General Metals Industry
August 3, 2017 / best practices, continuous improvement, lean manufacturing, LIT, production planning, productivity, strategic planning, workflow process
Over the last 20 years, lean manufacturing, Six Sigma, and other improvement techniques have changed the face of manufacturing. Kaizen programs, 5S, value-stream mapping, and other lean strategies have rendered impressive results in high-volume manufacturing plants around the world. However, not every lean principle is an off-the-shelf solution for operational efficiency. This is especially true for high-mix, low-volume manufacturing environments.
Industrial metal-cutting shops are often juggling multiple jobs—many of them custom and almost none of them the same. Production requirements, lead times, and due dates can vary, which makes forecasting and traditional lean concepts difficult to apply. In fact, according to the eBook, Five Performance-Boosting Best Practices for Your Industrial Metal-Cutting Organization, many small, high-mix operations don’t even attempt to implement traditional lean techniques because they are typically more successful in higher production environments.
The good news, however, is that lean manufacturing is evolving. “A growing number of high-mix, low-volume operations are tweaking traditional lean methodologies to their specific situation,” the eBook notes. “Lean manufacturing techniques can be modified to increase efficiency in even the most customized metal-cutting operations.”
For example, according to an article from Canadian Metalworking, one way to achieve operational excellence in a high-mix manufacturing environment is to create a mixed-model value stream. This begins by creating “product families” or groups of products that have similar process flow and work content. “The next step is to create one current-state map per product family and then a future-state design for that family that can achieve operational excellence,” the article states.
There is no question that this task can be complicated when dealing with a variable product mix. To help managers successfully achieve operational excellence in mixed model production, Canadian Metalworking offers the following 10 guidelines: (You can read the full article here.)
- Do you have the right product families? Create product families based on similar processing steps and work content, not brainstorming.
- What is the takt time at the pacemaker? Determine how often the pacemaker must produce a part to keep up with customer demand for the product family.
- Can the equipment support takt time? Determine if existing machine capacity can support the product family within the established takt time.
- What is the interval? Calculate how often the pacemaker will cycle through and produce all the parts in the product family.
- What are the balance charts for the products? Balance the work content, per operator, to takt time to create continuous flow through the pacemaker process. There will be different balance profiles for each product within the family.
- How will we balance flow for the mix? Determine how variation within customer demand and the product family will be handled, either by adjusting labor, sequencing, or work balancing.
- How will we create standard work for the mix? Standard work means establishing one standard way to build the products in the family, and then having everyone follow that method.
- How will we create pitch at the pacemaker? Pitch is a visual time frame that tells everyone in the value stream if they are on time to customer demand. The pitch created is tied to how often work is released to and taken away from the pacemaker.
- How will we schedule the mix at the pacemaker? Determine the mix that can be supported at the pacemaker, and schedule the pacemaker to handle variation within the product family.
- How do we deal with changes in customer demand? Customer demand can vary, and we need to pre-establish a Plan B to use when it does. Plan B might involve pulling a product or rebalancing the pacemaker.
Of course, this is just one example of how lean can be applied to smaller, variable manufacturing environments. For more strategies, check out the book Made to Order Lean by Greg Lane or these links of archived case studies published by Modern Machine Shop and The Fabricator.
While high-mix, low-volume operations certainly present a unique set of production challenges, there are several custom methods managers can put in place to reduce waste, optimize flow, and improve productivity. It may take a little research and some creativity, but leading-edge shops are finding that in today’s competitive market, the benefits are well worth the investment.
General Metals Industry
April 1, 2017 / benchmarking, best practices, continuous improvement, Cost Management, industry news, LIT, maintaining talent, operations metrics, optimization, performance metrics, productivity, skills gap, supplier relationships
While no one would likely call it a “boom,” recent months have provided good news for industrial manufacturing. Reports have been positive, and business confidence among metal-cutting companies and other industrial manufacturers is up. Experts admit that some challenges and risks remain, but most believe that growth will continue in 2017 and well into 2018.
There is no question that uncertainty has plagued the manufacturing sector for the last several years. Hints of recovery followed by sluggish growth have made it hard for many companies to trust that business was fully rebounding. Last year, terms like “cautiously optimistic” were being thrown around, but many were still wondering — “Are we there yet?’”
Reports and forecasts indicate that we are at least heading in the right direction—both globally and within the U.S. The JP Morgan Global Purchasing Managers’ Index (PMI) has remained above the neutral 50.0 mark throughout the past 13 months and registered 53.0 in February and March—its highest level in 69 months. According to the bank, the expansion in March “remained broad-based by product type, with PMI readings for the consumer, intermediate, and investment goods sectors all signaling further solid growth.”
Forecasts from Manufacturers Alliance for Productivity and Innovation (MAPI) also point to growth, although slower than some would like. According to the latest outlook, manufacturing growth is expected to be 1.2% in 2017 but then accelerate to 2.6% in 2018. Average annual manufacturing output growth is expected to be 1.5% between 2017 and 2020.
Recent data show U.S. manufacturing expanded in March, following a very strong February. The Institute for Supply Management Purchasing Managers’ Index (PMI) hit 57.2% in March, a 0.5 percentage point reduction from a record-setting 57.8% in February 2017. Of the 18 manufacturing industries, 17 reported growth in March, including Fabricated Metal Products and the Primary Metals industries. According to one survey respondent from the Fabricated Metals segment: “Regional business is strong. Hiring qualified team members has improved.”
Cliff Waldman of MAPI says that March data adds to mounting evidence that U.S. manufacturing output performance is on track for moderate improvement, relieving the factory sector from the sluggish growth that has plagued it since 2013. “Data on actual manufacturing output from the Federal Reserve are basically in sync with the recent ISM data as they show an acceleration of growth in U.S. manufacturing since the beginning of 2017,” Waldman said in a blog post. “However, the year-over-year improvement thus far is moderate. Nonetheless, the reasonably broad-based nature of factory sector growth in both January and February suggests growth stability.”
Business confidence among industrial metal-cutting companies and other manufacturers is also up. The first-quarter Manufacturers’ Outlook Survey from The National Association of Manufacturers (NAM) revealed that manufacturers’ optimism rose to a new all-time high in the survey’s nearly 20-year history.
According to NAM, the rising confidence stems from the hope that the new administration in Washington, D.C. will bring much-needed regulatory relief, as well as tax code reforms and a significant infrastructure package. “Indeed, business leaders are cautiously hopeful that pro-growth policies from Washington will allow the country to emerge from the sluggish expansion seen in the years since the Great Recession,” the association said in the report.
Metal companies are confident as well. According to industry leader ArcelorMittal, global apparent steel consumption is estimated to have expanded by 1% in 2016. Based on the current economic outlook, ArcelorMittal expects global apparent steel consumption to grow further in 2017 by between 0.5% and 1.5%.
In the U.S., Mittal says that apparent steel consumption (ASC) declined in 2016 by approximately 1.0% to 1.5%, driven in large part by a significant destock in the second half of 2016. “However, underlying demand continues to expand and the expected absence of a further destock in 2017 should support ASC growth in the U.S. of approximately 3.0% to 4.0% in 2017,” the company said in its 2016 Annual Report.
Sentiment about customer markets is also positive. Mark Millett, president and CEO of Steel Dynamics Inc., told Modern Metals that he expects growth in the energy sector and continued growth in construction spending, “especially for larger public sector infrastructure projects.”
And although there have been reports that automotive manufacturing peaked in 2016 and will decline in 2017, metals companies don’t seem too worried. AK Steel told MM that a richer product mix, including the premium pricing that can be obtained on newer, more specialized or custom grades, should help offset declines. “Our volumes are going to be fairly stable, and fairly steady compared to what they were last year,” Kirk Reich, AK Steel president and COO, said in the MM article.
Trends to Watch
That’s not to say that companies don’t still have some concerns. In late January, M. Robert Weidner III, president and CEO of the Metals Service Center Institute (MSCI), urged the new Trump administration to take serious and immediate action to restore growth and to help the industrial metals supply chain fully recover from the lingering effects of the Great Recession and government policy.
“The industrial metals sector needs action now,” Weidner said, noting that service center aluminum shipments are registering 20 percent below their pre-Great Recession peak, and carbon steel shipments from service centers are still down 30 percent. “The erosion in the U.S. industrial metals supply chain hurts our communities; erodes local, state, and federal tax revenue; and reduces the pool of well-paying U.S. jobs,” Weidner continued.
The strong dollar and reduced capital spending are also concerns. “Signs of wide, yet modest, improvement in global growth are the key drivers of better performance in U.S. manufacturing,” Waldman of MAPI says. “Unfortunately, the problems of a high dollar, a long-term capital spending malaise, and significant policy uncertainty remain to challenge the magnitude of the U.S. manufacturing improvement, even as the world finally provides much-needed support for U.S factories.”
Many industrial manufacturers also remain risk averse. In a recent PwC survey, only 30 percent of U.S.-based industrial manufacturing senior executives said that their companies were planning to increase spending on information technology in the subsequent 12 months. “There is a remarkable opportunity here,” PwC says in a blog post. “Yet the industrial manufacturing sector remains risk averse, unwilling to spend on new machinery, software, and talent during a period of protracted slow growth and limited proven solution.”
According to PwC, there are six actions industrial manufacturers can take to be more profitable in 2017. You can read the full list here, but the following four strategies are the most applicable to industrial metal-cutting companies:
- Leverage data and analytics in a new business model. By upgrading their technical capabilities, industrial manufacturers can bundle a variety of services enabled by connectivity and data, replacing the increasingly outmoded model of selling one big complex machine under warranty and a service agreement for maintenance and repair.
- Develop strategic partnerships. Industrial manufacturers must become more active players in the technology ecosystem, seeking expertise outside the industry in order to develop equipment connectivity, data analysis, and software that are beyond their current abilities.
- Mine operational data. If connected machines—the primary components of the Internet of Things (IoT)—are to be the backbone of industry in the near future, industrial manufacturers will have to figure out how to manage the data coming from an avalanche of sensors, integrated equipment and platforms, and faster information processing systems. There is a critical need to hire people who can mine these bits and bytes of information and work more closely with customers to use the data to improve equipment performance and open new revenue streams.
- Create strategies for talent development and retention. industrial manufacturers must purposefully map out an exciting technology strategy with specific benchmarks and achievements anticipated for the next 18 to 36 months—and then communicate this story clearly to job candidates. Even companies that have not yet felt the shortage of technology-savvy staffers need to take steps to prepare for it as the number of job openings in this field will continue to outpace the number of available hires for the foreseeable future.
Of course, a major technology overhaul may not be possible for every shop, but there are always improvements that can be made. As stated in the eBook, Five Performance-Boosting Best Practices for your Industrial Metal-Cutting Organization, thriving in today’s market requires companies to embrace change and focus on continuous improvement in all areas of their business.
“Whether implementing a lean manufacturing tool to improve processes or investing in training to develop people, proactive leaders are focused on making positive changes in their operations so they can quickly respond to today’s changing customer demands,” the eBook states.
Yes, the sentiment among industry players and experts is positive, but that doesn’t mean companies should put improvement activities on the backburner. Industrial metal-cutting organizations that keep a close eye on mega trends while continuing to optimize their internal operations may not only do well in 2017, but exceed expectations.
General Metals Industry
March 1, 2017 / agility, blade failure, blade life, blade selection, customer service, industry news, LIT, strategic planning
As we reported in last month’s blog, experts consider aerospace to be one of the strongest industries. In one report from the Metal Service Center Institute, Richard Aboulafia, vice president of analysis at the Teal Group Corporation, said that aerospace was the only industry that saw growth acceleration through the recession and that the civil aviation sector in particular offers “major opportunities for long-term growth.”
This, of course, is good news for industrial metal-cutting companies serving this sector, and prospects continue to look good for the near future.
Set to Soar
According to a report from Defense News, the aerospace and defense industry set a new record for international sales in 2016, delivering $146 billion in exports. The article went on to say that 2017 could be “another banner year” for the defense and aerospace industries thanks to some anticipated government orders.
As reported by Defense News in December, the U.S. State Department approved in the first quarter of this fiscal year foreign military sales worth an estimated $45.2 billion dollars, which is said to be more than the total foreign military sales for all of fiscal 2016. “If approved by Congress and manufactured this year, some of those purchases could help rack up the export total for 2017,” the article states.
Deloitte’s 2017 Global Aerospace and Defense Sector Outlook is also optimistic. According to the Executive Summary, Deloitte expects industry revenues for the global aerospace and defense sector to resume growth, driven by higher defense spending. Following multiple years of positive but subdued rate of growth, Deloitte forecasts that sector revenues will likely grow by about 2.0 percent in 2017.
Forecasts from industry leader Boeing show similar trends. According to a January report from Reuters, Boeing expects to deliver between 760 and 765 commercial aircraft in 2017, topping 748 deliveries in 2016. Honeywell, on the other hand, forecasts a slight decline in 2017; however, the company expects deliveries will begin picking up in 2018 due to the strength of several new aircrafts entering service, AINonline reports.
This could spell opportunity for many industrial metal-cutting companies. As an article from IndustryWeek states, the aerospace industry is a good business in which to be competitive because the underlying drivers of demand are very strong. “Since the end of the Great Recession, new commercial aircraft orders have typically been double, and in some years, triple the number of annual deliveries,” the article states. “This reflects explosive growth of air traffic in the emerging world as rising incomes and declines in ticket fares make air travel affordable for increasing numbers of households.”
Equipped for Growth
As a critical part of the supply chain, there is no question that metal-cutting companies could reap the rewards of aerospace’s success. However, companies serving this sector need to be sure they are doing what it takes to win the business of both existing and potential aerospace customers, even if that means investing in advanced metal-cutting tools designed to meet the unique demands and shifting trends within the industry.
For example, as reported here by The Fabricator, Superior Machining & Fabrication has upgraded its 110,000-sq.-ft. machine shop to better serve the aerospace sector. “Changes include the addition of CAD/CAM software, a larger 5-axis bridge mill for hard metals, and a 5-axis SNK bridge mill,” the article states. “The company also has tripled the size of the quality room, added an assembly room, created a staffed tool/fixture room, introduced lean manufacturing/5S throughout the shop, and segmented the shop into cells with their own leaders/supervisors to help improve product flow.”
Shops should also be sure they are equipped to handle the material demands of customers, including the growing use of titanium in aerospace components. In a recent interview with American Metals Market, Rich Harshman of metals supplier Allegheny Technologies, Inc., says he sees a significant mix shift happening within the aerospace industry. Specifically, he says there is a “growing demand for our differentiated next-generation alloys as well as growing demand for our isothermal and hot-die forging and titanium investment castings.”
For metal-cutting operations, this means having a carbide-tipped band saw blade. Since titanium and other high-performance alloys are stronger and harder, they need more than the average bi-metal blade. Using a carbide-tipped band saw blade not only allows for the successful cutting of hard metals like titanium, it simultaneously offers longer blade life and faster cutting as well, according to the white paper, Characteristics of a Carbide-Friendly Bandsaw Machine.
In today’s unpredictable market, the truth is that no one really knows what the future holds for aerospace. However, industry leaders know that it pays to be prepared. Tailoring your operations and processes to meet the unique demands of the industries you serve will not only position you as a valued supply chain partner, but as an agile, industrial metal-cutting leader that is ready to fly when demand takes off.
General Metals Industry
February 1, 2017 / agility, customer delivery, customer service, industry news, LIT, strategic planning, supplier relationships, value-added services
Although there is still a lot of uncertainty surrounding the economy, many metals companies and experts are fairly optimistic about the short term. According to the January 2017 Precision Metalforming Association (PMA) Business Conditions Report, metalforming companies expect strong business conditions throughout the next three months.
Much of this optimism is based on positive forecasts for end-use markets. At the Metal Service Center Institute’s Forecast 2017 Conference, for example, economists and industry experts shared positive outlooks for several customer segments, giving the metals supply chain an idea of where to place their focus this year.
Below is a summary of segments that show some growth potential for industrial metal-cutting companies this year, as reported by MSCI. (You can access the full report here.)
- Aerospace. According to Richard Aboulafia, vice president of analysis at the Teal Group Corporation, aerospace continues to be the strongest industry and “the only one that saw growth accelerate through the recession.” Aboulafia said that commercial deliveries to China are setting a new record, but now, in part due to a lot of backorders on jets, it is the civil aviation sector that is offering “major opportunities for long-term growth.”
- Military. Aboulafia expects military aircraft to be stable and profitable, but says he is only cautiously optimistic about any growth over the next five years or so. The good news for steel and aluminum producers and processors, however, is he doesn’t expect a lot of competition. He believes that both civil and military aviation will “continue to favor legacy products” in their manufacture.
- Energy. Experts are the most optimistic about the renewable energy sector. “Federal tax credits are the heart of what is driving this industry,” said Andy Lubershane sector specialist at IHS Energy. “And those credits have now been renewed, so we are looking at a lot of strength for both wind and solar perhaps into 2021.” Costs are dropping in both segments, Lubershane said, and efficiencies are increasing, both good signs for industry strength.
- Construction. A continued demand for new housing is adding muscle to residential construction, according to Ken Simonson, chief economist at AGC of America. He judged the outlook for this sector as “very positive” for the foreseeable future.
While these are broad-based outlooks, they should provide metal-cutting companies with some confidence as they invest in existing customer segments or consider branching out into new markets. Knowing where the growth is located is a critical part of strategic planning.
Of course, the other key element is knowing how to best serve those customers—both new and existing. As reported in the news brief, “Strategies for Improving Customer Service and On-Time Delivery in Industrial Metal Cutting,“ on-time deliveries are no longer enough. Today’s customers are looking for trusted suppliers that go the extra mile. “Whether offering a new, value-added service or investing in certification, metal-cutting companies have several opportunities to cultivate a strategic customer relationship built upon premium service,” the brief states. (For some specific strategies for improving customer service, you can download the full news brief here.)
It is far too early to tell how this year’s market will shake out, but as the above forecasts show, there are several segments that offer growth potential for industrial metal-cutting organizations. With a little strategic planning and a strong focus on customer service, companies may find they can make this year one of their best.
General Metals Industry
January 1, 2017 / best practices, industry news, LIT, productivity, quality, ROI
It’s a new year, which means companies are getting a jump start on major projects and working toward new goals. For many manufacturers, this includes transitioning from the ISO 9001:2008 quality management standard to the updated ISO 9001:2015 standard. Although the revised version of the standard was published back in September 2015, companies have until September 2018 to complete the transition. The following is a quick summary for industrial metal-cutting companies that are considering recertification.
While many would say that ISO’s most recent revision is “significant,” as explained here in an article from the Association of Manufacturing Excellence (AME), the changes are more evolutionary then revolutionary. “These new guidelines are less prescriptive than previous versions – an effort to adapt to the working conditions of the 21st century,” the AME article states. “ISO 9001:2015 is the result of the intensive study from experts in about 95 countries throughout a three-year period. It’s a tool to help improve efficiency while maintaining the ability to adapt to today’s quickly changing work environments.”
Some of the key updates in ISO 9001:2015 include the introduction of new terminology, restructuring of some information, and increased leadership requirements. Another key change is that the new update incudes ten clauses, whereas the previous version included only eight. According to Luc Marivoet, a quality expert at Paulwels Consultant, the first three clauses in ISO 9001:2015 are largely the same as those in ISO 9001:2008, but there are considerable differences between ISO 9001:2008 and ISO 9001:2015 from the fourth clause onwards. More specifically, the last seven clauses are now arranged according to the PDCA cycle (Plan, Do, Check, Act). You can read more about the clause changes here.
Overall, most experts agree that the newly updated standard is more relevant and has been written for the benefit of organizations, not auditors. ISO says that the revised standard was designed to bring companies the following benefits:
- Puts greater emphasis on leadership engagement
- Helps address organizational risks and opportunities in a structured manner
- Uses simplified language and a common structure and terms, which are particularly helpful to organizations using multiple management systems, such as those for the environment, health & safety, or business continuity
- Addresses supply chain management more effectively
- Is more user-friendly for service and knowledge-based organizations
Steps to Update
As noted above, companies have a three-year transition period from the date of publication (September 2015) to move to the 2015 version. This means that, after the end of September 2018, a certificate to ISO 9001:2008 will no longer be valid.
Why go through the recertification process? That question is discussed in more detail here, but in general, it is widely accepted that ISO 9001 certification provides companies with several benefits, including improved quality and cost savings. In fact, the eBook, Five Performance-Boosting Best Practices for your Industrial Metal-Cutting Organization, lists ISO 9001 certification as a key strategy for industrial metal-cutting companies that want to improve their performance.
There is no question that transitioning to the new standard will take considerable time and resources. ISO offers the following tips for companies that are transitioning to ISO 9001:2015:
- Familiarize yourself with the new document. While some things have indeed changed, many remain the same. A correlation matrix, available from ISO/TC 176/SC 2, will help you identify if parts of the standard have been moved to other sections.
- Identify any organizational gaps which need to be addressed to meet the new requirements.
- Develop an implementation plan.
- Provide appropriate training and awareness for all parties that have an impact on the effectiveness of the organization.
- Update your existing quality management system to meet the revised requirements.
- If you are certified to the standard, talk to your certification body about transitioning to the new version.
To further assist industrial metal-cutting companies that are seeking ISO 9001:2015 certification, the LENOX Institute of Technology has gathered a few helpful resources:
- Click here to download and purchase ISO 9001:2015.
- Click here to download ISO’s transition guidance document.
- Click here to watch a video describing why ISO decided to update the standard.
- Click here to download a checklist to assist you through the transition.
How might recertification benefit your industrial metal-cutting organization?
General Metals Industry
December 15, 2016 / Cost Management, industry, maintaining talent, quality, ROI, strategic planning, training
Industrial manufacturers find themselves competing in an increasing uncertain global market with rising customer expectations and ever-evolving technology, according to the 19th Annual Global CEO Survey from PricewaterhouseCoopers (PwC).
The survey found that only 24% of manufacturing CEOs think global growth will improve over the next 12 months compared to 34% last year, and 23% think it will worsen compared to 18% the prior year. In addition, just 29% of industrial manufacturers are confident of revenue growth in the next 12 months, but when given a three-year span, 46% of manufacturers think they’ll see growth.
Data also suggests that CEOs believe business risk has increased. According to the survey, 55% of industrial manufacturing CEOs said opportunities have increased during the past three years; however, 61% believe the number of threats has increased.
The PwC survey, which interviewed 205 industrial, manufacturing CEOs in 53 countries, revealed that industrial manufacturing companies are working hard to deliver results year after year, but most understand that the future brings complex challenges. The survey highlights three key focus areas for today’s industrial manufacturing CEOs:
- Great expectations and influences. When asked to describe their company’s purpose, the survey found many industrial manufacturing CEOs believed it was centered on filling customer needs or developing first-class products, but others said it was creating a great place to work for employees or achieving social goals. And the influences that impact that purpose and overall strategy are many. As one would expect, customer demands drive final products, but 89% of industrial manufacturers say their customers and clients have an impact on their overall business strategy. Supply chain partners weigh-in, too, with 88% of CEOs planning to address social and environmental impacts of their supply chain. In addition, competitors and peers are also a focus, with a third of CEOs saying they too have a high impact on strategy.
- Technology and talent. Executives know Industry 4.0 has arrived and are working to invest in new innovations and train their workforce to capitalize on their investments. The survey found that 90% of industrial manufacturing CEOs plan to make changes in how they use technology to assess and deliver on wider stakeholder expectations. However, with new technology comes new skill requirements, and 76% of respondents say they are concerned about the availability of key skills to grow their business. In response, more than half of CEOs are changing their talent strategy.
- Measuring and communicating success. Data showed that 60% of survey respondents said innovation is the number one area where the business could do more to measure the impact and value for stakeholders. Not only are CEOs realizing they need to measure and track business success, but that they also need to communicate that success. The survey found that 68% of CEOs believe R&D and innovation has the potential to drive better engagement with wider stakeholders. Together with customer relationship management, data and analytics take the top three spots—validating smart manufacturing will be a driving force for industry leaders.
Like any industrial manufacturer, PwC’s survey findings can help metal-cutting organizations prepare for another challenging, but transformative, year. As reported in the case study, “Best Practices of High Production Metal-Cutting Companies,” sometimes this means investing in technology. Jett Cutting Service, for example, hit a record-setting 1.1 million cut parts last year and attributes the milestone to smart investments. “I would like to believe that our increase in sales is due to investing in the latest cutting technology, which increases our capacity and production capabilities,” Vice President Mike Baron said. “The newer technology also allows us to offer competitive pricing, which has led to many new customers.”
However, Jett Cutting also understands that it needs to be just as committed to its employees and its customers. The metal-cutting organization also has a strong training program for new employees, an ISO certification program to maintain high quality standards, and additional training for existing employees every time new equipment or software is purchased.
For many metal-cutting companies, 2016 certainly hasn’t been the best of years, but it also hasn’t been the worst. As PwC’s survey confirms, no one is confident about what next year will bring; however, industrial manufacturing leaders aren’t standing idle. Jett Cutting and many others are investing in new technology and training now to prepare for growth in the future.
How is your industrial metal-cutting company investing in the future?
General Metals Industry
December 1, 2016 / agility, best practices, blade selection, industry news, material costs, productivity, skills gap, strategic planning
Over the last few years, uncertainty has plagued the manufacturing industry. Currency fluctuations, material costs, customer demands, labor shortages, and political issues are just a few of the factors feeding into an overwhelming feeling of doubt and apprehension among manufacturers.
Instead of fearing change, most companies have come to expect it. This has led many industry leaders to focus their efforts on becoming more “agile” so they can quickly respond to changing customer demands. As explained here in a blog post, “agile organizations operate on a ‘sense and respond’ mode rather than the ‘predict and control’ mode.”
An agile company is able to take advantage of short windows of opportunity and adapt to fast changes in customer demand. According to a previously published blog, this tactic can be especially attractive for industrial metal-cutting companies that are trying to gain an advantage over offshore competitors.
However, the question is whether this renewed focus on agility should come at the cost of long-term planning. While short-term goals and gains are important, is it really wise for today’s manufacturers to ditch long-term strategic planning because the future looks uncertain? Does it really pay to be shortsighted?
An article from Forbes suggests that the answer to that question is no. According to the article, one of the top-five questions managers should ask during a strategic planning session is where they want to be in the next three years. “While some might balk at long term plans, they help people to frame a future vision,” the article states. “When teams don’t articulate long-range goals, they get trapped into incrementalism. Each year a little more growth is expected, a few changes are made and revenue and profit targets are increased. The result is a business that probably inches forward.”
According to an editorial from IndustryWeek, there are also risks associated with companies that are fixated on the short term. In fact, the article asserts that short-term goals can often lead to long-term problems. “I am a firm believer in capitalism but capitalism cannot thrive if we remain focused on short-term profits at the expense of long-term sustainability,” the article author states.
From an operational standpoint, this theory holds some weight, as short-term decisions can have long-term consequences. The white paper, Tackling the Top Five Operating Challenges of Industrial Metal Cutting, gives two examples:
- Some metal-cutting operations use the “pick for speed” method to meet growing demand and improve short-term productivity. This means operators are grabbing fresh material every time and ignoring scrap. However, many industry leaders are finding that “pick for clean” is a better long-term solution. In most cases, using remnants first and striving to keep inventory low leads to increases in productivity and quality in the longer term because operators take the time to perform cuts right the first time. This also keeps material costs low, which affects the bottom line.
- One machine shop found that upgrading to a carbide-tipped band saw blade provided a substantial improvement in efficiency. Previously, the shop was using bi-metal band saw blades to cut stainless steel, which could take up to two hours. Now, with the carbide-tipped blade, cuts are performed in minutes, which has provided huge time savings and has freed up the sawing equipment to do more cutting. While the short-term cost of the newer blades was higher, the machine shop found that the long-term productivity benefits were well worth the investment.
While there is no question that today’s companies need to be able to adapt to change, long-term thinking and planning are still an important part of business success. An article from Harvard Business Review puts it this way:
“Don’t just say that the future is uncertain, and that you will act when it gets here. It is the responsibility of a forward-looking leader to share a point of view about the role the company might play in specific scenarios. Communicate how customers are changing, and how your organization can address those needs in the future.”
What is your company’s long-term point of view?
General Metals Industry
November 15, 2016 / bottlenecks, continuous improvement, industry news, KPIs, lean manufacturing, material costs, productivity, root cause analysis, strategic planning
The metals industry is constantly facing challenges—high inventory levels, fluctuating raw material costs, and declining shipments to name a few. To help offset the challenges and meet customer demands, industrial metal-cutting companies have long turned to continuous improvement practices to reduce downtime and boost productivity.
In fact, continuous improvement is an essential practice for today’s metal-cutting organizations. As stated in the eBook, Five Performance-Boosting Best Practices for Your Industrial Metal-Cutting Organization, the difference between a metal-cutting company that survives versus one that thrives is continuous improvement.
One continuous improvement tool executives are incorporating into their operations is “obeya.” As defined here in a blog from visual solutions provider Graphics Products, obeya (also spelled oobeya) is a Japanese term for “big room” or “great room.” In lean manufacturing, it is a dedicated room that is reserved for employees to meet and make decisions about any production challenges.
According to the blog, the idea behind obeya is for employees to collaborate easier and solve problems faster by having a central location to meet, share, and discuss key information. Benefits of using obeya include:
- Efficiency – Leadership can save time by brining visuals, data, and other vital resources together in one place.
- Focus – Project leaders can focus on the right issues faster by having the right team members in the same room at the same time.
- Collaboration – Employees can easily work together in real-time across disciplines, saving time and improving communication.
Like other lean practices, obeya is part of the Toyota Production System (TPS), which also includes 5S, Kaizen, and Total Productive Maintenance (TPM). According an article from IndustryWeek, obeya is also referred to as the “brain” of TPS and is often called the “Adrenaline Room” at Toyota.
“We call it the Adrenaline Room because we are trying to encourage our manager to address the day, every day, urgently, to improve the output to our customers, internal and external,” Scott Redelman, senior manager, production control and logistics at Toyota Industrial Equipment Manufacturing, told IndustryWeek. “So if we think about each process or each person—even within our four walls—as the customer, how do we aggressively have the adrenaline and the energy, the sense of urgency to quickly react and grow together to make that improvement for the customer? We have to have the adrenaline to do it.”
Industrial metal-cutting companies have also benefitted from obeya. As described in IndustryWeek, ball-bearing manufacturer Timken created an obeya at its Shiloh, N.C. plant four years ago to help meet sudden growth at the time. The company also added an obeya at its Honea Path, S.C. plant earlier this year. According to operations manager Robert Porter, the investment is paying off with productivity improvement year over year, even in down years.
Obeya, however, isn’t just placing your managers in a room and hanging charts on the wall. To ensure obeya is an effective tool, the Lean Enterprise Institute suggests managers focus on a few key issues:
- Customer complaints. Reviewing customer complaints keeps the organization focused on the customer, as well as the end product. The obeya is the space where employees can find ways to improve the process, product, and value the company offers.
- KPIs and objectives. Track key performance indicators (KPIs) and clearly display the overall objective. Have manages report on performance improvement progress and discuss ways to achieve the goal faster.
- Future changes. Post planned changes in the obeya so that everyone can start thinking about possible challenges or problems the change may create.
While there are many continuous improvement tools available, obeya has proven itself valuable. In fact, Toyota considers it one of its lean pillars. Industrial metal-cutting companies that are looking to stay ahead of the competition in today’s challenging market can experience the benefits of obeya too.
What lean manufacturing tools are you using to improve your metal-cutting operation? Is obeya one of them?
General Metals Industry
November 1, 2016 / continuous improvement, industry news, maintaining talent, operator training, resource allocation, ROI, skills gap, strategic planning
Although recent reports paint a brighter picture of U.S. industrial manufacturing, many companies are still unsure of what the future will bring—and how to prepare for it.
The first half of 2016 didn’t start off strong for industrial manufacturing. Industrial production was essentially unchanged in the first quarter of 2016 and then fell at a 1% annual rate in the second quarter. However, conditions made a turn in the right direction in third quarter when industrial production rose at an annual rate of 1.8 percent—the first quarterly increase since the third quarter of 2015.
Recent data continue to show good overall conditions. The Institute for Supply Management’s Report On Business, for example, states that activity in the manufacturing sector expanded in October, and the overall economy grew for the 89th consecutive month. Specifically, the October PMI registered 51.9 percent (a reading of 50 or higher indicates growth), an increase from the September reading of 51.5 percent.
Unfortunately, ISM’s report wasn’t all good news, especially for the metals sector. Just like in September, both the Primary Metals and Fabricated Metal Products sectors reported contraction in October, although one survey respondent from the Fabricated Metals Products sector stated, “Business is much better.”
With the year drawing to close, what does all of this mean for industrial metal-cutting companies? As executives evaluate performance and look to strategize for the future, the question of whether or not to invest in information and technology advancements will likely be at the forefront of discussion. With terms like “machine-to-machine communication” and “Internet of Things” flying around, many companies are trying to discern whether or not these ideas are truly worth the investment, or if they are nothing more than “buzz words.”
As stated in the white paper, Tackling the Top 5 Challenges In Today’s Metal-Cutting Industry, today’s uncertain market requires managers to carefully and strategically determine whether or not allocating resources to automation and technology will offer a true return on investment. Based on some recent reports from industry experts, technological investments are not only worth it, but necessary for future success, regardless of economic conditions.
A recent article from PwC put it this way:
“Manufacturing may be facing some headwinds, but it’s undeniably in the midst of a technological renaissance that is transforming the look, systems, and processes of the modern factory. Despite the risks — and despite recent history — industrial manufacturing companies cannot afford to ignore these advances. By embracing them now, they can improve productivity in their own plants, compete against rivals, and maintain an edge with customers who are seeking their own gains from innovation.”
Of course, this type of transition is easier said than done. There is a lot to consider before companies start planning, strategizing, and investing in what many are calling “Manufacturing 4.0.” To help give companies a little perspective, the Manufacturing Leadership Council has identified six critical Issues facing the manufacturing industry as it undertakes the journey toward an information-based future. Described in detail here, these issues include the following:
- Factories of the Future. Large and small manufacturers, in both process and discrete manufacturing, must now understand and embrace the potential of new and evolving production models, materials and technologies along the journey towards Manufacturing 4.0 to help them create more autonomous, flexible, connected, automated, intelligent, reconfigurable, and sustainable factories and production models for the future.
- The Integrated Manufacturing Enterprise. To maximize the potential of Manufacturing 4.0, manufacturers of all sizes need to actively transform traditional, inhibitive functional silos to create more integrated, cross-functional, collaborative enterprise structures, both within and beyond their organizations. These structures must be supported by new digital thread technologies that stretch across the value chain from ideation, to product end of use.
- Innovation in Manufacturing. Manufacturers must now successfully develop and manage rapid, continuous, collaborative, and often disruptive innovation processes across the enterprise to drive growth, new products and services, operational efficiencies, and competitive success in the world of Manufacturing 4.0.
- Transformative Technologies. Manufacturers must learn how to identify, adopt, and scale the most promising M4.0-enabling technologies in order to achieve greater agility and competitiveness and to drive innovative new business models and better customer experiences.
- Next-Generation Manufacturing Leadership & the Changing Workforce. Manufacturing 4.0 requires manufacturing leaders and their teams to become more collaborative, innovative, and responsive and to make decisions based on a greater understanding of manufacturing’s role in company strategy. That means leaders must embrace new behaviors, structures, and strategies. And they must transition the talent within their organizations by identifying, attracting, developing and retaining the next generation of people and skills.
- Cybersecurity. In the face of increasing vulnerability to external cyber threats and potential internal disruption, manufacturing companies must identify the most effective cybersecurity processes and technologies and create a culture that will ensure operational continuity, data security, and IP protection.
While the industry still has a way to go before Manufacturing 4.0 becomes mainstream, there is no question that technology is changing the manufacturing landscape. Today’s economic conditions may be uncertain, but industrial metal-cutting companies need to ask themselves if they’re willing to do what it takes to prepare for whatever the future holds.
General Metals Industry
October 15, 2016 / best practices, bottlenecks, continuous improvement, industry news, LIT, predictive management, preventative maintenance, productivity
While a full economic recovery is still uncertain, manufacturers are finding ways to gain a competitive edge and improve productivity. New advancements and technologies, including “smart” manufacturing and the Internet of Things (IoT), are helping the manufacturing industry do just that.
One way metal-cutting companies are optimizing their overall operations is by using technology to improve maintenance programs. As cited in this eBook, 5 Performance-Boosting Best Practices for Your Industrial Metal-Cutting Organization, machine breakdowns are one of the top causes of lost productivity, and when productivity suffers, so does the bottom line. While many manufacturers have realized success with tried and true preventative maintenance initiatives, which ward-off an inevitable breakdown, two technologies—predictive maintenance (PdM) and CMMS— are helping manufacturers improve overall maintenance even more accurately.
According to Deloitte’s 2016 Global Manufacturing Competitiveness Index, predictive technology, specifically, holds the most potential for manufacturers. According to the study, more than 500 executives from around the world ranked predictive analytics as the number one future advanced manufacturing technology. IoT, smart products and smart factories, and advanced materials were also considered critical to future competitiveness.
Unlike preventative maintenance, which uses anticipated and planned downtime to prevent unplanned breakdowns and minimize cost impacts, predictive maintenance (PdM) aims to predict breakdowns before they even occur. Software and sensors collect data, and algorithms identify not only the anticipated failure, but also calculate the probable time that failure will occur.
In fact, several metals leaders are already reaping the rewards of predictive maintenance to repair or replace parts before failure and eliminate both planned and unplanned downtime, as reported in this blog post.
Another technology helping industrial metal-cutting companies improve maintenance is CMMS, or a computerized maintenance management system. While PdM tools provide powerful data, most experts agree its information’s value is limited without the context provided by CMMS software. CMMS software tracks and schedules maintenance tasks by analyzing data to identify bottlenecks before they even take place.
According to an article from MRO Magazine, CMMS can improve maintenance on the production line as it reduces downtime and repairs, improves the lifecycle of equipment and forecasts replacement, and reduces rework and manufacturing scrap—all while providing crucial data for future decisions and improving scheduling and planning.
What does this look like in practice? As described here in an article from Better Buys, one CMMS solution included data-entry fields for technicians to input degradation values manually. The system would provide a graph indicating how many months were left until failure and then give a plan for replacement on a set date if the equipment continued being used excessively.
Making the Switch
In most cases, larger manufacturers have been the only ones looking into PdM and CMMS-based maintenance programs. However, as technology advances and competition intensifies, many smaller companies are starting to invest in the technology as well.
There is no question that making the transition from a paper-based maintenance system to a digital one can be overwhelming, especially for smaller metal-cutting organizations. An article from IndustryWeek provides a few tips for simplifying the transition over to CMMS:
- Form a team. Make sure a small team oversees the transition. Designate a lead planner and scheduler to define the processes (such as what equipment and data to collect). The team should understand how the company processes information, how it organizes workflows and analyzes key data.
- Data download. A CMMS system is only as good as the data in it. Determine how accessible that data is and establish a baseline of how much to collect before making the switch. Once up and running, don’t stress over every data point. Add as you go to bulk-up your data inputs.
- Tech knowledge. Consider how comfortable your team may or may not be with technology. Some may not have any computer experience. A basic computer training course can quickly ease worries.
- Tech training. In addition to basic training, the entire maintenance team should be trained on CMMS best practices. Develop step-by-step guides with screen shots at each workstation to help with the transition.
- Codes. To help track performance and maintenance trends, start with 10-15 industry-standard codes when setting up maintenance activities. Consistent problem and failure codes can provide valuable information when it comes time to replace equipment before failure.
Technology is no doubt changing the manufacturing landscape, and today’s industrial metal-cutting companies need to ask themselves if they’re willing to do what it takes to prepare for the future. Investing in new technologies and maintenance programs may be one way to keep the competition at bay while optimizing production for future demand.
What technology investments is your organization using to optimize your maintenance department?