May 25, 2017 / continuous improvement, Cost Management, human capital, industry news, lean manufacturing, LIT, skills gap, strategic planning, supply chain
Broad spectrum forecasts continue to look positive for manufacturers. As reported in our 2017 Industrial Metal-Cutting Outlook, experts believe that 2017 will be a year of growth for industrial manufacturing. Specifically, the latest outlook from MAPI says that industrial manufacturing growth should be 1.2% in 2017 and then accelerate to 2.6% in 2018.
Manufacturers are also optimistic. According to a May survey from the Institute for Supply Management, U.S. manufacturing and services executives expect to see increased revenue, hiring, and capital spending in 2017, reflecting confidence in the economy, reports IndustryWeek. Even after a short decrease in manufacturing orders in April, ISM’s gauge remains well above the average for all of 2016 and “indicates healthy optimism among factory managers,” according to Bloomberg.
A Focused Forecast
What does this mean for metal forges? From a big-picture standpoint, this is all good news. Economic health directly impacts automotive and other customer segments that carefully choose how they spend money with forges and other supply chain partners.
However, as stated in the article from Forging magazine, “Forgers are manufacturers, of course, but drawing their circumstances out of the mass of data represented by surveys like PMI or similar sources is futile.” In other words, it is more beneficial to look at segment forecasts than it is to look at broad manufacturing outlooks.
To give a more accurate outlook picture, Forging conducts its own annual survey with forging executives. Below are some results from its 2017 Forging Business Outlook:
- Shipments: About 62% of all respondents expect their operations’ tons/shipped to rise in 2017, compared to 2016. Only 6.6% of the total expect the coming year to deliver an overall decline in shipments, and 31.1% are forecasting 2017 results will be “about the same” as the 2016 total.
- Spending: Over 65% of all respondents said they have capital spending plans for 2017. For 50.8% of these respondents, the investments will take the form of new manufacturing equipment; 11.1% plan to expand their existing operations, and 3.2% plan to invest in new production plants.
- Challenges: When survey respondents were asked to identify the problems they anticipate lying ahead in 2017, topping the list is “lack of orders” (43.6%), followed by “foreign competition” (38.2%), “general labor shortage” (27.3%), “energy costs” (25.5%), and “higher labor costs” (25.5%).
- Opportunities: For 2017, 25.0% of respondents see commercial opportunity in automotive components, while 20.0% see that opportunity in fuel-efficient engine designs. Only aircraft/aerospace components (16.7%) and alternative-energy systems (10.0%) drew respondents in double digits.
Trends to Watch
Like most industrial manufacturers, forges remain committed to continuous improvement, regardless of market conditions. Because lean manufacturing is nothing new, today’s forges need to think outside the box—or beyond the shop floor—to find new improvement opportunities. As stated in the news brief, Resource Allocation Strategies for Leading Industrial Metal-Cutting Organizations, “managers focused on continuous improvement should explore all of the ways they can save their operation time and money.”
For example, Weber Metals of Paramount, CA and Ulven Forging of Hubbard, OR have taken their lean manufacturing and other continuous improvement activities “above the shop floor” and into the front office. According to Forge magazine, this has resulted in numerous benefits for the companies, including improvements in traceability, quoting, product flow, and scheduling.
Another big trend within the forging industry is a commitment to technological advancement. Last year, the Forging Foundation (FIERF) and Forging Industry Association revised the industry’s Forging Technology Roadmap to develop, support and fund technology and research to benefit the North American forging industry. In early 2017, The FIERF Board approved funding for five new technology projects. Below are three of those projects, as reported by Forging magazine: 1. Forging of Magnesium Alloys for Automotive Applications. Professor May Wells, University of Waterloo, Dept. of Mechanical and Mechatronics Engineering, and two graduate students, are engaged in the project that seeks “to design, build and validate an automotive, fatigue-critical component made of forged magnesium.” Ford Motor Co. is the industry partner to their research. 2. High-Strength, High-Toughness Microalloyed Steel Forgings Produced with Relaxed Forging Conditions and No Heat Treatment. Professor Anthony DeArdo, University of Pittsburgh, Dept. of Mechanical Engineering & Materials Science, and a graduate student, are seeking a “new composition and process route for making high-strength, high-toughness forging with minimum die wear, limited distortion and no heat treatment.”
1. Forging of Magnesium Alloys for Automotive Applications. Professor May Wells, University of Waterloo, Dept. of Mechanical and Mechatronics Engineering, and two graduate students, are engaged in the project that seeks “to design, build and validate an automotive, fatigue-critical component made of forged magnesium.” Ford Motor Co. is the industry partner to their research.
2. High-Strength, High-Toughness Microalloyed Steel Forgings Produced with Relaxed Forging Conditions and No Heat Treatment. Professor Anthony DeArdo, University of Pittsburgh, Dept. of Mechanical Engineering & Materials Science, and a graduate student, are seeking a “new composition and process route for making high-strength, high-toughness forging with minimum die wear, limited distortion and no heat treatment.”
3. Development of a Manufacturing Process for High-Power-Density Hollow Shafts. Professor Gracious Ngaile, North Carolina State University Dept. of Mechanical and Aerospace Engineering, with two student researchers will work to develop a cost-effective manufacturing process for high-power-density hollow shafts. The project’s industry partner is Mid-West Forge.
For a complete explanation of all five projects, you can read the entire article here.
Market forecasts aside, one thing is clear—today’s metal forging operations need to stay relevant and focused on the future. Improvement should continue to be the goal in 2017 and beyond, both in terms of process and technology. Forging may be a mature industry, but as the editors at Forge have stated over and over, with the efforts of industry leaders, it can still be advanced manufacturing.
In what areas can your forging operation advance in 2017?