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Improving Efficiency in a High Mix, Low Volume Machine Shop

March 20, 2014 / , ,


There is no question that lean 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.

Machine shops that cut metal 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. That’s not to say, however, that high-mix operations can’t get lean. As the following examples demonstrate, lean and other improvement techniques can be modified to increase efficiency in even the most customized job and machine shops.

While high-mix, low-volume operations certainly present a unique set of production challenges, these case studies reveal that there are several strategies 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 machine shops are finding that in today’s competitive market, the benefits are well worth the investment.

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:

The Importance of Ergonomics in Lean Fabrication

March 10, 2014 / , , ,


Over the last ten years, the term “efficiency” has moved beyond an industry buzzword to an industry expectation. Most fabricators have incorporated some form of lean principle into their operation, and those that haven’t are starting to consider it. In today’s market, only the “leanest” survive.

What many managers may not realize, however, is that lean processes can make jobs highly repetitive. As pointed out in this article from Industrial Engineer, this often eliminates critical rest time for employees. “The repetitive jobs take their toll on employees as stressful postures and high forces are repeated over and over throughout the day,” the article says. “In the long run, the financial savings from the productivity gains and quality improvements are used to pay for the higher cost of workers’ compensation claims.”

This is why many leading fabricators and other industrial metal-cutting organizations are incorporating ergonomics into their lean processes. Strategic equipment placement and improved ergonomics not only keep employees safe and healthy, but they are key aspects of high productivity and optimized workflow. The fewer times an operator touches a material, the fewer chances for injury and human error, both of which contribute to productivity.

Here are just two examples of how ergonomic improvements can make a difference in an industrial metal-cutting operation:

To read more about the impact lean manufacturing processes can have on employee health, check out this article from the Safety Daily Advisor. While being “lean” may be expected of today’s manufacturers, as the article warns, fabricators need to be sure they aren’t becoming anorexic.

Quality in your Service Center Starts with Your Suppliers

March 5, 2014 / , , ,


When most managers think about quality, they tend to think about their internal operations and the competency of their staff. And, yes, quality control is largely based on the processes that managers have put in place to ensure that tolerances are met, cosmetic expectations are achieved, and errors are kept to a minimum.

However, it is important for managers to remember that quality begins with the supply chain. As echoed in this paper from the LENOX Institute of Technology (LIT), product liability and traceability continue to be huge concerns for metal service centers, and mix-ups can be both expensive and dangerous. For this reason, it is critical that operations managers track the quality and accuracy of the material coming from the mill. By taking the time to confirm what is coming in the door, metal service centers can confidently supply products that are both accurate and fail-safe.

There are several tools today’s manufacturers are using to manage supplier quality. This blog from LNS Research lists several that could be useful, including supplier risk scorecards and document management. According to an article from Quality Magazine, these tools not only help manage supplier quality, but also keep the line of communication open. When failures do occur, the magazine suggests that manufacturers include suppliers in the process of determining the root cause of the issue. Instead of pointing fingers, the article says that manufacturers should use the opportunity to work closely with suppliers to strengthen quality processes so the same mistake doesn’t occur again.

Close supplier relationships can also help improve quality before errors occur. For example, this white paper from LIT discusses the role band saw manufacturers can play in optimizing processes and making sure manufacturers are getting the best possible results out of their equipment and industrial metal-cutting tools. By utilizing value-added services from trusted suppliers and making them more of a partner, service centers can improve quality and productivity—both of which impact the bottom line. In fact, this is one of the key principles on which the quality management system standards of ISO 9000 standards are based.

Quality can’t just be one aspect of an operation. As the Quality Magazine article confirms and as many leading companies have found, quality needs to be engrained in every aspect of an operation, starting with the supply chain.

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.

Best Practices for Managing Costs in Forges

February 25, 2014 / ,


In today’s competitive and unpredictable market, managers need to approach cost strategically. While several reports are forecasting a forging industry upswing in 2014, both in the U.S. and globally, many forges remain cautiously optimistic about the market and, as a result, are continuing to watch their costs.

According to the “2014 Business Outlook” from Forging Magazine about 41% of the forges the magazine polled said their capital spending totals will be “about the same” in 2014 as they were in 2013. Another 34.5% of forges indicated their spending total would increase in 2014, and 24% said that spending would decrease, according to the report. The annual business survey also revealed that most new investments would be financed without new debt, and about 12% of respondents said they were hoping to actually reduce their debt levels in 2014.

There are several ways today’s forges and other industrial metal-cutting companies are proactively approaching cost, whether that means cutting back on spending or improving efficiency. Below are a few best practices to consider:

 

Enhancing Customer Service in Your Machine Shop

February 20, 2014 / ,


In today’s competitive landscape, many industries are finding that enhanced customer service is becoming more important than ever. Companies like Amazon are raising the bar on what customers should expect from a service provider, whether that means Sunday deliveries or using the latest technology to improve the purchasing experience.

Not surprisingly, the so-called “Amazon effect” has found its way into the manufacturing world. In a recent blog post, supply chain consultant Lisa Anderson says she has seen this first hand with all of her manufacturing and distribution clients. On-time deliveries, she says, are no longer enough. Today’s customers are looking for suppliers that can offer faster lead times and value-added services that will benefit their bottom line. Sound familiar?

Anderson goes on to suggest several ways manufacturers can provide Amazon-type service in their own operations. From same-day delivery to collaborative programs, she challenges manufacturers to think outside their service “comfort zone” and consider new ways they can add value to their customer relationships.

What does this look like in a machine shop environment? What services can you add? The answer to that will vary based on the needs of your customers, your budget, and simply put, your willingness to change. Adapting to customer needs is critical in today’s unpredictable market, but as the landscape gets more competitive, anticipating customer needs can give your shop the edge.

Below are examples of three shops that decided to enhance their current services in some way. While each company took a different approach, all three have found that value-added service has been beneficial to both their customers and their business.

 

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.

Simple Strategies for Fabricators that Want to Reduce Bottlenecks

February 10, 2014 / , ,


When operations gear up for the day, most fabricators have one overarching goal—to move as much metal as possible. Huge volumes, continuous sawing, and quick turnaround are characteristic of most of today’s fabricating operations, and that means there is no time for bottlenecks, errors, or other unexpected events.

To keep saws running, studies suggest that getting ahead of production hiccups is key, either through continuous improvement initiatives or predictive operations management. However, when you are in the midst of the day-to-day grind—sometimes churning out thousands of parts per week—finding the time to identify bottlenecks and assess processes is a very real challenge.

But here’s the good news: Continuous improvement doesn’t have to be complex to have an impact. While you may not have the extra hours or resources to implement an aggressive lean program, there are some simple tactics fabricators can use to improve the efficiency of their metal-cutting operations.

One Day at a Time
According to Leanproduction.com, one of the most powerful ways to reduce down time is to identify and fix one problem each day. By making small, incremental improvements, the article says that companies have seen their overall equipment effectiveness (OEE) improve by 10% or more when managers consistently apply this strategy over a period of three months.

The key, the article points out, is to ask three simple questions that lead to one very specific action or change that can be made on the same day. The first question is based on information you gather from the plant floor that identifies a loss. The second question is designed to get the team to focus on pinpointing the biggest loss or easiest “win.” The final question should push the team to decide on a specific action that will reduce the loss. You can read more about this strategy and see some sample questions here.

Ask Operators for Input
A magical thing happens on the shop floor when an operator or process area becomes committed to their operation and, more importantly, takes pride in hitting productivity and quality goals. This type of employee “buy in” can have a substantial impact on efficiency. As any management expert will confirm, employees tend to support what they help build, which is why more and more manufacturers are actively including operators in improvement initiatives. No one knows your workflow better than your operators, so why not engage them?

What areas slow them down? What changes do they suggest to make processes safer and faster? Then, when appropriate, follow through on some of their suggestions. This tactic not only helps improve operational efficiency, it also shows operators that they are a critical aspect of the company’s success.

Learn from Mistakes
While no one likes to admit their mistakes, ignoring failures or pretending that they didn’t happen only increases the chances of recurrence. As one fabricator states in this white paper from LENOX Institute of Technology, managers need to document mistakes so they can learn from them. When bottlenecks or failures occur, it is worth the time and effort it takes to get to the root cause of the issue so that it never happens again.

In fact, an interesting editorial from Manufacturing.net goes one step further and says that companies may even want to consider trading failure stories with other manufacturers. “Oftentimes, manufacturing feels far too siloed, every company is struggling within its own four walls,” notes Joe Hans, managing editor of Manufacturing.net. “There’s a lot that could be learned if companies began to not only fix downtime, but take advantage of its instructional moments, and then share those with others.”

Is It Time to Change How You Allocate Resources within Your Service Center?

February 5, 2014 / , , ,


One of the most common pain points for metal service center executives is allocating resources in the most efficient and economical way. From a strategic standpoint, it would be ideal for managers to make continuous changes within their operations, in terms of both equipment and human capital resources. However, budget and time constraints have made that a challenge for many industrial metal-cutting operations.

As stated in this article from McKinsey Quarterly, most executives find themselves stuck in the trap of allocating resources the same way over and over again and expecting different results. Specifically, the management consulting firm states, “Every year, they turn the handle on the same strategy-development, capital-planning, talent-management, and budgeting processes, and every year the outcome is only marginally different from the one they reached in the previous year and the year before that.” Alternatively, McKinsey suggests that managers who refocus these processes have an opportunity to deliver different results.

A separate article from Manufacturing.net goes one step further and says that 2014 should be the year that executives dump all “tribal knowledge”— the tendency to do things simply because “it’s the way we’ve always done it” — and start using actual facts and data to make decisions. “The bottom line in today’s mobile-enabled, hyper-connected world: Companies that continue to rely on tribal knowledge and myths alone are falling further behind enterprises that are dealing in reality and actionable fact,” the article says.

Perhaps it is time to take a closer look at how you are distributing resources within your metal-cutting operation. Do you find yourself using the same resource allocation strategies you have used for years? Are you using facts and hard data to make those decisions? Are those decisions improving efficiency? And, last but definitely not least, do you know what other metal service centers are doing?

A recent white paper from the LENOX Institute of Technology (LIT) lists several ways leading metal service centers are choosing to reallocate their resources to improve efficiency. Below are two examples from the paper that show how technology investments like software can pay off:

Of course, managers can make other, non-technology related investments in areas such as training and safety and also get a high return. Every operation is different, with its own unique strengths to build on and weaknesses to improve.

The first question managers need to ask themselves is whether or not it is time for a change. Are you making strategic, proactive decisions for your industrial metal-cutting operations, or are you simply doing things “the way they’ve always been done?” As suggested in the McKinsey Quarterly article, today’s unpredictable market requires managers to be more agile in all of their business decisions, including resource allocation.

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