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Fabricators

Four Ways Fabricators Can Encourage Lean Success

August 10, 2017 / , , , , , , , , ,

Continuous improvement and lean manufacturing are certainly not new concepts to today’s fabricators. The numerous benefits of “getting lean” have been widely accepted, which means that most shops have already undergone some type of improvement initiative. In many cases, understanding the benefits of lean manufacturing is not the challenge. The real challenge is making the initiative stick long enough to produce results.

Unfortunately, that is often not the case. Using a hypothetical example, an article from The Fabricator explains that it is not uncommon for a fabrication company to go through four or five different improvement initiatives, none of which end up successful. The problem, the article states, is that engineers and managers may make changes to the way employees do their work, but they really don’t spend enough time helping operators and other employees understand why or how to do it. Even if everyone is often willing to take on the lean transformation, managers need to teach everyone the “what, why, and how” behind the lean principles.

In addition, there are often employees that are hesitant to embrace improvement initiatives like lean manufacturing. Some may even actively fight against it, even while performing their assigned lean tasks.

The goal for any manager should be to not only get workers to adopt lean principles, but to fully embrace them. Getting everyone—from the top down—is the only way a shop will start seeing results. As explained in the eBook, Five Performance-Boost Best Practices for Your Industrial Metal-Cutting Organizations, for lean to be successful, “it must permeate the business silos and receive universal backing amongst senior management and employees.”

How can managers accomplish this? A recent article from IndustryWeek offers four ways fabricators can get even the toughest employees on board with lean initiatives:

  1. Don’t Gloss Over the Fact that Challenging Times Lie Ahead. Instead of minimizing potentially negative consequences of the looming change, state flat out that some individuals will face more adversity than others. Much of this has to start from the top. The unknown intimidates, frustrates, and creates emotional insecurity. If leadership communicates and exhibits its vision, then change becomes the catalyst for improvement.
  2. Evaluate Current Staffing. Lean management is not synonymous with layoffs. However, some team members are not open to working in a lean culture. They may not agree with lean philosophies, nor do they want to better understand these principles. If you retain these individuals as company culture evolves around them, you are not benefiting them by allowing them to continue working for a lean company. Consider respectfully transitioning recalcitrant team members out of their positions.
  3. Pre-plan Team Communications. Use rich communication mediums to announce change. Face-to-face communication cannot be overvalued as a means to convey positivity, commitment, and optimism. An “all hands” meeting is an appropriate venue for the initial announcement. Do not make a habit of distracting teams from their primary responsibilities with frequent updates.
  4. Highlight Empowerment Versus the Increase in Responsibilities. Team members accustomed to traditional workplace cultures will not readily evaluate their own actions and suggest process improvements. This type of self-evaluation may be completely foreign to them. Initially, many team members will find the concept of increased responsibility daunting rather than empowering. To teach lean thinking, strive to make lean ambassadors out of the organization’s influence drivers. Focus on those who can deliver change and who will become not only the informal leader on the floor, but also the industrial athlete of the cell.

While changing processes is certainly a huge part of any lean manufacturing journey, getting people to accept, embrace, and understand the changes is the first and most important step a shop can take. As many fabricators have discovered, missing this critical step could mean the difference between seeing results and hitting another dead end.

Fabricators

Developing Strong Talent in Your Fabrication Shop

July 10, 2017 / , , , , , , , , , ,

Historically, the trend has been for metal companies to put process over people. The manufacturing industry’s shortage of workers with the necessary skills (also known as the “skills gap”), however, is forcing companies to allocate resources back to their workforce.

For many companies, this means changing the way they train and maintain talent, whether that means beefing up training programs or rethinking their hiring tactics. Rockwell Automation, for example, is working to recruit military veterans and leverage their unique skill sets. “We’ve been able to develop a truly groundbreaking program that will help solve a challenge critical to fueling the future growth of the manufacturing sector,” Blake Moret CEO of Rockwell Automation, states here in a press release. “Military veterans possess a unique combination of technical savvy and core work skills that makes them well-positioned for careers in today’s advanced manufacturing environments.”

Companies are also reevaluating how they are maintaining their talent. As lean manufacturing expert Jamie Flinchbaugh says here in IndustryWeek, you can’t “just hire talent and then leave it alone.” Continuous improvement applies to all areas of an operation, including training and maintaining talent.

According to Flinchbaugh, when it comes to building a strong team, manufacturers should consider the following:

  1. Put the right talent in the right place. Hiring is part of this, but so is organizational design. Too often Flinchbaugh says he sees organizations reward talent by taking them out of the place they perform the best. That’s like taking your best hitter on the team and making them a team coach before their retirement as a reward. So top salespeople become sales managers, and top engineers become engineering managers. Is that the best use of their talent?
  2. Talent is responsible for its own improvement. Your talent should hold the primary responsibility for their own development. A lean thinker should be encouraged to improve their talent in any skill that matters, whether personal or professional.
  3. Coach and train. Making the development of talent a core part of your business means integrating it into your management systems. This is not something to delegate to human resources. The hardest part of this is how you leverage your top talent. While not everyone is suited to coaching and training, leveraging your top talent to build more talent is the long-term play.

In a metal-working environment, it is also critical that operators and other employees feel valued. While the idea of empowering employees sounds a bit cliché, a growing number of managers are finding that operators who take ownership of their process or work area are invaluable. According to the brief, “Strategies for Training and Maintaining Talent in Industrial Metal-Cutting Organizations,” operator “buy-in” can positively affect all aspects of an industrial metal-cutting operation, including quality, productivity, and in the end, the bottom line. Similarly, when employees feel disconnected, those same business areas can be negatively affected. Strategies such as collecting feedback, goal setting, and incentives are good ways to encourage employee ownership from the start.

As the skills gap has proven, investing in talent is just as important as investing in technology and process. Metal-cutting companies—not to mention the manufacturing industry at large—can’t afford to neglect one of its greatest assets. In the end, building and cultivating high-quality talent is necessary for building and cultivating high-quality services and products.

 

Fabricators

Metal Fabricators Looking for Growth in 2017

May 10, 2017 / , , , , , , ,

Based on expert forecasts and industry sentiment, the outlook for 2017 continues to be hopeful. As stated in LIT’s 2017 Industrial Metal-Cutting Outlook, metal fabricators and other industrial metal-cutting organizations are getting more and more optimistic about the near future, and recent market data looks promising.

While the latest outlook from the Manufacturers Alliance for Productivity and Innovation (MAPI) expects “relatively sluggish” output growth for the manufacturing industry as a whole, the near-term forecast for Fabricated Metal Parts is positive. Specifically, MAPI forecasts that output growth for the Fabricated Metal Parts sector will register 1.8 percent in 2017 and 3.4 percent in 2018. In addition, March data from the U.S. Census Bureau shows that both new orders and shipments of Fabricated Metal Parts were up 5.5 percent compared to 2016.

Recent data from the Institute for Supply Management (ISM) is also encouraging. As stated here in a press release, economic activity in the manufacturing sector expanded in April. According to the Manufacturing ISM Report on Business, 16 out of 18 manufacturing industries reported growth in April 2017, with the Fabricated Metal Products sector nearing the top of the list. In fact, one survey respondent from the Fabricated Metal Products sector stated, “Business is definitely improving. Profit margins are increasing.”

This type of optimism seems to be prevalent throughout the industry. The first quarter Fabricating & Forming Job Shop Consumption Report from Fabricators & Manufacturers Association International (FMA) revealed that 61.9 percent of metal fabricating managers and shop owners see improving conditions for the coming quarter and another 34.3 percent expect things to stay the same. A mere 3.7 percent expect things to get worse. “This is the most confident the sector has been in a while,” says Chris Kuehl, FMA’s economic analyst.

Industry Trends

That’s not to say that fabricators don’t have some concerns. After attending FMA’s Annual Meeting in March, Kuehl reports here that he noticed three key trends among attendees, including:

1. Cautious optimism. According to Kuehl, most fabricators appear to be optimistic but many remain cautious. “The years of an administration that was at best ambivalent toward business and at worse downright hostile are over,” he writes. “There are definitely mixed opinions about what happens under Trump, but thus far the promises are looked upon as encouraging. That said, there is doubt that many of the promises will be kept because of fierce opposition from many quarters and lack of faith in Trump’s diplomatic skills. Still, there is hope that some of the big issues will get the attention deserved—trade patterns, regulation, and taxes at the top of the list.”

2. People will stay at the top of the list of worries. The manufacturing skills gap continues to be an issue for most fabricators, according to Kuehl’s analysis. “It is harder than ever to find the employees needed,” he says. “Manufacturers aren’t finding qualified and eager job seekers no matter what they offer to pay. The powers that be have not yet addressed this problem, and that is immensely frustrating.”

3. Concerns about the future. Even with some renewed confidence, Kuehl says that fabricators and manufacturers are still concerned about the future and whether the industry is ready for developments it hasn’t seen in over 10 years. “Interest rates will be higher for the first time in over a decade, and inflation will be rearing its ugly head sooner rather than later,” he writes. “Add in the ramifications of a trade war or two, and the concern many have expressed [is] that the progress seen thus far could come to a screeching halt.”

Customer Forecasts

Even with some potential challenges ahead, most fabricators remain focused on growth. Over the last few years, automotive has been a huge growth market for fabricators, but some experts believe that sales are slowing and the market is stabilizing. However, as stated in a blog post from Branam Fastening, there is still plenty of opportunity for growth in the following customer segments:

A Bright Future

Does the future look bright for metal fabricators? According to MAPI, there are certainly “glimmers of light,” and recent data certainly reflects that assessment. However, preparation and continuous improvement should still be a top priority for fabricators. As stated in the white paper, Best Practices of High Production Metal-Cutting Companies, industry leaders need to remain focused on optimizing every aspect of their internal operations—regardless of market conditions—so they can be ready for whatever the future holds.

In what ways can you position your operation for growth in 2017? 

Fabricators

Three Ways Fabricators Can Build Stronger Supplier Partnerships

February 10, 2017 / , , , , , ,

For most fabricators, supplier relationships are the building blocks of success. While there are still some companies that base their supply chain on price, as customer expectations for both quality and delivery continue to increase, many industry leaders are taking the time to form strong supplier relationships that are built on a lot more than an affordable product or service. In many cases, suppliers are becoming strategic partners.

Data confirms this trend. As reported in the eBook, Five Performance-Boosting Best Practices for Your Industrial Metal-Cutting Organization, a survey conducted by Tompkins Supply Chain Consortium found that 80 percent of supply chain professionals believe that the supply chain is an enabler of business strategy. “A majority of companies also felt that the supply chain is a source of business value and competitive advantage,” the eBook states.

How can you form strong supplier relationships that provide real value? The eBook offers three best practices:

1. Schedule on-site visits. Like any relationship, communication is key. Expect your prospective supplier to assume a “partner” role from day one by focusing more on service than on the sale of the product. To facilitate this relationship, start by asking for an on-site needs assessment. This gives you the opportunity to discuss your business goals in person, as well as providing the vendor with a full overview of your operation.

2. Include training in your purchase agreement. Most suppliers should be willing to provide some level of value-add training as part of the purchase agreement. This is especially important when it comes to your equipment and tooling providers. No one knows your production equipment better than the people who designed it, and they should be willing to share that expertise with you.

3. Expect thought leadership and self-service tools. Industry-leading partners should be able to support your business by providing informational and educational materials, as well as practical tools and services. You can and should rely on your supplier to be an industry thought leader that provides a steady stream of valuable industry trends data, operational strategies, and technical product information.

Of course, maintaining strong supplier relationships doesn’t come without its challenges. According to the 2017 Manufacturing Outlook Survey conducted by ASQ, 83 percent of manufacturers experienced problems with suppliers last year. However, only a third felt concern that those issues would spill over into 2017. In addition, 66 percent of those surveyed said they are working with current suppliers to fix previous concerns—an indication that the majority of manufacturers see the value of working closely with existing suppliers to address challenges they face. As an article from Supply Chain Drive notes, “…a consistent cycling of suppliers can harm long-term performance as relationships take time to cement.”

ASQ does warn, however, that manufacturers should be prepared for those moments when suppliers don’t come through. The key is to openly communicate with existing suppliers to determine any potential risks and, more importantly, to have back-up plans—and back-up suppliers—to alleviate supply chain disruptions. Ultimately, the goal for any manufacturer should be to turn vendor relationships into strategic partnerships. By taking the time to build trust and value into the supply chain, suppliers can become an integral part of your business strategy and, more importantly, your shop’s success.

In what ways can your fabrication shop get more out of its supplier relationships? 

Fabricators

Quality Comes First for Leading Fabricators

January 10, 2017 / , , , , , ,

Like many industrial metal-cutting companies, fabricators face the constant challenge of balancing speed with quality. Although most managers understand that both are critical, tight schedules and rising customer expectations are making it more and more difficult for companies to keep up.

According to the brief, “Strategies for Improving Customer Service and On-Time Delivery in Industrial Metal Cutting,” managers need to be sure that when push comes to shove, quality comes first. “While speed and agility are certainly key attributes of any leading metal-cutting operation, they cannot come at the expense of accuracy,” the brief states. “In sawing, for example, if an operator increases the speed of the saw to get more cuts per minute without considering the feed setting or the material, the end result will be decreased blade life, possible maintenance issues, and lower quality cuts. In the same way, companies focused solely on speed and delivery without considering the quality aspect of customer service will likely see other areas of their business suffer, including customer retention and costs.”

Leading fabricators understand the benefits of keeping quality high, and many continue to invest in this part of their operations. Madden Bolt, a fabricator based in Houston, TX, recently announced that it has earned its AISC certification from the American Institute of Steel Construction (AISC). The goal of the certification, the company states, is to further demonstrate to customers its commitment to delivering quality steel products—a step Madden says only half of the steel fabricators in its category have taken.

According to a company press release, the six-month AISC certification process was worth the effort and directly benefits customers. Specifically, the certification requires Madden Bolt to implement effective procedures that safeguard the specifications and agreements within customer contracts, including a system that would resolve discrepancies or deviations from contract requirements. Madden is also required to ensure that material ordered complies with design and drafting specifications and that the materials are inspected to meet ASTM standards.

Many fabricators are also in the process of undergoing ISO 9001:2015 certification. The quality standard, which was recently updated, is a best practice for many industrial metal-cutting organizations, including Metal Cutting Service, Inc. in City of Industry, CA. David Viel, president of the specialty metal-cutting shop, admits that while it is hard to pinpoint the dollar benefit ISO 9001 certification has brought to his bottom line, it has definitely offered a return on investment. “Our quality, if I had to make an estimate, would be in the range of a 20% to 30% improvement,” he says here in a case study.

Of course, certification is just one way fabricators can invest in quality. There are several technologies available that help industrial metal-cutting companies enforce quality control, such as the inspection tools used by companies featured here and here in Modern Metals.

Regardless of how you decide to ensure quality within your shop, the point is that you put in the time and resources necessary to make it a top priority. In today’s fast-paced market, slow and steady does not win the race, but fast and sloppy doesn’t stand a chance.

In what ways has your fabrication shop invested in maintaining high quality standards? 

Fabricators

Training Strategies for Today’s Advanced Metal Fabrication Shops

December 10, 2016 / , , , , , , , ,

With all the buzz around connectivity and “smart” factories, it appears as if the manufacturing industry is on the brink of a major shift. Some experts, as we reported here, are calling this Industry 4.0. Even companies in more mature industries like metal fabrication are starting to realize that the demands of today’s customers are not only changing the scope of their work, but the way in which they actually need to do their work.

“Investments in fabricating technology, information systems, and employees will be necessary to stay on top of the growing complexity in the metal fabricating business,” Dan Davis, editor of The Fabricator, says here in a recent editorial. “There’s no other way around it in this world of massive customization in manufacturing.”

While most industry leaders understand the capital and technology investments that may be necessary in the near future, many fail to realize the growing importance of investing in employees and, more specifically, in their training. In today’s lean manufacturing world, metal fabricators and other industry metal-cutting organizations have been conditioned to think in terms of efficiency. This means that secondary activities like employee training are often neglected because they don’t directly contribute to the bottom line.

However, as stated in the brief, “Strategies for Training and Maintaining Talent in Industrial Metal-Cutting Organizations,” research shows that investing in areas like training can provide a host of benefits, including better quality, faster on-time customer delivery, higher revenue per operator, and lower rework costs. “Put simply, companies can’t afford to neglect one of its greatest assets,” the brief states. “By investing resources into the workforce, industrial metal-cutting leaders can better equip themselves for today, as well as the future.”

For shops that want (or need) to beef up their training programs, an article from Foundry magazine provides some insight on what it takes to create an effective training program. According to the article, training programs should include a strong combination of education, engagement, and use: “Training must educate by teaching skills, transferring knowledge, cultivating attitudes and hitting other specific targets. But training that is purely educational doesn’t get results. That is why training must present information in ways that are engaging, interactive and require the learner to think and use the information learned.”

The article goes on to describe a method often used in training known as VAK Attack. VAK is an acronym describing the three ways people learn, as spelled out below:

According to the Foundry article, effective training should include all three of the VAK principles so that employees can better learn and absorb the information presented. The author also suggests hiring an outside trainer to ensure long, impactful results. (You can read the full article here.)

It would be hard for anyone to ignore the advancements of the manufacturing industry; however, too many companies are ignoring the role employees play in today’s increasingly complex production environments. By investing in employees and their training, today’s metal fabricators can prepare for the future and, more importantly, stay competitive today.

How is your fabrication shop investing in employee training?

Fabricators

Three Cost Management Strategies for Metal Fabricators

November 10, 2016 / , , , , , , , , ,

According to research from Kronos, U.S. manufacturers as a whole are bullish about future growth prospects. As reported by IndustryWeek, the research shows that nine out of 10 company leaders expect revenues to increase every year over the next five years, and well over half anticipate strong annual growth of 5% or more.

That doesn’t, however, mean companies don’t anticipate stumbling blocks. In fact, the report lists five critical challenges today’s manufacturers feel could limit their potential sales and profit growth. Not surprisingly, three of those challenges are cost-related—material costs, labor costs, and transportation/logistics costs.

So while some manufacturers are optimistic right now, there is no question that uncertainty about market conditions remain. The latest data from the Institute for Supply Management, for example, revealed that that Fabricated Metal Products sector contracted in October; however, new orders were up in September. This type of instability means that most fabricators are keeping a close eye on cost.

As stated in the brief, Cost Management Strategies for Industrial Metal-Cutting Organizations, there are no “one size fits all” answers when it comes to cost management. However, there are some of guiding principals industry leaders are using to keep costs low.

From an operations standpoint, managers can better manage equipment costs by making sure saws and other metal-cutting tools are operating as optimally as possible. According to the brief, this includes ensuring that equipment is running at the proper settings and that fluids are adequate.

“Closely monitoring blade life and maintenance reports are a critical aspect of managing equipment costs,” the brief explains. “If operators are taking too long to cut a specific material or blade costs are up, managers should review equipment settings and monitor the operator in action.” Consistent general and preventative maintenance programs can also help metals executives better manage costs.

From a more strategic standpoint, there are several best practices metal fabricators can follow. Below are three strategies to consider:

  1. Partner up to increase buying power and save money. As suggested in an article from Thomasnet, partnering with other small businesses can yield volume discounts and achieve savings. Consortiums put the benefits of economies of scale into effect for small businesses that would otherwise be left paying premiums. In addition, small firms should seek strategic partnerships with key suppliers. Purchasing from fewer suppliers saves time and resources while building trust. A small business owner can talk openly with a strategic partner and ensure the company is not overspending due to unnecessary costs.
  2. Include financial personnel in improvement initiatives. If your company has decided to embark on a continuous improvement activity to save costs, you may want to check out this article from IndustryWeek. In addition to discussing the dangers of disguising cost cutting as improvement, the article also reminds managers to spend time with the financial community and hold discussions on costs and savings before starting an improvement project. Managers should work closely with the financial team to develop a tracking system for possible problems to prove cost savings in the future. The article also suggests that a person from the financial community be included in each improvement team. This person will be able to validate cost savings and ensure all costs are tracked accurately.
  3. Factor time into the cost equation. While most people believe the old adage “time is money,” traditional accounting practices don’t exactly account for the cost of time—specifically, customer lead times—in metal fabrication. As explained in an article from The Fabricator, traditional cost accounting treats inventory as an asset and does not capture the true costs of long lead times. However, according to the author of the book, The Monetary Value of Time, there is an accounting method that corrects this oversight and complies with generally accepted accounting principles. You can read more about this method here.

Regardless of whether you are optimistic about the market and making investments or taking a more cautious approach and holding your pennies close, it is always important to closely monitor costs. By taking the time to approach cost strategically, today’s metal fabricators can save money, stay competitive, and, hopefully, see long-term increases to the bottom line.

Fabricators

A Look at Industry 4.0 in Your Fabrication Shop

October 10, 2016 / , , , , , , , , , , ,

Thanks to advancements in machine-to-machine (M2M) and communications technology, many believe the manufacturing industry is on the brink of the “fourth industrial revolution,” also known as Industry 4.0. This concept has been widely discussed and promoted in Europe, especially by German manufacturers Siemens and Bosch, but the term is starting to gain traction in the U.S as well.

What is Industry 4.0?
Because it is a newer term, definitions for what comprises Industry 4.0 vary greatly. A report from Deloitte states that there are four characteristics that define Industry 4.0:

  1.   Vertical networking of smart production systems
  2.   Horizontal integration via a new generation of global value chain networks
  3.   Cross-disciplinary “through-engineering” across the entire value chain
  4.   Acceleration through exponential technologies

An article from Forbes defines Industry 4.0 as “a combination of several major technology innovations, all maturing simultaneously, and expected to have a dramatic impact on manufacturing sectors.”  More specifically, the article states that technologies such as advanced robotics and artificial intelligence, sophisticated sensors, cloud computing, and the Internet of Things, are joining together to integrate the physical and virtual worlds.

Simply put, Industry 4.0 is the advent of the long-awaited “smart factory,” in which connectivity and advanced technologies are being used to streamline decisions, optimize processes, eliminate waste, and reduce errors.

Industry 4.0 In Practice
According to the Forbes article, Industry 4.0 has the potential to offer manufacturers three major benefits:

What could this look like in your fabrication shop? EVS Metal, a precision metal fabricator headquartered in Riverdale, NJ, says here in a blog post that Industry 4.0 “will eventually impact the way we fabricate and machine both single items and finished products, from start to finish, including warehousing and shipping, whether we’re manufacturing full production runs, or single prototypes.”

On a small scale, fabricators can start by equipping components and machines with necessary Industry 4.0 features, such as sensors, actuators, machine-level software, and network access to measure productivity of metal-cutting equipment. For example, one metal service center, featured here in a white paper, is using an internal software system to automatically track the number of square inches processed by each band saw and each blade. At any point, the operations manager can go to a computer screen, click on a saw, and see how many square inches that saw is currently processing and has processed in the past. This has allowed the service center to easily track trends and quickly detect problem areas.

This, however, is only the beginning. Once a manufacturer starts capturing relevant data from multiple machines, this data can be further analyzed to detect patterns, helping managers forecast and, eventually, automate decision-making processes. In a metal-cutting environment, this might include predicting blade life and equipment maintenance needs, which would essentially turn disruptive, unplanned downtime to more anticipated, planned downtime. This could translate into more jobs completed on time.

The Time is Now
Like any trend, it will take a while for Industry 4.0 to fully take hold. However, many experts are saying that industry leaders are embracing this next generation of manufacturing and, more importantly, are starting to make investments.

A PwC survey encompassing 2000 participants across nine industry sectors has concluded that Industry 4.0 will revolutionize industrial production and that first movers are transforming into digital enterprises. According to the study, 33% of companies say they’ve achieved advanced levels of digitization today, and 72% of companies expect to achieve advanced levels of digitization by 2020.

While no one believes the changeover to Industry 4.0 capabilities will come cheap, more than half of companies in PwC’s survey expect a return on investment within two years. “The payoff will potentially be enormous, as competitive landscapes get redefined,” PwC states. “Industrial companies need to act now to secure a leading position in tomorrow’s complex industrial ecosystems.”

Is your fabrication shop ready to invest in Industry 4.0?

Fabricators

Two Automotive Material Trends Metal Fabricators Should Be Watching

September 10, 2016 / , , , , , , ,

For the last several years, the U.S. auto industry has been a growth driver for many industries, including industrial metal cutting. As we reported in our “Metal Service Center Outlook for 2016,” the automotive sector is one of two industries expected to help metal fabricators “ride out the storm” of today’s uncertain market.

While recent reports have shown that U.S. auto industry sales have started to cool, most experts still believe auto sales will remain strong over the next few years, even if they aren’t breaking any new records. In theory, this is good news for metal fabricators and other companies serving the auto segment. However, sales aren’t the only trend suppliers should be tracking.

According to an article from PricewaterhouseCoopers (PwC), the auto industry is in the midst of change, and the supply chain needs to be ready to respond. “It’s not clear how cars will change in the coming years, but automakers and suppliers no longer have the luxury of sitting out the transformation,” the PwC article states. “If you are an executive at an OEM or an auto equipment supplier, your strategic acumen — your ability to place your company in the vanguard of product trends without running afoul of ever more stringent environmental rules — will surely be tested.”

Put simply: if automotive is one of your key customer segments, it’s time to pay attention.

Material Matters
One of the biggest shifts happening within automotive manufacturing has been the growing use of lightweight materials. To meet federal emission standards, a growing number of U.S. automakers like Ford are using lightweight metals to decrease the weight of their vehicles and, therefore, increase the fuel economy. Many in the industry refer to this trend as “lightweighting.”

Of course, with new materials come new equipment and tooling needs, as well as new cutting parameters and techniques. To ensure that fabricators are prepared, below is a short summary of two materials trends worth following:

Steel Still Reigns—For Now
Even with these new materials hitting the automotive scene, steel will likely continue to be the dominant metal used in automotive manufacturing. According to Automotive World, the average vehicle is still made using between 800kg and 900kg of steel.

As Tim Triplett, editor of Metal Center News, said in an archived editorial, the steel industry won’t likely lose any ground in auto design but, instead, will simply adjust to the trends. “Just as many headlines heralded new developments in lightweight, advanced high-strength steels,” Triplett wrote. “Steelmakers claim the auto industry can meet the government mileage standards by using the new steel alloys, in combination with power train innovations, and at a lower cost than switching parts to aluminum.”

Indeed, reports show that auto manufacturers are already testing the use of lightweight steel alloys, and innovators like GM are even trying mixed-metal manufacturing in which steel and aluminum parts are welded together.

Regardless of which automotive material trends take hold, the point is that fabricators and other suppliers serving this market need to be ready: Do the research, ask the questions, and be ready to adapt accordingly.

Fabricators

Three Questions Fabricators Should Ask About Their Inventory Management System

August 10, 2016 / , , , , , ,

For any industrial metal-cutting operation, inventory management is an ongoing challenge. Ensuring the right amount of inventory in-house while simultaneously working to reduce overall operating costs is not an easy task.

This has been especially true in recent years. As we reported here in our annual industry outlook, high inventory levels were a major challenge for fabricators in 2015.

As a result, many fabricators are now re-evaluating their inventory management tactics, and more and more shops are moving away from holding large amounts of inventory. According to  industry survey results published by The Fabricator, a little more than half (54 percent) of the respondents said they hold less finished-goods inventory today than they did three years ago. “Custom fabricators don’t want to drown in inventory,” states an article from thefabricator.com. “In fact, for fabricators having customers requiring them to hold finished-goods inventory, those inventory requirements aren’t as high as they once were.”

Many metal-cutting shops are also starting to use more remnants, a strategy often known as “pick for clean.” As explained in the white paper, The Top 5 Operating Challenges Facing Fabricators’ Metal-Cutting Operations, this tactic “promotes a cleaner inventory, which makes shops safer, more productive, and profitable.”

Of course, there are many strategies  shops can use to better manage their inventory. In fact, supply chain expert Lisa Anderson says she could write 100 articles on the subject because there are so many ingredients to an effective inventory management system. However, Anderson does say there are three key questions every manager should address when it comes to inventory:

1. Do you have the right talent? “It is surprising how often this question is overlooked, yet it is #1 to achieving bottom line results,” Anderson writes. “Although inventory could be considered a ‘basic’ fundamental skill and is often on the resume of every supply chain and operations job applicant, all talent is not created equal.”

She also says there is vast confusion surrounding inventory skills and which skills are needed for which job functions. For example, do you need inventory control? Inventory accuracy? Inventory planning? Supply chain planning? Inventory tracking? “Most of these roles require far more than inventory expertise,” Anderson explains. “They require the right combination of analytical skills and communication skills.”

2. Is your system working? This question, Anderson notes, should cover both process and system. “The second most common mistake is to try to put a square peg in a round hole,” she writes. “Instead of dictating the process or system based on whatever worked in a previous life or what your ERP system says is ‘best practice,’ I’ve found the key to success is to understand what works for each particular situation (unique combination of people, processes and systems).”

3. Have you eliminated complexity? “I gain tremendous traction in delivering bottom line results solely from eliminating complexity,” Anderson writes. “I find that complexity is enticing – the more complexity, the more people feel valued and indispensable. So, instead of getting lost in complexity, encourage and reward simplicity.”

Anderson suggests getting a team together to brainstorm ways to unscramble the complexity. In what ways can you categorize your inventory in order to prioritize? Can you start with one machine? One commodity? One location? One customer? One supplier?

In the end, taking a close and honest look at your inventory management system can have real, bottom-line results. As Anderson explains, if you improve inventory accuracy by 10%, you can end up with anywhere from 10 to 100+% improvement in on-time delivery and/or efficiency. If you improve inventory turns by 10%, you could end up with more cash and increased efficiency. Put simply—it pays to evaluate your inventory management system. How does yours stack up?

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