Starting over: Ohio scrap firm rebuilds its business after losing traditional supply source.

Some 100 years ago, Brett Muckle's great grandfather started in the scrap business with one employee and a cart. Today, Muckle is president of Ashtabula Iron & Metal Co. in the northeastern Ohio port city with the same name. The 22-acre site his great grandfather moved to in 1946 sits on Lake Erie between Cleveland and Erie, Pa.

Ashtabula's location was ideal for the scrap business. Proximity to steel mills, heavy manufacturing, the Big Three automakers and, of course, the lake, made it convenient to receive, sell and export material.

DEALING WITH CHANGE. In four generations, the business has changed. But those changes pale in comparison to what the firm has experienced in just the last three years.

"In 1969, the local Union Carbide ferro-alloy plant decided to outsource its turnings processing," says Muckle. "They asked my grandfather to be their sole supplier, so he decided to specialize in turnings."

Ashtabula Iron & Metal put in a laboratory and started blending turnings. The firm took in turnings from the automakers and other scrap yards.

"We accepted turnings with known and unknown chemistry, classified them, added or blended out alloy and provided custom-manufactured chemistry for various industries. In a short time, Ashtabula became synonymous with turnings," recalls Muckle.

The company never brokered material; everything came through Ashtabula. Customers through out the Northeast quickly recognized the company's view of scrap as a quality manufactured product. In addition, ships bound for Europe frequently stopped in Ashtabula to receive the firm's main product: guaranteed-analysis, short-shoveling turnings.

For 32 years, turnings comprised 100 percent of its business. Then came 2001. More than 30 mills were in bankruptcy and scrap prices hit an all-time low.

"We quickly lost three-fourths of our business," says Muckle. "Steel was becoming more advanced and we found ourselves competing with our customers. It became obvious that being a one-commodity operation made us susceptible. It was not a good long-term strategy.

EQUIPPING FOR THE FUTURE. The jolted market meant change. New products, new customers and new equipment.

Muckle added a truck and 50 boxes to handle industrial accounts. Ashtabula Iron & Metal began to handle all grades, including high-temperature alloys. Its robust peddler business includes everything from aluminum cans to copper tubing.

But an aging 7-yard wheel loader would not be enough. Muckle "had to get new capital equipment."

If past experiences had taught anything, they taught the need for flexibility.

"We needed to maximize our property and at the same time be able to adapt as new avenues opened," says Muckle. "We considered stationary cranes and shears, and could have set up something that fit our needs today. But how would they fit in tomorrow?"

Beyond the new equipment requirements were considerations of maintenance and, not the least important, of selling products the company had barely dealt with in more than 30 years.

"Mobile cranes were a must," says Muckle. "We needed the flexibility not only in use the cranes in every part of our yard, but easily use them off site. In our case the Caterpillar cranes fit our needs."

Working through the local Caterpillar dealer, Ohio Cat, the company purchased a material handler and a hydraulic excavator. The company equipped the wheeled handler with a grapple and a 57-inch magnet. How the excavator is equipped is key to the operation.

"We purchased an 800-ton mobile shear and found it to be fantastic," says Muckle. "It's the perfect alternative to a stationary shear. It gives us flexibility with our processing. It's easier and cheaper to move the shear to the material than move the material to the shear--and then handle it again."

The company has since purchased another handler and a larger Caterpillar excavator with an even larger shear (the 1,084-ton Caterpillar S365).

"Not only his the system allowed us to maximize our yard, the wheeled cranes give us off-site capability," notes Muckle.

STAYING ON COURSE. All the machines are equipped with Caterpillar's Product Link. It allows the dealership to monitor the machine remotely. "It's easy to overlook scheduled maintenance, oil changes and the like," says Muckle. "With Product Link, we don't have to worry about that."

The company also purchased a lift truck, but found it "not the perfect machine." It worked well in the materials warehouse, but was limited to that area.

To increase its machine flexibility, Muckle purchased a skid steer loader and equipped it with forks and a grapple bucket.

We look at skid steer loaders as off-road lift trucks.' They move easily between the warehouse and the yard and give us double duty. We wanted the versatility to do multiple tasks--and they provide it."

On the surface, it would appear that the increase in fleet numbers would mean a corresponding increase in the company's maintenance capacity. Not so, says Muckle. Ashtabula Iron & Metal did not have a mechanic before its expansion, it doesn't have one now, and it has no intention of hiring one.

"We are in the scrap business, not the machine servicing business. We use our dealer (Ohio CAT) for everything. We fuel, grease and change hoses, but that's it," says Muckle.

"We rely on the dealership for immediate response to any issue," he adds. "My eyes have been opened. Since buying all this equipment, I've learned first hand that selecting who provides you the equipment can be almost as important as the equipment itself. A real provider can bring a lot to the table. We look at Ohio CAT as a business partner as much as a supplier."

Ashtabula Iron & Metal and Caterpillar also worked together through the involvement of the Cat Word Trade. The group brokers the company's scrap.

"The arrangement gives me an extended sales force and was a key factor in our decisions," says Muckle. "I now have a Caterpillar entity selling me my equipment, servicing my equipment, and selling my product."

While many still think of the firm as a turnings processor, that's not the case. Turnings are now just 20 percent of the company's business, and "diversification" is the term Muckle thinks applies best.

"We can reach out further than we ever could and broaden what we do. With equipment limits, you limit what you can do," he comments.

The author is a freelance writer based in Normal, Ill., who provided the story on behalf of Caterpillar Inc.