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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? 

Measuring the Cost of Quality in Your Metal Service Center

February 5, 2017 / , , , , , , , ,

Keeping costs low and quality high are the top goals of just about every industrial metal-cutting operation. What’s interesting, however, is that many companies treat these two areas as independent variables. A recent series of articles from IndustryWeek (IW) shows why it is important for managers to look at quality and cost together. More specifically, it recommends that companies quantitatively measure the cost and benefits of quality.

“Tracking the financial impact of any support function is necessary in order to illustrate its value and garner continued support and resources from senior management,” the IW article explains. “This struggle is vitally important for quality management departments that continue to struggle with competing for resources. Once organizations get clarity on the financial impact of quality, the next step is to understand what practices and applications help improve the financial value.”

Unfortunately, this seems to be easier said than done. Based on the results of a 2016 survey conducted by the American Society for Quality (ASQ) and the American Productivity & Quality Center (APQC), approximately 60 percent of organizations say they don’t know or don’t measure the financial impact of quality. According to a report on the survey’s findings, “this lack of measurement may be attributed to not having a common method for capturing the financial impact.”

Many companies also do not understand the benefits of measuring quality and, instead, simply use it as a means of “compliance” or to keep customers happy. This is especially true in today’s market. As stated in the white paper, The Top 5 Operating Challenges for Metal Service Centers, customers continue to expect higher quality and tighter tolerances from their metal-cutting suppliers.

However, the IW article states that quality should be about more than “checking a compliance box” or basic due diligence. “Developing a solid foundation of quality assurance for continuous improvement, risk mitigation, and compliance provide immeasurable value,” the article states. “However, once that solid foundation is established, organizations can then leverage quality for the benefit of the customer and enhance brand image, thus serving as a competitive differentiator.”

In fact, based on ASQ and ASQC’s survey findings, “organizations that leverage quality as a strategic asset were more likely to report higher levels of financial gains from their quality program.” In other words, companies are using quality to drive profitability.

For more information on how to start measuring the cost of quality, click here to access IW’s four-part series. The articles look at the relationship between financial benefits and the following areas:

How are you measuring the financial impact quality has in your service center?

Customer Outlooks Create Optimism for Industrial Metal-Cutting Organizations

February 1, 2017 / , , , , , , ,

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.)

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.

Creating a Team Atmosphere in Your Forging Operation

January 25, 2017 / , , , , , , , , ,

Teamwork is essential to any manufacturing operation. Most experts agree that it is the cornerstone of any successful improvement initiative, and many of today’s industry leaders understand that collaboration and decision-making go hand in hand. From the shop floor to the executive office, everyone’s input carries value.

Unfortunately, building strong teams isn’t as easy as sitting a bunch of people in a room together once a week. As one article from IndustryWeek points out, just because a company works in teams doesn’t mean it is good at teamwork. Simply building a team isn’t enough. The goal has to be building an effective team.

What does this look like in a forging environment? For many companies, it starts with creating a sense of unity. According to an article from Reliable Plant, the goal is to remove the barriers that often exist between the departments by taking a one-plant, one-team approach. Specifically, the trade publication suggests removing any team or function name that directs the function of the team to one specific department or function. For example, change the name of total quality management to total quality manufacturing and then develop improvement teams consisting of personnel from each department within the plant. “This begins to create a common workplace interest and supports a one-plant, one-team environment,” the article states.

Another important step is for managers to consistently ask employees for input and, more importantly, to make some of their ideas a reality. According to the white paper, The Top Five Operational Challenges for Forges that Cut and Process Metal, communicating with shop floor employees and actively including them in operational decisions promotes a team atmosphere, and, therefore, motivates employees to achieve company goals. To see this principle in action, check out this video, which shows one manufacturing floor operator’s reaction to implementing a high-performance team culture in his organization.

An article appearing in the Harvard Business Review confirms that effective teams are hard to build, especially in today’s diverse, dispersed, and digital world. However, it is possible. Quoting research from J. Richard Hackman, a pioneer in the field of organizational behavior who began studying teams in 1970, HBR says there are three “enabling conditions” that lead to strong, thriving teams. The following is a quick summary of those conditions, as described by HBR (You can read the full article here.):

  1. Compelling direction. The foundation of every great team is a direction that energizes, orients, and engages its members. Teams cannot be inspired if they don’t know what they’re working toward and don’t have explicit goals. Goals should be challenging enough to motivate, and they also must be consequential: People have to care about achieving a goal, whether because they stand to gain extrinsic rewards, like recognition, pay, and promotions; or intrinsic rewards, such as satisfaction and a sense of meaning.
  2. Strong structure. Teams also need the right mix and number of members, optimally designed tasks and processes, and norms that discourage destructive behavior and promote positive dynamics. High-performing teams include members with a balance of skills. Every individual doesn’t have to possess superlative technical and social skills, but the team overall needs a healthy dose of both.
  3. Supportive context. Having the right support is the third condition that enables team effectiveness. This includes maintaining a reward system that reinforces good performance, an information system that provides access to the data needed for the work, and an educational system that offers training, and last—but not least—securing the material resources required to do the job, such as funding and technological assistance. While no team ever gets everything it wants, leaders can head off a lot of problems by taking the time to get the essential pieces in place from the start.

The HBR article goes on to describe a fourth condition—shared mindset—which is similar to Reliable Plant’s suggestions for creating a one-plant, one-team environment. This condition requires managers to facilitate shared information among departments and to be intentional about building bridges among team members.

Like any company-wide initiative, building an effective manufacturing team takes time, intention, and a little trial and error. By encouraging unity, fostering collaboration, and implementing strong foundational elements such as diversity and incentives, today’s forges can create a team-centered manufacturing environment that truly benefits everyone.

How are you creating a team environment in your forging operation? 

Best Practices for Selecting Cutting Tools for Your Machine Shop

January 20, 2017 / , , , , , , , ,

In any manufacturing operation, having the right tool for the job is critical. The challenge is that there will always be instances when the “right tool” won’t be a clear-cut decision.

For example, in metal-cutting, bi-metal band saw blades have been traditionally used for easier-to-cut metals such as aluminum and non-ferrous metals, carbon and structural steels, and some alloy steels. However, blade technology is evolving, and there are now carbide-tipped band saw blades on the market that have been designed specifically to cut aluminum and non-ferrous alloys. This begs the question: Is the new technology worth the investment, or would it be smarter to stick with a tool operators already know?

Answering those types of questions is never easy and takes careful consideration, especially when there is some investment necessary. In today’s competitive market, even a simple tooling decision is strategic.

To assist managers with the task of selecting the best machine tools for their operations, the LENOX Institute of Technology offers the following tips:

      1. upfront costs against overall operating and maintenance costs
      2. long-term productivity of a machine and its intended use
      3. equipment and blade life, as well as cost per cut

 

What best practices does your team follow when choosing a new machine tool? 

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? 

Supply Chain Trends Impacting Metal Service Centers in 2017

January 5, 2017 / , , , , , ,

As metal service centers and other industrial manufacturers find new ways to stay competitive, the role suppliers play is becoming more and more critical. Now more than ever, manufacturers need to be in tune with what is happening within their supply chain.

One major trend companies need to be aware of is the shifting dynamic within the supply chain, much of which has been caused by cost pressures. “Competitive pressure to reduce costs is forcing changes in supply chain operating models, creating more complexity and dependence in the value chain,” notes PricewaterhouseCoopers (PwC) on its website. “The number of entities and interdependence between parties is increasing and expectations regarding reporting are also becoming more burdensome.”

Another trend is increased collaboration with suppliers. Many service centers are looking to form strategic relationships with suppliers that can provide value, not just low-cost services or products. A white paper from the Lenox Institute of Technology discusses how this is happening within industrial metal-cutting:

“Operations managers increasingly find that to be successful, they must establish a collaborative vendor relationship that moves far beyond the sale of a product. By leveraging all of the assets their vendors can bring to the table, companies can form strategic partnerships that not only help fulfill their customer demands, but that also help optimize other aspects of the business such as cost management and employee training.”

A recent article from ThomasNet confirms this trend, stating that supplier collaboration will be crucial in 2017. The article, which you can access here, lists three more trends worth noting:

  1. Increased Emphasis on Ethics and Transparency. In 2016, many companies came under fire due to a lack of ethical practices within their supply chain. As consumers become more environmentally and sustainability conscious, supply chain professionals will be under enormous pressure to ensure that their products are safe, ethical, and environmentally friendly. As a result, procurement teams will invest in technologies that provide greater visibility into their suppliers.
  2. Digital Will Become Standard. For years, the supply chain has been shifting away from the paper-and-technology model of information management to an all-digital approach. In 2017, that shift will go from optional to essential.
  3. The Supply Chain Will Get Agile. Today’s intricate, global supply chains are inherently risky, so supply chain managers need to be able to plan ahead and react quickly when a disruption does occur. Thanks to the advent of real-time data, it’s now possible. Leveraging data, supply chain professionals can make quick decisions that can resolve potential crises.

Of course, only time will tell how much of an impact these trends will have on your service center this year. Some of them may have no impact at all. However, for those companies that want to have an edge up on the competition, it is critical to keep a pulse on every aspect of your business, including your supply chain.

Tips for Industrial Metal-Cutting Companies Transitioning to ISO 9001:2015

January 1, 2017 / , , , , ,

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.

Revision Details

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:

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:

  1. 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.
  2. Identify any organizational gaps which need to be addressed to meet the new requirements.
  3. Develop an implementation plan.
  4. Provide appropriate training and awareness for all parties that have an impact on the effectiveness of the organization.
  5. Update your existing quality management system to meet the revised requirements.
  6. If you are certified to the standard, talk to your certification body about transitioning to the new version.

Additional Resources

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:

How might recertification benefit your industrial metal-cutting organization?

Engaging Employees Is Key to Continuous Improvement in Your Ball and Roller Bearing Manufacturing Operation

December 30, 2016 / , , , , , ,

There is no question continuous improvement is critical to succeeding in today’s market. Case in point: two of the three industrial metal-cutting companies featured here in a case study on top performers listed continuous improvement as an imperative operational strategy and best practice that sets their operations above the rest.

It’s also widely accepted that continuous improvement efforts require “buy-in” from the top-down to truly be successful. This isn’t always an easy task. Articles like this one from IndustryWeek discuss the challenges improvement teams face in getting upper management on board. Perhaps the larger challenge, however, is getting operators and other employees committed to improvement efforts. While upper management support is needed to secure resources, employees are the ones carrying out the efforts, making them absolutely critical to success.

The key, one expert states, is to intentionally engage employees. “For any effort directed towards continuous improvement or innovation to succeed, your employees must feel that their suggestions…are genuinely wanted and in fact encouraged,” Chris Ruisi, leadership expert, writes here in a blog published by the Association for Manufacturing Excellence (AME). “They must willingly take ownership in the future of their organization—continuous improvement is everyone’s responsibility.”

To facilitate this, Ruisi offers the following strategies:

If your ball and roller bearing operation is dedicated to continuous improvement, it may be worthwhile to consider some of Ruisi’s suggestions. In addition to helping continuous improvement efforts stick, taking the time to engage employees often builds new levels of trust among employees and management—trust that can provide invaluable benefits like improved morale and employee loyalty.

Does your current continuous improvement plan actively engage employees?

Is Your Forging Operation Ready for Next Generation Lean?

December 25, 2016 / , , , , , , ,

Lean manufacturing is nothing new. Principles based on continuous improvement, streamlining production, and machine efficiency have long changed the way manufacturers operate. Industry leaders like Jorgensen Forge have been using lean manufacturing tools like 5S and Total Productive Maintenance (TPM) for years to lower costs, improve responsiveness, and increase efficiency.

However, as stated in the eBook, Five Performance-Boosting Best Practices for Your Industrial Metal-Cutting Organization, lean manufacturing is evolving. “Companies that ‘got lean’ years ago are focusing on continuous improvement, and a growing number of high-mix, low-volume operations are tweaking traditional methods to fit their specific situation,” the eBook states.

A recent article series published by IndustryWeek takes this idea further, arguing that lean manufacturing should be evolving. “I am convinced that for Lean to remain relevant as a strategy for improving manufacturing effectiveness it needs to evolve to the point where expert practitioners are NOT needed for most typical Lean transformations,” consultant Paul Ericksen states here in the first article of the series. “Lean shouldn’t be a mystery or black art that is only successfully conducted by an elite group of practitioners. For this to happen, additional Lean concepts, strategies, metrics, processes, and tools need to be developed.”

Specifically, Ericksen argues that the lean evolution needs to go beyond simple “tweaks” and instead, should change its current emphasis on waste elimination to one of total business performance (i.e., revenue). He calls this Next Generation Lean.

You can read through the details of Ericksen’s entire theory here by accessing the full seven-part series, but below is a summary of some of his major points, as detailed in the fourth article:

While Ericksen’s theory may or may not make sense for your shop, one key point is worth noting: Your approach to lean manufacturing should be continuously improving and evolving right alongside your operation. If your forging operation has been using lean manufacturing tools for years, perhaps it’s time to re-evaluate and reconsider how those tools could better serve your company.

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