February 5, 2015 / benchmarking, industry news, LIT, operator training, quality, Safety, skills gap, strategic planning
Based on recent data, the metal service center industry entered 2015 on the right foot. According the latest Metals Activity Report from the Metals Service Center Institute (MSCI), U.S. service center shipments of both steel and aluminum were higher in December 2014 than in the prior year. In addition, year-to-date U.S. steel shipments were higher than 2013 by 4.2% while year-to-date U.S. aluminum shipments were up 8.1% year over year. Canadian results for December 2014 and for the year were similar.
All of that good news falls in line with most industry forecasts. As we reported here, industry trade publication Modern Metals says the outlook for 2015 is mostly positive. However, the magazine also warns that “competition, domestic and foreign, is always the overriding force that determines whether volume, price and demand forecasts are in balance.”
Indeed, even with positive expectations, service centers need to be aware of some of the potential challenges they will face and, even more so, start finding ways to be prepared. Earlier this month, MSCI President and CEO M. Robert Weidner III discussed the top trends challenging the metals industry in his State of the Industry address. Below are the three of the five challenges that he outlined, as reported by thefabricator.com (you can read the full coverage here.):
- Market Intelligence – Volatile markets and increasing competition have heightened the need for trustworthy data and analysis tools, as well as the need for cybersecurity resources and training to secure market intelligence.
- Business Disruption – World events have an even bigger impact on local economies than before, creating a need for topic- and area-specific experts and information and enhanced vehicles and technology to provide information.
- Congressional Gridlock – U.S. partisan politics have stalled action in the legislative branch, often resulting in extreme actions through regulators that have impeded manufacturing growth. It’s imperative to continue to advocate on behalf of the metals industry in the U.S. and Canada for pro-business agenda.
In his last two points, Weidner stressed the importance of employee safety and ongoing training as a means of attracting and maintaining workers. Investing in areas like safety and education shows employees that you value them, which only encourages them to invest right back into the company. In addition, LENOX Institute of Technology’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. In other words, it’s a win-win for everyone.
Only time will tell if industry performance plays out the way everyone expects. After all, forecasts are really only educated guesses. However, managers need to be sure they remain aware of trends like those outlined by Weidner so they can make informed decisions and be as prepared as possible for whatever 2015 brings.