Mid Continent — A Look at the Innovation and Philosophy that Benefits the Pallet Industry: With Service, Manufacturing Efficiency, and Made in U.S.A.
Leading U.S. nail manufacturer offers lessons for the pallet industry through its service and manufacturing efficiency. Its U.S. plant is truly unique in the world and a model of American manufacturing ingenuity.
By Dr. Ed Brindley
Date Posted: 8/1/2011
Poplar Bluff, Missouri—Things have sure changed a lot since the first time I toured a nail facility back in the 1980s. These changes reflect advancement in automation and serve as a case study for production success for American manufacturing companies. Nail manufacturing has come a long way in assimilating new technology into a process that dates back before Christ was born.
My recent visit to Mid Continent Nail’s Poplar Bluff plant was enlightening because the company displayed an attention to management and service details that is important in the pallet and lumber industries. This facility is one of the most impressive manufacturing operations that I have ever seen for any industry, and it makes Mid Continent the largest nail manufacturer in the United States. They wage a daily battle to discover and develop manufacturing methods to improve efficiency and reduce scrap; allowing them to compete with the world for business in the U.S. nail market.
Manufacturing Nails the Mid Continent Way
The first nail plant I ever visited was impressive, but pale in comparison to Mid Continent’s Poplar Bluff plant. Let’s explore the process to see how it works. Here is a quick look at the processes:
Wire Mill – 7/32" steel rod, with specific chemistries is drawn to determined diameters.
Nail Cells – Wire is made into nails
• Smooth shank products are conveyed directly into collation machines
• Threaded products are conveyed directly into thread rolling machines
• Threaded nails are conveyed into collation machines or cleaning systems
• Output coils, bulk, or strip nails are inspected and packaged
• Finished cartons are lifted onto staged pallets
Central Conveyor System – filled pallets are conveyed to the warehouse and are stretch-wrapped on the Conveyor line
Warehousing – filled, wrapped pallets are scanned into inventory with RF scanners and stored in the warehouse, awaiting truck loading.
Shipping – input orders from Customer Service are printed and staged for final check-off, prior to loading in truck
• pallets are scanned to remove from inventory and truck is loaded.
Steel nails start through the process as rod that is drawn into wire—they go through multiple processes in a heading machine. Headers cut the wire to length, form the kind of point desired, and either tamp a head on the nail or roll the head on – all of this at extremely fast speeds. The nail headers at Mid Continent can manufacture about 2,000 stiff stock steel nails a minute per machine, depending upon nail size. As the smooth shank nail is manufactured, the point style (blunt diamond, blunt chisel, shear point, etc.) is determined by the cutting tools installed in the machine. The threading process, which follows nail heading, runs in tandem speed with nail making. Thread-rolling machines use a grooved ring that turns at high speeds and presses the nails against a mating surface to achieve either a screw or ring shank. Compare this to pallet building speeds that range from a few hundred per day on tables or 300-400 per day on some older nailers to the one to two thousand pallets or more a shift on high speed automated nailing systems we see today. Cutting pallet stock from cants, dimension stock, or logs has made similar sawing advances in either sawing speeds or kerf reduction from earlier days. Some of the newer cutting lines also follow this same philosophy of continuously moving the lumber through the various lines, until it is a finished product. Like NASCAR, the name of the game is speed, speed, speed….but mistakes are just as costly to performance and efficiency. Mid Continent Nail has spent considerable R & D time and money to ensure that speeds are not obtained at the cost of quality.
Collated nails go through a collating machine to be made into strips or coils. The serial connection of wire coil nails is accomplished by welding a continuous wire to the nails, in two places, as they are positioned to a specific angle of orientation. Likewise, paper tape nails and plastic strip nails use adhesive-backed paper and melted plastic polymers, respectively, to connect the nails into units. Mid Continent nail has invested heavily over the years building machines and changing available machine designs to improve quality and productivity.
The pallet industry has adjusted out of necessity to remain competitive. Companies continue to strive for both increased production and higher quality products. Compared to the other nail facilities I have seen, the new Mid Continent plant achieves a much higher manufacturing speed that significantly reduces processing costs. By combining the various manufacturing steps into a smooth, compact production flow, the associated costs of stacking, storing, and retrieval are removed. The philosophy of Mid Continent is to never let the product touch the ground until it is in the warehouse.
The Mid Continent production method is extremely fast and efficient compared to the older standards of nail manufacturing. While Mid Continent employs over 300 people, without its manufacturing efficiency it would have more difficulty competing in the global nail market. Without the investment and dedication of the owners, a plant like this would have to have employed over 600 people and would have over 600,000 square feet of space to produce the same output. Many pallet operation owners can also look back to the outdated processing of lumber and building of pallets and imagine the size of the plants and the number of people they would have to employ for today’s production needs.
Its bulk nail plant and the collated plant run two ten hour shifts four days a week and may be supplemented by overtime on an extra production day. Jeff Libla’s scheduling and manufacturing group stand ready to react to customer needs at a moment’s notice. Mid Continent is approximately 50%/50% in construction versus pallet nails. Mid Continent currently manufactures and ships close to 6,000 tons of nails per month, much of it dedicated to the pallet industry.
The company machines and fabricates much of its own perishable parts and production equipment. Three CNC centers make many of the replacement parts for the equipment. A Brown and Sharp measuring device provides the precision measurement that nail manufacturing parts require. The six wire drawing machines that compress and stretch the rod into wire before it goes to the nail making lines work under tremendous stresses and require frequent replacement of parts, many fabricated in the machine shop. These machining centers represent a significant investment by the Liblas to reduce the cost of manufacturing.
In keeping with its efficiency in a competitive world, Mid Continent has grown to meet its current and future commitments. At least three of the key management people emphasized that Mid Continent has a record of many years without a missed delivery. In fact, on numerous occasions they have helped out buyers who are not their customers when imported deliveries have failed to arrive or the customer failed to place an order in time for a shipment to arrive. This is not an accident; it is a part of the culture that is prevalent in the company’s attitude toward the customer. This is supported further by Mid Continent’s dedication to prompt delivery by its fleet of 19 tractor-trailers. Most nails are delivered on company trucks and there is a specific division that manages and monitors activity and, most importantly, performance.
A new rail spur was constructed at the factory about a year ago. Almost all the money to build this spur came from the Liblas. Mid Continent buys virtually all rod from North American sources. Deliveries by rail are the most cost efficient, as the steel mills prefer this method over trucking and price accordingly. Poplar Bluff has probably the largest switching yard between St. Louis and possibly New Orleans.
Family Dedication to the Pallet Industry and to United States Manufacturing
What is so special about this company and its products? The list is long. Mid Continent Nail is one of the largest manufacturers of nails in the United States and the only nail manufacturer that began specifically as a manufacturer of pallet nails. Mid Continent is probably the most automated and efficient nail manufacturer in the world, a showplace of modern American technology. It champions the “Buy America” cause.
When asked why Mid Continent is one of the few domestic nail manufacturing companies still in business, Dave Libla said, “Most other nail manufacturers did not reinvest back into their manufacturing business in the U.S. They failed to make the commitment to maintain their U.S. based production.” Mid Continent has eight new nail manufacturing lines running. The company had several more automated nail lines under construction during my visit.
Since a large nail supplier has dropped its domestic nail making operations, Mid Continent has taken this as an opportunity to continue expanding its U.S. nail making capacity. Sometimes a slow economic period like that we are in today is the best time to expand manufacturing capacity. Some of the leading pallet manufacturers in the U.S. have successfully undertaken plant expansions during slow times. While this is not as common today as it has been at times in past recessions, there are still some pallet plants and sawmills that are expanding or modernizing their processes today in order to make money tomorrow.
Mid Continent Nail Corporation is owned by the Libla family. I know of no other family that serves the pallet industry with products and services that has been any more involved in our industry through the years than the Liblas. Dave Libla and Doug Libla have owned a number of companies, including a trucking company, one of the largest pallet manufacturing companies in the Midwest, and First National Pallet Rental, a pallet management company that was a forerunner in pallet management. They started manufacturing nails for their own pallet company and became a major nail manufacturing company by focusing on pallet nails. There is no doubt that the Liblas are devoted to the pallet industry.
Dave is the principle hands-on owner involved in company management. Doug spends most of his time calling on pallet manufacturing customers at their location, and at most industry events.
The management and sales team includes Dave’s daughter Marsha Libla, Inside Sales Manager and Customer Service Manager. George Skarich is Executive Vice President of Sales and Marketing, Kirk Henningsen is Manager of Eastern Region Distributor Sales, K. G. Sims is the Manager of Industrial Sales and Pneumatics, and Carlos Johnson is Manager of Western Region Distributor Sales. Jeff Libla, Dave’s son, is the General Manager who oversees the Poplar Bluff manufacturing plant, including the raw material purchasing, engineering, manufacturing, trucking, and quality assurance functions. Mary Libla, Dave’s wife, provides marketing coordination and office support.
The Mid Continent family, over 300 strong, is typical of the family owned and managed nature of the pallet industry. Now that gasoline prices have surged again, Mid Continent has taken the step to distribute gasoline cards to its employees. This helps its’ people, many of whom travel a significant distance to get to work. It helps the community by putting dollars into the pockets of local gas stations and retailers. Marsha said, “We often hear from local merchants that they know when we have distributed these gas cards because it really brings our people into their stores. Part of our buy U.S.A. program is trying to keep dollars in local communities.”
It Is All About Service
Doug said, “Today you must have quality to compete. Without good quality, you won’t be in business. For us, focusing on service is a major deal. I am constantly calling on our customers in the pallet business. I made a visit recently to a small volume customer who was shocked that I would call on him in person. As a skid of nails per month customer, he didn’t expect that kind of attention. Mid Continent is committed to our friends and customers. I like to talk with pallet entrepreneurs. I like to see as many customers as possible, at their plants, at least once a year. We have a considerable market share of nails in the pallet industry. Serving our customers conscientiously is an awesome obligation, both an honor and privilege.”
Marsha stated, “Service is the center of the hub in Mid Continent’s wheel.” I have to confirm that if there was a central theme shared during most of my meetings with key management people it would have to be a total commitment to the industry and service for Mid Continent’s customers.
About a year ago, the company opened a 45,000 sq.ft. warehouse in Ontario, Calif. to complement the approximately 400,000 sq. ft. in Poplar Bluff and to act as a distribution depot for nails to customers along the West Coast. While Poplar Bluff is centrally located in the middle of the country to serve customers nationwide, this new Ontario warehouse provides a western service center, which has helped the company expand more aggressively into western markets.
Most collated customers are serviced through distributors or the Industrial Sales team. The internal service staff has to handle very few customer complaints. Most inquiries are checking on such things as delivery schedules or modifications to product mix. By manufacturing virtually all kinds and specifications of nails in the central United States, Mid Continent can handle a wide variety of customer needs. If a customer is ordering a fairly common nail, it is often possible to change an order right up to the shipment day. If a product is in stock, an order can be changed as long as the truck has not left the dock.
Mid Continent builds inventories by forecasting customer demands. This helps keep nails in stock, providing quick service for emergencies and outages. It also provides the data to keep in touch with customers and help them project their needs. It is common for customers to thank the company for reminding them about their ordering practices and suggesting they might want to check their inventories against their projected orders. Over the years many pallet companies have shared this same philosophy of working with their customers to make sure they do not run out of pallets. Accomplishing this goal can take on a variety of faces, including stocking common pallet sizes, helping customers take physical pallet counts, and working with customers to develop methods of tracking pallet needs.
Just like a pallet company that can build a particular pallet spec on short notice, Mid Continent can make just about any commonly used nail spec on short notice and ship it out. If a nail is not in stock, Mid Continent can make the necessary machine changeovers and get the product run quickly. There is no risk of potentially having to wait for shipments from other parts of the world. Marsha indicated they are adding new parts and products to their computer data base just about every week now. With some companies down-sizing their North American involvement with certain pallet nails and field services, Mid Continent has had opportunities to make some sizes and types they have not made before. Mid Continent has a goal of not letting a customer run out of nails.
When appropriate, Mid Continent works with other U.S. nail companies to help customers get products quickly. Mid Continent desires to support U.S. businesses every time it can.
While nail complaints are extremely rare, Mid Continent can trace a box of nails, by its’ date code, back to the date manufactured and nail line that was used. Bonuses are based on quality not on quantity because that is the heart of Mid Continent Nail’s management thrust. High production rates for competitive pricing are built into the company’s efficient manufacturing structure.
By instituting tracking ability into its production process to identify quality problems Mid Continent creates a desirable model. Tracking codes or stamps could assist pallet manufacturers to discover pallet repair operators who do a poor job to saw operators who don’t maximize yield or fail to supply the specified quality required by a customer.
Mid Continent is flexible with a variety of options supporting its pneumatic nails and tools. Mid Continent can own the tools and provide parts to customers who do repairs, or customers can own their own tools and do their own repairs. Or Mid Continent can own the tools and customers send them in to be repaired. Any combination of ownership and maintenance can be arranged. The Magnum brand of pneumatic tools is designed and built for reliability and to help pallet manufacturers maintain a productive pace, by reducing downtime for repairs.
In addition to distributing its nails and nailing products throughout the continental United States, Marsha is excited about Mid Continent’s expanded outreach. “We expect to soon sell nails into Alaska. We sell into Hawaii, the Caribbean, Canada, Jamaica, and the West Indies. We sell pallet nails into Canada and the Caribbean. Most of the others are construction nails.”
Dave Libla said, “Mid Continent Nail has to be better than the guy across the water for us to stay in business. In some ways nails are like pallets. How far can you ship a load of pallets or nails and still be competitive? While the pallet industry is still local or regional in most of its outreach, nail competition is global.
“The pallet industry is the reason we are here. Initially we made nails for our own pallets. Then we focused on nails and put all of our energy into them. Our nail business has survived all of our former businesses. I still love the smell of wood.”
K.G. said, “We are proud of almost 25 years of manufacturing nails here in the United States. The Liblas have consistently reinvested their money back into the industry so we can continue to grow and expand our service to include both quality products and knowledgeable advice for our customers. We can go out and shake hands with real people with U.S. paychecks because Dave and Doug have reinvested in this company. Service and U.S. manufacturing are at the heart of Mid Continent Nail.”
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