When CastCon Stone Inc., a producer of precast stair and architectural concrete products, outgrew its Cranberry Township production plant, Kerckhoff, president and CEO, committed to building a facility that would have the minimum possible impact on the environment. In the bargain, the company got one that slashed its per-square-foot energy costs by two-thirds.
The company selected a brownfield in Saxonburg, the site of a former USX sintering plant, for its new 47,000-square-foot plant, nearly triple the size of its Cranberry location. Working with local community development groups, its own employees and a team of design and construction professionals, Kerckhoff and her sister, Sandy Ussia, CFO, overcame significant obstacles to constructing the plant.
The site required installing caissons for reinforcement, an unexpected expense, and the initial appraisal of the property left a gap between its value and the money needed for the project. Pennsylvania Industrial Development Authority financing and a loan from the CL Fund helped fill the gap.
In all, CastCon Stone spent about $40,000 more for construction on the $5.5 million project than it might have if it had opted for a comparable building using conventional materials and design. Energy savings returned that investment in just six months.
Lowered energy costs are just the tip of the iceberg in cost savings. Fewer maintenance materials and better work processes, says Kerckhoff, will leverage savings over the life of the building. With the help of Jim Clark, the company’s COO, CastCon Stone is implementing a comprehensive lean manufacturing system that will save operating costs.
Kerckhoff talked with Smart Business about the cost of pioneering, teamwork and why lean means green.
Why did you decide to build a green facility?
I think that the germ of the concept is in our upbringing, which is to use resources wisely. And so, as we had really gotten beyond our capacity at our other facility we were converting every square foot to production space over at Cranberry so we knew that we really needed to expand.
It seemed like an obvious choice for us to look at an old industrial site to reuse the land rather than take farmland or woodlands or something like that and convert it to industrial space.
What were the key elements of the process?
We already had in mind the team of people that we would use if we went forward with building and designing a new facility. We went with folks in the construction industry that we had worked with over the years as suppliers and people we had sold to.
They were folks that we knew had, in some way, the same philosophy about reuse of resources that we did, the same approach, and that we wouldn’t have to explain it that much in working with these folks. So we started the process, and the very first thing we did was build our team, which included, to a large extent, our team of employees.
I guess the very first step was working with a process engineer from Catalyst Connection. I would say that was the beginning of the tie-in between lean manufacturing and a green building. The object of both of those concepts is to make the best possible use of your resources reduce, reuse and that sort of thing.
Did you run into any unanticipated problems on the way?
We did run into a number of roadblocks early on, but we had such a cohesive team, which included the banker as well. An absolutely critical piece to any growth is having your banker be one of your best friends.
We ran into a real hiccup a couple of days before the groundbreaking. About two days before that, we got the news that the appraisal on this property came in way lower than the projected cost of building. Part of that is because there are so few green buildings, particularly industrial types out there we’re one of the first and there’s a price to pay for being a pioneer.
And there’s so much vacant industrial space here that it really drives the price down. This park wasn’t developed yet; we were the second one coming in here. It was a tough thing to appraise not doubt about it.
So we had to scramble, we had a decision to make. We could have just said forget it, but we never felt that was a possibility. We were so completely beyond our capacity at the other facility, we just had to move forward.
What are the most important factors in the process of developing a green facility?
The key is internalizing the concept early on. That’s what matters most in the long run. You’re always going to get energy savings out of doing a green building, but the best, most cost-effective way is to completely rethink your processes.
It’s not like you can incrementally change the way you’re doing things or slightly modify. Green buildings should be the same way. You shouldn’t just say, I want to build a retail space and I’d like to do some green building features.
To get the full value out of it, the thinking should be, what would a retail concept be like if you were going to reduce your impact on the environment around you even though you’re putting some new building on it. And, get your key people on board with the concept and get their input. And it’s the same with lean manufacturing.
What was the hardest part of the process?
The hardest part has been making the best use of this facility, one of the things we didn’t do as well as we could have. We did a great job of sustainably building this facility and of maintaining our business while we were moving, and we had very little dip in sales.
But we didn’t make that fundamental sea change or plan ahead enough in the way we were going to do things really differently to take advantage of this facility with regard to our work processes and our overall approach to manufacturing.
That’s been something that Jim (Clark) has really taken on since he started, bringing in knowledge from other manufacturing settings that had already adopted lean processes and embraced them. We’ve been kind of struggling along here, trying to make incremental changes to the way we do things.
I think the thing Jim has brought to us is that like the way we built this building and how our concrete industry has changed things we did have a good handle on we can’t just make little incremental changes. We have to turn it on its head and change the way we work and we’re organized and approach manufacturing because the tools are out there now.
HOW TO REACH: CastCon Stone Inc., http://www.castconstone.com