Smithco Engineering Inc.’s employees do their jobs every day with pride in their work, Vice President and General Manager Scott Edwards says. “The team members at Smithco are excited to be part of it,” he says. “We’ve created something where everyone is proud to have the Smithco badge on their shirt.”
Tulsa, Okla.-based Smithco designs, manufactures and supports custom-built, air-cooled heat exchangers for the refining and processing industries. Founder Orville Smith started the company out of his garage in 1952. “The money to build the first cooler came from Mrs. Smith’s sugar jar,” Edwards says.
Orville Smith’s nephew, Roy Smith, bought the company in 1979. Twenty-eight years later, the Smith family sold it to Hudson Products Corp., a leader in the air cooler and axial fans market, Edwards says.
Today, Smithco is a leader in its market segment, Edwards says. “We’re the strongest company technically out of all our direct competitors,” he declares. “We have the best automated front-end designed system in the industry.”
The company also has substantial engineering expertise, which partially comes from Hudson. “Drawing on those resources gives us a competitive advantage and resources that our competition doesn’t have,” he states.
This allows Smithco to focus on serving customers that expect products to meet industry standards as well as quick turnarounds on designs and product deliveries. The company manages this through its “flow business” model, Edwards says.
“We have a very automated system that initially designs the coolers, and we give the customer a rapid turnaround with the drawings and design information,” he says. “It’s a quick process, from beginning to end.”
Smithco’s largest customer segment is gas processing, where its products are used with fracking and drilling systems to help separate liquids. “Along with the natural gas coming out of the ground, there are additional valuable hydrocarbons,” he says.
“Those hydrocarbons are typically ethane, methane and propane,” he says. “Our largest customers use [our products] in systems to knock these liquids out of the natural gas.”
The Next Level
Smithco maintains manufacturing quality by continuously investing in training. “Smithco must invest in the organization to take it to the next level,” Edwards says. “Floor training continues from safety to welding techniques.”
The company also has partnered with Tulsa Technology Center, a local technical college for training. “The state of Oklahoma has a great program which supplements the training of our work staff,” he says.
One of the largest areas of its focus is safety, Edwards says. “We strive to create a workplace that is productive and safe,” he says. “Everyone plays a role with safety.”
The training has nurtured longevity in the company by making its employees proud of their work. “We have people that have been here over 40 years,” he says.
“As employees become more educated and knowledgeable about the product they produce, a sense of pride develops,” Edwards continues. “As pride in your job develops, it is reflected in quality and production.”
Anything But Typical
Smithco nurtures close relationships with its vendors, Edwards says. “It’s not a typical procurement [relationship],” he says, noting that the majority of the company’s primary suppliers visit its headquarters once a month.
“We invite them in and make sure they understand what we’re doing,” Edwards says. “We engage them with the shop staff and the supervisors, so they understand what they’re providing, what the timeline is going to be with that equipment, [and that we] rely on them heavily.”
Today, companies such as Airtech Products Inc. and The Unlaub Co. are aware of Smithco’s schedule and provide key support. Airtech, for example, “supplies louvers as demand requires,” he says. “Their customer support and interest in Smithco is second to none.”
Unlaub provides several key components of Smithco’s heat exchangers, including motors, belts, sheaves and shafts. “Unlaub is able to package all components for an air-cooler, palletize the parts and shrink-wrap the assembly,” he says. “Everything is clearly labeled and delivered to our dock when we call for it.”
With these relationships, Smithco avoids stocking inventory and utilizes just-in-time services. “The concept is that nothing is going to sit around here too long,” Edwards says. “We’ve built our business around not having a warehouse.”
Smithco also has implemented lean manufacturing practices, which “is a project that has continuous development,” Edwards says.
Plans for Growth
Although the gas industry has matured, “Smithco has continued to perform well,” Edwards says. “We have turned our attention into optimizing our processes and making sure we are looking for ways to improve our product.
“This includes software development and automation to key investments in capital expenditures,” he says, noting that Smithco expects to continue gaining marketshare. “We’ve done a great job of going out and developing our customer base.
“As the team continues to develop their abilities, they will go out and get more marketshare,” Edwards predicts. “We will also always need our suppliers, with the continual growth and improvements we make every month.”