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Supply Chain Management of Ipsen International Inc.

Supply Chain Management of Ipsen International Inc.

Discuss Supply Chain Management of Ipsen International Inc. within the Elements Of Logistics forums, part of the PUBLISH / UPLOAD PROJECT OR DOWNLOAD REFERENCE PROJECT category; Based in Cherry Valley, Illinois, Ipsen International Inc. is a leading thermal processing equipment and systems manufacturer and is privately ...

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Supply Chain Management of Ipsen International Inc.
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Netra Shetty
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Supply Chain Management of Ipsen International Inc. - January 11th, 2011

Based in Cherry Valley, Illinois, Ipsen International Inc. is a leading thermal processing equipment and systems manufacturer and is privately owned by investors at Germany's Ruhrgas Industries GmbH. Ipsen has research and development facilities on two continents, as well as four worldwide manufacturing facilities. One segment of Ipsen's business involves atmosphere furnaces, while vacuum furnaces represent another large segment. By drawing from more than 50 years of thermal processing experience, the company has become a market leader in the development of vacuum heat treating equipment, serving a number of end markets including the aerospace and automotive sectors. In addition to standard and custom furnaces, Ipsen markets related software used for advanced process control and automation, as well as various controls and cleaning equipment. The company provides service and support for new furnaces, rebuilds other manufacturers' furnace brands, and performs upgrades, rebuilds, and retrofitting.

The Early Years: 1940-59

Ipsen International's roots stretch back to 1940, when Harold N. Ipsen established Ipsen Industries, a commercial heat treating shop in Loves Park, Illinois. Harold Ipsen was born in 1915 and grew up in Rockford, Illinois. His father, Mogens Ipsen, who was a native of Aarhus, Denmark, worked as an architect and was a nationally known construction expert who later served as director of the Rockford WPA, headed the city's water department, and served as city engineer. Following in Mogens' footsteps, Harold Ipsen pursued a career in engineering and earned a degree from Brown University in 1939. He started his own company the following year.

By 1942 Ipsen Industries was producing shell fuse parts for defense contractors. On June 29 of the following year, Harold Ipsen married Lorraine "Lori" A. Wrobal in Chicago, and the couple opened a decorative pottery business. When the operation's kiln broke, Ipsen designed and built a new one. The young industrialist discovered that the high-performance features of his new pottery kiln could be applied to his heat treating enterprise as well. Inspired by the need to create more uniform shell casings for the defense industry, this led him to build a new furnace for heat treating steel. Ipsen's new design was highly effective, and word of it soon reached other manufacturers, who asked him to produce similar furnaces for them.

An article in the December 19, 1955, Rockford Morning Star detailed manufacturers' reaction to Ipsen's invention, explaining: "They were astonished at the bright condition of the finished work after heat treatment. This bright condition was the result of protective atmosphere surrounding the work during the heating cycle as well as during the quenching operation." According to the article, Ipsen would demonstrate how a piece of wood or a newspaper could be placed into the furnace at 1,600 degrees Fahrenheit--a temperature that causes objects to burn bright red--without damage. This was because the absence of oxygen prevented them from burning.

When other furnace manufacturers would not produce a design similar to Ipsen's, he decided to forgo heat treating and concentrate on furnace manufacturing. On July 1, 1948, the company reincorporated and began focusing on this new market niche, relying on investments from outsiders and Ipsen's family.

According to company literature, the business found immediate success during its formative years: "Parts heat treated in Ipsen's new furnace came out uniformly cleaner, brighter and stronger than any furnace before it and demand soared. The consistent performance and dependability of MetalMaster furnaces became legend, enabling heat treaters to increase production while lowering manufacturing costs."

With its new focus, Ipsen Industries moved from Loves Park to more suitable quarters in nearby Rockford. A sister operation called Ipsenlab was formed in 1951. Also based in Rockford, it had a combined focus that included commercial heat treating, research and development, and the showcasing of equipment. In August 1953, strong demand prompted the company to form a related subsidiary called Ipsenlab of Canada Ltd. Based in Toronto and headed by Canadian metallurgist Peter B. McCurdy, it mirrored the Rockford Ipsenlab facility, right down to the building's architecture. Each Ipsenlab location was used to test customers' manufacturing problems before solutions were developed.

Ipsen Industries had opened six branch offices by September 1953. Strong demand in the eastern United States led to a new location in Plainfield, New Jersey. The new office joined other sites in Chicago; Cleveland; Detroit; Toronto; Hartford, Connecticut; and Burbank, California. These locations were all staffed with engineers and metallurgists. Around this time, the company also had sales representatives based in Denver and Houston.

Ipsen Industries had achieved pioneer status in its industry by the early 1950s. This was accomplished by turning heat treating furnaces into automated devices. Examples included the Carbotonik and Dewtronic furnaces that controlled steel chemistry during the treatment process. Other innovations included the incorporation of ceramic material that enabled Ipsen furnaces to withstand extreme stress at high temperatures.

By 1955 Ipsen was outgrowing its physical plant once again, and plans were made to construct a new, larger facility. The company even had its own airplane. Similar to President Dwight Eisenhower's personal plane, the aircraft was used to transport customers to and from Rockford. Around this time, end uses for Ipsen's furnaces included the manufacture of washing machines, automobiles, typewriters, and airplanes. The company's client base was highly international, with Paris-based Fours-Cyclops producing Ipsen equipment for European customers. International expansion continued in 1957 with the formation of Ipsen Industries GmbH (Ipsen International) in Kleve, Germany.

In 1957 Ipsen Ceramics, once part of Ipsenlab, began operations in a new, 15,000-square-foot facility in Pecatonica, Illinois. This was followed by the construction of a new factory near Cherry Valley, Illinois, in 1959. Manufacturing operations were relocated to a new, 210-foot-long structure situated on 48 acres. The plant included a 1,200-square-foot utility tunnel that could be used as a defense shelter. In February 1960 Ipsen announced that it would expand the new plant by erecting a new building for engineering, sales, and service personnel.

New Products in the 1960s

During the early 1960s, Ipsen began manufacturing vacuum heat treating equipment, which had applications for metals used in missiles, space probes, aircraft, and rockets. Ipsen produced the first horizontal vacuum furnace in 1960. A refractory metals department opened in Rockford the following year, focusing on ceramic, metallurgical, and electrical research.

By 1962 Ipsen Ceramics was producing materials used by the government for nuclear energy, aviation, and missile production. Plans were made for an addition that would double Ipsen Ceramics' capacity. Developments continued in 1963 as Ipsen introduced the first top load vacuum furnace and Ipsenlab relocated to a larger, 18,000-square-foot facility on the campus near Cherry Valley. That year, the company received a $49,920 contract from NASA to explore the use of foamed metal in spacecraft.

Sadly, Harold Ipsen was killed at age 49 when an airplane he was flying crashed at the Greater Rockford Airport on April 29, 1965.

Harold Ipsen held more than 30 patents during his life and left a permanent mark on both his company and the larger furnace industry. Following his death, Ipsen's widow, who had been first vice-president, was named president and director. In 1965 Ipsen Industries reported sales of $9 million.

A major development occurred in June 1966 when Ipsen Industries and all of its subsidiaries were acquired by Pennsylvania-based Alco Standard Corporation. Lorraine Ipsen was made an honorary director, and Vice President-Treasurer/General Manager Paul Glavin was named president. That year, Ipsen introduced the first bottom load vacuum furnace. By this time the company had opened additional international subsidiaries including Ipsen Industries Ltd. in Surbiton, Surrey, England; and Ipsen Industries SARL in Vincennes, Sein, France.

By 1967 continued expansion of the Ipsen plant had more than doubled its productive capacity. Developments continued the following year with the introduction of the first MetalMaster horizontal vacuum furnace, the MetalMaster bottom-loading vacuum furnace, and the Vacuum Oil Quench Furnace. The Ipsen Ceramics plant ended the decade by installing two roller hearth kilns designed by Harold Ipsen.

Expansion in the 1970s

Ipsen started the 1970s with Leslie E. Senet as president and a staff of approximately 500 employees. In 1970 the company expanded its main plant once more with a $300,000, 20,000-square-foot addition. Measuring 250 feet long and 80 feet wide, this was the fourth major expansion since 1961.

In 1973 Louis D. Clay, a civil engineer who had served as general manager of the W.F. and John Barnes Company, was named Ipsen's president. That year Ipsen introduced a batch aluminum brazing furnace, as well as a continuous vacuum diffusion bonding furnace. The company received the largest single order in its history to date when Bochnia, Poland-based Huta Lenia Steel Plant ordered ten horizontal vacuum furnaces for $6 million.

By 1975 the company faced a number of challenges, including high material costs that impacted its competitiveness with foreign players. Nevertheless, Ipsen continued to introduce new products including an automated atmosphere furnace line in 1975, as well as the first ion nitriding furnace in 1976. It also was in 1976 that Ipsen developed a cermaic roller hearth kiln that eventually was used to fire glaze on 34,000 protective ceramic tiles for the space shuttle Columbia.

Ipsen ended the decade by expanding its manufacturing plant in 1978. The expansion provided the company with more office space, as well as expanded and modernized facilities for research and development. That same year, the company unveiled the first continuous vacuum aluminum brazing furnace.

The 1980s-90s

In 1980 Ipsen's business was down 48 percent in the wake of an economic recession. The slowdown led to the layoff of about 40 of the 300 workers at Ipsen's main plant in 1981. Around this time Ipsen's furnaces ranged in price from $50,000 to many millions of dollars. Approximately 20 percent of the company's orders were comprehensive, in which Ipsen handled everything from the units manufacture to installation.

In April 1981 Ipsen acquired manufacturing plants in Bessemer, Alabama, and Nashville, Tennessee, adding to the two Cherry Valley plants, the Pecatonica location, and a facility in Fort Worth, Texas. The company had nine sales offices throughout the United States, as well as five licensees in other countries. Ipsen continued to introduce new products during the early 1980s including a five-bar vacuum furnace in 1982, the I/O 3000 atmosphere furnace in 1983, and the Turbo Treater Vacuum Furnace in 1984.

In 1985 Ipsen merged with Abar Corporation. The resulting Abar Ipsen Industries was a wholly-owned subsidiary of the TI Group. Abar's history dated back to 1960, when Charles Hill established the company to design and manufacture vacuum heat treating equipment. After being acquired by King Fifth Wheel in 1965, Abar moved its manufacturing facilities from Willow Grove, Pennsylvania, to a new facility in Feasterville, Pennsylvania. In 1981 Abar's parent was acquired by Tube Investments Ltd. (TI) of Birmingham, England.

Following its acquisition by Abar, Ipsen continued to roll out new products throughout the decade, including a TurboTreater vacuum furnace in 1986, the Ivadizing furnace in 1987, and the ToolTreater vacuum furnace in 1988.

Abar Ipsen began the 1990s by shuttering its manufacturing site in Feasterville, Pennsylvania, and moving those operations to Illinois. At this time the company also relocated sales, engineering, and marketing personnel to Bensalem, Pennsylvania. An important development occurred in 1992 when the LOI Group, which was part of Germany's Ruhrgas Industries GmbH, acquired Abar Ipsen.

More important developments occurred midway through the decade. In 1995 Ipsen Industries Furnaces Ltd. was formed in Shanghai, China. The following year yet another restructuring occurred as Abar Ipsen became part of the Ipsen International Group and all operations were consolidated at the company's Illinois headquarters.

Many new products were unveiled during the remainder of the 1990s. These included the VUTK 524 TurboHardener in 1996 and a MultiMaster semicontinuous vacuum furnace in 1997, and a redesigned Endothermic Gas Generator in 1998. Two years of hard work paid off for Ipsen in 1998 when it attained ISO 9001 certification after meeting stringent quality control standards.

By the late 1990s Ipsen's annual sales totaled approximately $175 million, and the company counted leading firms such as Boeing, Caterpillar, and DaimlerChrysler among its clients. Mario Ciampini served as the company's president and CEO, overseeing 275 employees at the Cherry Valley plant, including about 50 engineers. The company had a progressive training program for its union workers and paid a very competitive wage. Even so, it had a difficult time finding qualified employees due to its stringent quality standards.

A New Century

Early in the new millennium, Ipsen launched a number of new products. These included the Global VR, a TurboTreater unit with convection, and the AcaV furnace in 2001. In 2002 the company met ISO 9001: 2000 standards. Contributing to the achievement were customer satisfaction efforts such as an online parts store, as well as an online customer satisfaction survey.

In January 2003, Ipsen ratified a contract with the UAW Amalgamated Local 256, which went into effect in February and gave Ipsen's unionized workers a salary increase of 11.8 percent over a period of three years.

Late in the year, the Iowa-based John Deere Waterloo Works chose Ipsen to supply a line of atmosphere furnaces that it would use to heat treat drivetrain shafts and gears for its agricultural equipment manufacturing sites worldwide. According to the November-December 2003 issue of Furnaces International, "The key reasons Ipsen was selected were value, technical innovations, ability to make quality parts, equipment reliability and aftermarket support."

By mid-2004 Ipsen had performed software and hardware upgrades at its Cherry Valley plant. New software consolidated controls for its heat treating machines to one user interface instead of two; allowed operators to see displays in foreign languages such as Chinese and German; and enabled Ipsen to connect with its customers via an Ethernet interface. In 2005, Ipsen was on strong footing in a highly specialized industry that, thanks to the early efforts of Harold Ipsen, it had helped to pioneer more than 60 years before.

Principal Competitors: Carrier Corporation; Linde AG; Robert Bosch GmbH; Thyssen Krupp Stahl Company Inc.
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