05horner

28 ELECTRICAL APPARATUS / MAY 2015

Model motor shop expansionHow an Indianapolis company used all the resources at its command

for a state-of-the-art expansion

By Kevin Jones, EA Senior Editor

INDIANAPOLIS—A company that has acquired five other companies in the past 20 years—and has received a tax break from the city in which it’s headquartered so it can expand even further—must be doing something right.

That’s the position in which Horner Industrial Group of Indianapolis finds itself as it completes an expansion that’s adding 20,000 square feet to its motor shop.

With the expansion have come sev-eral new pieces of equipment that will expand the company’s already-broad service capacity even further. And it was made possible, in part, by a tax abatement granted by the City of In-dianapolis.

One thing that makes the Horner motor shop expansion unusual, apart from the tax arrangement, is that the expansion has been supported by other Horner divisions that provided materi-als and components for the project that most motor shops wouldn’t have been able to provide on their own.

This is a company that knows how to use the resources at its command.

All of the lighting in the new ex-pansion, for example, came from the Horner Lighting Group, which de-signed and built the LED linear lights that provide bright, even lighting

throughout the facility. (The effective-ness of the lighting is apparent in the photo on this month’s cover.)

The Lighting Group designed the lighting controls as well. In the new ex-pansion, lights will be dimmed to 25% of maximum when no one is present, and motion sensors will brighten the lights when someone enters. A control panel on the wall provides real-time monitoring not only of the lighting but of every other electrical process in the facility as well.

The lighting fixtures were designed and built by Horner’s Fan & Fabrica-tion division—an enterprise whose expertise in high-tolerance machining and laser-cutting has brought it busi-ness far outside that of a traditional machine shop. The Fan & Fabrication division also built the steps and railing leading up to the new catwalk.

Thanks to these synergies, the com-pany stands poised to expand further, and there is certainly room for it to do so. The company owns about two acres of vacant land to the west of the motor shop and a total of about ten acres at its primary Indianapolis location.

The company has grown steadily over the past 40 years, even with down-

Horner Industrial’s new expansion can be seen through the doorway in the upper left corner of this view of the original motor shop.

The new motor shop expansion includes a new test panel, an isolated test bed with an accom-modation for vertical solid-shaft motors, an observation room behind shatter-proof glass, and, overhead, a 50-ton crane.

turns in 2001 and 2009, and customer service remains its primary focus. There are constant requests for work on larger equipment, and for the company to fulfill this demand it had to add both crane capacity and square footage.

There was also growing demand from locations outside of Indianapo-lis. Horner Industrial operates satellite service centers in Ohio and Kentucky as well as in Indiana, and established customers in those areas were asking for more.

“We started getting requests for larger work,” explains company owner Alan Horner. “We looked at how much ca-pacity we had.” Then they determined what they wanted to be as a service business. “We decided after we repair the machine, we want to be able to test it as well,” so an expansion of testing capabilities appeared necessary.

“People were asking, ‘gosh, when can you do this?’” sales and marketing manager Terry Thorne says of the plan to expand services. Growing customer demand had previously been the impe-tus for opening a service center in Lou-isville, and, Thorne continues, “that same customer desire was a strong mo-tive for the addition—plus, we needed the space. We can do very large equip-ment,” Thorne says, “and that helped us make the decision for an expansion.”

Management spent months working on a layout to make sure it would fit the company’s needs and streamline workflow. As with many other service operations around the country, Horn-er’s shop had evolved over the years and workflow patterns were less than optimum.

Creating the perfect workflow would have meant starting over or moving to a different location. Management was not interested in relocating, because the company operates several facilities in the vicinity of its primary location and moving those operations would have been impractical. What’s more, the City of Indianapolis was willing to offer an incentive in the form of the tax abatement for the company to stay (see accompanying box on page 31).

Planning the expansion took about 18 months. Construction took six.

What was it like working around the construction during the expan-sion? “It was horrible,” says Horner. “It was a huge inconvenience for everyone, including our customers.” And it wasn’t cheap. “It’s a huge in-vestment,” Horner acknowledges.

During construction, the company lost the use of three shipping and re-

ceiving doors and had to install a new overhead door in the side of the exist-ing building to maintain access to a 25-ton crane. Significant logistical effort was required just to keep work flowing. Jobs that were in process needed to be stored, and there were further delays as parts were moved to a different build-ing to make room for work in progress.

And yet through it all, the company sustained its pace. “We maintained full capacity here,” says Horner. Feeding work to the satellite shops is “pretty continuous” in the best of times, he

crane. “If we can get it in the build-ing, we can work on it,” says Thorne, and with the new test panel “we can go from 0 to 13,800 volts without any bumps.” To accommodate the 50-ton loads the new crane can lift, the foun-dation in the expanded part of the shop is 10 feet deep, the floor is eight feet thick, and the fittings for the cranes ex-tend 10 to 12 feet beneath the surface of the shop floor. An 85-foot drive-in bay can accommodate a semi-trailer.

Next to the new test panel, “we put in a new isolated test bed, and we made an accommodation for vertical solid-shaft motors,” Thorne explains. “When we do a vibration test, we can have it certified by a Level 4 vibration analyst. There are very few in the country who can do that.” The company has three Level 4 and three Level 3 vibration analysts among its employees.

An enclosed control room is separat-ed from the test area by shatter-proof glass. This room is for customers who want to come and observe tests in the shop. Also, “we will be able to video-tape so a customer can view his test live, without being here,” says Horner. Eventually the company will have the capability to webcast tests for custom-ers who want to observe tests remotely.

Already the expansion has resulted in changes in the way things are done, and as thorough as the planning was, Horner expects to make additional changes.

Management spent months working on a layout to make sure it would fit the company’s needs

and streamline workflow

Company owner Alan Horner demonstrates the control panel that provides real-time moni-toring of all electrical processes in the shop, including the new lights. The control was de-signed and built by Horner Industrial’s Lighting Group.

Please turn to next page

ELECTRICAL APPARATUS / MAY 2015 29

says, but the expansion didn’t add to the volume.

Maintaining the flow of work was essential; after all, as Horner explains, “material handling is the key to our business.”

With the expansion, the company has increased the size of its local shop staff by eight full-time employees—from 35 to 43. Also part of the expansion are a new 50-ton crane, a new test panel to test up to 10,000 hp at no load and up to 13,800 volts, and a water-cooled dy-namometer to load-test up to 2,000 hp. The size of machines serviced will be limited only by the capacity of the new

The company’s organizational struc-ture will be altered to ensure the new capabilities are maximized. “We need more people,” Horner says, adding the common plaint, “but finding good peo-ple is difficult.” As of mid-March, the company had six job openings.

The new lifting and testing capaci-ties mean Horner can service higher-horsepower motors for current cus-tomers and make a stronger pitch to potential ones.

“There won’t be new departments, but there will be more defined lines,” says Horner. “There’s no question that

on the management side we’ll have to make some changes.”

The company is performing machine modifications for motor manufacturers, and some of these manufacturers have expressed an interest in Horner’s test-ing. Motors have been shipped to Horn-er Industrial from overseas for testing, and this is something “we’re definitely going to pursue,” says Thorne.

Over the years, Horner Industrial has tried to be a one-stop shop that can fulfill most of its customers’ needs. This doesn’t mean the company is ev-erything to everybody. Specific areas of expertise have been chosen, and

the company has tried to hire the best people available to lead its specialized segments. This has been true of all the company’s divisions, from Fan & Fab-rication to Thermal Spray & Industrial Coatings.

“One of the things we’ve tried to do is create an atmosphere where a cus-tomer can come in and get the service he needs” in one location, Alan Horner says. “The more you can do for a cus-tomer, the more loyal he’ll be.” Seek-ing new customers isn’t a high prior-ity, Horner says, because “we’ve had so much work at all of our locations.” What advertising the company does is generally limited to help wanted.

The expansion is one indication that Horner Industrial is committed to its location, which lies less than a mile east of the heart of Indianapolis at Monument Circle. It’s a commit-ment the company has demonstrated for many years.

SHOP EXPANSION continued


Mary Horner recently celebrated her nine-ty-third birthday with a motor-shaped cake baked by Classic Cakes of Indianapolis. —Horner Industrial photo.

In this panoramic view of Horner Industrial’s entire motor repair shop, the expanded part of the shop can be seen to the left.—Horner Industrial photo

Alan Horner (left) and Terry Thorne stand among work in progress at the Horner Industrial motor shop. Seven hundred motors pass through the motor shop in a typical month.

Horner Electric was founded in In-dianapolis in 1949 by Alan Horner’s parents, George and Mary Horner, and has grown to what it is today through numerous expansions and acquisitions. George and Mary were the company’s first two employees, and company lore has it that Mary once cured a stator in her kitchen oven. George Horner, who served as a sergeant in the U.S. Army Please turn to next page

ELECTRICAL APPARATUS / MAY 2015 31

during World War II, died in 2003. Mary Horner recently celebrated her ninety-third birthday.

The company has seven operations in Indianapolis at four locations. The company also operates facilities in Cincinnati, Fort Wayne, Louisville, Terre Haute, and Springfield, Ohio. “The other shops are feeder shops to this shop when it comes to larger

work,” explains Terry Thorne. The main Horner facility has been at its present location since 1969. The latest expansion is the sixth expansion since that year. The company currently em-ploys about 360 people.

“All of the shops are about two hours away” from Indianapolis, Terry Thorne explains. “It seems people are willing

How Horner Industrial received its tax abatement

The recent expansion of the motor shop at Horner Industrial has been aided by a tax abatement granted by the City of Indianapolis in return for creating new jobs.

Requests for tax abatements in Indianapo-lis are evaluated by the city’s Metropolitan Development Commission. Other companies that have recently received tax abatements from the city include engine manufacturer Cummins, Inc., for a distribution headquarters downtown, and the retailer Lowes, for a cus-tomer service center on the city’s perimeter.

Horner Industrial’s primary location is less than a mile east of Monument Circle, the heart of Indianapolis’s downtown. The area in which the company is located was historically industrial, but much of that industry has dis-appeared. Many in the city’s government had come to see the neighborhood as needing an economic boost. Today the city is effectively seeking to reindustrialize a formerly indus-trial zone, and Horner Industrial has been a beneficiary of this impulse.

The neighborhood in which the company’s main facility is located was designated an Economic Development Zone, and in 2007 the Fan & Fabrication division applied for a tax abatement. “We learned the ropes” in that process, explains Tom Berkopes, Horner In-dustrial’s chief financial officer.

The application for obtaining a tax abate-ment for the Fan & Fabrication division went

smoothly, and it didn’t take long for the com-pany to fulfill the employment requirement. The experience served the company well when it came time to apply for a tax abate-ment for the motor shop expansion. The com-pany applied for the abatement in May 2013 and received approval in November of the same year.

There are two facets to a tax abatement like the one Horner Industrial received: it applies to both real property taxes and to personal taxes. “We had to spend certain amounts of money” under the terms of the agreement, says Berkopes, “and we met that handily.” The company is “well on the way” to meeting the employment requirement as well, he adds.

Once a company is granted an abatement, it must report employment annually. The re-cipient of the abatement starts with a base number—the number of people currently em-ployed—and reports the number of new em-ployees above that number. The tax abatement expires after five years.

At the beginning of Horner Industrial’s tax abatement application for the motor shop ex-pansion, there were around 35 employees at the primary location. The Industrial Coatings division, as a new venture, reported all 10 of its employees as its base. Without naming a precise figure, Berkopes says the number of employees the company is required to hire to fulfill the terms of the new tax abatement is “a significant increase.”

What’s it like to go through the application process?

“They ask you a lot of questions about the project—how much you’re going to spend, how many you’re going to hire,” Berkopes says. “Otherwise it’s pretty boilerplate.” Company officers had to go before a council at Indianapolis’s Dept. of Metropolitan De-velopment for approval, but the experience with the Fan & Fabrication application had taught them what to expect.

Politics were not a consideration in the fil-ing process. “It’s very straightforward,” says Berkopes. The city has an incentive to make the process as uncomplicated as possible, because “a lot of people are competing with Indiana” in the tax abatement game, Berkopes points out.

Horner Industrial has invested more than $20 million in the primary location over 20 years—a figure that served the company well during the application process.

In addition to asking about Horner Industri-al’s plans for spending on the physical expan-sion, the city also wanted to know which local companies Horner does business with every day. The company responded by listing ma-chinists, trucking companies, a bearing sup-plier, a steel company—even the restaurants where Horner employees go for lunch.

On the whole, the experience was straight-forward and held no surprises—largely because Indianapolis has streamlined the process to keep companies from leaving the city. When it comes to expanding a business, Berkopes points out, “it’s a lot easier to get out in the cornfields and do this.”—KJ

to send their work out about two hours.” The exception is large equipment that might be shipped to the Indianapolis shop from much farther away.

The satellite shops are key to the company’s strategy to have facilities near customers for quick turnaround on emergency service or in case a

customer wants to come by and see equipment being rebuilt. The recent expansion gives Horner Industrial the capacity to repair large equipment that can be easily shipped using the compa-ny’s fleet of trucks. Each satellite shop is self-sufficient and has the authority to decide when work needs to be sent to Indianapolis.

Industries served by Horner Indus-trial include steel, utilities, municipali-ties, food processing, aggregates, oil refiners, pipelines, and hospitals and universities. “I don’t think there’s any industry we don’t touch,” says Alan Horner. Adds Terry Thorne, “We’re not your normal motor repair facility.”

A sense of corporate identity at the company runs strong. “Each loca-tion employs the Horner way of do-ing things,” says Thorne. Customers can expect the same level of service at all locations, he says. “We call it the Horner way.”

“I think at all shops you get the same level of service,” adds Horner. “If one loses, we all lose.” What unifies the var-ious divisions is a common objective. “Quality has always been our goal,” says Horner. “Each shop is proud, and they all want to keep the work at their shop, but the larger stuff is sent here.”

“We try to be a single resource for our customers,” adds Thorne, as the company offers both new and remanu-factured products in addition to repair. The strategy seems to work. “We have one hell of a loyal customer base,” Thorne says.

But in the end, the quality, the breadth of service, and the customer loyalty owe to much more than an ex-panded shop. “Say all you want about the facilities,” says Horner. “It’s about the people.” EA

Ken Jannotta Jr., manager of research & development at the Horner Lighting Group, demon-strates the various types of lights the company is capable of producing. The Lighting Group designed and built the lights for the shop expansion.

SHOP EXPANSION continued


—Photos, unless otherwise credited, by Kevin Jones and copyright 2015 by Barks Publications, Inc.

How Horner Industrial earned its safety qualification

Expanding its motor shop isn’t the only way in which Horner Industrial has changed in re-cent months. The company has also earned a safety qualification that streamlines the pro-cess by which it does work for customers that requires safety training.

The qualification process is administered by the Metro Indianapolis Coalition for Con-struction Safety, Inc., or MICCS, which serves as a clearing house for safety standards.

Under the plan, rather than undergo safety training with each company you want to do work for, you satisfy the standards of MICCS and you don’t have to go through safety train-ing for each customer.

“Most companies require prequalification,” explains Amy Fletcher, Horner Industrial’s Environmental, Health & Safety Manager. “Several companies we do business with want to see our certifications.”

The MICCS Certification Program has three statuses: Certified, Qualified, and Participant. Certified, the highest level, means that a com-pany exceeds OSHA standards. Qualified is the standard that most owners and construc-tion end users require. It means that a com-pany meets the minimum criteria, which are based on OSHA standards. A Participant is

a company that has submitted an application but does not yet meet the minimum criteria.

MICCS isn’t just for Indianapolis firms. Among its members are owners and contrac-tors throughout Indiana. There are also sever-al member contractors outside of Indiana that have earned MICCS certification so they can work on sites in Indiana.

Certified status requires fewer reported incidents than Qualified status and is gener-ally required by companies in industries with stricter safety standards, such as mining and nuclear energy.

Horner Industrial applied for and received Qualified status. Large general contractors might have an incentive to strive for Certified status; Horner Industrial has no immediate plans to do so.

Becoming qualified requires that the ap-plicant fill out a lengthy questionnaire that asks for information on the applicant’s safety record, such as incident reports from the ap-plicant’s office of human resources. Also re-quired are written company policies covering such things as personal protective equipment, crane use, and the use of hazardous chemicals.

“Once our safety program qualifies, then they come into our home office” for an au-dit, Fletcher explains. Applicants are provided with advance notice of what information the auditors want. There are no surprises.

In addition to examining the safety practices an applicant already has in place, MICCS also prescribes certain things that must be covered in written safety policies. If an ap-plicant doesn’t have a written policy covering the use of ladders, for example, MICCS might require that such a policy be developed and put in writing.

Horner Industrial applied for MICCS quali-fication in 2013 and received its qualification in November 2014. Now the company can ex-pect an audit by MICCS every year. This isn’t a “home audit”—an audit done at Horner’s facility—but more of a review based upon re-cords kept by Horner.

Some companies would be difficult for Horner to work with if Horner didn’t have Qualified status, because Horner would have to undergo the customer’s safety training at its own expense.

“And that doesn’t show up as a line item,” observes Horner Industrial’s chief financial officer, Tom Berkopes. “It’s just lost billable time.” There would be the cost of lost time in addition to the cost of training.

But earning Qualified status from MICCS is about much more than saving money. More importantly, it’s about ensuring the safety of employees. “I would like to see more compa-nies putting—as Horner does—safety above production,” Fletcher says.—KJ

05horner

Documents

Transcript of 05horner