US Synthetic

Source: Manufacturing Digital

Date :7/2/2007 1:38:10 PM

It takes a tough diamond to bore through solid rock, and US Synthetic has just what it takes to get the job done

Written and produced by James Buchanan & Patrick Harlow

Diamonds last forever.

That is, unless you are trying to gnash them through solid rock.

And that is a lesson known very well by US Synthetic.

“Our principle product is polycrystalline diamond cutters, or diamond inserts that we sell to the drill bit manufacturers for the drilling of oil and gas wells,” says Louis Pope, CEO of US Synthetic. “We have been in business for over 30 years, but chose to focus on this particular segment in the mid 1980s.

“We had been making diamond-based applications for a number of industries at that point, but we saw this particular segment as an emerging market and decided to act on that,” Pope says.

“Back then, I believe this particular segment was somewhere in the area of a $50 million market, but today it has grown to about $450 million, so it’s a huge market,” Pope says. “We knew at the time it would grow, but we certainly didn’t foresee that much growth.”

Based in Orem, Utah, US Synthetic was founded in 1978 by Pope, who — with a team of synthetic diamond experts — expanded and evolved the business. Key to their early success was developing an innovative and proprietary cubic press technology for high-pressure, high-temperature diamond synthesis.

By 1996, Pope and his crew had managed to grow their relatively small company into the market leader for the manufacture of polycrystalline diamond cutters (PDCs) for the oil and gas exploration industry. In doing so, US Synthetic had surpassed behemoths De Beers and General Electric, which had been number one and two respectively, says Pope.

“Part of the reason for this success was the decision to focus on this narrower industry, which fortunately has been one experiencing significant growth,” he says. “We have also worked very hard at perfecting our quality management systems, which are critical to our industry because we need to be sure that each product is the same time after time, so it is consistent.”

Pope also credits improvements to the durability, heat resistance and cutting effectiveness of the PDCs they produce as compared to competitors. Within the context of this market, he adds, the performance of the product is far more important than simply being the least expensive.

“The price war is really a no - win war,” Pope says. “When we decided to narrow our focus on inserts for oil and gas drilling, we placed an emphasis on improving the performance and value of our products.”

A high performing drill bit provides a significantly better value for drilling companies because it can remain in the hole longer. The financial implications of a long-lasting and effective drill bit are so substantial, says Pope, that the cost of the bit becomes relatively negligible.

These products use a diamond grit, which must be bonded together and bonded to a substrate such as tungsten, says Pope. The quality of these bonds can make a difference in the overall quality of the bit. Further, the thermal dynamics of the grit and cutters can also be improved, which adds to the lifespan of bits that use PDC.

“There are lots of ways to improve the product, which really doesn’t happen in steps, but are achieved incrementally,” he says. “If you stick with these incremental improvements you will continuously improve and develop a much better product.”

There are essentially three critical and related elements to producing PDCs that US Synthetic has exhibited an expertise in.

The first is diamond sintering. According to Pope, industrial diamonds are the hardest substance in existence, which makes them the most suitable tool for drilling through rock.

However, individual diamond crystals are an imperfect tool, in that they have fault lines that - when struck parallel to certain planes - will cause the diamond to cleave. Diamond sintering overcomes this problem by bonding a mass of diamond grit onto a larger coherent structure with no directional weakness, and supporting this diamond with a ductile material, usually a tungsten carbide substrate.

Sintered diamonds also provide more uniform wear than a single crystal and have the same thermal properties and hardness.

The next element is the process by which diamond grit is sintered, which requires applying extreme heat and pressure.

According to the company’s website, diamonds are typically sintered at 2,550 degrees Fahrenheit. If this is done at room pressure, the extreme temperature would cause the diamond to revert to graphite. However, if extreme pressure is simultaneously applied, the diamond will remain in its crystalline form.

To achieve this non-metamorphosis, pressures of approximately 1 million psi – the equivalent of a 160 mile high column of granite – must be applied.

To achieve these temperatures and pressures simultaneously, US Synthetic utilizes proprietary cubic press technology. Each cubic press consists of six large pistons, each of which is capable of supplying several thousand tons of force. Each piston pushes on a small tungsten carbide anvil, which in turn compresses a cubic pressure cell containing the raw materials – carbide and diamond crystals.

Once the desired pressure is reached, electric current flows through a resistance heater to achieve the required high temperatures. The heat and pressure combine in this manner to bond the individual diamond particles within the grit together.

The last element to producing high quality PDCs is diamond finishing.

Because industrial diamonds are the hardest substance in existence, there is nothing with the required physical properties to act as a finishing tool. The answer to this conundrum is to use diamonds to finish diamonds, which is nearly analogous to using a wooden saw to cut wood.

US Synthetic uses millions of carats of industrial diamonds each year to machine and finish its PDCs to the required final dimensions. The company has developed what it describes as specialized techniques and machines for lapping, grinding, polishing, brazing and cutting the PDC inserts.

With such tight tolerances and the challenging physical properties of the diamonds, US Synthetic needs to stay on the cutting edge of technology in order to maintain and grow the business. For this reason, the company dedicated space and capital equipment in its production facility to research and development, and has a group of experienced scientists and technicians driving its efforts to perfect and enhance existing diamond technologies. Resources in the facility include a full metallurgical lab, a computer aided design center, and a testing lab.

“We have five PhDs working with us, as well as a significant staff of engineers from many different discliplines,” says Pope. “In all, we’ve got quite a crew of experts working to develop and improve the products we produce.”

Further, a team of application engineers works directly with the company’s customers to develop custom products to meet their unique requirements.

All told, engineers are able to create and optimize designs using solid modeling software, analyze thermal and mechanical performance under simulated drilling conditions, quickly build prototypes, evaluate cutters using scanning acoustic microscopy, and monitor and improve performance with abrasion, impact resistance, and vertical turret lathe testing.

As the research and development wing works to perfect the company’s products, US Synthetic has fully embraced Lean manufacturing principals in nearly every aspect of the company’s work.

“I would say that about two-and-a-half years ago we began to integrate lean processes, and we are fully enabled to become as lean as we can,” says Pope. “We are great believers in the Toyota production system, and that has really driven our ability to change and evolve our process to become more efficient.”

He goes on to add that adopting and implementing lean principles is a continuum, as opposed to a one time action.

“We perform about three Kaizens a month, where teams of about 10 to 12 people get together to review the various elements of our process to seek out ways to do them better,” Pope says. “We’ve seen dramatic improvement in the floor, where — for example — our teams on the manufacturing floor are able to produce three times what they could before.”

Lean principles have also helped the company adjust and absorb its growth over the past few years.

“In the last two-and-a-half years we have tripled our business, and I don’t think we would have been able to do that without adopting lean principles,” says Pope. “We wouldn’t have been able to keep up with that growth.

“The move to lean was sparked by seeing the successes of other companies here in Utah. In touring these plants, that is where our paradigm shifted,” he explains.

Industrial diamonds (also known as synthetic diamonds) can be made through chemical and/or physical processes. Though they are essentially fake diamonds, they are nearly molecularly identical to naturally produced diamonds, and both are composed of carbon atoms arranged in the same way. There are small differences, however.

Synthetic diamond grit can be made extremely pure, which generally means it tends to be harder. This grit can also be tailored to provide the specific material properties that US Synthetic’s customers are looking for.

US Synthetic does not produce the grit or substrates that it uses for its PDCs.

“Most of the materials we use are manufactured within the U.S., but we do work with a handful of international suppliers,” says Pope. “We try and push our suppliers toward lean principles as well, because we feel that will ultimately benefit us both.

“We are also working with them to reduce the amount of inventory we carry, in order to maintain a just-in-time inventory system,” Pope says. “We have been able to maintain a continuous flow of supplies here.”

Further, due to the nature of its business, the company requires a tight control on the quality of the materials used to produce its PDCs.

“We audit their quality systems and are always in our suppliers’ factories,” says Pope. “We want to maintain an intimate working relationship with them.”

Pope also stresses that his employees are critical to the success of the company.

“We work at developing good employees and maintaining the company as a great place to work,” he says, “where employees can develop and profit and enjoy where they work and the work they do.”

As testament to the company’s culture, Pope says US Synthetic has a very low employee turnover rate and has been named as one of the best places to work in Utah by the governor.

The company also encourages its employees to increase their educational attainment.

“We have a lot of young employees, and there are a number of them that are still in college as they work with us, so we provide them with tuition reimbursements and help with being able to succeed and finish their college education,” says Pope.

The company also offers a number of training opportunities to help employees develop within the company and the industry.

The net result is skilled employees that help fulfill the high level of service promised by the company to its customers.

“This is an overall theme for our company that includes service to our employees, as well as the service we provide our customers,” says Pope. “We will do whatever it takes to deliver the product on time and to our customers’ specifications. We are very keen on our customers’ success and they have responded to this commitment with their business and loyalty.”

As Pope looks forward, he sees a need to widen the company’s focus.

“We want to keep moving forward on the oil patch, but we also recognize that we have to diversify,” he says. “We have an active diversification program in order to expand into other diamond-based applications.”

These applications include industrial bearings for oil and gas drilling tools, wire dies, scientific instrument components, and mining. Other applications are likely to follow in the next several years.

“All of these could be significant markets for us,” says Pope. “Because these are relatively new prospects without a lot of competitors in them we don’t want to advertise our plans too much until we have made a splash.”

Acquisitions are also on the table as Pope seeks to grow the company.

“So far we’ve grown organically, but we will very likely be making some acquisitions,” he says. “I would say that 90 percent of our growth will be organic, but 10 percent could be through acquisitions.”

He goes on to add, “It is our intention to grow this into a $1 billion company by 2015.”