WaterFurnace International

Clean and green┬áWaterFurnace International manufactures geothermal heating and cooling systemsÔÇöan environmentally friendly alternative energy source. Executive vice president John Groulik tells Linda Seid Frembes about good stewardship of the earth and of the workforce. WaterFurnace International specializes in the ultimate green technologyÔÇögeothermal heating and cooling systems for the residential market. ┬áGeothermal technology is not as well known as solar or wind power, but John Groulik, executive vice president of operations for WaterFurnace, thinks that will change very soon. ÔÇ£People finally believe that green is good, and geothermal is one of the few green alternative energies that actually save the customer money,ÔÇØ he explains, referring to the $0.01 per kilowatt-hour cost for geothermal versus $0.25 per kilowatt-hour for solar. Geothermal systems work by tapping into the consistent temperature of the earth. During the heating cycle, a geothermal system regularly circulates water through a ground loop to extract heat. The unit then transfers this heat from the loop to the home in the form of forced air distributed through a conventional duct system, hot water for radiant floors, or domestic hot water heating. In the cooling mode, a geothermal system reverses the process to extract heat from the home and return it back to the ground. Once the system extracts the heat from the air, it redistributes it throughout the home as cool, conditioned air. Groulik joined the Fort Wayne, Indiana, manufacturer in 2000 and brought 30 years of experience in the manufacturing industry. Today, the former automotive supplier executive oversees WaterFurnaceÔÇÖs order fulfillment and engineering. ÔÇ£IÔÇÖm in charge of everything between order entry and shipping, as well as product development and R&D,ÔÇØ he adds.Prior to his arrival, the company faced operational hurdles such as excessive inventory and other inefficiencies. Since then the company has embraced all manners of lean techniques to improve efficiency, speed operations and streamline processes. ÔÇ£We also work with our supply base to buy futures and protect against market swings,ÔÇØ Groulik adds. ÔÇ£We do all we can to leverage our costs with the supply base.ÔÇØWaterFurnace now uses kanbans to manage its inventory. Suppliers manage their inventories onsite for just-in-time fulfillment. The company gives each supplier a 16-week planning horizon, but kanban signals are what pull in the inventory.Groulik notes that sales and production have been on the rise, but recent economic conditions have slowed output. ÔÇ£Sales are ahead of last year, but itÔÇÖs slowing down due to our cyclical industry. We typically work four 10-hour days here, but when demand is low we donÔÇÖt need a fourth day of production. Employees are given the option to work on 5S programs or take the day off without pay,ÔÇØ he says. WaterFurnaceÔÇÖs pledge to do away with layoffs and not to use temporary workers in manufacturing is one of the many ways the company stands out. Its dedication to employees stems from the overall work culture at the facility. The company provides plenty of opportunities for on-the-job training as well as cross-training. As an incentive to learn, pay increases reflect the number of skills that each person has acquired. WaterFurnace also has an apprenticeship program that rotates employees through all facets of the company ÔÇ£so the employees can find their niche,ÔÇØ says Groulik. ÔÇ£People will excel at what they like to do.ÔÇØCurrently, the company employs 265 people, about 45 of whom are in field sales and the balance are in Fort Wayne. Continued expansion has increased the importance of finding top talent who are dedicated to growing with the company. WaterFurnaceÔÇÖs employee referral program also offers great incentives, with employees receiving $100 every three months (up to $1,200) for as long as their referral works at the company. Approximately 80 percent of new hires have come from employee referrals.┬á It is also interesting to note that WaterFurnace has no human resources department. ÔÇ£ItÔÇÖs up to the supervisor and manager to take care of their employees,ÔÇØ says Groulik. ÔÇ£Our company outsourced HR to someone who comes in two hours a day to administer OSHA, hand out paychecks, etc.ÔÇØ WaterFurnaceÔÇÖs other major initiative is to reduce waste. Its Cut Out Waste (COW) program encourages employees to submit cost-saving ideas. Ideas that save more than $100 are awarded $20 and recognition at the companyÔÇÖs quarterly company-wide meeting. Some of the ideas include upgrading the variable-speed drives for the facilityÔÇÖs geothermal system, which has saved $3,000 a month. Another suggestion was to consolidate parts and SKUs and combine similar parts into one. The program, which started nine years ago, saved $2 million in the first year. Reducing waste has also helped the bottom line and, in turn, helped employees. Groulik adds that employee bonuses are based on profitability and that ÔÇ£last yearÔÇÖs bonus was in the seven percent range.ÔÇØReducing waste also means that the company has an extensive recycling program and uses its own geothermal technology to heat and cool its 115,000-square-foot headquarters. According to the company, it installed what was at the time the largest geothermal pond loop system in North America. All these efforts led the company to pursue LEED Silver certification from the US Green Building Council. ÔÇ£We were one of the first existing buildings in Indiana to be LEED certified. We were doing all these programs anyway, so going for certification wasnÔÇÖt any extra work,ÔÇØ says Groulik. Despite recent turmoil in the housing market, the companyÔÇÖs focus on the residential market does not waiver. Groulik remains bullish about geothermal technology and the benefits to homeowners. ÔÇ£The future for geothermal is bright,ÔÇØ he says, pointing out that the Energy Improvement and Extension Act of 2008 offers a one-time tax credit of 30 percent of the total investment (to a maximum of $2,000 for a single residence) for all residential ground loop or groundwater geothermal heat pump installations. ÔÇ£The replacement market is still going strong. Furnaces need replacing, and people are looking at geothermal as a viable option.ÔÇØ ÔÇô Editorial research by Alan Iodice┬á