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“Product availability is the big thing,” Mark Olson, CEO, Caleffi North America Inc., told us at the beginning of this year during a visit to the company’s operations in Milwaukee as the company dealt with supply chain issues brought on by COVID-19. “While it is a challenge, I also think this is one the company’s biggest successes to come out of the pandemic.”
Olson went on to tell us how a Herculean effort in the U.S. and with his colleagues in Italy got the “barn,” as Olson calls the warehouse, stocked with the products contractors have come to rely on since Caleffi Group launched its North American operations 20 years ago.
“From a production standpoint, our guys in Italy have done a great job with material availability,” he told us. “And here in the U.S., our planners and expediters have been just fantastic in getting product here. Our staff anticipated accurately the best product mix to inventory.”
During the pandemic, Caleffi used the time to turn unused second-floor space into 8,300 square feet for a training room and its growing employee headcount as well as a new assembly area where employees modify products from Italy for the North American market.
While the company “pushed up” for more space, Olson and his management team are planning to “push out” with plans to practically double its Milwaukee storage space in the coming year.
“In the meantime, we’re very aggressive on ordering from our factories,” Olson added. “If we end up with more inventory sitting in the barn here then we’d really like, well, it’s just a cost in the name of availability.”
‘Made In Caleffi’
That conversation got us thinking about those factories, the barn and how everything finds its way to Milwaukee and in to the hands of our readers in the faultless way it does even during a global pandemic.
Over the years, we’ve written plenty of stories on Caleffi’s operations here in the U.S. with one of our first features marking the 2007 opening of its current address, located across the parking lots from American Family Field, home to the Milwaukee Brewers.
But the company’s catchphrase is “Made In Caleffi,” which means made in Italy, which means 4,451 miles away.
Each year, Caleffi processes more than 16,000 tons of brass to machine 200 million pieces while its technopolymer plant delivers 120 million finished products, all including hundreds of specialized components, such as valves, air separators, manifold systems and modular heating distribution stations.
The products come from Caleffi’s ISO-9000-certified and highly automated manufacturing facilities located in Northern Italy.
In order to understand this better – and, more importantly, to witness just how all these products are made, tested and shipped – we flew to Italy last June. Our trip included a couple days at three factories, plus one day spent at a trade show in Milan.
Our tour guides were Fabio Rossi, export area manager; and Antonello De Magistris, director, production and logistics.
Joining our tour from Caleffi North America were Sharon Alexander, brand marketing leader; and Max Rohr, education and industry engagement manager. Rohr actually started his career in 2009 at Caleffi’s Italian headquarters as an intern and rejoined the company two years ago.
On the ground
The three plants we visited are all centralized on purpose within 20 minutes of one another.
“Ever since our company was founded by Francesco Caleffi,” De Magistris said, “our strategy has been to have a short supply chain that can bring logistical benefits and allow us to build strong technical and professional partnerships. The fact that the facilities and, in particular, people are close to each other is a competitive factor for us, since it ensures a high degree of flexibility when it comes to developing and designing new products to meet ever-changing market needs.”
We talked in more detail with De Magistris about the company’s overall manufacturing philosophy, including his thoughts on quality control and logistics, on our last day of the tour. But before we go into those details, let’s provide a quick rundown of the factories we saw:
• PRESSCO: This was our first stop. Located in Invorio, PRESSCO is where forging and stamping brass takes place.
The facility, once an independent business, has been owned by Caleffi since 1983, and was one of the first vertical integrations in Italy of its kind for our industry. Bar stock ranges from brass and low lead alloys to dezincification–resistant alloys and steel.
Like the manufacturing facilities, the sources of that raw material aren’t that far away either. And that turns out to be another vitally important very first step to many of the company’s finished products.
“I think what you will see as we go from the initial steps of creating our products, and then on to assembly, quality control, packaging and shipping,” Rossi added, “is that U.S. and Canadian contractors can be many time zones away, but we can control every single variable to ensure a high quality product. And depending on the level of automation that the finished product has gone through, the installer’s hands might, in fact, be the first ones to touch the product once it’s taken out of its packaging.”
• Caleffi 2 Plant: Adjacent to the company’s headquarters in Fontaneto d’Agogna. Not only is this home for assembly operations, the corporate campus also includes an extensive engineering operation that keeps manufacturing operations running behind the scenes. For example, with the exception of a few machines that were originally manufactured by external suppliers, most of Caleffi’s assembly and testing machines are designed and manufactured in-house.
“Based on the specifications of the products to be placed on the market, we agree with the Technical Management Department on the best integration and assembly process and with the Quality Department on the tests to be performed,” De Magistris added. “In our laboratories, the in-house team designs and builds new visual testing systems to meet the highest standards of the Quality Department, requiring functionality testing on 100 percent of production.”
• Caleffi 3 Plant: Located in Gattico, this is where we saw further assembly, including the home to Caleffi’s plastics molding processes. The company is upgrading its production facilities in Italy and plans to expand technopolymer production.
When we finally sat down with De Magistris to talk more about the company’s overall approach, he used an interesting word to describe the methods: la ricetta. That’s Italian for “recipe.” We can’t blame him for thinking in such ways considering the culinary reputation of the country. Back home, however, we might think of these as processes to follow to get the job done.
“If we have a good process,” he added, “we have a good product.”
Manufacturers need recipes these days since the market for Caleffi “has radically changed in just the past 10 years,” De Magistris explained, calling for entirely different manufacturing procedures that he says defined the industry in the early-2000s.
“In recent years, our customers have been placing orders more frequently for smaller batches,” he added, “and, as a result, the number of products has increased by about 40 percent. Our catalogue currently includes more than 7,200 item codes.”
While we saw a dizzying amount of machining and assembly processes during our visit, let’s go over at least two common denominators we saw, regardless of the actual product being made:
‘Connected Factory’: We’re used to a high degree of automation in American factories we’ve visited. And here too, we saw driverless material handling vehicles driving down the aisles of the Caleffi’s spotlessly clean factory floors.
“Automation is one of the competitive levers of operations,” De Magistris said, “especially because the logistics process is designed in such a way that we know exactly where materials are located at all times, since the handling units are managed through radio-frequency tracking of the individual box that identifies the material.”
And we’re also used to seeing robotic arms behind protected cages putting in their shifts. However, we hadn’t really thought of the word “cobot” before De Magistris pointed out several manufacturing cells that pair humans and robots to do their respective jobs in unison as efficiently as possible.
Caleffi has taken automation to a much higher level than we’ve seen before.
“Over the last decade we have implemented the ‘Connected Factory’ concept: information has been digitized, thus, minimizing the use of paper, and production has been piloted and monitored by more than 110 information points that allow us to keep track of every step of the process and make sure that the plants are working properly.”
The work is part of a larger philosophy, Industry 4.0, which is another concept we hadn’t heard of prior to our trip. Following the old-school industrial revolutions of steam, electricity and more recently computers, this new stage takes advantage of the internet’s ability to easily share data.
In 2013, Caleffi began modernizing operation in the following key aspects: management (production planning), productions processes (their design and optimization) and operating procedures (modernization of production processes, with new machinery and systems and with a parallel investment in staff training).
Quality control: Certainly, following closely on the heels of a connected factory is more meticulous quality control tests on literally 100 percent of Caleffi products.
Take a very common product here in the states: the 521 mixing valve. How many different times does Caleffi verify it is within tolerance for production standards and ultimate product quality?
“The size of each mechanical element is measured and, during the subsequent assembly stages, it is tested several times for both tightness and hydraulic seal,” De Magistris explained. “The assembly and testing processes are either semi-automatic for small batch sizes or fully automatic for larger batches. In both cases, six or seven tests are carried out using 12 or 14 parameters at different working and operating temperatures.”
In addition, each mixing valve is tested in water at operating temperatures and pressures and in air to carry out seal tests under worst-case conditions compared to operating conditions.
“This is also why we have been increasingly focusing on using more automated systems and automated testing systems that allow us to increase our production capacity, along with high-performance vision systems,” De Magistris added.
Of course, it’s one enormous task to keep making high quality products day after day. But it’s entirely another skillset to get those products out the door and fill orders.
Here’s where automation comes into play in a huge way. At the end of our first day, we saw the impressive MAV, a ten-story fully automated vertical warehouse that’s been fully operational since 2010.
Look at an aerial shot of Caleffi’s corporate headquarters, and it’s easy to see that the company had nowhere to go but up when it decided to build a warehouse for parts, components and finished products that is fully integrated with shipping.
“These days, stock is no longer kept at our client’s premises,” De Magistris said, “but in our automated vertical warehouse that allows us to promptly supply our clients. Handling reliability is guaranteed thanks to an automatic paperless process: once the order is entered into the system, the picking list is sent to the automatic warehouse and made available to the logistics personnel who arrange the packages. Urgent orders can be processed within 24 hours.”
The warehouse contains more than 3 million cubic feet of space that can store up to 51,000 boxes of product.
“In fact, it is one of the very few warehouses in the world that is able to handle double-loading units at once,” De Magistris explained. “In addition, it has also made it possible to increase daily picking, thus meeting the market’s growing need to monitor orders to be parceled up, which can be processed on the same day, with a degree of automation that ensures very few part-per-million errors.”
De Magistris, who joined Caleffi seven years ago, says what’s impressed him the most about his company is the focus on customer service no matter if that customer was a high-volume business or a small school waiting for only a single valve to solve a heating problem.
“I appreciated how well the company reacted to emergency situations, also on a global level,” he explained. “I can recall the many times when, with help from our Caleffi North America branch, we addressed emergency situations by arranging for quick deliveries from the Italian production facility to the end customer.”
His first lesson learned about “Made In Caleffi” was about this level of dedication and professionalism.
“When applied on a daily basis, customer satisfaction and product reliability are ensured,” De Magistris said. “What we can see today was achieved thanks to the dedication of the women and men who have worked for the company over the last 60 years. Our strategy is to keep on doing this.” l