Middletown Tube Works
Cover Story
By Brian Salgado   
Tuesday, 01 May 2007
smc Middletown Tube Works bails out its customers.
Middletown Tube Works bails out its customers.
According to Vice President Angela Phillips of Middletown Tube Works, her family’s company keeps clients satisfied by doing anything it can to keep them in business. For instance, when a client misreads its forecasts, Phillips says Middletown will do whatever it takes to make sure that client gets the tubes it needs.

“The biggest thing is we’re small enough to react quickly, and we’ve always been that way,” Phillips says. “We spend six months trying to court business, and on the other hand, someone will call out of the blue, and they are about to shut down and their supplier had a problem. So, we will work around the clock for three or four days to get it to them because they will keep coming back for more.”

Middletown Tube Works is a specialty welded steel tubing manufacturer based in Middletown, Ohio. Formerly the ArmcoTubing Division, it was purchased by the Ralph H. Phillips family of companies in 1993 from Armco Corp., which is now AK Steel. The company manufacturers tubing used in the automotive and appliance industries in its 240,000-square-foot facility.

Ralph H. Phillips founded Phillips Machine and Welding Co. in Shelby, Ohio, in 1967 in a converted garage, according to the company. Today, the RH Phillips family of companies has grown to more than 500,000 square feet in production space across three facilities.

“With business integrity and customer-driven goals, Mr. Phillips has brought these companies to where they are today – among the world’s leading tubing manufacturers,” the company adds. “While the companies have grown into major corporate entities, they have maintained the family values and close relationships with customers that has truly set them apart from the rest of the industry.”

Phillips took time to speak with Manufacturing Today about how Middletown Tube helps customers in dire straits, adapts to a volatile steel market and plans to improve quality.

MT: Can you provide an example of where Middletown Tube Works bailed out a customer?
AP: We’ve got a former customer who actually purchased their own tube-producing equipment, and they have been producing for five years. But their equipment broke down, and they called us in a panic. We have consistently helped them by producing the tube on short notice and getting it to them.

MT: How is your company adapting to market changes?
AP: The steel industry is very volatile, and it continues to be that way. We’re at the tail end of that, but our selling price is completely dependent on steel and what the steel market does. Several of our competitors are either bankrupt or closed, and we’ve stayed in business.

MT: How have you survived?
AP: Another thing we do is reinvest. Eighty percent of what we clear after taxes is reinvested, primarily in new equipment, like updating parts of our existing line. In 2006, we installed a new tube mill, which was a $600,000 investment on that line. It has taken our production speed from 140 feet per minute up to 240 feet per minute.

MT: How do your customers define quality?
AP: We’re measured in parts per million (PPM) on automotive customers from a quality standpoint for any kind of problems. We’re at approximately 3,000 PPM in automotive and 2,800 PPM in non-automotive.We’re working toward lowering that. Our goal was to have both under 2,000 PPM for 2007.

MT: What is the company doing to work toward that goal?
AP: We’re training for better inspection and testing, and we’re putting more focus on quality as opposed to productivity.

MT: What is the company’s approach to management of inventory?
AP: We tend to buy large amounts of steel for our customers. We buy steel because we’re able to get larger quantities, and we carry that inventory as our customers need it.

We may buy 90 days’ worth of inventory or nine months’ worth of inventory, and it is some of what has given us an edge in the marketplace, as well. Occasionally, we get criticized until the customer needs it or is in trouble, then they’re perfectly happy we carry as much steel.

MT: How do you train the manufacturing employees?
AP: Annually, we bring in equipment tooling manufacturers, who do four or five days on site, walking us through this case setup or trouble shooting equipment as it runs. We bring in other equipment manufacturers on support equipment, in case we have to cut off the other systems we’ve got.

MT: What is in the future for Middletown Tube Works?
AP: We have Metallurgical Services Inc., a sister company of ours, which continues to grow and add capabilities to our tubing industry. It offers metallurgical testing, so it tests steel as it comes into our facility.

As they are processing it, they run a series of tests that show how we’re affecting steel properties as we’re manufacturing tubes. In the automotive market, those areas can be very critical. It is growing from outside clients and expanding the testing capabilities, and it has new equipment to further test both our products and the open market.
 
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