www.arielcorp.com

Ariel corporation, mount Vernon, ohio, UsA

ust in time— Ariel Corporation, Mount Vernon, Ohio, USA, is one of the leading manufacturers of high-speed reciprocating compressors in the world. To this day, Ariel produces exclusively in Ohio. It was at this location that Jim Buchwald, one of the most successful compressor designers in history, founded the company in 1966. While this small city in the heart of the state of Ohio may not be located in the current centers of the oil and gas industry, Ariel stands by the traditional Mount Vernon site. Thanks to a highly modern distribution center, almost all replacement parts for Ariel compressors routinely ship at any destination worldwide within 24 hours. TEXT: Ludwig Schönefeld • PHOTOS: Ralf Baumgarten

JTop Logistics for the “Golden Age of Gas”

W e are the prime choice worldwide for high-speed reciprocating compres-sors,” explained Steve Thompson, Vice Presi-

dent Supply Chain at Ariel Corporation. “We worked hard over many years to achieve this position in the market. We are very proud that we recently shipped our 40,000th compressor.”

Global market leadership goes hand in hand with a significant logistical challenge. “We have a very respectable market share that we plan to

increase,” Steve Thompson added. The value proposition that Ariel provides to the customers covers everything from shipping the compressor to service in everyday operation. Developing the best systems, including for the aftermarket, has therefore been one of Ariel’s strategic objectives for many years. “In the early years of Ariel, it could take several months to complete an order. For example, the basic lead time for valves was 13 weeks,” Steve Thompson recalls. “Today, the majority of HOERBIGER parts can be received in three weeks with specially engineered product in

nine to twelve weeks.” The new distribution center opened in 2012 has considerably expedited Ariel’s replacement part shipments as compared to most of its competitors. Most parts routinely ship within 24 hours. “In a few isolated cases, it may take up to 48 hours.” HOERBIGER Corpora-tion of America, which supplies the lion’s share of all valves used in Ariel compressors, is making a significant contribution to this achievement. “HOERBIGER is an extremely important supplier for us,” Steve Thompson said. “After all, we have a long common history.”

“early a basic valve had a lead time of 13 weeks—today just three. replacement parts routinely ship within 24 hours.” Steve Thompson vice President Supply Chain Ariel Corporation

With the recently shipped 40,000th

compressor, Ariel underscores its

leading position in the world market.

steVe thOmPsOnVice presiDent sUpplY cHAin

Ariel corporAtion

Steve Thompson has been in the oil and

gas industry for 32 years, 27 of them with

Ariel. Since 2000 he has been responsible

for Ariel’s supply chain.

Partnership entails obligationsThis shared history dates back to immediately after the company’s founding. At that time, Jim Buchwald met Hubert Wagner, who was in charge of developing the HOERBIGER commer-cial agency in the USA established in 1963. Hubert Wagner was excited about Jim Buch-wald’s idea to build a reciprocating compressor that had a speed of 1,800 revolutions per min-ute. He advocated the development of a match-ing valve at HOERBIGER in Vienna, Austria. The basic design was the tried and tested RX valve. It was fitted with a newly developed spring

Logistics hand-in-hand: while Bryan Moore (left)

records a HOERBIGER shipment in inventory, his

colleague Hilary Matthews prepares a customer

order (center). Steve Sheets (right) removes

replacement parts from the spiral conveyor.

“iT’S ALmoST imPoSSibLe To KeeP ALL vAriATionS in invenTory. hoerbiGer reALLy doeS A very Good Job And ASSureS ThAT We Are AbLe To SuPPLy even rAre rePLACemenT PArTS WiThin An AdequATe Time FrAme.”steve thompson

plate, which ensured reliable functioning of the valve even at 1,800 revolutions per minute. At 3,600 piston strokes per minute, this equated to a capacity of more than 100 percent over the customary performance.

Over the decades that followed, Ariel and HOERBIGER repeatedly joined forces to work on innovative solutions. Soon, the focus would no longer be only technical aspects, but in-creasingly also the logistical requirements of the supply chain.

One example is the “IN-SYNC” program from 2004. “Back then, we replaced the existing manual process for ordering valves with an elec-tronic order system,” Steve Thompson reported. The system has been expanded since then: “The valves are now shipped configured for the unit and already contain the Ariel serial number.”

Alex Wright, the oldest son of Ariel CEO Karen

Buchwald Wright, is managing the new dis-

tribution center, which opened in January

2012. Here, 24 hours a day, 7 days a week,

120 employees assure that the network of

Ariel’s distributors can be supplied with all

components of an Ariel compressor within

the shortest time—from standard replace-

ment components to machined parts. “We

process approximately 800 orders a week

here,” Alex Wright explained. The 50,000-

square-foot (4,600 square meter) facility of-

fers sufficient capacity to keep up with the

strong growth that is expected in the market

in the coming years. “Previously, we barely

had 8,500 square feet (800 square meters)

available for the logistics operation,” Alex

Wright reported. “The added space now al-

lows us to process the orders considerably

more efficiently, and more importantly we

can handle them faster.” When it comes to

planning the processes, Ariel uses the

benchmarks from the automotive and com-

mercial vehicle industry as a guide: the auto-

motive retailer AutoZone, the industrial

equipment manufacturer Caterpillar, and the

motorcycle manufacturer Harley-Davidson

served as inspiration for the development of

the new logistics center. “We deliberately

used companies for reference that have an

extensive global spare part business,” Alex

Wright stated.

Alex WrightDirector AftermArket operAtions

Ariel corporAtion

100 Percent Performance “For our collaboration on the supply chain, our goal was 90 percent on-time performance. HOERBIGER achieved nearly 100 percent dur-ing the first phase of the program—IN-SYNC 1. This was and still is an outstanding achieve-ment.” According to Steve Thompson, this high performance is critical for the aftermarket: “The aftermarket business is a major logistical chal-lenge for everyone involved, notably for the parts that HOERBIGER produces.” Especially when it comes to valves, there are numerous variations —depending on the output and application of the compressors—despite a largely standard-ized portfolio. “It’s impossible to inventory every configuration of HOERBIGER valves. HCA works hard to help Ariel respond to customer needs in a reasonable time frame.” All this is done world-wide. Over the years, HOERBIGER has invested in a global network of production plants and service locations. These complement Ariel Cor-poration’s distributor network.

Always Close to the Customer“We must be prepared that our markets will be-come ever more global in the coming years,” Steve Thompson explained. The new logistics center in Mount Vernon will support the increas-ing globalization of Ariel’s business, but consti-tutes only a part of the strategic preparation for the challenges of the future. Steve Thompson added: “It is extremely important to us that we are represented around the globe wherever our compressors are being used. HOERBIGER is

part of this network and contributes to ensuring that we can always procure the necessary com-ponents close to our customers.” Like all players in the market, Ariel is intensively engaged in an-alyzing the effects of the economical use of shale gas. Steve Thompson anticipates signifi-cant momentum, especially in the North Ameri-can market: “We are a U.S. factory, and as a re-sult our focus is, of course, on supporting the development of the U.S. marketplace.” While at present there is uncertainty in the USA to what extent the government will actively engage the availability of shale gas, it is important to note that the use of shale gas will be a significant positive driving force for the national economy. The domestic shale gas deposits provide the USA with the opportunity to reduce its depen-dence on energy imports. Shale gas will addi-tionally create options to lower the unemploy-ment numbers.

Growth through Shale GasSteve Thompson is convinced: “Shale gas will drive the economy like nothing else in the past decades.” This will have considerable impact not only on companies that are involved in gas gathering, but also on gas-processing indus-tries, such as the chemical industry: “There are many locations along the Gulf Coast in this sec-tor that were shut down over the last few years. These plants can now be put back into opera-tion.” He added that a lot of companies moved abroad because natural gas prices were so high. “Now that the prices for natural gas are falling,

“The LoGiSTiCS CenTer iS imPreSSive. We hAve AChieved ouTSTAndinG LoGiSTiCS quALiTy—And ThAT’S The boTTom Line.” Alex Wright

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PArt The close collaboration between Ariel and HOERBIGER goes back to the inception of Ariel Corporation in 1966. Virtually all of the standard valves used in Ariel compressors are manufactured by HOERBIGER Corporation of America in Pompano Beach, Florida, USA. When it comes to developing new valves, Ariel works close-ly with HOERBIGER’s research and development. “This close co-operation is paramount for us,” explained Karen Buchwald Wright, CEO of Ariel Corporation. “A common understanding of modern product design, quality and service drove both companies to con-tinually improve their products and business processes.”

PArt OFAriel Corporation is considered a market leader around the world for high-speed compressors. Initially, Jim Buchwald’s idea of com-bining conventional gas engines with high-speed compressors to form one powerful unit was met with skepticism by the industry. Today, the portfolios of almost all renowned compressor manufac-turers include high-speed reciprocating compressors that follow this design principle. “For a trendsetter, it is crucial to tirelessly explore the requirements of the customers and respond with custo-mized solutions,” Steve Thompson explained, Vice President Supply Chain at Ariel Corporation. “Because we do this, we are optimistic about the future of our industry.”

PArtnershiPThe partnership between Ariel and HOERBIGER goes back to very close, friendly relations between Jim Buchwald, the founder of Ariel Corporation, and Hubert Wagner, who was searching for new business partners in the “New World” for the HOERBIGER commercial agency founded in 1963. Hubert Wagner valued the personal traits of the visionary design engineer from Ohio. From the history of HOERBIGER Ventilwerke in Vienna, he knew the dif-ficulties that pioneers have to overcome to be successful. For this reason, and arguably also because he shared the vision of Ariel’s founder, he supported the undertaking to develop a compressor that was to be faster and more powerful than any reciprocating compressors available at the time. To this day, the cooperation between Ariel and HOERBIGER is distinguished by the pioneering spirit from those times—to include when it comes to developing innovative logistics processes for the supply chain.

John Wise, Valve Cell Engineer, during a functional check of the valve (left)

before it is packaged and stored (right).

these companies are returning. And they will bring back other businesses,” Steve Thompson added. It is critical for Ariel to be prepared for rapid growth. The company has undergone intensive preparations: “We have given very careful thought to how we must respond to the new develop-ment in the gas market and what strategies we must rely on to take advan-tage of the new opportunities that natural gas presents,” Steve Thompson stated. “It is imperative that we have the right processes in production and in logistics to be able to keep up even with strongly rising demand.” Ariel invested not only in the new distribution center, it also expanded the work-force.

Global, of CourseAriel is also working on new developments for high-speed compressors, which are specially tailored to the value-added chain as it relates to shale gas, from gathering to the end user. To this end, Ariel continues to count on the long-standing partnership with HOERBIGER: “We recognize that HOERBIGER is a very R&D driven company,” Steve Thompson added. “HOERBIGER has managed to continually bring out new products with better performance and higher reliability. With this, HOERBIGER clearly demonstrates that it wants to remain a technological leader in the market.Together, we are well-prepared for the future,” Steve Thompson said. Natural gas will be the driving force of this future. Will it also drive globalization? Steve Thompson leaves no doubt: “Ariel is a global company. By default, we will expand our presence internationally. This has always been a focus for Ariel.”