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April 22, 2014
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Phoenix Contact: Automation’s Sustainable Connection

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Well-known for its connectors and thousands of other products that serve automated building and manufacturing systems, Phoenix Contact is also a home-grown leader in energy-management and sustainability.

By Rick Carter, Executive Editor

“Our business is automation,” says Doug Ferguson, Vice President of Americas Operations Services at Phoenix Contact USA, Harrisburg, PA. “And as we continue to innovate, we get more into energy-management. So if we want to convince customers to use our products for automation to be more efficient, what better way than to bring a customer in and show them where we use our own products in our own facility to be more efficient?”

As Ferguson suggests, Phoenix Contact’s multiple-ISO-certified Harrisburg operation (9000, 14000, 18000 and working toward 50001) is, indeed, a showcase for the company’s products and energy-efficient operations. The site is the Germany-based company’s U.S. headquarters—a 52-acre campus east of Pennsylvania’s state capital that includes offices, production and laboratory areas, a distribution center and 500 full-time employees. A stroll through the light-infused lobby of the site’s four-story office building highlights company achievements, from its product line and presence in nearly 50 countries to its focus on sustainability. There’s no missing the working electric-car charging station, for example, located behind the reception desk, at least not when a car is using it. Fitted with a U.S.-standard charger head co-designed by Phoenix Contact engineers, the unit is used to charge the company’s electric Smart car, which is driven right into the lobby through the building’s main automatic double doors. It arrives, charges and leaves in petroleum-free silence. It can also fill up at a solar-powered charging station in the company parking lot opposite the lobby.

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Vice President & General Manager Dave Skelton charges Phoenix Contact’s electric Smart car in the company lobby.

Phoenix Contact takes pride in producing subtle “wow” factors like this that employees say demonstrate the company’s ability to stay competitive through attention to detail and quality, organic growth and “staying close to our customers.” The style is handed down from the company’s world headquarters in Blomberg, Germany. Founded in Essen, Germany, in 1923, privately held Phoenix Contact enjoys strong sales—an estimated $2.28 billion (€1.64 billion) in 2013—thanks to intense customer focus via a product line that serves the rapid-growth needs of modern automated systems, especially those designed to manage energy. It offers some 60,000 items across numerous categories, including connectors of many types, cable, PLCs, industrial computers, power-supply units, Ethernet networks, relay modules and others that process infrastructures require in manufacturing and facility management. Most of the company’s core connector products are manufactured on automated machines custom-designed and built by Phoenix Contact in Germany.

Self-powered sustainability
The connection with eco-conscious Germany has helped Phoenix Contact’s Harrisburg operation become nearly a textbook example of sustainability in manufacturing. The site, which opened in 1984, has always focused on sustainability, says Ferguson, “but in the last three to five years we have seen a much bigger push behind it.” Sustainable strategies like recycling, re-use, energy management and others receive the same continuous-improvement focus as production. And like other companies that reap the rewards of sustainability, Phoenix Contact sees this focus as a logical way to strengthen its competitive stance.

“We’re a manufacturing facility in central Pennsylvania,” says Ferguson, “so we’re starting the race from dead last when it comes to being able to compete in a global marketplace, let alone the U.S. One way we can do that is to have competitive infrastructure and overhead rates. That all goes into the cost of the products we manufacture here. And we’ve been working for a while to keep the campus as energy-efficient as we can.”

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Mechatronics Technician Jason Bollinger adjusts one of the Harrisburg plant’s custom-made connector-building machines.

The campus’ buildings—all adjoining thanks to a recently opened 39,000-sq.-ft. production area in the middle—include the office tower, a 75,000-sq.-ft. distribution center and another 50,000-sq-ft. production/laboratory area that predates the expansion. Completion of the new area triggered a reinvigorated push toward energy efficiency that takes the facility close to energy independence.

Because the addition “almost doubled our manufacturing footprint,” says Ferguson, the company decided to incorporate on-site power generation. “We looked at the Marcellus shale/natural-gas opportunities here as well as solar and determined there was a bigger bang for the buck with natural-gas microturbines.” At the end of February, the site was commissioning a 1mW, natural-gas-fired microturbine system that will enable it to operate partially free of the grid. It went on line in March. The company will continue to use electricity from its local utility, says Ferguson, “but there will be times in the shoulder season when we’ll pretty much be able to sustain ourselves.” Not surprisingly, he adds, “80% of the controls to run the system are our own products.”

Despite choosing natural gas first, the company did not rule out solar. A second generation project, for example, calls for a 200-kW solar application to be installed on the distribution center roof. Designed and ready to go, its approval will depend on another payback analysis for 2015, says Ferguson. It will also take the Harrisburg campus that much closer to grid freedom. All electricity generated by the panels would be used to power the Harrisburg campus, which would allow it to be grid-free about 65% of the time.

A culture of energy management
Oversight of the company’s ISO-based energy-management systems and responsibility for managing waste streams falls to Jennifer Graham, Environmental Compliance Specialist. According to Graham, the company’s recycling programs cover all municipal waste—paper, plastic and glass—and various hazardous-material streams that include solder dross, electronic waste, scrap circuit boards and cable assemblies. Areas to deposit recycled material are numerous at the facility and plainly marked with color-coded bins. “Green is office paper, blue is single-stream plastic and black is for landfill trash,” says Graham, “which can be anything from food waste from our café to other waste produced on site that can’t be recycled.”

Under a recently adapted zero-landfill initiative, the company hopes to phase out all “can’t be recycled” material by 2020. Ferguson points to encouraging progress in that direction from 2010 to 2013 when the company’s percentage of landfill-bound trash dropped from 59% to 43%. “A lot of that was due to a re-education effort that began on Earth Day 2013,” he says, when the color-coding was updated, a lunch-and-learn on waste streams was held, and the company reviewed how material made its way into landfill trash. “We found that a lot of it still contained recyclable material,” some of which was easy to divert, like bathroom trash that was mostly paper. “Other material like cafeteria waste will be more difficult,” he says. “We’re looking at how we might compost that right here. Also, we know there are things we can recycle and get money back for rather than letting our recycling hauler take it away.” One is copper wire, which is now co-mingled with regular production scrap. “It’s still getting recycled,” adds Ferguson, “but if we do a better job, we can not only recycle it, but save some of the cost for us to process it.”

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Reusable plastic totes have replaced much of the cardboard that once traveled to and from Phoenix Contact’s Harrisburg operation, says Environmental Corporate Specialist Jennifer Graham.

Other keys to the company’s sustainable strategy include the energy-saving features of the facility itself as well as advanced approaches to product packaging. “Our new building is one of the few in the United States with triple-pane insulated glass,” says Ferguson. “In that building we also have fully automated blinds and daylight harvesting, which allows lighting to be higher or lower depending on amount of light coming through windows.” Other features in the new building include solar-powered flushless valves on all urinals and toilets (use of which is to be extended to the rest of the complex), and all buildings on site use only energy-efficient LED, T5 and T8 bulbs.

Time- and energy-saving initiatives in the packaging area include use of recyclable air pillows. “We just moved to these and away from the peanuts,” notes Ferguson, who says another big money-saver is their use of plastic totes. “All of our products that come in from Germany or China by sea container are packed in reusable plastic totes, and we use these for what we send back out. We’re also expanding use of the totes with some local suppliers.”

Phoenix Contact goes a step farther with a local lighting-manufacturer customer that buys large quantities of the company’s rail assemblies. “We once packaged everything for them using bubble-wrap and cardboard,” says Ferguson. “Then we developed a cart system where we slide the rail assemblies onto a [stainless steel] cart, roll it onto a delivery truck, drive it to their facility, drop it off and bring back the empty.” The customer rolls the stocked cart into its production area, slides the rail assemblies off where needed, and returns the empty cart to its shipping/receiving area for pickup and return to Phoenix Contact. “The customer loves this,” he says, “because they’re not opening a box, taking out packaging material and having to throw all of that away or recycle it. It saves them many minutes of labor just getting to their product.”

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A cart stocked with Phoenix Contact rail assemblies awaits shipment. The unique shipping solution eliminates all packaging material, saving time and money for both, says Vice President of Americas Operations Services Doug Ferguson.

Clever solutions like this exemplify Phoenix Contact’s equally strong commitment to customer needs and sustainable solutions, says Ferguson. And it’s this approach, he believes, that will enable the company to realize its master plan in Harrisburg, which calls for further additions to production and office space. “We’re here for the long haul,” he notes. “And doing these types of things to remain competitive will get us there.” MT&AP

How Phoenix Contact Builds A Sustainable Workforce

It’s a familiar refrain: “We need people in production and engineering,” says Dave Skelton, Vice President & General Manager of Development and Manufacturing for Phoenix Contact at the company’s U.S. headquarters in Harrisburg, PA. And like many U.S. manufacturing operations, Phoenix Contact has had difficulty filling both skill sets. The problem became particularly acute in production when more operators and technicians were needed during a 2011 expansion. After consulting with company headquarters in Germany, Skelton and his team decided an apprenticeship program could solve the problem. Particularly important, says Skelton, was the need for a program in mechatronics, the interdisciplinary field that combines mechanical and electrical engineering with computer science, which “is the hardest skill for us to find.”

The absence of an existing mechatronics apprenticeship program in the U.S. meant the company would need to create its own. Tapping their experienced staff and local community-college partners (who provided input on “general-purpose courses like thermodynamics and [standard] 61131 PLC programming,” according to Skelton), a four-year program was designed that features approximately 8000 total training hours—600 in the classroom, and the rest on the job at the Harrisburg facility. A full-time trainer was hired to help administer the apprenticeship program and assist with employee training in other areas like IPC (Institute of Printed Circuits) standards and safety.

To fill the apprenticeship classes, the company had to look no farther than its own operation. “We found a number of employees here who were interested and willing to make the commitment,” says Skelton. “The attraction is that while you’re in school, you’re still at work, which means you’re still being paid. What you learn in class you apply immediately on the job.” Another attraction was that upon completion of the course—now registered with both the federal and Pennsylvania-state governments—graduates would receive journeyman papers. The first group of five graduated in mid-February, says Skelton, who adds that he hopes to expand the program into other areas, including quality and maintenance.

Spurring interest in engineering takes a longer view and has a longer history at Phoenix Contact. Centered on a paid internship program begun in 2006, the company’s quest for engineers is aided by its relationship with several local colleges and universities whose students participate year-round. “Last summer we had 22 interns in development manufacturing,” says Skelton, who calls the program a win for the company and interns because it involves “real work,” not tedium.

Interns receive a well-rounded view of the company by starting in production assembly and moving through more complex operations the longer they’re aboard. “This way we learn about them and they learn about us,” says Skelton. “Right now we have about 10 who work here part-time, and when they near their final year, we can make them job offers. By then, everyone knows each other and we know there will be a fit. We do a lot of our recruiting that way, and we have no trouble filling our internships.”

Other company-driven initiatives like its annual Engineering Week also help Phoenix Contact stay ahead on hiring. This event mainly “celebrates our engineers,” says Skelton, but also includes community-outreach efforts to local public schools as well as universities. A highlight is the week-long engineering-themed course created by Phoenix Contact engineers who teach it to a local middle-school class. The event also features a company-sponsored contest where middle- and high-school students are given Phoenix Contact controllers and connectors, and tasked with creating working machinery, winning examples of which are on display in the Harrisburg lobby. This effort has since been expanded to the college-level.

These outreach programs “were not intended to bring more people into Phoenix Contact directly,” says Skelton, “but they have given us great awareness in the community and the fact that we have technical careers available. We are, however, seeing a lot more people who want to come work at our company. There’s an investment in each of these programs, but the rewards are great because the employees we get are committed, they’re knowledgeable and they’re good people. The cost of recruiting is expensive,” he adds, “so the bar to entry is not all that high for what we do when you consider the benefits.”

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