An interview with Mr. Patrick McKenna, CEO of furnace manufacturer Ipsen in Rockford, Illinois, USA.
First up, Pat, I appreciate you taking the time to speak with us. I always like to start with some background information. Last time we spoke, you told us about the foundation you earned while learning the trade and going back to graduate school. You started at Ipsen in the mid-90s, and then transitioned into commercial heat treating and brazing as a business owner for 15 years, and then returned to Ipsen in 2015...
Going from a position where you were buying furnaces to one where you are selling furnaces must have made for a very interesting experience. Did it change your perception of industry suppliers and the challenges they face?
“Having experience in both sides of the business has been very helpful Gord. I find myself using both perspectives throughout the day.
Furnace builders are experts in designing, building, and servicing the equipment. Heat treaters, whether captive or commercial, are experts at operating the furnaces. I have heard others explain the difference as “one designs and builds the race car, the other is the race car driver.”
I have enjoyed both sides of the business, and each has its own unique set of challenges.”
What have some of those life and career changes taught you as you developed into your present role as CEO of quite possibly the largest furnace builder in North America?
“One thing I’ve learned is that someone in this industry – like most industries – needs to take responsibility for their own career. A company should certainly provide advancement opportunities for their employees, but it is up to each of us to decide what we want to do and then put in the work and sacrifice necessary to achieve our goals. If we don’t know what we want to do in our careers how should the companies we work for be expected to know?
I am fortunate to have worked at great companies along the way that held up their end of the bargain and I feel the heat-treating industry has no shortage of opportunities for people willing to put in the hard work.”
Please tell us about Ipsen as a global supplier and where Ipsen USA fits in. What are the main markets for your furnaces?
“Ipsen is one of the few truly global manufacturers of vacuum and atmosphere heat treating furnaces. We have manufacturing facilities in the U.S., Germany, India, China and Japan.
Ipsen USA is the largest of the Ipsen Group in terms of sales, and the largest market we serve is aerospace & defense – whether directly, or indirectly through commercial heat treaters.”
Let’s focus on your products now. Why is so much of your business based on aftermarket parts and services?
“Ipsen USA has an installed base of about 2,500 units, and globally the installed base is over 10,000. That alone represents a very large aftermarket opportunity, but in addition we often provide aftermarket parts and services for equipment built by other suppliers. Our aftermarket products and services have grown to almost 50% of Ipsen USA’s annual revenue.”
All of the industries you serve involve critical components, but none more so than aerospace & defense with their Nadcap requirements. How do you address the standards necessary for the aerospace industry?
“We work to stay ahead of the requirements coming down the pike by listening to customers, attending periodic technical meetings such as AMEC, and participating in industry associations such as MTI.”
I have seen a number of Ipsen press releases and news items talking about your increased field presence in the US recently. My first thought is that this is very commendable, and my second thought is that Ipsen is bucking the trend as many companies are going the opposite direction-reducing field presence as a way to control costs. What is the driver behind this? Has it been successful?
“Our Field Service Engineers have a high ‘paid service utilization rate’, which is to say they are busy generating significant revenue. I have never considered reducing FSE headcount as a cost cutting measure. On the contrary, I want to hire as many experienced Field Service Engineers as I can find.”
Speaking of increasing your field presence, I have to ask you about people. Many in the industry moan and groan about a lack of experience. How do we change that? I am not talking about “pie in the sky” ideas to get more people in heat-treating in 20 years…how do we get more skilled people in the industry in 2022?
“You will have more experienced people in 2022 by first retaining the staff you have then investing aggressively in the development of newcomers. We have developed the Ipsen Academy training program (sessions held in 2019 and 2020) to fast-track new Field Service Engineers who have little or no experience in our industry. The year-long Academy represents a significant investment including two full-time trainers and is already proving itself a success. We have held similar Academy sessions for mechanical, electrical, and software engineers in the past as well.”
What do you see as the next logical step in the evolution of vacuum furnace design? Do you see any requirements that would encourage you to design furnaces with substantially higher quenching pressures? Is there much demand for larger size furnaces? Higher temperatures?
“We will always serve both the “standard” and “special” markets. I think it is most logical to let the customer guide our product development efforts. If a customer has a need that aligns with our technology and capabilities, we will take it on (no matter the size, temperature, performance, etc.) as long as it makes financial sense to do so. Many times these “one of a kind specials” actually end up as multiple repeat orders for us in future years.”
Are there any new products Ipsen will be bringing to the market in the near–to–medium future, which you could tell us about or even hint at?
“As mentioned above, we are continuously driven to innovate by our customers and enjoy working on the challenges they present to us on a daily basis. We look forward to sharing press releases on these exciting and interesting projects with you and your readership when able to do so.”
Pat, I thank you for your time today.
Patrick McKenna Biography: Patrick McKenna is President and CEO of Ipsen USA, a global manufacturer of thermal processing equipment for the aerospace & defense, automotive, energy, and medical industries. Having originally worked at Ipsen USA in the mid-1990’s, Patrick returned to an Executive role in 2015 as Vice President of Sales and subsequently promoted to President and CEO in 2017. Prior to joining the Ipsen Executive Team, McKenna most recently served as Co-Founder and Vice President of Nevada Heat Treating and California Brazing (acquired by Trive Capital Partners in 2018). McKenna served on the Metal Treating Institute Board of Trustees for 10 years, holding various board positions, including President in 2016. McKenna has received several awards from MTI, including the President’s Award (2014) and the Heat Treater of the Year/Master Craftsman award (2011). McKenna holds a bachelor’s degree in mechanical engineering from the University of Illinois at Chicago and a master’s degree in manufacturing engineering from Northwestern University, where he still volunteers in the Northwestern Mentorship Program.