Fontanafredda, an Italian municipality in the Province of Pordenone, is the home of the Terex plant born from the Comedil tower crane business. The firm was established by brothers Raffaele and Ferruccio Moritsch in 1962 and the business was acquired by Terex in 1998, along with the Peiner firm. Members of the Moritsch family still occupy prominent roles in Terex’s tower crane business. Martina, Ferruccio’s daughter, is managing director for Terex tower cranes global operations, and Simone, his son, is the sales director.
“Tower cranes were a real passion for my father”, says Martina. In 2004, six years after Comedil was sold to Terex, Ferruccio established a new company, Recom, focused on crane design. As this issue of Cranes Today went to press, Terex announced its 33% stake acquisition of the company, as well as an agreement to purchase the rest of the business later.
One thing is clear from speaking to the directors at Fontanafredda; the philosophy of this originally family-run business of relationships, people, innovation and training still rings true, even though they now are part of an international brand. Martina is the first to admit her passion for the company; “I still act as if the company was mine”.
But how has the economic crisis affected this picturesque site? Martina Moritsch concurs that a shift in focus and product offerings was vital for Terex: “We are in a downturn, so you have to be flexible, and consider your options. Our strategy has had to change since 2008; it is something new for us to be in the second hand crane market. It is a business, but it hasn’t been our business.
“We want to manufacture and sell new cranes; we have always left the second hand market to others, but now we have to be in that market. We have to be quick to get into this business now.”
It seems that customers’ requirements have also changed following the downturn. While in the past, quick delivery was seen as imperative, Martina suggests that there is a more pertinent detail that potential clients now look to first; “Delivery is not an issue anymore; there are many cranes on the ground; the price could now make all the difference.
“It starts to be more difficult as you have to prove to the customer that you really deserve to get the contract. The market changes, as does the market need, we need to be ready and be quick to adapt our service to the customer with the same speediness. We have to be adaptable.”
Indeed Massimo Cappello, customer care director, has felt the direct affect of this new focus. His role now includes after sales, service activities, spare parts, training, and also, more recently, the refurbishment of older machines; an activity he states is becoming ever more important. He says, “A few years ago we were so focused on production and didn’t see second hand cranes as important, now the market requires that we operate in this area with a dedicated team.”
Simone Moritsch says: “We want to be on and in the market. In the last 10 months we have seen big improvements; the second hand and rental aspects help this strategy. We want to support, but also create new relationships. My team and I are at the complete disposal of the customer- my phone is on 24 hours a day!”
The Fontanafredda plant is producing a large proportion of Terex tower models; 11 self erecting models, 23 flat tops, 13 luffing jibs, as well as a 12t luffing jib Derrick crane. For loading and unloading on the yard, the plant uses the CTT 331-16 and CTT 231-12 flat top cranes.
The downturn has affected all aspects of the business, Simone adds; “Rentals are now part of our general strategy, which was adapted because of the crisis.”
While primarily focusing on the development of new products, Riccardo Alba, engineering director, understands that the move into this market was required. Therefore, when dealing with second hand models, he says: “The first approach is always to renew the old product without additional features.
“But where possible, we will regenerate second hand cranes using new features on request of the customer, this results in an upgrade ‘above’ second hand. Customers have different standards and objectives; these must be considered when dealing with models in this market.”
Simone Moritsch agrees that the standards of customers will always be the top priority; “We will always continue with a direct relationship with our customers; that will never change. We will not lose this, we have the Terex name for a reason.”
The general feeling at the plant is definitely one of synergy; Fontanafredda operates together. While sounding simple, the techniques being adopted are going great lengths to ensure safety, quality and production at the plant.
The focus on people can be seen throughout the managerial structure; while primarily toward the customer, employees are considered when making decisions for the coming day, week or month; they are not just cogs in a machine and their work directly affects the whole supply chain. This is something Blake Smith, Terex business system (TBS) manager patently understands.
Smith was brought in to introduce lean concepts and practices in the manufacturing and business processes at Fontanafredda; a role he clearly relishes. Originally hailing from Seattle, in the last 3½ years, he has worked to facilitate the smooth running of the Italian plant by implementing practices including a simple daily meeting.
“The first thing we want to know is if it was a safe day; were there any incidents, injuries, or near misses we need to discuss. The safety of our team members has to come first.
“The meeting enables us to make plans for the day very quickly; one thing I’ve been trying to improve since I got here is our communication channels.”
Smith will continue the application of lean concepts at the plant, for example he has paid a lot of attention to reviewing the assembly line within production. He states that before concepts can be realised, a few considerations must be made: “If a new product is to be introduced, we need to know how it will fit in with our production area, in terms of the time it takes to make the crane and the parts needed to ensure continuous production. We set up our production line based on the time it takes to produce the cranes and the customer demand. We don’t want one that takes two days to make, and another that takes five to be produced in the same line; we want to keep the line balanced.”
The idea of balance runs through the production side of the business; rather than routinely producing five of each crane a week and running out of space, Smith says, “We try to built to order because that way the customer can have the exact crane which meets their requirements and also it reduces how much inventory we have onsite, but you have to balance how fast you can build things compared with how fast customers need delivery.”
In 2008, the plant saw the addition of a new building, the training centre and spare parts warehouse. There are currently around 3,000 spare parts listed as in stock, although when considering the parts from older cranes, the figure is probably much higher.
Cappello states that holding such a high inventory makes things easier for the customer. A website is in production with the same focus, he explains: “We now have a better availability of spare parts and can create the right documentation, therefore to enable the customer to identify the exact parts needed. We have just completed a website where the customer can enter with a password, see his fleet of machines, identify the required parts and order on the web. Here we have all the spare parts and logistics dedicated to spare parts for tower cranes, interfacing also with our Terex warehouses across the world.”
The Fontanafredda plant also holds a training facility; another project created with the customer in mind. Cappello provides an overview of the types of training undertaken here: “We have onsite training, a multimedia room, a practical area with several crane simulators, and an outdoor testing yard where we have a climbing cage, dedicated to training for self erecting and climbing tower cranes.
“This is very important from a customers’ point of view as the climbing operation is very critical, so we conduct the training with very skilled personnel. We have a facility where we can perform a real climbing activity; we are teaching the theory but then also participating in the activity.”
The training programme is available in a number of languages, or a translator is supplied, with groups of eight to twelve people arranged according to skill level (pre-determined by an e-learning programme carried out by trainees before attending the course). Students receive certificates of attendance or ability.
This training is not confined to just Italy, the department works in tandem with the global Terex Cranes training team, Cappello says: “We are working toward fine tuning our training with the rest of the team; we are trying to harmonise with other bases across the world.”
As Martina Moritsch describes Fontanafredda as a ‘centre of excellence’, this can only be supported by Terex’s commitment to theoretical and practical training. She says, “Training on tower cranes is very important. The safety on the construction site is at the forefront of our minds, and we consider this right from the start when designing a new model. Worldwide, there is legislation being worked toward and parameters are set.”
So with such a repertoire of models, does the Fontanafredda plant cater to any particular market or region? Well, yes, Simone Moritsch says, all of them; “We are selling worldwide, so we have markets across the world.
“The self erectors, for example, are good for specific markets, namely Europe and Australia. It also depends on the model; each market has requirements, in terms of the capacity range. For example, in Italy, we have many requests for cranes within 100-200t; within this range you should have good performances, the best possible quality and safety devices.”
But how does the tower crane market currently stand? Simone continues; “We are starting to have a good increase in orders for self erectors; you must consider that at the start of the crisis, the smaller cranes were affected first. This means that we are probably moving away from the worst.
“In general, I can feel that requests are generally increasing in all ranges from the last period; the market is not at its best, but I feel quite positive that we are getting in to a better position.”
The strategic outlook for the company has changed, and the emphasis on operating in a glocal market has become an increasingly important part of the Terex business plan. Simone Moritsch explains: “We talk a lot about being glocal- local and global. We need to stay close to our main market or markets where there is real capacity potential, such as the emerging areas of Brazil or India.
“Therefore we need to give a structure that could be based on a synergy with other Terex firms, and we need to create an immediate network of distributors so we can really be glocal. This way, you can have the market more in your hands.”
While a new product is currently in the testing stages (that’s all I can say!), the Fontanafredda plant will continue to support the second hand and rental market, while still being relatively new to the area.
Cappello believes that supporting good relationships with customers, and ensuring orders are quickly realized by having a presence in as many areas as possible, is vital; “In this industry we have to reduce our down time as much as possible for the machines, therefore training and availability of spare parts are the two main issues that we should provide the best support to our customers with.”
However, the core of this plant is the production of new products, something that is clearly important to Riccardo Alba. He says: “We expect to release a number of new products around Q1 of 2011 from numerous ranges; we have the prototypes and are in the final stages before testing.
“There has to be more focus on research and development, application engineering and jobsite consultancy- this is good for customers as it creates added value, and this information can be fed to the R&D department.”
The introduction of lean techniques have clearly helped to make the Fontanafredda plant a safe and productive place of work; when a customer is looking to buy a crane in these difficult times, they want to be able to trust the manufacturer, and also be safe in the knowledge that their needs are a priority. Terex’s attitude toward personal relationships with their clients has served them well; indicative by the fact that the move into the second hand and rental markets was relatively smooth.
What remains clear is the importance of people at Terex, as Martina says: “The best thing in this company is the team”; however this workforce-focused brand also have the requirements of their customers at the forefront of every decision, so they can adhere to the promise of ‘lifting the world together’.
