Solutions

Volume 17, Number 1

in focus

Solutions is published by RL Hudson & Company.

publisher

LEADING THE TEAM

Troy Scott is RL Hudsons new Director of Sales.
Leadership comes naturally to Troy Scott. He was president of his college fraternity, active in student government, and in his high school and college baseball playing days his position was catcher leading the defense, and in the action on every play. Now, this fifteen-year veteran of the rubber and plastics industry is leading RL Hudsons offense. Troy is a native of Hannibal, Missouri and stayed close to home for college. He has an undergraduate degree in business from Missouri Valley College as well as an MBA from William Woods University. A multisport athlete throughout his school years, Troy is a big believer in the values learned from competitive sports. I think the work ethic I learned competing in baseball, football and wrestling is crucial to my success in business, he said. When Troy was in high school he took a job cutting the grass at a rubber factory in his hometown. Little did he know how that summer job would shape his career. Before long, he was working part time at the plant doing everything from running presses, pulling parts, to working in the mixing plant and sweating out carbon black.During summers home from college, Troy continued working at that plant and learned a great deal about the rubber business. He loved the business, but he knew his future was not on the plant floor, but out in the field with customers. After graduation, Troy joined a large molded rubber and plastic manufacturer and began his career as a sales professional. Troy said he is grateful for the knowledge and experience he has gained over the years: Ive been fortunate to work alongside some very experienced and professional salesmen who were great mentors. They have had a positive impact on me as I worked in the field and now leading our Sales team. Troy joined the RL Hudson Sales team in 2008 and quickly distinguished himself. Now, as Director of Sales, he is focused on making sure customer service remains at the heart of his teams mission. Our customers are doing more with less and are busier than ever. As a Sales team, we need to not only listen carefully to their needs, but enhance our value as a resource that they can rely on for solutions. Troy believes that one of the keys to RL Hudsons success has been a willingness to evolve in response to customer needs. We will continue to listen to our customers and respond as our customers and our markets change,he said.

Rick Hudson
editor

Chris Owen
copy editor

Scott Parker Bogue

contributors

Scott Parker Bogue Roux Carroll Robert Denton Benny Foreman John Hamill Rick Hudson Ray Podesta Bruce Sumpter
photographer

Ralph Cole
To subscribe, please send your name and address to info@rlhudson.com. Entire contents 2011 RL Hudson & Company. All rights reserved.

RL Hudson
2000 West Tacoma Broken Arrow, OK 74012 PHONE: 918.259.6600 FAX: 918.259.6700 TOLL FREE: 800.722.6766

Who We Are and What We Do

RL Hudson designs and supplies a broad range of rubber and plastic products for some of the most respected manufacturing companies in the world. We help our customers become more competitive by providing world-class pricing, product improvements, and opportunities for vendor consolidation.

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meanwhile, back at the office

Annual Fund Raising Week
Every October things get a little strange around the offices of RL Hudson. Tables of merchandise appear in the hallways, tempting baked goods fill the kitchens and space is cleared in the warehouse for a dodge ball court. All of these unusual occurrences are lots of fun and serve a great purpose. This year, the silent auction, bake sale, dodge ball tournament and some gratuitous pies in the face benefited the Community Food Bank of Eastern Oklahoma, an organization that works with 450 partner programs to serve more than 60,000 people in 24 Oklahoma counties each week. Russell Clemens, chair of RL Hudsons Employee Activity Committee, said that the food bank was chosen as this years beneficiary because of the need.The demand for their services has risen, and donations are down. The organization also uses its resources efficiently, with only five percent or less of contributions going to overhead. Russell reports that more than $17,000 and nearly 200 pounds of food were donated during the week-long event.

New Members Bring Depth, Experience to Sales Team

Mel Banuelos is our newest Territory Manager serving the south central US. Hes from Brownsville, Texas and attended the University of Texas Brownsville. Mel and his wife Rebecca have three children, Victoria 14, Luis, 9, and Alejandro, 3. Mel enjoys sports with his sons and talking pop culture with Phyllis Alcorn his teenage daughter. Mel says of the RL Hudson team, Its a fun group who are passionate and focused on providing world class products and service to our customers. Patrick PatLoney grew up in Minneapolis where he is based. Hes a veteran of the rubber business, serving previously as national sales manager for Chardon Rubber. Pat graduated from St. Johns University. Pat and his wife Sherri have two grown children, Ryan and Brett. The Loney family enjoys spending time at their cabin as Mel Banuelos well as outdoor sports like snow and water skiing. Pat says he has been struck by the RL Hudson work ethic. Im impressed with the professionalism and hard work that our company represents, from the office staff, to the warehouse, to engineering and throughout the organization.

Alma Mater Honors CFO

RL Hudson Vice President and Chief Financial Officer, Toby Patrick Loney Joplin was recently honored by his alma mater, the Spears School of Business at Oklahoma State University, which named him one of its top fifty distinguished MBA alumni of the past fifty years. Toby has had a distinguished career in finance, serving as an executive in the software and film production industries before joining RL Hudson. In announcing the honor, Rick Hudson said,Toby is a great asset to RL Hudson. We are so forToby Joplin tunate to have him as a key member of our executive team.

Thirty Years and Ac-counting

There is only one person who has worked at RL Hudson & Company longer than Phyllis Alcorn, and thats founder Rick Hudson. Phyllis joined the company in 1981 and has been working efficiently in the accounting department ever since. Phyllis was born and raised in Bristow, Oklahoma. She has a degree in accounting from Tulsa Community College and currently serves as Accounts Payable Clerk. When she isnt checking invoices and generating checks, Phyllis can be found biking along the river, antique shopping, checking out vintage European sports cars or riding a motorcycle. She is also a devoted mom to her loyal Miniature Pinscher, Princess.
In The Face! Hudson VP, Roux Carroll takes a pie in the face from Director of System Development & Training, Rosannah Shepherd. It was part of the Companys fund raising campaign for the Community Food Bank of Eastern Oklahoma.

behind the scenes

by ROUX CARROLL

PRICING PRESSURES
Manufacturing costs continue to increase.
In the classic Bill Murray movie Groundhog Day, someone asks Murrays character, Do you ever have dj vu? He replies, Didnt you just ask me that? The
recent round of price increase notices arriving here at RL Hudson feels a little like dj vu. I look at the pile of letters and ask myself, havent we already done this? A few years ago, a runup in the cost of oil and other commodities drove prices up on everything from raw materials to shipping. As a result, for the first time in 27 years, we implemented a price increase of our own. That was followed by a severe recession that held prices in check for a period. Now that the economy has recovered somewhat, costs are going up again. Commodity prices are on the rise around the world. We are seeing aggressive price increases from suppliers here in the US, in Asia and in other regions. There are several factors driving these increases worldwide, but in China, where we are seeing some of the most significant increases, there seem to be four key drivers: labor, dollar devaluation, raw material costs and domestic demand. LABOR Workers are demanding better pay and better working conditions, and they are getting them. Union membership is spreading rapidly and government policy is encouraging higher wages. As a result, manufacturing wages have gone up nearly thirty percent in less than two years. DOLLAR DEVALUATION Over the past four or five years, the RMB, Chinas currency, has gained more than twenty percent in value as compared to the US dollar. The figure is six percent in the past twelve months. That means that it takes more dollars to buy Chinese goods than it used to. RAW MATERIAL COSTS The cost of polymers and other ingredients that make up a synthetic rubber compound has been increasing for more than a year. The price of some of our materials has increased by one hundred percent. Some of this volatility is due to the price of crude oil which provides a number of key ingredients for rubber, but demand also plays an important role. DOMESTIC DEMAND Over the past several years, the Chinese government has adopted an aggressive strategy of boosting domestic consumption of goods.This has led many factories to focus less on the export market and more on the market at home. It has also led to more demand for raw materials, which has driven up prices. DOES CHINA STILL MAKE SENSE? China became the worlds manufacturer largely because of the huge price advantage it offered. As prices increase, its fair to ask the question: Should we be looking elsewhere? At RL Hudson, we have a diversified international supply base and are always looking at new sources. But while we produce products in the US and a number of other countries besides China, we find despite increasing costs that China continues to offer our customers unique value. That value includes wages that are still very low compared to other industrialized countries, a sophisticated manufacturing, technological and logistical infrastructure, and strong government support for industry. We at RL Hudson will continue to watch these developments closely. Through our Account Managers and Territory Managers, we will stay in close communication with our customers. Everyone hates price increases. We know that. If such a step becomes unavoidable, we will do all we can to minimize the impact on our customers.

RL Hudson COO, Roux Carroll talks about the increasing cost of manufacturing rubber and plastic products.

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benny & bruce

by BENNY FOREMAN and BRUCE SUMPTER

THE ART OF SIMPLIFICATION

Holy part consolidation, Batman! We just saved some money!
BRUCE: Hey Benny, Ive got to come up with a presentation on part consolidation. Its a big topic. Where would you start? BENNY: Well, it depends on the type of assembly, but I usually start with fasteners and leak points. BRUCE: I meant, where would you start on the presentation? But,okay. So, fasteners and leak points ... BENNY: You know, bolts and nuts and clamps and threaded fittings and gaskets BRUCE: I got it already. Now that you mention it, weve already converted a bunch of assemblies into rubber parts with hoses or cuffs molded right in. BENNY: Remember that last one? BAM! we got rid of a hose. WHAM! a fitting and two clamps. That, my friend is what we call part consolidation. BRUCE: Yeah, I remember. And we also got rid of two leak points. That was fun. Rubber does give us a lot of flexibility, doesnt it? BENNY: So does plastic. BRUCE: More than you. Dont you ever stretch? BENNY: Sure, whenever I BRUCE: cant reach the donut? BENNY: Oh, I love fat jokes. Did you hear the one about the senator from BRUCE: Hold on there, hoss. Lets get back to part consolidation. Ive got a presentation to put together. BENNY: Heres something to think about. Weve converted a lot of metal ducts to plastic lately. Most of the time, they have threaded holes on the sides. BRUCE: Yeah, they screw barbed hose fittings into them. So? BENNY: But sometimes they dont. Thats why they need the thread. If they want a connection, they screw in a hose barb. If they dont, they screw in a plug. With plastic, we can just mold the barbed fitting in with a thin web of plastic in the ID that can be punched out when the customer wants to connect a hose. So, then weve eliminated a plug, a fitting, a leak path, labor, weight, inventoryWHAM! Part consolidation. BRUCE: Bam? Wham? Have you been reading Batman again? Hey, what are you doing now? BENNY: Stretching. BRUCE: Dont stretch too far, caped crusader. Sometimes, getting rid of parts can hurt you when you look at the big picture. BENNY: I know. Serviceability, assembly variations like different mounting positions or connector locations, or other concerns. Sometimes it makes sense to keep all the parts or even add some. BRUCE: Yeah, remember that metal pump assembly we converted to a single plastic part? BENNY: Sure. We added a metal wear plate so when it wears out the end user could just replace a $1 part instead of a $20 part. BRUCE: Our customer was happy, their customers were happy ... BENNY: Yep, but the service sales guys probably hated us. BRUCE: The engineers didnt. They usually like us. We simplify their work. They also like us because were not married to a single material or manufacturing process we design and supply injection molded, blow molded, and extruded parts, and were equally at home with rubber or plastic. BENNY: And we can bring a fresh perspective to their design problems if they get us involved early. The sooner we get involved in the design process, the more value we can add. BRUCE: Hey, nice. Thats how Im going to start my presentation. Thanks, Benny. BENNY: Sure it wont be a stretch for you? BRUCE: Hey, what happened to that last donut?

Benny and Bruce discuss ways RL Hudson design engineers can help customers save money by consolidating multiple parts into one.

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the right things right

Have you ever wondered why this column is called The Right Things Right? The name comes from our companys values and theres a story behind it.
by RICK HUDSON

can. People in every position in our company voiced their opinions about these ideals. We condensed their comments into the statement: At RL Hudson, we do the right things right.

CUSTOMERS FIRST
We take care of customers no matter what it costs.
A few years ago we met with all of our employees in small groups to hear their thoughts on how we could improve our company. We asked them what they believed we really stood for as an organization. Evaluating the feedback, the common theme was that all employees embraced these ideals: 1) At RL Hudson we believe in doing the right thing, meaning putting principles ahead of profit; and 2) we believe in doing things right, meaning we believe in giving our customers the very best not just good enough, but the best products and service we possibly I like it because it honestly reflects the values on which we built our business. And to see that those values continue to permeate the culture of our company after three decades is very satisfying. Thats nice, you may be thinking, but what really makes RL Hudsons values different from anyone elses? Everyone talks about customer service and how they value their customers but, the one place you can always find the truth about a company's values is their checkbook. If you want to know what an organization really cares about, look at how they spend their money. At RL Hudson we continually invest in our ability to serve our customers. We put that ahead of everything else. When you visit our headquarters, youll see it everywhere. We invest in our people, in training, in systems, equipment and R&D, so we can provide better value and service to our customers.

There is one place you can always find the truth about someones values: their checkbook.

Highly skilled people throughout the company use sophisticated systems not just to meet, but to anticipate the needs of our customers. Im constantly gratified by the stories I hear of people working creatively and proactively to solve problems for customers. Ive never heard anyone say, Thats not my job or Its not my problem.Thats true in every department, especially our Demand Management group. Our Demand Management team is made up of professional supply chain specialists who manage an incredibly complex web of logistical challenges to keep parts flowing to customers despite constantly fluctuating demand and lead times (you can read more about this on page 9). Investing in people, systems and infrastructure is extremely important, but sometimes it just isnt enough. Hiccups occur, creating quality or production issues; its how we react that sets RL Hudson apart. Fortunately, the hiccups are rare here, but they have happened. And when they have, weve always put our money where our mouth is, doing whatever is required to fix the problem and to minimize the impact on customers. We do this regardless of what it costs. We take care of the customer first, and worry about the cost after the problem has been resolved. Thats doing the right thing!

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product profile

VIBRATION ISOLATION
We design products that keep vibration in check.
With all due respect to the Beach Boys, the vibration isolation experts at RL Hudson believe theres no such thing as good vibrations.
Many mechanical systems have a limited tolerance for vibration. Left unchecked, vibration creates noise, causes user discomfort, loosens fasteners, damages seals, and leads to fatigue-induced failure. RL Hudsons vibration control products help eliminate problems created by this unwanted shake, rattle and roll. BUMPERS When a moving object contacts a stationary one, its speed instantly becomes zero, sending a shock wave through both objects. Bumpers reduce the peak force exerted on a component by deforming under impact load. CUSHIONS can absorb shock, reduce the transmission of vibration, or distribute applied forces over a larger area. In mechanical systems, they are often used where there is little or no relative motion between two objects. DAMPING PRODUCTS absorb and dissipate energy from vibration, shock, or impact. Bumpers and cushions may or may not also perform a damping function. ISOLATORS are used to separate one or more components from a source of vibration. An isolator may simply allow two mechanically-linked components to vibrate at different frequencies, without absorbing any energy itself, or it may also be designed to absorb some energy. SHOCK ABSORBERS usually consist of one or more closed cylinders that each contain a piston and oil. The piston contains holes, valves, or both, to allow a restricted flow of oil as the piston moves in response to shock, impact, or vibration. SPRINGS store mechanical energy but do not absorb or dissipate energy. RUBBER SHEET has long been used as a sound and vibration damper under equipment supports and machinery bases.

COMMON VIBRATION CONTROL APPLICATIONS

APPLIANCES Door close cushions Motor mounts Rack and door bumpers AG/CONSTRUCTION EQUIPMENT Seat suspension Hose and wiring harness retainer cushions Electronic equipment mounts TRUCKING Suspension stop bumpers Hose & wiring harness retainer cushions MARINE Hatch close cushions Fan/blower motor mounts Electronic equipment mounts Pump/generator isolators OUTDOOR POWER EQUIPMENT Backpack engine isolators Tool handle isolators Fuel tank cushions/retainers RECREATIONAL VEHICLES Suspension stop bumpers Suspension springs Battery cushions Electronic equipment mounts

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ON THE COVER: Clockwise from top: Allison Woods, Sheila Lawson and Vicki Reid. Photographed by Ralph Cole.

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In the heart of the RL Hudson headquarters is a group of a dozen or so offices filled with people who play a vital role in meeting our customers needs.
The department is called Demand Management, and they are very dedicated to what they do. Sheila Lawson, the Director of Demand Management, sums up the mission of her department this way, We work our tails off to meet the customers needs. She could have talked about overseeing the production and delivery of thousands of parts for hundreds of customers, or the challenges of working with factories all over the world. She could have explained the intricacies of interstate and international shipping, or any number of other important tasks. But, like everyone at RL Hudson, Sheila understands that no matter what anyones specific job may be, everyones job is taking care of the customer. Were not perfect; we have problems and glitches like any other supplier. The difference to me is that we are focused on doing absolutely everything we possibly can to give the customers what they need every day,Sheila said. There are four specific positions in Demand Management: Project Manager, Buyer/Planner, Demand Analyst, and Account Manager. Like gears in a machine, each team member works closely with the others to accomplish the departments mission. PROJECT MANAGERS get the ball rolling on each new part. They are responsible for every detail as a new part goes from concept to production. Project managers work internally with Hudson engineering and quality staff. They interact externally with engineering, purchasing and quality at the customers plant. They also handle communication with the factory as the part is tooled and prototyped. Their job doesnt end until the part receives final approval from the customer and goes into production. At least thats the way it usually works. Lead Project Manager Allison Woods told the story of one Project Manager who heard from a co-worker that a customer was unexpectedly running out of a crucial part. No parts were in inventory and lead time was several weeks. Without the part, their production line would shut down. The Project Manager thought that maybe another of that customers parts might be similar enough to work as a substitute. She stayed late that night, going through images and drawings in the system until she found one that would work. With some modification in our Assembly department, the part did the job and kept the line rolling. Stories like that illustrate some of our best traits, which are flexibility, resourcefulness and responsiveness, Sheila said, Our customers often receive large last minute orders from their customers, and its our job to help them meet those spikes in demand. And thats where our Buyer/Planners come in. BUYER/PLANNERS have the task of ensuring that parts are available when customers need them. RL Hudson Buyer/Planners are highly trained and hold the Association for Operations Management (APICS) Certified in Production and Inventory Management (CPIM) designation. Customer forecasts are just that, forecasts, and forecasts change. Buyer/Planners carefully monitor customer orders and inventory levels. They are sensitive to any fluctuation that might indicate coming changes in demand, and they work to ensure that we are prepared. Buyer/Planners also track shipments to assure on-time delivery from the factory. This includes monitoring shipments coming through Customs. When a ship is delayed in Customs, our Buyer/Planners have been known to have a container offloaded, and get the parts put on a plane to meet our delivery commitment,Sheila said. DEMAND ANALYSTS are responsible for entering orders and compiling all relevant forecast data from customers. They take EDI, web downloads, spreadsheets and faxes and enter the information in our system. ACCOUNT MANAGERS are the face, or rather the voice, of RL Hudson to many of our customers. Theres no frustrating automated phone system at RL Hudson. When customers call with questions or concerns about order status, quality issues, or whatever they may be dealing with, their Account Manager is ready to take the call, Sheila said. We try to be as responsive as we possibly can. We know thats important to customers. Led by the Demand Management department, the RL Hudson team keeps parts moving from factories all around the world, over the sea, on airplanes, trains and trucks, in and out of warehouses, and to the customers production line, on time. Its not an easy job, but as Rick Hudson says, If it were easy, our customers wouldnt need us, would they?

Our customers often receive large last minute orders from their customers, and its our job to help them meet those spikes in demand.

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tech session

BLACK GOLD
In the oil industry, one bad seal can ruin your whole day.

There is an old proverb that tells the story of how a kingdom was lost because of the failure of one small nail in a shoe on the kings horse.
For want of a nail the shoe was lost. For want of a shoe the horse was lost. For want of a horse the rider was lost. For want of a rider the battle was lost. For want of a battle the kingdom was lost. If there were a version of that proverb for the oil patch, it might go something like this: For want of a seal a bearing was lost. For want of a bearing a drill bit was lost. For want of a drill bit, $50,000 an hour was lost. When the drill bit meets the rock, there are no backups. Every component has to do its job with 100 percent reliability. At RL Hudson, we understand that after all, weve been serving the oil and gas industry for more than thirty years. Achieving that kind of reliability in severe service, high performance applications is what this issues Tech Session is about. It all starts with asking the right questions: Whats the H2S level? What is the temperature range? Will CO2 be injected? Whats the maximum loss of compressive modulus the seal can endure and still function? Is wear a factor? What about aromatic solvents and water-based corrosion inhibitors? The specific answers to these questions, and more like them, will lead to selecting or developing a compound that will meet the basic requirements. But we dont stop there. Heres an example. A face seal energizer is a type of O-ring that is used to force, or energize, two metal sealing surfaces together. These surfaces move in relation to each other, so they wear. In addition, they operate in extremely

high temperatures. The energizer is exposed to gases, vapors and liquids that can soften it or cause it to shrink. If the energizer loses its ability to maintain constant sealing force, the result is loss of lubricant and failure of the drill bit assembly. Compression modulus in a typical oilfield seal decays over time, even in the absence of wear or swelling. At RL Hudson, weve developed a proprietary hydrogenated nitrile (HNBR) material that maintains its compression modulus, even in the hostile environment of the borehole, for significantly longer than the maximum service life of a drill bit. Now lets talk about wear. The shaft seal O-rings that protect the downhole journals have to operate in an aggressively dynamic environment of shock, vibration, and heat, and up to a million rotations of the drill string and bit. Excessive wear is a real possibility. The same slow-decaying compression modulus that works to advantage in face seal energizers results in rotating O-ring seals that quickly wear in to a low predetermined level, then effectively stop wearing while continuing to provide a leakproof seal. Particularly in the hostile oilfield environment, material selection is almost invariably a compromise. For example, fluoroelastomer (FKM) compounds show excellent high temperature and hydrocarbon liquid resistance, but at the expense of low temperature flexibility. Given that challenge, the rubber research team at RL Hudson has developed a group of FKM compounds that are priced like conventional FKM compounds, and range from 60 to 90 Shore A, are suitable for use down to -35C, have tensile strengths exceeding 3,000 psi, and show elongation at break of 350% to 750% with no loss of FKMs traditional resistance to hydrogen sulfide, acids, hydrocarbon oils, aromatic solvents, and high temperatures. Added to that is compression set of only 3% after 70 hours at 175C about a tenth of what is usually expected with FKM. For seals, thats a big advantage. Another aspect of high performance and reliability is consistent properties, seal to seal, year to year. Rubber compounds are complex mixtures whose properties can be greatly changed by variations in how theyre mixed. In addition, molding, curing, and postcuring must all be completed under closely controlled conditions. This is particularly true of engineering elastomers such as the FKMs and HNBRs that are characteristic of oilfield applications. To ensure product consistency, RL Hudson designs the compounds, purchases the raw ingredients, and has the materials custom mixed in small batches according to a detailed specification for addition sequence, mixing conditions, mixing time, and mixing temperature. The parts are then molded by custom molders who understand the application and can work in real time with RL Hudsons quality auditors and engineers. For help with your oilfield elastomer challenges, give us a call at 1-800-722-6766.
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