Canadian Tank Truck and Trailer Manufacturer on the Rebound
Advance Engineered Products
The Advance Engineered Products Group, based out of Regina, Saskatchewan, designs and manufactures tank trucks and trailers and also provides parts and service for this equipment. The company’s mission is simple: “we try to give our customers an edge,” says Doug Kee, vice-president of sales and marketing.
Advance’s equipment has hauled everything from crude oil to milk, chemicals and fuel for Air Force One – the aircraft that transports the U.S. President. Advance relies on high quality design, engineering and craftsmanship to produce tank trucks and trailers that are both light to save on fuel costs for drivers and tough. Advance tank trucks and trailers need to be able to endure brutal weather and road conditions in isolated oil fields and mines, not to mention routine wear and tear from constant highway travel.
The company primarily makes its own tanks and trailers, though it does distribute parts from other manufacturers. In Regina, Advance has three locations for parts, service and manufacturing respectively. The manufacturing plant also serves as company headquarters, and it runs another manufacturing plant in Drummondville, Quebec called Lazer Inox.
Acquired in 2008, Lazer Inox services “our eastern Canadian market, from Ontario through to the Atlantic provinces for aluminum product. They are also our stainless steel manufacturer,” says Kee.
In addition, the company operates Advance Tank Centres. These facilities offer repairs, service and parts for bulk haulers and are open to any customer, not just Advance clients.
Advance’s largest customers include Federated Co-operatives Limited (a Saskatoon-based organization that distributes fuel and food and other goods to member co-ops in Western Canada), Plains Midstream, Parkland Fuel Corporation (the largest fuel distributor in Canada), Westcan Bulk Transport and Gibson Energy.
The company has manufactured equipment for Manitoba Hydro and airplane refuellers for the U.S. government, some of which were used to service Air Force One. Advance’s refuellers can be found at “different airport locations all across Canada and in the U.S.,” states Kee.
Advance was founded by Doug’s father Doug Kee Senior and three partners. The firm began operations in October, 1984, “and their first piece of equipment rolled out in December. Ever since then, we’ve been building equipment steadily,” says Kee.
Advance initially had sixteen employees and worked from a 10,000 square foot space. The company still uses the same facility today, albeit in greatly expanded form. The firm grew quickly and in the early 1990s bought the intellectual property of Westank, a company Kee Sr. and other Advance employees once worked for. Between 2007 and 2009, it fluctuated between 900 to 950 employees. Revenues hit $186 million in 2013. Unfortunately, revenues and personnel then plunged, in part because of crashing oil prices and an unsteady economy forcing the company to adapt and sell off and separate some assets.
However, Advance is now on the rebound. “Today, we have 257 employees. We are hiring right now. We’re looking to hire in our services facilities in most of our Alberta locations,” says Kee.
The firm is anticipating growth of ten to fifteen percent this year. Eventually, Advance wants to return to the kind of revenue it was generating in its glory years. There are challenges to achieving this goal, however. For a start, low oil prices mean “people are tentative about buying new products … they’re looking for ways to lease … We don’t necessarily believe that the market is ever going to be exactly the same as it has been in the past. I don’t know if you’ll ever see oil over $100 a barrel again,” says Kee.
Widening the company’s scope has been one way to survive the changes. “We’re making sure we are looking at diversification to be well-rounded as a business,” says Kee. Back in 2013, roughly sixty percent of what Advance manufactured was for the oil sector, but it has worked hard to diversify its portfolio. Today, in addition to fuel tank trucks and trailers, the company offers a wide selection of equipment for hauling asphalt, chemicals, acids, milk, sanitary equipment and water for camps and worksites.
As Advance considers hiring new staff, Kee says the firm wants employees who are hard-working and positive minded. Many of the original employees who started with the firm are still with the company, he notes.
Workers who show ambition and talent can expect to be rewarded. The company has taken employees who were doing basic-level assembly jobs and trained them in-house to become certified welders.
In a similar manner, Advance has certain qualifications in mind when looking for suppliers. “We’ve got expectations that we go the extra mile with our customers. If we’re going to do that with our customers, we want our vendors to do the same for us. If we have a vendor that says ‘no’ to something any time there’s an issue or a warranty problem, it’s unacceptable to us.”
Maintaining quality suppliers is vital to maintaining Advance’s overall reputation. “When a customer looks at the head of a tank trailer, they see our name. They don’t know necessarily just by looking at it who [made the parts] on it. If they have a failure, it’s the Advance Tank that’s down. So we don’t want our name sullied by having poor quality vendors or having poor quality product going into our product,” says Kee.
Quality and safety are entwined at Advance’s own operations. “Our focus first is making sure our employees are safe and through that process we’re able to gain quality,” states Kee.
As an example, he points to how Advance treats its welders. Work stations are arranged so that welders can do their job comfortably and securely, keeping both feet on the ground and not having to contort into awkward positions to do a weld. This ensures that a welder is always in an optimal position to do quality work while maintaining their safety. Welders are also given top-notch equipment, detailed instruction and comprehensive training.
“We have qualifications for every different kind of welding we have, and we have it documented so that we can show them that hey, this is actually how we want you to do these kinds of welds on these kind of products. And we classify our welders, so we actually have A, B and C welders [with different levels of responsibility].” On top of this “we do a rigorous quality control check on every tank” before it’s sold, he adds.
Advance has embraced concepts such as Kaizen, the Japanese manufacturing principle of continuous improvement, and 5S, a Japanese corporate organizational method, based on the notions of sort, set in order, shine, standardize and sustain.
Advance’s staff includes a general manager who comes to the company from Honda and is extremely well-versed in the continuous improvement mindset. Continuous improvement means always looking for ways to do things more efficiently, by changing procedures, using different tools or equipment or shifting personnel. To maintain quality, Advance also has a large engineering staff.
“We have the largest engineering staff out of all of our competition including guys who are three or four times bigger than us in the U.S.,” states Kee with pride. He says the reason why Advance keeps so many engineers on staff is “because the focus is making sure the product is built right and engineered properly. So when customers ask us to do something we make sure we’ve looked at all the angles and run stress tests and made sure that everything is going to functionally work and you’re going to get some longevity and strength out of the product.”
Focusing on quality and custom products is one way for Advance to stand out in a very competitive market. Some of its competitors offer standardized tank trucks and trailers and accept very low margins just to stay in business. Clearly, Advance is doing something right; the company’s website is replete with testimonials from very pleased customers.
Advance regularly looks to improve its products or introduce new ones. This involves researching ways to make its tank trucks and trailers lighter and more durable, so they are more profitable for end-users.
For promotional purposes, Advance attends and participates in trade shows and has a social media presence on Facebook and LinkedIn, as well as a website.
In five years, Kee believes the company “can double and triple the production levels we have today and do it efficiently and effectively. I believe that we can be in a range where we’re building 900-plus units or 1,000 units a year between our facilities in Quebec and Regina … As long as we make the right decisions and train properly, I see us as a leader in the industry and able to grow and get to two or three times what we’re at now.”