The Influence of Metal Coil Processing on Roofing - PODCAST TRANSCRIPT

Editor's note: The following is the transcript of a live interview with MetalForming Business Development Director Chad Rowe. You can read the interview below, listen to the podcast or watch the recording.

Intro: Hello and welcome to another Lunch & Learn from RoofersCoffeeShop. My name is Heidi Ellsworth, and we're here today to talk about something that you might be wondering, "How does that really work with our company?" Well, there is some great information and really this is all about something that you need to be aware of in that front office to really know how to help grow your business and answer questions from your customers.

Heidi J Ellsworth: So we're going to get started today. First of all, this is a Lunch & Learn so there is a discussion sheet. Please be sure to download that. Get with your team, have some lunch, watch this fun Lunch & Learn and fill out the discussion form because afterwards you can take a test online. It's a quiz. Doesn't take very long, and once you complete it and you do so well with it, you'll get a certificate of completion and get entered into a contest for a free lunch, so be sure to take that time and get ready as you are watching this. So today, I am very, very honored to welcome Chad Rowe to talk about coil processing. Chad, welcome to this Lunch & Learn.

Chad Rowe: Good afternoon, and I want to know who's buying the free lunch.

Heidi J Ellsworth: RoofersCoffeeShop. We're buying a free lunch for everybody out there.

Chad Rowe: Outstanding. Well, if you're in the Atlanta area I highly recommend that you pick Rathburn Steakhouse. That's probably not going to meet... It's probably going to be a little budget.

Heidi J Ellsworth: Well, you never know. They could also get ahold of you and maybe go to lunch and talk about coil processing.

Chad Rowe: Let's do that.

Heidi J Ellsworth: So Chad, let's start with an introduction. If you could introduce yourself, tell us about what you do with MetalForming and a little bit about MetalForming.

Chad Rowe: Sure. I'm Chad Rowe. I've been with MetalForming for a little more than 25 years. I think that's probably pretty rare these days. I'm the last of that stubborn generation I suppose is the best way to put it. I started my journey as a service technician and have moved and done a lot of things throughout the company of MetalForming. So MetalForming, a little bit about MetalForming... Oh, and I've been in the sales role capacity for the last 10, 11, 12 years. My current position is business development, so a lot of different hats. Actually, earlier I was just outside working on a customer's [inaudible 00:02:39], so I still get pulled into those jobs as well.

Chad Rowe: So MetalForming is North America's leading supplier of architectural sheet metal work equipment. MetalForming started in 1997 with a single owner and really kind of changed the industry with folding technology, shearing technology and as those systems were being sold and developed, there was a demand and a need for additional products. And one of those products that we're here to talk about today, it was the coil processing systems. So the 10-foot folders and shears, hey, that's great for everybody who wants to purchase 4 x 10 flat sheets or maybe even up to a 13-foot flat sheet, but what if I want to take advantage of purchasing in bulk and then processing my own coil? We'll talk a little bit more about some of the advantages a little bit later regarding those bulk purchases, but really that history starting in the late '90s.

Chad Rowe: The coil processing component was always thought of that it could only be done by some of these major manufacturers, and truly that was really the case simply because of the price point that that equipment was at. I mean, it really wasn't for any other reason. So MetalForming partnered with the company Schlebach and really changed who could purchase and take advantage of these solutions. The first slit-to-width and cut-to-length machine that we offered in the... Again, this is the late '90s. We offered it for under $30,000. Yes, that was one of the wonderful advertisements. It was 29,995, and then it could be paired with a manual 10,000 lb decoiler, so really for approximately $35,000 a customer or someone could get started with bulk coil processing where those larger manufacturers were spending upwards of 100,000, maybe even more depending on what their needs and how sophisticated that equipment was. So making a piece of equipment that was robust, rugged, met those customer demands at the right price point really opened up the doors to who could be into coil processing.

Chad Rowe: Those early days really was the metal building manufacturing because they had such a need for longer components, and then once that coil processing kind of became a... Or known that it was capable and possible for everyone, then that shifted so that the roofing contractor also could take advantage of this coil process.

Heidi J Ellsworth: And MetalForming has been on the front line, working with roofing contractors ever since. So I love this, and I think this is really important for contractors as they differentiate their business, as they look at adding, but also just understanding from the purchasing side. So let's get started. Let's first of all review our three learning objectives, and our three learning objectives will be history of coil processing, why coil processing performance is important and why is having your own ability for the roofing company to process coils important for the future. So those were our three learning objectives, starting with our very first objective, history of coil processing. Chad, we would be not doing our job if we didn't just first of all say what is coil processing? Can you tell everybody what coil processing is?

Chad Rowe: Yes, absolutely. So generally speaking, materials used in the metal building or roofing contractors world is going to be steel, aluminum, copper, zinc. Those are not so common, and those typically are not... It's not as common to purchase those in a coil form. If they are, they're in a much smaller specific to standing seam application, but they are available in coil. So what is this coil processing? Well, typically this master coil is going to come in an approximately 48-inch width with a capacity or a weight of about 10,000 lbs. That's typically what's considered a master coil, and just like going to your favorite Costco, BJ's, Sam's Warehouse Club, you get a better purchase price because you're the one that's processing that material.

Chad Rowe: So I'm going to take this coil then and I'm going to process it into whatever my needs are. So with the coil processing system, I may just make my own 4 x 10 sheets, but I get that advantage of the full purchase with coil. I can also then with these coil processing pieces of equipment, I can also slit that material into my desired width and through CNC programming I'm able to cut that material to my desired length as well. So with those systems then, originally of course they all started with all manual types of operations. Today it's possible to have some semi-automated operations all the way to fully automated coil warehouse and slitting, cutting, blanking systems. So whatever your needs are, if you are just starting out today or you're not sure if this is the right fit, "Where should I start?" Those are always great questions. Taking advantage of that purchase of bulk raw materials and then paying yourself, essentially, for doing the process.

Heidi J Ellsworth: Yeah, and for roofing contractors out there, this is going to be metal roofing, it could be HVAC, it could be accessories, it could be siding. I mean, there's just so many different where coil processing being able to have those different lengths and be able to process your own flats or your own things are important. So let's talk a little bit about the timeline, kind of the history, like we said, our first learning objective, history of coil processing. So what is the timeline of coil processing in the architectural sheet metal market? When did this all start?

Chad Rowe: So really this all started approximately 1998. I mean, again, it was available previously, but really it was only those major manufacturers that were taking advantage of it, systems coming from some company names that everybody knows, some Bradbury, maybe some Braner, Iowa Precision and Red Bud. These are still today leading suppliers of coil processing equipment but on a much larger scale. So in that late '90s, the birth of the affordable coil processing solution was brought to the North American market, which really made it affordable so that other people besides those people with big deep pockets could take advantage of bulk purchasing and processing their own materials to the widths they need or even if they just wanted to make the blanks.

Chad Rowe: The other big benefit that this really gives that contractor is you now have more control over your inventory, you have on demand, you're able to make one piece of material, one piece of trim, whatever your needs are. So it gives that contractor more flexibility. Then as we move through the early 2000s and into approximately about the mid 2000s, came along the ability to use a semi-automated coil processing systems where the slitting knives were automatically changed by the system, jobs could be downloaded into that control system and the machine then would take care of some of those manual functions of positioning the slitting knives, "What are my jobs? How many pieces?" And keeping track of all of that. Excuse me just one moment. As a lot of us are this time of year, I've been in... Well, last week I was in four different states in three different days so a lot of different temperature changes. Excuse me.

Chad Rowe: So getting back to this semi-automated coil processing, the other piece that came along with that really was the ability to use software to optimize and get the best usage of that coil. And previously those softwares were available, but typically with the manual operation people didn't want to take advantage of it. So with an automated system or a semi-automated system, it's very necessary then to get the best usage of your materials to utilize some piece of software to help you. So then approximately into the, oh, let's say the mid 2012 to 2015 came the ability with an automated coil warehouse system so that not only now am I positioning the slitting knives in an automatic function, I'm also able to use my coil warehouse, one, for storing my coils. I have to store coils somewhere, so I might as well put them in a usable position and put them in this coil warehouse where the system then is doing all of the work.

Chad Rowe: So as far as a coil comes in, I touch it one time, I bring it in and I can load it directly into a coil warehouse system. Then once it's in that system, then I don't have to touch it again till that coil has run out, so the fully automated systems then are going and picking up that coil when it's the right time and staging it so that it's next in line and then is bringing that coil into the slitting, cutting solution and processing that way. Film could be applied, barcode labels can be applied for further downstream applications where I may want to use a barcode to tell my next process what to do or what it is, "What is this piece of flat material that I have?" So there's a lot of functionality, and the way that coil processing has changed over the years really has changed dramatically.

Heidi J Ellsworth: Yeah, and when you are looking at this and I'm thinking about for the contractors out there who are watching this, this is really across and you kind of said this, but across national manufacturers than regional manufacturers because there's a lot of regional and then there's very localized manufacturers that we kind of call sheet metal shops. But in this history, like you said, it's gone from the national all the way down to now the sheet metal shops and to contractors having their own sheet metal shops with coil processing. Talk a little bit about what you've seen in your experience of the contractors really starting to bring this in-house.

Chad Rowe: So it's typically there is a huge value in being able to purchase coils, and I had indicated that this master coil commonly is 48 inches wide by 10,000 lb coil. You don't have to always take that. You can specify that you want that 40-inch wide coil as 3000 lbs, maybe it's 5000 lbs. Those limits can help you with storage, again because I'm not storing such a large coil and then also the other equipment that you might need to move such a coil. Maybe currently today you only have a forklift that has capacity up to 5 or 6000 lbs. You don't have to jump all the way immediately to that big 10,000 lb coil.

Chad Rowe: So as far as that contractor, how and why has this become important? It's really truly... There is cost benefits, but it is truly about taking control of your job. Typically the metals component of any job site is always behind, and it's simply because there are multiple processes, things that have to happen before the metal gets to its term. So starting from the ground up, well, if the weather doesn't cooperate then there's delays with the foundation. If there's other delays... So by the time it gets to the metal, those contractors are always behind. They start off behind the eight. So having the ability to really, truly control their job and make the materials that they need and the number of pieces when they need them and in a rapid controlled environment really gives them an advantage. Every job site has mistakes. Every job site has mistakes, and the ability then to react when I need one or two pieces can make or break when you get paid for that job.

Heidi J Ellsworth: Yeah. So I love that, and it makes sense to me why contractors would start bringing this in-house. But let's go to our second learning objective, why coil processing performance is important and let's talk a little bit about what the contractors are getting if they bring it in. And I really see this, Chad, in two different ways. One, if they are bringing that into their production and they have their own coil processing or as they are talking to their local sheet metal shop, their local or your more regional or national, on really understanding why good coil processing is important for the end product. So if you can start with why it's important, and let's start with material quality and consistency. What does it mean to have really good coil processing and what do they need in order to get that?

Chad Rowe: So there are... Oh my goodness, you asked such good questions. You always ask such good questions, and my brain goes to all over the place with a lot of possible different answers. So going again, using the old adage, what you put in is what you get out. So one, it starts with a good partner of where are you buying these coils? Who is your supplier of those coils? There are a lot of different suppliers out there, and as a roofing contractor you may be certified with certain programs. Those systems, of course, you need to buy material for those particular jobs and how they are spent for those jobs, but if it's a non-spec job or you have your choice, it is very important that you find a good supplier that's going to provide you with quality materials, that has a good reputation. Honestly, when it comes to coil purchasing it is very important that you negotiate down to half pennies, which is a much different process than typically when you're purchasing blanks. You have your sales guy that wants to come in and based on your volume, he's authorized to give you certain discounts.

Chad Rowe: But when you're really truly purchasing in bulk with these large volumes of materials, those half a pennies really start to make a big difference when you start going from, "Well, I purchased this many sheets to now I'm purchasing tens, hundreds of thousands of pounds of material." So having that good supplier, having a good relationship with them, sometimes it might be that you can negotiate with them, that they will keep some inventory specifically for you so that you don't have to take up all of the space in your shop. So that's that starting point.

Chad Rowe: So then getting into the types of equipment and what is important in that equipment, one, you really have to understand what your current process is and if you want to change your current process or if you just want to mimic what you've been purchasing but you want to do it in-house. So for example, maybe I have already just been buying flat sheets and I want take advantage of this bulk purchase power with the coil processing, but for my shop maybe it makes the most sense that I'm just going to make blanks and I'm going to store them in a rack system and then I'm just going to use them when I need them. So in that scenario, it's very important that a system that you're considering as a strong, robust, powerful straightening solution so that when this material is coming off of this coil and it wants to stay in a round shape, that it can be flat. So a good robust straightening system is an important factor.

Chad Rowe: Am I going to apply protective film for this material? It's most common that material stored in flat sheets does have a film applied to it. The next question then is, "What film do I use?" And I am absolutely... Some, I don't know, 10, 11, 12 years ago, I decided one year I was going to make myself the film expert. There are so many variations in what applies in what situations. I apologize. I can't help you. Your material supplier will be able to help direct you as far as what films are needed. There are different films with different adhesive properties, whether it's being applied to a steel, whether it's being applied to a painted surface, whether it's being applied into aluminum. So there is a lot of discussion to be had and a learning curve about what films are needed.

Chad Rowe: So back to this equipment side, it may be important to have multiple rolls of film available. Some pieces of equipment offer only a single roll at one time. Some other pieces of equipment have the ability to have multiple rolls of film staged, prepared and then ready to be applied for the different material types that might be going into the machine. If I'm doing blanking, it's important to understand how the material is guided. Is it going to be straight? Is it a guillotine shear that's cutting my links? Is it a rotary shear that's cutting my links? And then if that's where I want to stop, that's great, but I do need then a good stacking solution. How will I stack that material?

Chad Rowe: I know that you said we have a short amount of time and I told you, as I always do, I get to go and so please keep me on track here because... Okay, so that process might be I want to take advantage of coil processing and I want to eliminate some steps in my process, so with that blanking scenario I'm going to make my flats, I'm going to put material in a rack and then I'm going to take it back down and I'm going to do another process to it. I'm going to take it to a shear. I'm going to cut it up into whatever widths that I need there, and then I'm going to take it to the former or roll former, whatever that next process is.

Chad Rowe: With this coil processing and having the ability to slit to my desired width and cut to my desired length, I can eliminate a step in my process so that I'm not touching the material multiple times so I can set my slitting knives. So another something to consider is what materials am I using? How many slitting knives do I need in a system? What is my narrowest strip width that I want to make? How many pieces can I get out of that width of coil that I'm purchasing? So those pieces all play into, "Okay, well, how many strips? How many knives? What are the size of the knives?" There's a lot of consideration that goes into that side of when I'm looking at these pieces of equipment.

Chad Rowe: So this coil processing, backing up, I'm going to buy in bulk. I'm going to take some advantage with my price pull. I also have the ability then to control and produce on demand when I need that material produced. I can produce just like I have been my purchasing. I can make just flat sheets and store them and put them into a rack system. I need to understand, though, with that piece of equipment, "What is control and what is feeding my slitting unit or my coil processing device. Is it a power decoiler? Am I using a manual decoiler? Am I going to use selected coil cart? The film application, how many rolls of film do I need? What types of materials am I going to use? Maybe I want to a combination. Maybe I'm going to buy some of my flats and I'm going to buy coils only for certain applications." But then again, being able to slit those materials to the proper width that are needed to go to my folder, cut them to length, I can produce really, truly on demand when that folder is ready or whatever that next process is. Maybe I'm slitting these strips to go feed into a roll former. Whatever that next process is, I'm producing what I need just in time when I need it and I'm only handling and touching the material a minimal amount of times.

Heidi J Ellsworth: So Chad, I love this because I think contractors out there right now are kind of thinking through this and they're like, "Okay, I get it." What is important so not only if they want to bring it in, but as they're talking to their suppliers to really understand are they using the right equipment to make sure those sheets are flat? Are they using the right equipment to make sure they can customize it to get their flats as they're going? And if they're bringing it inside, making sure they're asking all these questions so they have the right machinery and the right... I love how you talk about making sure you have the right metal, the right coils, that you're really talking and looking at getting for that performance for that second learning objective.

Heidi J Ellsworth: But let's go to our third one because I think this is where it's all going to come together, and that is why is having your own ability to process coils important. And I think this is really interesting because everything that you're talking about when we think about roofing and we think about metal roofing, but I know so many roofing contractors that do all their own HVAC metalwork and all their own bending and they are really putting together shops that allows them to have all of these great benefits. So let's for our third... Sorry, I'm going because I get excited about this too. So why should contractors be thinking about bringing this ability inside? What are some of the benefits? Let's start out with cost-effectiveness. What does this do for sheet metal shops that contractors have for their process and their production?

Chad Rowe: So I'm not going to speak roughly on true specifics again because it's all about your buying power, but, as an example, a 24-gauge Kynar 4 x 10 sheet depending on where you're getting it from can range anywhere from 80 to $100 whereas if I purchase that coil and I produce this sheet myself, I can save 10, 20, 30, 40% of that one sheet, so that sheet may only cost me $60 as opposed to that $80 that I was paying. As I work through the size of my jobs, that can make a big difference as to what my profitability is in a job. Maybe I can become more competitive and still earn the margin or what it is that I want to earn on the job site. Maybe this gives me the flexibility to add some additional equipment. Because I'm saving in one area, maybe I can add a whole nother crew. Maybe this gives me the ability to add another crew so that I can sell more.

Chad Rowe: What do owners want to do? They want to produce more, they want to sell more and they want to say yes, so that's... And from the cost-effectiveness, really, again, those numbers that I'm throwing out there, again, I'm not the expert on pricing [inaudible 00:30:08] materials, but you should expect something in that 20 to 30% savings when purchasing in the coil form versus a flat form. The next big piece as to why, who, how really is taking control of your jobs. It's having the need for a one piece or a two piece? Well, how do you cover that today if you're purchasing everything? Well, you have to purchase additional materials to cover for waste or as needed, so maybe I'm buying an additional five sheets, maybe I'm adding a 10%, 15% overage just so that when things happen on job sites, things fall out of trucks, that I am prepared and I have that material available. Well, with a coil, when I have my own coil processing and I have my own materials, I no longer need to plan and budget for that type of overage. That's a very common practice. So there's additional savings there.

Chad Rowe: But most important is it's when I need the pieces that I need, I have complete control of the job and being able to instead of trying to plan and build my schedule around someone else's schedule and then their schedule falls through, now I have to readjust my schedule as well and that all becomes a juggling challenge. The next benefit that I find a lot of people as they're looking into considering getting into this, those are... Everything that we've talked about are benefits directly that are affected by your day-to-day operation, but there's other things that I can do with this coil processing equipment that maybe you haven't considered.

Chad Rowe: Maybe now you become the supplier of flats and pallets of flat-shaped metal to some of your neighbors, some of your friends down the street. That can add additional revenue while not taking anything away from what your traditional focus is because typically a coil processing solution for a common roofing contractor, it's going to run two to three hours a day and that's going to build up enough inventory or enough volume of flat materials that can be processed and sent to folders, to roll formers for other processes. So there's additional revenue streams that can be generated with coil processing. We've really talked about flats and making these blanks, but the other side of it is being able to recoil. So I can start with this full width master coil of 48 inches. A lot of roofing contractors, some of them just say, "Hey, I don't want to have anything to do with standing seam metals or metal roofing. I'm going to stay in my world."

Chad Rowe: But there are a lot of blended companies, as you mentioned, sheet metal shops with HVAC. I might need... There are some common strip widths for standing seam, there are some common strip widths in the HVAC market depending on what type of equipment you have, so, again, not only am I able to make the flats in my slit-to-width, cut-to-length pieces, I'm also able to take this master coil, slit it down and rewind it for further processing. So again, I can have complete control of what my inventory level is. I'm making one purchase for this piece of coil, but then I'm going to process it and make it into a usable something for three different processes. So it also helps alleviate the amount of inventory that you might be having to purchase and trying to keep track of. So the benefits go on and on about coil processing and what's possible, and it just all depends on how do you want to start, where do you want to start and then, "What is the right system that I can grow with?"

Heidi J Ellsworth: Right. Right.

Chad Rowe: Because typically it's not zero to a hundred. It's not.

Heidi J Ellsworth: And when you think about it, it's across the board. Whether it is flat, single-ply roofs, they need metal accessories, they need metal flashings, copings. If you are in residential, you're going to have, again, flashings, all these different things. So there's a lot of opportunity out there to sell some of these products within your market for other people who maybe do not have the same setup and aren't able to put all this together, so I think that is great.

Heidi J Ellsworth: Chad, as you're really looking at this just to kind of bring this Lunch & Learn to an end... And I do want to repeat we've gone over our three learning objectives, which is the history of coil processing, why coil processing performance is important and we talked about that and then why is having your own ability to process coils, why is it important? How is it taking your business to the next level? What are some of the things, just last kind of to get everybody there, as they are talking to their MetalForming company and really talking to you guys about this, how do you start talking to contractors about that sheet metal shop and where in the process does coil processing come in and what's some of your advice for looking at that into 2025?

Chad Rowe: So probably the largest consideration is space. That's probably step one. Step two is there is typically an estimated sales revenue when it starts to make sense to transition from flats to processing my own coils. If I'm just starting, maybe I've worked for a previous company and I'm going to go out on my own, I'm going to start my own roofing contractor business and I'm going to start with X number of accounts, typically that's not going to yield [inaudible 00:36:59] unless you just have some really deep pockets or maybe you won the lottery and then I'm going to ask you why in the world are you messing with metal? And I know the answer to that is because we're all kind of sick and we just love really-

Heidi J Ellsworth: Love it.

Chad Rowe: It's just what we know and it's second nature. But typically, it can be... It's less restrictive, less space and I only need to purchase what I need at that moment, so it can be a little more cost-effective in the short term where I'm only buying what I need when I need it.

Heidi J Ellsworth: Yeah, and it seems to me that really as contractors keep in mind that today, it's not something... You need to understand it, so as you're purchasing flats, as you're starting your sheet metal shop, you need to have that, but this is really something too to keep in mind long term as a growth opportunity for your business.

Chad Rowe: It's very common. It's a common progression to go from flats to bringing that coil process in-house. There are... In many cases, customers have been so successful with producing flats and recoiling and using that as a revenue stream that they decide to change their business model and they completely come off of the roof and they just start selling to their subcontractors. The other thing that we see more and more, if you are that roofing contractor, you're providing metal on a job site. It's becoming more and more common that the general contractors want to limit the number of subcontractors, so you may get asked to do more and more metal work. So there's another opportunity as to why and when that transition starts to make sense. So there's a lot of benefits, there's a lot of value. Talk to your metal suppliers, talk to your preferred equipment supplier. If you have any questions, regardless of whoever your preferred equipment supplier is, MetalForming will always take your calls and chat with you and give you our advice and hopefully it works out long-term in any direction. But yeah, please ask questions. The more you learn, the better informed decisions that you can all make. Absolutely.

Heidi J Ellsworth: That is excellent. Thank you, Chad, so much. I've learned quite a bit, and I have to tell you this is just... It's a small part of the business, but it's a growing part of the business. So as you're thinking about this for your roofing company, please check out the MetalForming directory on RoofersCoffeeShop where you can get all kinds of information and see videos on how this all works. You're also seeing videos throughout this Lunch & Learn. And then also you can get a hold of Chad anytime you want or any of the folks at MetalForming who I can tell you for sure they will answer every question whether you're a customer or not. So thank you, Chad, for all of your wisdom and for sharing this today. We so appreciate having you on this Lunch & Learn.

Chad Rowe: Thank you very much, Heidi. As usual, it's always a pleasure.

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