General Metals Industry

Selecting KPIs for Your Industrial Metal Cutting Organization

March 15, 2014 / , , , , , ,

Most companies that have adopted lean manufacturing strategies know the importance of measurement. When a metal-cutting operation can quantitatively assess their performance, it can start to make significant improvements and set realistic goals to stay competitive. It also allows them to benchmark themselves against other industrial metal-cutting organizations. However, metrics are only meaningful if they are tied to strategy. That’s where key performance indicators (KPIs) come into play.

KPIs are the measurements selected by a company to give an overall indication of the health of the business. KPIs are typically dominated by historical, financial measurements, but most experts agree that they are more valuable if they also include operational measurements. Unfortunately, this isn’t as easy as it sounds and takes careful consideration.

Case in point: Over the last several years, it has been popular for manufacturers to us overall equipment effectiveness (OEE) as a KPI. However, this blog post argues that OEE is not a KPI that should be measured at a company or plant level. In the blog, the author states five reasons why OEE is not a good KPI, including the fact that it is not comparable between different pieces of equipment and/or different locations. Instead, he suggests OEE should be used as a way to help identify and eliminate waste in front of a process, line, or equipment.

Although the “right” KPI will vary by organization, there are a few simple guidelines managers should follow to determine the most effective performance measurements for their metal-cutting operation. Below are a few strategies to consider:

General Metals Industry

Valuing Your Plant Floor Operators Can Pay Off

March 4, 2014 / , , ,

For the last several years, most metals companies have been investing in technology to improve productivity. And as the industry tries to deal with the skills gap, that trend will likely continue. In fact, a report from Fabricating & Metalworking expects 2014 to be the year of “unprecedented automation.”

However, industry leaders also realize that automation isn’t going to be the panacea for their workforce challenges, nor is it the only way they can optimize their operations. A growing number of manufacturers are finding that plant floor workers can play just as much of a role in improving efficiency and, if leveraged correctly, can be more of an asset than a cost.

According to this article in The New York Times, a few years ago, motorcycle manufacturer Harley completely redesigned its production system around this concept. The company built a brand new plant, but instead of relying on robots to ramp up productivity, the well-known brand put its value in its workers and the problem-solving skills they brought to the table.

Of course, Harley is a custom, unionized shop. Can the same hold true in a high-production metal-cutting environment? A recent column from IndustryWeek says yes. As evidenced in the winners of its Best Plants Award, IW says that leading manufacturers—both union and non-union—are investing in their plant floor production staffs and are seeing positive bottom-line results.

Here are a few metals companies that also finding that to be the case:

To succeed in today’s competitive market, metalworking executives need to optimize all aspects of their operations—and that includes their human capital. Whether it’s incentivizing employees to keep quality high, leveraging their problem-solving skills to improve productivity, or providing them with the training to acquire the skills required in today’s automated plant, it pays to value your operators. Like Harley, metals companies have a choice: They can either treat their plant floor operators as costs, or they can turn them into valuable assets.

General Metals Industry

How Metals Companies Can Manage the Skills Gap

February 15, 2014 / , ,

At this point, most industrial metal-cutting executives are aware that the manufacturing industry is facing a tremendous workforce challenge. A widening skills gap is threatening U.S. businesses at large, and, according to Forbes, even the best firms are feeling the effects.

For manufacturers, the issue is two-fold. First, skilled production workers are one of the largest workforce segments facing retirement in the near future, which will have an impact on the number of experienced workers on the shop floor. In fact, recent reports say the mass “boomer exodus” has already begun.

Meanwhile, the current talent pool isn’t what is should be. Streamlined production lines and more process automation have changed the nature of manufacturing work, and the incoming generation of workers lacks the skills and technical knowledge required. What’s worse is that most young workers aren’t interested in working anywhere near a production line.

All of this is especially disheartening at a time when many companies are trying to bring manufacturing back to the United States. Industry associations like the Society of Manufacturing Engineers and major players like GE are attempting to get ahead of the problem by working closely with universities and government bodies to provide the necessary training and education to encourage students to pursue careers in manufacturing. And while these types of initiatives are certainly encouraging—and necessary—what can manufacturers do right now to help close the skills gap within their own operations?

For many companies, managing the skills gap will require changing the way they train and maintain talent, whether that means beefing up training programs or rethinking their employment strategies. This will mean different things for different companies, but here are a few of the talent strategies being used by some forward-thinking manufacturers:

The skills gap is a daunting issue for sure, and there is no “silver bullet” solution. However, manufacturers that fail to tackle this challenge now will find themselves facing bigger problems in the future. The next generation of manufacturing may offer a new set of talent challenges, but as proactive companies are finding, it also presents a new set of opportunities.

General Metals Industry

What Does It Take to Be an Industrial Metal-Cutting Leader?

January 30, 2014 / ,

Like every other U.S. manufacturer, industrial metal-cutting companies have spent the last few years focusing on mere survival. Most companies have been forced to run “lean” and, in turn, have had to make some changes. However, a few organizations have risen above the fold and emerged as industry leaders. The question is how? While your goal may not be to make it onto IndustryWeek’s Manufacturing Hall of Fame, the fact is that today’s competitive market will continue to weed out companies that remain stagnant. In other words, “getting by” just isn’t going to be enough.

So what does it take to be an industrial metal-cutting leader? Below are a few of the common traits found among best-in-class companies:

Industry leaders understand the importance of continuous improvement. Experts like consultancy McGladrey continue to find that thriving manufacturers have a “relentless focus” on continuous improvement. According to McGladrey’s latest Manufacturing & Distribution Monitor Report, this is especially true as the economy emerges from the recession. As stated in the report, industry leaders are starting to realize that continuous improvement is vital because “increased profitability will likely need to come as much from productivity improvements as it will from revenue growth.”

Industry leaders invest in training. Investing in the right machinery is an important aspect of every metal-cutting operation; however, leading manufacturers know that productivity starts with the operator. All three of the industrial metal-companies featured in this series of case studies from LENOX Institute of Technology (LIT) have thorough training programs for both new and seasoned operators. Metal Cutting Service, Inc. (MCS), for example, offers an intense 40 hours of training when operators are first hired, as well as ongoing training at least once or twice a year. According to MCS president David Viel, “You are no better than your employees.”

Industry leaders work closely with key suppliers. Perhaps one of the greatest benefits of an increasingly competitive market is that many suppliers are offering value-added services to differentiate themselves—a trend that is especially beneficial for smaller manufacturers. Support in areas such as preventative maintenance, troubleshooting, and even software tools can help improve productivity and, ultimately, save costs. As stated in this article from ThomasNet, suppliers possess deep knowledge about the products they produce, and manufacturers should tap into this expertise and use it to their advantage. Global manufacturing giants like Unilever have even established long-term supplier partnership programs to help achieve specific company goals. To read how this can work in an industrial metal-cutting environment, check out this white paper from LIT or this case study on Aerodyne Alloys, a leading metal service center.


General Metals Industry

Getting to the Root of Performance Issues

January 15, 2014 / ,

Let’s paint a possible scenario in an industrial metal-cutting environment: After reviewing monthly costs, a manager notices that tooling costs are up. Upon further investigation, the manager discovers that operators have been replacing blades more frequently than usual. In other words, a blade the company has been using for years is now failing. What does the manager do?

A. Contact the supplier to complain about a bad shipment
B. Research new blade options
C. Check equipment settings
D. Evaluate operator performance

In most cases, the answer is likely going to be A or B. When a problem happens on the cutting room floor, most managers want to fix it and move on. And if the problem appears to be mechanical, the natural instinct is to blame the machine. However, these issues can also be symptoms of larger, operator-based problems such as improper blade usage, lack of training, and poor maintenance.

When a performance issue arises on the cutting room floor, managers should have procedures in place that help determine the underlying causes of the failure. This will not only solve the problem at hand, but can also weed out any “hidden inefficiencies” that could be negatively impacting the bottom line. In the aforementioned scenario, for example, premature blade failure not only increases tooling costs, it also creates bottlenecks and decreases quality. If the real source of problem is a poorly trained operator, a new blade isn’t going to solve any one of these issues.

Forward-thinking managers know the key to optimal performance is identifying the root cause of failure so that it never happens again. Below are a few strategies managers can use to uncover the source of operational issues:

General Metals Industry

Being Proactive Is the Key to Smarter Operations Management

December 19, 2013 / ,

With increased competition and uncertain economic conditions, today’s operations managers have to be more than just good problem solvers. Yes, they still need to be able to handle unforeseeable crisis on the fly; however, now, more then ever, managers also need to have strategies in place that predict risks. By using a more proactive approach to management, industrial metal-cutting companies are finding they can actually reduce the adverse effects that can happen in a manufacturing environment.

In a recent market research report, Aberdeen Group details a predictive, more agile management strategy called Operational Risk Management (ORM). According to the firm’s research, best-in-class manufacturers are taking a risk-focused approach for three main reasons:

Put simply, these leading companies are using ORM to improve operating performance. Aberdeen says the goal of this type of management is to create “a framework that helps executives, employees on the plant floor, and maintenance personnel understand and manage the risks impacting their organization, establish processes to effectively address these risks, and implement procedures for corrective and preventative actions.”

Several leaders in the industrial metal-cutting segment are finding ways to use proactive operations management. In fact, data from the LENOX Institute of Technology’s Benchmark Survey revealed that companies with high machine uptime are benefitting from investing in smarter, more predictive and agile management operations approaches. For example, 76 percent of industrial metal-cutting operations that followed scheduled and planned maintenance on their machines also reported that their job completion rate is trending upward year over year. In addition, more than half of organizations that “always” follow preventative maintenance (PM) plans reported that they can “always” or “mostly” predict blade failure.

By having this “predictive downtime” information, managers can plan for downtime and actually use it to their benefit. This is quite different than “interruptive downtime,” which can negatively impact performance, customer delivery, and equipment and material costs.  Steel of Carolina LLC, a fabricator, featured in this case study from LIT, has said that weekly PM checks have become critical to keeping its saws operating as much as possible. To keep production running smoothly, the company schedules PM checks for the weekends (when equipment isn’t running) and also keeps specific wear parts in stock for quick replacement.

Of course, PM and parts inventory is only a small part of predictive management. Aberdeen outlines an entire roadmap for manufacturers that want to establish a formal ORM framework. You can download a copy of the report here and read information on technology enablers and a great case study on Coca-Cola.

In the end, there is no crystal ball. However, by implementing predictive strategies that go beyond simply reacting to crisis, operations managers can minimize risk, increase agility, and perform smarter in today’s volatile market.

General Metals Industry

The Value of Safety

December 15, 2013 / , ,

In an industrial metal-cutting environment, safety is critical. Everyone knows that. In fact, most managers would probably list it as a top priority. However, in practice, most of those same managers treat safety more like a necessary evil than a business strategy. In other words, their safety initiatives are built around simply meeting OSHA requirements, not as a means of maintaining—or better yet, improving—the bottom line.

The truth is that most managers need to shift their mindset when it comes to safety. Randy DeVaul, author of Performance Safety: A Practical Approach and Performance Safety: Lessons For Life, argues that safety should be viewed as a value, not a priority. What’s the difference? According to DeVaul, priorities change depending on the circumstances; however, a value is maintained, regardless of the circumstances. In other words, safety should be a constant, and it should be integrated into every aspect of your industrial metal-cutting processes.

The concept is actually fairly simple: Injured operators can’t be productive.

If your best operator is constantly calling off because of a bad back, someone else needs to be trained to take his place. This not only takes time away from production, it could also affect quality. And, of course, there is the cost element.

There are several ways safety can have an impact on overall business operations, but here are three key points today’s managers should consider:

While an operator’s wellbeing should always be the top concern, the value of safety goes beyond employee health. A safer environment is more productive; a more productive environment provides more output; and more output provides more money. Really, it’s that simple.

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