April 20, 2014 / continuous improvement, human capital, industry news, LIT, maintaining talent, operations metrics, operator training, performance metrics, skills gap, strategic planning
Here’s the good news: Data continues to show that 2014 will likely be a year of growth. Gardner’s most recent metalworking business index (MBI), for example, showed that conditions in the metalworking industry expanded in March for the third straight month and the fourth time in five months. According to Modern Machine Shop, this was the fastest rate of growth since March 2012. Additional MBI findings revealed positive trends in several key business areas, including new orders and production, capacity utilization and spending, employment, and supplier deliveries. You can read the full report here.
All of this good news, however, comes with some uncertainty. As reported in LENOX Institute of Technology’s (LIT) 2014 outlook, most metals executives are only cautiously optimistic about the near-term future. Political issues, pricing pressures, and talent shortages are issues weighing heavily on industrial metal-cutting companies, leaving executives with no choice but to focus on continuous improvement as they attempt to strategically approach a shaky marketplace.
For machine shops, taking the time to make improvements is a challenge in itself, especially if business is starting to pick up. However, leading-edge shops know that in today’s demanding market, optimization is the only way to stay competitive. In other words, they are making time.
While you may not have the resources to undergo a major improvement initiative in 2014, the following are two key trends today’s machine shops need to consider:
- Data-Driven Manufacturing. Yes, “big data,” the Internet of Things, and digital manufacturing have all become industry buzzwords. But as this article from Modern Machine Shop Editor Mark Albert suggests, behind all of this terminology is a trend that can’t be ignored: Today’s machine shops need to make decisions based on information. In fact, Albert says this is the only way that production can move forward. “Facts and figures determine the path a manufacturing process should take, and they propel it ahead,” he states. “To drive manufacturing, factual information has to be available so that people, as well as computers, can use it.” Whether you are manually measuring cut times or implementing cutting-edge monitoring software, the point is that today’s manufacturing decisions need to be based on real, quantitative data.
- Closing the Gap. For years, experts have been warning manufacturers about the skills gap, but it is just now starting to have an impact. Case in point: Prime Advantage Corporation, a buying consortium for midsized manufacturers, recently conducted a survey of CFOs from its member companies. According to the results, 65% of those surveyed said they have open positions that they are seeking to fill, but are having difficulty filling the jobs because of a lack of qualified labor. Other reports are revealing similar trends. To close this gap, companies are discovering that they need to start investing in their human capital. This is a change from the last few years, when metals executives invested more in technology and equipment. In addition to addressing the skills gap, LIT’s benchmark survey of industrial metal-cutting companies provides evidence that investing in areas like training can provide additional benefits, including better quality, faster on-time customer delivery, higher revenue per operator, and lower rework costs.
To read more about trends we expect to see in 2014, check out LIT’s 2014 Industrial Metal-Cutting Outlook.