Zenar embraces vertical integration and customization.
Adapted from an article in Manufacturing Today.
John A. Maiwald and Brad McKendry founded Zenar Corporation in 1972. Both had previously worked for a crane manufacturer near Milwaukee and were knowledgeable about engineering though neither had a college degree.
They founded Zenar in a small building in Oak Creek, Wis., a bit south of Milwaukee, initially servicing and rebuilding other people’s cranes. Over time, they began to manufacture parts for smaller cranes – ranging from one to 10 tons – and later began manufacturing cranes with some outsources components.
Today, Zenar is a vertically integrated company that manufactures all its own components and builds customized cranes that can lift from one to 250 tons. The company is still located in Oak Creek but now works out of a 120,000-square-foot facility with five manufacturing bays that sits on a 22-acre property. John C. Maiwald, grandson of John A. Maiwald owns Zenar.
Zenar manufactures overhead cranes mostly used by steel and aluminum manufacturers. Its smaller cranes, in the 25- to 50-ton range, take about six months to manufacture and larger cranes take about nine months. In a typical year, Zenar manufactures about 40 cranes that it sells in the United States, Mexico and Canada.
All cranes manufactured by Zenar are customized for size, tonnage, speed and other attributes. To manufacture a crane to a customer’s needs starts with asking “hundreds of questions,” Vice President of Sales Tom Kujath says. Next, Zenar uses modeling software to analyze the design before building.
“We are implementing the most up-to-date 3D SolidWorks software,” Kujath sys. “When we design the crane, we look at fatigue levels and where there might be weakness. We can rotate it left and right and can click on each part of the crane and assemble it (on screen) like Lego set. We can look at things and discover potential problems before they are there.”
While there are hundreds of companies that assemble cranes, Zenar is one of only two or three that manufactures all its own parts. “We are paying more for raw materials and labor but you get a highly controlled product put together from one company,” Kujath says. “Because we do everything in-house, we control quality much better than other companies that outsource parts.”
Because it sells mostly to steel and aluminum manufacturers, “that allows us to specialize and produce a product that is more tailored to what the customer needs,” Kujath says. “Because it’s all done in one location, we can assemble it and test it. The customer can visit out facility and witness tests before we disassemble it and ship it.”
That dedication to quality is what separates Zenar from the competition. “Our cranes are built to last,” Kujath says. “They have a great reputation. They move molten metal, blooms and coils. A lot of them have to work in humid, hot, dirty and dusty places.”
Zenar takes great pride in the quality of cranes it manufactures, so Kujath finds it frustrating to be compared to manufacturers that product lesser-quality cranes. “Trying to explain the difference is increasingly hard. We work to educate customers on why we are worth the premium versus vendor X,” Kujath says.
Zenar’s aim to make “world-class products at a fair price,” Kujath says. “Yes, we have lost orders because we are not the cheapest. Two years later [those buyers] call me and say, ‘This crane [from a competitor] is falling apart.’ We build a crane to last, not just to last through the warranty. If a crane goes down in a steel mill, they lose hundreds of thousands of dollars a day. We stand behind our cranes 100 percent.”
Upgraded and Conservative
While the basic mechanics of a crane haven’t changed, electronics change substantially every three to four years, Kujath explains. Cranes are now becoming semi-automatic and even completely automatic. “We are starting to dominate that field,” Kujath says.
Zenar’s engineering department keeps track of upgrades in technology and incorporates them into cranes. The company is also in the midst of upgrading its website.
The company has service centers in Oak Creek, Louisville, Ky., and at the beginning of 2019 opened up a service center in Alabama. Zenar is considering opening up another service center in the rust belt.
In many ways, Zenar takes a conservative approach to business. The company hasn’t spend any money on advertising in the last 20 years, Kujath says. “We live off our name – word of mouth and people buying the product and seeing it,” he says.
The company also avoids borrowing. “We don’t buy anything unless we have the cash to buy it,” Kujath says. “We don’t take out loans or overextend ourselves.” Recently, Zenar bought new gear cutters and grinders and a new plasma-cutting table.
Zenar also believes in transparency. “We have a small family culture – anyone can talk to the owner any day,” Kujath says. “Anyone is welcome to come to the plant and tour it and see everything.”
For the last two decades, U.S. steel mills have been shutting down and orders for overhead cranes were limited to existing steel mills. That has changed since President Trump took office and instituted tariffs on oversea metal, particularly from China.
“For the last few years, all these steel and aluminum companies are building brand-new steel mills,” Kujath says. “$1 and $2 billion steel mills. It’s unbelievable. You are talking about mills that will employ 200 to 1,500 people and where average salaries are $72,000 a year. The steel industry hasn’t seen growth like this since the Carnegie days, back when the United States was the king of steel.