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On MiddleGround’s fourteenth episode of Executive Sessions, Clayton Gullet leads discussions with MiddleGround Founding Partner, Scot Duncan, Managing Director of our Transaction Team, Ryan McComb, and CEO of Attala Steel Industries, Gary Kessinger. This episode covers:

1. Responding to a Critical Equipment Failure
2. Lessons Learned from the Disaster
3. Managing Crisis Situations in Manufacturing

Responding to a Critical Equipment Failure

Attala Steel Industries (ASI) is a leading producer of structural steel for the U.S. solar market and was acquired by MiddleGround in 2020. The company faced a major catastrophe in 2023 when a hole was punctured in its galvanizing kettle, a piece of equipment that plays an essential role in coating steel with zinc to prevent rusting. This unexpected failure was a huge shock given that the equipment was only two years old when the typical lifecycle ranges from 7 to 9 years.

Recognizing that this failure could have long-term impacts on ASI’s operations, we assembled a team of operators and sent them to the facility the day after the hole was found. The team assessed the situation, brainstormed potential solutions, and put a plan in place to get production back on track. In the short term, ASI relied on outside galvanizing suppliers to ensure that customers’ needs were met without delay. For the long term, they initiated the installation of a backup galvanizing kettle to prevent this kind of critical failure from happening again.

Lessons Learned from the Disaster

There were four key learnings from this disaster:

1. Having backups of all essential equipment on hand.

If ASI didn’t have access to a spare galvanizing kettle in Texas, there would have been more months of downtime, negatively impacting ASI’s financial position and customer relationships.

2. The value of running different solutions in parallel.

The team considered shipping the spare kettle against simply repairing the hole in the existing one, but there was no guarantee that the welding would hold up. We decided to explore both options at once. Two months into the kettle extraction period, it became clear that it was unrepairable. Having the spare kettle already on its way saved the company several months and about $400,000 per week in losses.

3. The implementation of rigorous inspection and audit processes.

At ASI facilities, this included installing viewing ports to check for leaks under the kettle, and a comprehensive preventative maintenance program was also established to catch potential problems before they escalate.

4. The importance of transparent communication.

The team was open and honest with customers about the situation and gave them options like using external galvanizing suppliers or adjusting delivery dates. This approach helped maintain customer relationships during a tough time.

Managing Crisis Situations in Manufacturing

The galvanizing kettle failure incident provides valuable lessons for navigating crises in manufacturing facilities. Firstly, assembling the right team with diverse expertise is critical as having individuals with different skills and perspectives ensures that all angles are considered when devising solutions.

A readiness to “roll with the punches” by being flexible and adaptable is also essential. As new information about equipment failure emerged, adjusting plans became necessary. The team also had to make decisions with limited data, striving for the best possible outcome while balancing the need for quick action with thorough analysis and planning.