora, IL, because, as Potts explains, “Besides the village being friendly to deal with and offering some tax incentives, the site itself is in a prime location. We are now right off of a major interstate where people drive by and see our sign everyday. And there are 10 acres at the end of the building where we can expand in the future.”

Creating The Perfect Fit

The company purchased the building from Northern Builders, a Chicago area development and construction company that also served as Peerless’ general contractor on the project. Previously leased by 3M for distribution purposes, the building provided a good foundation for Peerless’ needs, but these new owners set out right away, renovating and reconfiguring to create its manufacturing hub.

The building was a blank slate—providing a square shape upon which Peerless could impose its designs. Prior to buying the building, Potts and his team had evaluated the facility to ensure it would accommodate production. Says Potts, “All of our equipment had been entered in a CAD program to scale, so when we looked at the building, we obtained a CAD drawing of the plant and placed equipment to make sure there would be a suitable flow to operations.”

Changes to the building structure were also made to accommodate Peerless’ needs. For instance, there were numerous loading docks, and one of the first alterations was to expand several of them to create entryways large enough to accommodate the transport of raw materials and finished products.

Photo: Peerless
Photo: Peerless

“The existing docks were not big enough for trucks to bring steel into the building,” explains Potts. “Also, we keep metal scrap dumpsters inside and needed doors to accommodate those. If they are kept outside, the scrap rusts, and you don’t receive as high a premium for it.”

The larger doors also served in moving some of the larger equipment into the facility. “We have a 600 ton press that is very wide and tall, and there was not an existing door we could use to move it into the building,” notes Potts. Meanwhile, the concrete floors of the plant needed to be reinforced in some areas to support heavier equipment (some of which was new to the Illinois operation). “Some of that equipment required us to install pads on the floor where it would be placed, because the existing concrete wasn’t thick enough,” Potts says.

An area where existing conditions were used to Peerless’ advantage was an explosion proof room located in a corner of the building. This room was constructed with concrete walls measuring 18″ thick, and while Peerless did not have a need for an explosion proof area, the team did recognize an opportunity.

“We placed our casting operation in one half of that room,” explains Potts. “For one thing, removing the thick walls would have been very costly. But, casting operations generate a lot of heat, and it was beneficial to locate that in the separate room, since we don’t need that heat in the rest of the plant during the summer months. We put extensive exhaust fans in and louvers to bring in fresh air. It worked out very well.”

Meanwhile, the other half of the explosion proof room houses three powder coating ovens. The heat expelled from these ovens does double duty; during the winter, the exhaust heat provides about 25% of the heat used throughout the plant.

Photo: Peerless
Photo: Peerless

When moving into the new facility, the Peerless team decided to take the opportunity to put into place an array of energy management strategies. Recovering the exhaust heat from the powder coating ovens to help warm the rest of the plant is an example of these efforts.

Potts explains, “We put in ductwork with recirculating fans, and when we flip a switch the heat is sucked out of that room and directed out to the plant. We had been aware of this strategy, but in our old plant the oven was located outside, which made it impossible to capture the heat. Even if we could capture the heat, the ceilings were lower and were wood deck ceilings. So it would have been bad for the wood (shrinkage) and the roof above in that location. Now, with the 30′ clear, the oven located within the plant, and the metal deck, we had the opportunity to recirculate the heat.”

Molding Energy And Water Use

To gain control of its utility usage and costs, Peerless sought new strategies for energy and water. For electricity, a major step was the implementation of an automated energy management system. “We contracted with a company to install monitoring devices on our main panel as well as subpanels and individual pieces of equipment,” says Potts. “Now instead of guessing which departments are using the most energy, we can identify where energy is actually being used. Sometimes you can have a smaller department that uses more energy than a larger one, and we can look at why that is.”

To reduce costs, one focus has been to try to lower energy consumption during peak demand times. By doing that, Peerless can reduce those higher energy costs charged during peak times. While it is not always feasible to alter plant operations to avoid peak usage, Potts says having the data available gives the power to evaluate if there are ways to change the way the plant uses energy.

“We now have a year’s worth of data usage by month,” he says. “We have an internal team that looks at those numbers. One of the first things we wanted to focus on was identifying the biggest energy usage by department. And now we can do that with the data in hand.”

Other energy initiatives include installing high efficiency fluorescent lighting throughout the building and occupancy sensors in office areas and throughout portions of the plant. Plant equipment has couplers to measure minimum electrical needs at various times or stages of a process (this regulates consumption so energy is not wasted by idle equipment or on low-usage runs).

Potts notes renewable energy is also a consideration for the company, though it is currently in the exploratory stage, looking at wind and solar energy. “We are educating ourselves on a wind turbine at a facility unrelated to Peerless but under the corporate umbrella,” he says. “At this point, we don’t have anything here.”

Meanwhile, Peerless has eliminated the need for outside parties to treat its wastewater. The company installed equipment that collects wastewater derived from manufacturing activities and evaporates it back into the atmosphere. What remains is the oil, sludge, or other materials that were contained in that water, and a service provider picks that up for proper disposal.

The evaporative system saves money for Peerless, and it also eliminates the energy use that would be expended by an off-site wastewater treatment plant. In terms of costs savings, Potts says, “In the previous facility, a company would come out every two months to pump out the paint line washers and haul away the water. That would cost $4,000 each for two washers.” So while an investment was required for the new approach to wastewater treatment, it is paying for itself over time in savings.

Finishing Touches

Since early 2010, Potts and his team had been working toward the final move into the company’s new and streamlined manufacturing and headquarters facility. These efforts were capped off in May 2011 when the final group of employees moved into the Aurora location, marking the completed consolidation.

As part of the move, 22,000 square feet was added to an existing 12,000 square foot office space. The two story configuration houses all employees, a set up Potts characterizes as having helped to foster interaction between colleagues.

For Peerless-AV, increasing efficiencies guided its relocation from four buildings into one. As a result, Potts and his team are seeing positive results in terms of production, energy management, and employee interaction.

This article was based on an interview with Potts.

Project Information:

Project: Peerless-AV. Location: Aurora, IL. Type of Project: Existing. Function of Facility: Manufacturing, distribution, and headquarters for audiovisual products company. Owner: Peerless-AV. In-House Project Manager/Interior Design: Mike Campagna. In-House Facility Manager: John Potts. Square Footage: 307,813. Construction Timetable: January 2009 to January 2010. Architect: Harris Architects. General Contractor: Northern Builders. Electrical Engineer: Complete Electric. Mechanical Engineer: S Mechanical. Structural Engineer: Welsch Engineering.

Product Information:

Furniture: AIS. Carpet: Shaw. Office Equipment: Canon; Cisco Systems. Building Management System/Services: Honeywell. Energy Management System/Services: Hawkeye Energy Solutions. Security System Components: DSC; Panasonic (cameras). Fire Alarm Components: Gamewell-FCI. HVAC Equipment: Honeywell; Trane. IT Infrastructure: Dell. Signage: Aubrey Sign Company.