From Die Casting Management  August 1996

C&H Die Casting is a medium-sized manufacturer of custom aluminum die castings located in Troy, Texas.  The company was founded by Texas native Ed Hinkle and a partner in 1970.  At that time, with just three die cast machines and a handful of employees, the partners scavenged for new accounts, eventually landing a variety of smaller customers that launched the business.

For the next decade, C&H evolved into an established and respected regional die caster.  During this period, the Hinkle family proceeded to increase their ownership interest in the company.  In 1988, the family's next generation, Charles Hinkle and Ferol Richardson, purchased their parents' interest in the company.

Charles Hinkle would take over the presidency of C&H Die Casting.  He had earned a bachelor's degree in accounting from Washington and Lee University in Lexington, Virginia, as well as an M.B.A. from the Harvard Business School in Boston (where he was a Baker Scholar Graduate).  He'd worked for a Boston-based strategy consulting firm for two years before returning to Texas to work at C&H Die Casting.

Ferol Richardson received a bachelor's degree in marketing from Texas A&M University.  As vice president, she would take on the challenging tasks of staffing and management of the company's human resources.

Under their direction, C&H Die Casting grew from a crew of 90 employees in 1987 to an employer of 500 personnel in 1996.

The company now services a diverse customer base with demanding requirements; the precision parts produced here are integral components in a variety of industries including HVAC; automotive; electric motors; cable television; gas meters; and valve actuators.  Its 500 employees make C&H one of the larger employers in its region and a key player in the community's economic well-being.

Complete Customer Service

C&H stresses the continual improvement of Complete Customer Service (CCS), a corporate doctrine that emphasizes being responsive, flexible, fast and reliable when addressing customer needs.  Toward this end, C&H utilizes world-class technology in manufacturing equipment, process/quality control instrumentation, as well as advanced information systems.  Included in the C&H technology stable are 26 diecast machines, and 28 CNC lathes, mills and machining centers.

A priority has been placed on remaining state-of-the-art; this is evident throughout the C&H facility.  Computerized process monitoring and control is integrated into all 26 diecast machines; real-time x-ray of diecast parts helps control porosity; a spectrometer guarantees the purity of the aluminum chemistry; and a computerized SPC Data Collection Network is tied in to electronic variable data gauges and monitored/operated by C&H staff.

The advanced technology utilized at C&H has increased the company's expertise in and control over value-added processes including high precision machining, finishing and assembly of the die castings produced.  The combination of Complete Customer Service, the maximization of employees' potential, and technological advanced have allowed C&H Die Casting to prosper and grow into an operation that generates $26 million a year in sales.

C&H's efforts to become a world-class supplier have resulted in its servicing accounts around the world, with large customers in Australia, Germany and Mexico that depend on the high-quality, Texas-made, machined aluminum die castings.   Assembly line production of automobiles would come to a screeching halt in several countries without parts produced by C&H.  The long logistical train to overseas customers requires that zero-defect shipments be consistently achieved.

Disaster Strikes

But for all the planning and innovation set in place by C&H management, the fast-growing die caster almost met its match on Dec. 15, 1995.  At 5:00 a.m., with the dawn not yet broken on another day in the heart of Texas, a fire broke out in the offices of the high precision machining/final inspection area.  The blaze spread quickly and smoke poured from the flames, thwarting attempts by graveyard shift employees to extinguish it.

Already at work, Charles Hinkle was alerted to the fire and quickly dialed 911.  Disappointingly, the first fire engines did not arrive until almost 30 minutes later.  By that time, the fire fighters could only focus on containing the destruction to one side of the facility's firewall that separates the High Precision Machining department from the diecasting and secondary operations areas and corporate offices.  By 9:00 a.m. it was obvious that the fire would simply have to burn itself out, leaving C&H management to sort through the rubble.

Fortunately, no one was injured in the fire that ultimately destroyed 45,000 sq. ft. of the C&H facility; all CNC machining equipment and gauging was lost; more than $1 million in finished goods and work in progress inventory was gone.   The warehouse and shipping facilities were swallowed by the flames, as were the administrative offices for the Quality Control, Scheduling and Customer Service departments.  Fire marshals concluded that a smoldering cigarette in a trash can had compromised the future of this successful die caster.

Hinkle realized that an immediate and intense response to this disaster would be necessary to continue meeting customer schedules and cost objectives - and thereby save the company.  C&H's insurer, Liberty Mutual, was contacted by 8a.m., and their adjuster would arrive to assess the damage before noon on the day of the fire.

Both the insurer and die caster agreed that an extended downtime due to this fire would be disastrous for everyone involved.  Quick action would need to be taken.

Die cast and secondary operations resumed within 12 hours of the fire and ran 24 hours a day, seven days a week, to replace the lost inventory.   Within the first 48 hours after the blaze, C&H had relocated and recreated the crucial warehouse, shipping, customer service, and scheduling functions.  Agreements were quickly hammered out with four regional machine shops to subcontract space and equipment; C&H employees would be cutting parts within six days of the fire at these subcontracted shops.

But it became apparent that many of these regional machine shops had equipment that would not meet all of C&H's requirements.  Additionally, some customers were hesitant to accept parts that had been outsourced, for fear of sacrificing the quality they had always received.  To address these concerns, C&H ordered the first $2million of new CNC equipment - which was delivered and installed in less than two weeks.

But while these efforts successfully calmed current customers, Hinkle realized it was urgent to rebuild the facility as quickly as possible.  He knew that his subcontracted space could dry up at any time, leaving him powerless to satisfy orders.  He remembered how painfully long the original construction of the damaged area had taken.  A prolonged reconstruction would not - and could not - be tolerated.

Rebuilding and Recovery

Liberty Mutual introduced Hinkle to The Evans Team, high-speed disaster recovery specialists based in Houston, Texas.  Evans has an impressive track record of getting businesses back on their feet after catastrophes.  They'd repaired or rebuilt structures around the world after such high-profile disasters as Hurricane Marilyn, the Oklahoma City bombing, California earthquakes and wildfires, as well as the flooding of the Mississippi River.  After a careful assessment of the job at hand, Evans promised to rebuild 45,000 sq.ft. of C&H's Die Casting's facility in just eight weeks - which was music to Hinkle's ears.

The first four weeks of recovery involved cleaning out the castings and fixtures from the burned-out area, and working out the administrative agreements between The Evans Team, Liberty Mutual, and banking institutions.  After a careful check of Evans' referenced, a contract was negotiated and The Evans Team began to rebuild the damaged facility.

"We knew coming in that our construction window would be tight." said David Hookway, project manager for The Evans Team. "But we're used to working under unbelievable pressure.  We knew that with the cooperation of C&H and suppliers we could pull it off."

Steel erection proceeded smoothly - until winds began to rise in Central Texas.  For several days, 40 and 50 mile per hour winds shut down iron workers as they attempted to attach a metallic skin and insulation to the framing.   Despite the lack of roof, interior construction continued below, leaving newly drywalled offices vulnerable to sudden rainstorms.

"It was a gamble we had to take." said Hookway, "if there was going to be any chance of meeting Mr. Hinkle's schedule.  We had reams of Visqueen on hand in case of showers."

The gamble paid off.  The offices stayed dry and iron workers worked round the clock, taking advantage of the calmer breezes of midnight to finish installing the roof system.  The Evans Team finished right on schedule.

"It was difficult to believe," said Charles Hinkle, "that Evans could completely finish the reconstruction in just eight weeks.  To their credit, Evans came through with flying colors."

Hinkle is careful to share praise for this successful recovery from disaster.  He stresses that it was a team effort involving C&H management and employees;  Liberty Mutual (the insurer); The Evans Team (disaster recovery specialists); and Mazak, Mori Seiki, and Brother (three machine tool suppliers) that made it happen.

"It was this team that pulled off a very difficult task - if not an impossible one." said Hinkle. "Because we were able to get back into our building with 12 weeks of the fire, there were no supply interruptions or cost penalties to any of our customers.  If Evans had been unsuccessful and we had experienced supply interruptions, we could have lost 50 to 70 percent of our revenue."

Surviving a catastrophe of this nature does not come cheaply.   "We spent approximately $100,000 for air freight to Australia and Germany, as well as $1.4 million in extra expenses for machine shops and other costs." calculated Hinkle.  "The total loss was more than $11 million.  Having the right insurance - and the right insurance company - played a huge role in our speedy recovery."

The "right" insurance for a die caster, according to Hinkle, is a policy that includes 100 percent replacement cost - and is free of coinsurance requirements.  The policy should also be devoid of other exclusions or limits that would hinder recovery from a disaster, Hinkle also stresses the benefit of having all insurance - especially business interruption, facilities and contents - through a single insurance company.  An insurer facing huge business interruption losses will be especially diligent in settling claims and getting his insured back up and running.   Liberty Mutual proved to be the "right" insurance company; despite the magnitude of the loss, all claims were settled fairly and promptly.  There was never a distinction made between the interests of the insurer and the insured.

The successful recovery from a devastating fire should not come as a surprise to anyone acquainted with C&H Die Casting.  The company's phenomenal growth and reputation for quality and service are an obvious result of carefully conceived - and executed - corporate strategy.

From Die Casting Management  August 1996