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Hidden energy in Zeeland
Technology powerhouse Woodward is growing and its reputation spreading.
Woodward Inc., a high-tech aerospace/energy components manufacturing business with a growing plant in Zeeland, is widely known for its precision parts used in jet engines and turbine generators at power plants.
Its growing reputation for technological expertise also won it a NASA research contract and, more recently, helped a University of Michigan business/engineering team take top honors in a global competition.
The culmination in September of the 19th annual Spotlight! competition at the University of Michigan was the news that the team sponsored by Woodward — one of 35 teams sponsored by 28 companies around the world — took top honors.
The competition is put on by the Tauber Institute for Global Operations, a joint venture between the university’s Stephen M. Ross School of Business and the College of Engineering, with many industry partners volunteering to facilitate cross-disciplinary education in global operations management.
The Spotlight! teams are U-M students working on MBAs or graduate degrees in supply chain management and engineering. Their projects were real process challenges in sectors that included manufacturing and supply chain, health care, energy, technology and logistics.
The winning Woodward-sponsored team was made up of graduate students Dot Gregg and Kevin Shallcross. The pair spent the summer at the Woodward plant, working to leverage process improvement, demand forecasting and materials planning to reduce the company’s turnaround time for aircraft fuel nozzle repair and overhaul. They each received a scholarship award of $5,000.
Woodward Inc., which has corporate headquarters in Fort Collins, Colo., engaged the Tauber team to help Woodward prepare for anticipated growth by reducing turn-around time on fuel nozzle repair for its customers.
Up to now, about half of the Zeeland plant’s production of fuel injection nozzles has gone into engines for U.S. military aircraft, but that may be about to change, according to Scott Nisbet, who heads the plant. Nisbet, vice president of the Woodward Turbine Combustion Systems Center of Excellence, predicts “a huge boom” in commercial aircraft engine production, and Woodward is already the primary supplier of fuel nozzles to the two main engine makers: GE and Pratt & Whitney.
The improvements worked out by Gregg and Shallcross over the summer are expected to reduce average turnaround time by 73 percent and drive the 95th percentile delivery time down from almost four weeks to less than two weeks. In addition, by introducing improved flow, the proposed changes reduce the processing time for a complete engine set of nozzles by 40 percent and increase efficiency for two types of key repair jobs by 162 percent and 114 percent, respectively.
“Pulling together a broadly scoped project in 14 weeks meant we had to be careful of our division of labor. The components of our project were independent but interrelated, and I think the hardest part was trying to find the right balance between working together to maintain strong coordination while trying to maximize efficiency by working independently,” said Gregg.
Additionally, Woodward’s vast accumulated data was a challenge for the team, which had to work through a wide variety of variables in order to determine their key steps.
“I was very pleased to see how quickly they ramped up and integrated into our team as if they were long-term employees. Both students were extremely bright, professional and, above all, self-motivated. They engaged our organization and worked the project with a high level of energy. Also, they utilized their professors effectively to supplement their technical capability,” said Nisbet.
One year ago, NASA awarded Woodward a $2 million multi-year contract to develop advanced, low-emissions combustion technology for use in commercial turbine engines. The contract was awarded under NASA’s Environmentally Responsible Aviation program to advance technologies that achieve passenger aircraft emissions requirements for the year 2020 and beyond.
Woodward’s multi-million dollar combustion laboratory, which opened in 2005 and is on the Zeeland plant site, was instrumental in securing the NASA contract. Nisbet said live testing of fuel injection is done in the lab using jet fuel, diesel fuel and natural gas.
Woodward is also involved in research at Wright-Patterson Air Force Base near Dayton, Ohio, on a key part it makes for the afterburner in jet fighter engines. The afterburner gives the aircraft a critical burst of speed when needed in combat situations.
Another partner Woodward works with on technology research is Western Michigan University.
The Zeeland plant now employs about 280, and that has been slowly building since Nisbet took over in 2007 when it had 210 employees. The employment growth reflects the upward sales curve, he noted — not dramatic, but consistent.
“We’re just very steady and reliable and keep growing,” added Nisbet.
The Zeeland plant comprises three connected manufacturing facilities with a total of 137,000 square feet, plus the 5,000-square-foot combustion lab. The Woodward plant is virtually surrounded by Gentex manufacturing facilities in Zeeland.
When the NASA contract was announced, former Zeeland mayor Les Hoogland said the city was “proud of what Woodward is doing in Zeeland, and (we) are happy to have supported Woodward’s investment in the city of Zeeland.” Hoogland told the Business Journal after the award announcement that Woodward “does a lot for the community.”
“We do more than just build fuel nozzles here,” confirmed Nisbet. “We’re active in the community, as well.”
The company supports the local United Way drive, Relay for Life, Zeeland Christmas Parade, and others.
“Creating jobs and economic stimulation is great, but engaging the community is important, too,” said Nisbet.
Last year Woodward had net sales of more than $1.7 billion, an increase of 17 percent from the year before. Net earnings for fiscal 2011 were $132.2 million, or $1.89 per share, compared with $110.8 million, or $1.59 per share, in 2010. In July, Woodward reported net sales of $460.2 million in the third quarter, an increase of 5 percent over the third quarter of last year.
Nisbet said the firm’s business model is based on a very long product cycle. “They last for decades,” he said, noting that Woodward still makes replacement fuel nozzles for engines in the U.S. Air Force’s B-52 fleet — and the B-52 has been in use for several decades.
The re-election of a Democratic administration and the issue of future defense spending doesn’t pose big worries for Woodward. With such a long business cycle, “I think the short-term undulations with election cycles aren’t nearly as significant,” said Nisbet.
Then, of course, there is that major competition going on between Airbus and Boeing to build the next generation of fuel-efficient commercial aircraft for airlines around the world — and Woodward is firmly in that mix.
Woodward’s Zeeland plant was built in the 1980s by ExCell-O, a manufacturing company that had its roots in Detroit. ExCell-O was making fuel injectors for Pratt & Whitney military aircraft engines. The Zeeland plant was later acquired by Textron, and Woodward bought it from Textron in 1998.
Nesbit said the Woodward strategy was to acquire manufacturing facilities allowing it to design, develop and produce all the components used in fuel delivery and combustion in turbine engines.
Woodward was previously known as Woodward Governor Co., a reference to the mechanical governor Amos Woodward patented in 1870 for effective control of water wheels, which were then a major source of power for factories and mills. It never left the energy industry, changing its name to Woodward in 2010. The focus today is on meeting increasing demands for low-emission and fuel-efficient turbine engines.