September 5, 2015 / agility, best practices, continuous improvement, Cost Management, customer delivery, industry news, lean manufacturing, LIT, preventative maintenance, resource allocation, strategic planning, value-added services
Staying ahead of the competition can often seem like an impossible task, especially in today’s marketplace. Continuous improvement is now the expectation, lean manufacturing is fairly commonplace, and uncertainty about market conditions makes it hard to gauge investments and risk.
So how do you get ahead in the current landscape? While it would be near impossible to truly answer that question, the LENOX Institute of Technology (LIT) gathered a few examples of high-performing service centers and outlined some of their key traits below. How does your service center stack up against these leaders?
Reliance Steel & Aluminum
Los Angeles, CA-based Reliance was ranked number one in Metal Center News’ (MCN) annual survey, “Top 50 Service Center Industry Giants.” The industry leader, which operates more than 290 locations in 29 states and 11 countries, continues to expand its reach. According to Reliance’s profile in MCN, the service center shines in three key areas:
- Value-added processing. Reliance’s services range from cut-to-length/blanking and laser cutting, to sawing and water-jet cutting. The company has made 58 acquisitions since 1994 and continues to acquire businesses that add to its capabilities.
- Quick delivery of small orders. According to the company web site, it isn’t uncommon for Reliance to fill and deliver orders within 24 hours of receipt. Perhaps that’s why more than 90 percent of customers return to do business.
- Strategic supplier relationships. According the MCN, Reliance “continues to cherry-pick the best players in metals distribution, along with strategic downstream processors.”
A.M. Castle & Co.
In addition to distributing a wide range of metal and plastic materials, the leading metal service center also performs simple sawing operations at several of its locations, including its main distribution center in Franklin Park, IL. A case study, published here by LIT, describes the company’s three areas of focus:
- Lean improvements. Glen Sliwa, who is responsible for keeping saw operations up and running, says the company is focused on continuous improvement and is “always doing something to upgrade.” About 7 years ago, the operation underwent a lean transformation, which included major changes in workflow and equipment placement as well as simple improvements like color-coding material. The facility also uses the lean tool known as 5S, which eliminates waste by keeping work areas clean and organized.
- Preventative maintenance. According to Sliwa, preventative maintenance is critical to keeping production moving. Operators perform daily maintenance on machines by following a checklist that they have to verify and sign at the end of every job. Sliwa and his team also perform more in-depth PM checks on a quarterly basis.
- Close supplier relationships. Sliwa works closely with his suppliers and relies on their expertise any time his team has a cutting issue or is looking to improve performance. In one instance, operators were having a hard time reaching productivity goals when cutting several grades of stainless steel. A technical representative from Sliwa’s blade supplier came out to evaluate the problem and suggested a new blade type. Not only did the new blade cut Sliwa’s cutting time in half and double the blade life, the supplier also trained his team and tuned up his saws.
Klein Steel Service Inc.
In May 2015, American Metal Market (AMM) magazine named Klein Steel one of its service centers of the year. According to the magazine, the Rochester, NY-based company experienced its largest year ever in 2014 in terms of weight shipped and revenue generated. The following are just a few notable attributes of the service center:
- Technological investments. Klein launched a newly designed web site last year that increased its web site visitors by 50 percent and earned it three awards, according to AMM. The company also invested in technology that uses data and information flow to streamline and improve operations.
- Customer service. After earning an almost-perfect customer retention rate and millions of dollars in new customers last year, it’s clear that customer service is important to Klein. In fact, a 2014 survey revealed that customers do business with Klein because of great customer service, on-time delivery, and rapid quote response time, reports AMM.
- Strategic planning. In addition to the AMM’s honor, Klein was also named Metals Distributor of the Year at the 2015 Platts Global Metals Awards. As detailed in Platts Insight magazine, the service center scored high marks for its ability to strategically plan for growth while keeping an eye on the economy and remaining flexible. According to the Insight, Klein “maintains steady inventory, buying according to customers’ forecasted needs and minimizing speculative purchases that increase risk.”
July 1, 2015 / agility, best practices, KPIs, lean manufacturing, LIT, productivity, strategic planning
In today’s information age, there is certainly no shortage of industry buzzwords floating around. Most recently, terms like “KPI,” “smart manufacturing,” and “agility” are making the rounds, while older terms like “lean” and “best practices” continue to circulate.
Unfortunately, the more terms like these are thrown around, the more they run the risk of either being lost in translation or watered down to the point that no one really knows what they mean anymore.
One term that has suffered from this fate is “strategy.” For the last several years, manufacturing experts and consultants have encouraged manufacturers to approach their business strategically, yet most managers aren’t clear on what that actually looks like in practice.
Perhaps part of the problem is that many managers just aren’t clear what the word means. At the most basic level, strategy is defined as “a careful plan or method for achieving a particular goal usually over a long period of time.” However, as a recent article from Harvard Business Review explores, when applied in a business environment, strategists and other experts have differing opinions on what strategy is—and what it isn’t.
For example, quoting the thoughts of strategist Michael Porter, the HBR article suggests that strategy should NOT be defined as the following:
- Seeking a single ideal competitive position in an industry
- Benchmarking and adopting best practices
- Aggressively outsourcing and partnering to improve efficiencies
- Focusing on a few key success factors, critical resources, and core competencies
- Rapidly responding to ever-evolving competitive and market changes
After listing several different theories, the HBR author comes to the following conclusion:
“…strategy boils down to a discouraging choice between ‘do something so dauntingly original that no one can copy you’ and ‘fight to the death with your rivals over the pie.’”
Regardless of whether or not this falls in line with your personal definition of strategy, it is worth doing a little research to make sure you are on the right track. A clearly defined business strategy is imperative for any company that wants to effectively apply it and achieve business growth.
Putting Strategy to Work
In most cases, applying strategy to your industrial metal-cutting organization begins with developing a strategic plan. This is definitely not a simple endeavor, but there are plenty of resources available that provide guidance. This archived article from Forbes, for example, provides a great 13-point strategic plan template.
For information catered specifically to the industrial metal-cutting industry, check out the educational course, “Five Modules for Success,” offered by the Metal Service Center Institute. The five-week course of study is conducted over 18 months and covers topics ranging from strategy and operational excellence to leadership and investments.
If creating a strategic plan overwhelms you—or if you just don’t have the time or resources available—it is possible to still make strategic decisions. An article from Fast Company even argues that small businesses should “scrap” strategic planning in place of strategic thinking. The article, found here, lists three ways companies can “develop an adaptive, opportunistic approach to strategy.” (For examples of companies that have successfully adopted strategic thinking, check out these articles from Chron and thefabricator.com.)
A Plan for Success
“Agility” and “adaptability” may be the current buzzwords, but successful companies understand the importance of having a focused plan with clear goals, or at the very least, a focused method for making critical decisions.
How are you applying strategic thinking and planning in your industrial metal-cutting organization?
May 10, 2015 / agility, best practices, continuous improvement, Cost Management, lean manufacturing, LIT, productivity, root cause analysis, strategic planning, workflow process
Lean manufacturing is nothing new for industrial metal cutting companies. Principles based on continuous improvement, streamlining production, and machine efficiency have long changed the way metal fabricators operate. What has changed, however, is customer demand.
Today, fabricators simply must do more with less to stay afloat—cutting more in less time. For high-mix fabricators and sawing operations, the increased challenge is nothing less than daunting. With a few improvement techniques, however, increased productivity is tangible even for the most customized job and machine shops.
If you are a high-mix fabricator, below are a few strategies to help you operate as efficiently as your higher volume counterparts:
- Get on a schedule. An unscheduled fabrication shop is at the mercy of its orders, which puts customers, employees, and the bottom line at risk. According to a recent column in The Fabricator, a principle called Practical Lean can help high-mix shops schedule without the headache. Developed specifically for high-mix, low-volume fabricator shops, Practical Lean helps ensure parts and orders are received and released at a set time (as is the goal of scheduling), but it also looks at the root causes of why scheduling goes awry. See the full article here to read more about how this tool can help prevent scheduling nightmares.
- Optimize Workflow. An entire fabricator shop is made of many moving parts with various operators and several stations. However, if taken one-by-one, each process can be broken down into a set process. Take those individual processes and improve them where you can. As this white paper from the LENOX Institute of Technology describes, this includes analyzing equipment placement, material flow, and ergonomics. The less times an operator has to touch or move material the shop saves time and money—resulting in increased production.
- Be open and flexible. Despite changing schedules and customer requirements, it’s important to remain open with key stakeholders and flexible with the new processes you’ve put in place. This article from Industry Week says transparency with management, supervisors, and operators increases overall communication and allows the entire operation to adjust if and when needed. This leads to another guiding principle—maintaining flexibility, both figuratively and literally. Operators should be able to adapt to changing orders with their workstations, equipment, and overall shop floor layout, just as the shop should be able to accommodate more or less staffing needs and adjust processes as necessary to ensure orders remain on schedule.
While it is a challenge for high-mix shops to achieve the efficiency of high volume metal-cutting operations, it is possible. Taking time to assess, and more importantly, implement changes to processes can help eliminate downtime, increase productivity, and maybe even boost volume.
As consumer demand increases, how will your high-mix fabrication shop deal with the pressure? Perhaps it’s time to look at your current production processes and see where you can make some changes. Even small improvements can have a big impact.
April 25, 2015 / agility, best practices, Cost Management, industry news, KPIs, LIT, operations metrics, Output, performance metrics, productivity, strategic planning
Most metalworking companies started off 2015 with positive expectations. As the LENOX Institute of Technology reported in the 2015 Industrial Metal Cutting Outlook, early forecasts painted a positive picture, with manufacturing production projected to grow by 3.7% in 2015 and 3.6% in 2016.
However, recent reports have clouded expectations a bit. A mid-April outlook from the Manufacturers Alliance for Productivity and Innovation (MAPI), for example, stated that short-term outlook for industrial manufacturing is “murky” and “fairly bleak.” According to the report, manufacturing production fell by 1.2 percent during the first quarter of 2015, the first quarterly contraction in factory sector output since the second quarter of 2009. And even though there was a modest gain in factory output growth in March (0.1%), MAPI points out that production in key industry sectors such as primary metals, aerospace, and furniture contracted.
Even with this sobering data, many manufacturers remain optimistic that 2015 will be a year of growth, even if it is only slightly better than last year. Two articles from Forge magazine give some specific reasons why forges can remain hopeful now and in the years ahead.
In its “Aerospace Industry Outlook,” Forge states that based on the 20-year projections from Boeing and Airbus, the long-term outlook for the aerospace industry (one of the forging industry’s biggest markets) is positive. While the demand projections between these two top companies differ slightly, both expect growth, which is good news for the forging industry.
“Whichever forecast you want to believe, many planes will be ordered during the next two decades,” the article states. “The world’s leading forgers, many of which are located in North America, will be asked to supply a wide assortment of forged products made of high-performance and lightweight materials.”
In a separate article, “North American Forging is Advanced Manufacturing,” the industry publication argues that the forging industry has several reasons to be confident in its future position in the metals industry. According to the article, forging is not only an enduring industry, but “is vibrant, technologically challenging and critical to the country’s economic health and defense.” The reason forging endures, the articles adds, is because it provides the parts for critical applications that cannot be produced by any other manufacturing process.
“If the application is important, it depends on a forging,” the article states. “Why would any designer choose any metalworking process not capable of providing the optimum combination of strength, toughness and fatigue resistance required of the application?”
Have a Plan
The point is that regardless of what current data shows, the long-term prospect for the forging industry is bright, which means that managers need to stay focused on growth. However, that means you need a plan. As any leading metals executive knows, success in today’s market requires a strategic plan focused on continuous improvement while also accounting for external challenges.
What does that look like? Below is a brief outline from Canadian Metalworking that will help forging executives create a simple but workable planning process for their business:
- Analyze the current state of the company, including annual sales and estimated market share and whether these variables are growing or sinking.
- Determine your goals and objectives over the next 12 months to five years.
- Take an inventory of the financial and non-financial resources the company currently has and what additional resources are needed to achieve these goals and objectives.
- Identify activities and courses of action that the company needs to embark on to accomplish these objectives.
- Establish key performance indicators (KPI) to quantifiably measure the company’s performance against specific activities that management has identified or against key success factors in the industry.
- Review performance and accomplishments against the plan on an on-going basis and do not hesitate to pivot if necessary.
(For a more in-depth explanation of these steps, you can view the full article here.)
Are you ready for whatever 2015 brings? If you remain focused on growth and have a strategic plan in place, odds are you are more ready than you think.
April 10, 2015 / agility, best practices, Cost Management, cost per cut, customer delivery, customer satisfaction metrics, Employee Morale, human capital, industry news, maintaining talent, Output, productivity, strategic planning
As we reported in our 2015 Industrial Metal Cutting Outlook, most manufacturers are expecting some growth in 2015, although no one expects it to be a banner year. “Modest improvement,” “slight gains,” and “steady” are just a few of the words being used to describe 2015 business prospects.
Based on recent data, those words seem fairly accurate. According to the latest report from Institute for Supply Management (ISM), activity in the manufacturing sector expanded in March for the 27th consecutive month, and the overall economy grew for the 70th consecutive month. However, it is worth noting that ISM’s readings for March were lower than February’s readings. Specifically, March PMI registered 51.5 percent, a decrease of 1.4 percentage points from February’s reading of 52.9 percent and, even more noteworthy, the fifth consecutive monthly decline. The New Orders Index registered 51.8 percent, a decrease of 0.7 percentage point from the reading of 52.5 percent in February. Even so, PMI and the New Orders Index readings were above the set thresholds of 43.1 and 52.1, respectively, which indicate overall growth.
Of the 18 manufacturing industries covered in ISM’s report, 10 reported growth in March, including fabricated metal products. As one respondent from the fabricated metal products segment told ISM, “Our business is still strong and on projection. Dollar strength is challenging for our international business.”
Planning for Growth
According to industry publication The Fabricator, most fabricators went into 2015 expecting steady growth, and many planned on investing in capacity-building equipment to prepare for increasing customer demand. “The fabricating industry is looking to add capacity to gear up for the unexpected,” the magazine said in its 2015 Metal Fabrication Forecast. “Custom fabricators are all too familiar with demand variability, and demand has become even more variable in recent years.”
Quoting findings from FMA’s 2015 Capital Spending Forecast, The Fabricator says most fabricators are planning to build capacity with more equipment. “Projected capital spending growth has slowed from the dramatic rebound seen postrecession—2015 projections are up only 3.5 percent over 2014—but the spending has shifted,” the magazine says. “Specifically, fabricators are expecting to spend much less on consumables and supplies (down almost 30 percent) and more on capacity-building machinery, especially in cutting and forming, where spending has jumped past prerecession levels.”
Ready for Anything
Regardless of whether or not you entered the year bullish or cautious, most industry leaders would agree that being proactive is the only way to approach today’s marketplace. While you may or may not be planning to add capacity this year, there are several other strategies you can use to prepare your operation for whatever 2015 brings.
In fact, a recent article from IndustryWeek suggests that there are five tests every manufacturer should run quarterly to gauge “factory readiness.” These include the following:
- Utilization versus capacity: Are utilization and capacity running even?
- Per-project profitability: Is per-project profitability acceptable?
- Client mix: Could the client mix be improved?
- Workload diversity: Will the current and expected workload allow for learning new skills and expanding the business?
- Sick time and personal time off: Are workers motivated to deliver exceptional work? If not, why not?
As the IW articles notes, forecasting the future with any measure of precision is difficult under the best of conditions, and manufacturing tends to have less visibility than most industries. However, by regularly following and measuring your operation’s performance, fabricators can not only be better prepared for what might happen in the near future, but more importantly, be prepared to handle unexpected changes.
April 5, 2015 / agility, customer delivery, industry news, material costs, strategic planning
Like most sectors of the metal-cutting industry, metal service centers are hoping that experts are right about the growth prospects for 2015. After 2014 fell short of expectations and with recent data showing less than favorable numbers, most companies are trying to stay optimistic about the months ahead.
The latest figures from the American Iron and Steel Institute show that February steel shipments from U.S. steel mills were down 10.8 percent compared to January 2015 and decreased by 9.1 percent compared to February 2014. Shipments year-to-date were down 5.3 percent compared to 2014 shipments.
According to data from the Metal Service Center Institute (MSCI), U.S. service center steel shipments declined in the first three months of 2015 compared to the same months in 2014, although March shipments were only down by a tenth of a percent. Shipments of aluminum products, on the other hand, increased in both February and March after being down in January. Meanwhile, steel and aluminum inventories grew in the first three months of 2015, MSCI reports.
Even with a rough start to the year, analysts remain optimistic that there will be growth in 2015. As we reported in our 2015 Industrial Metal Cutting Outlook, forecasts for steel demand are positive, but growth rates will not be as strong as they were in 2014. According to the Short Range Outlook 2014-2015 from the World Steel Association (worldsteel), U.S. steel demand is expected to increase by 1.9% in 2015—much lower than the 6% growth the U.S. experienced in 2014. Globally, worldsteel forecasts that global apparent steel use will increase by 2.0% this year.
Many industry leaders are also fairly optimistic about this year. In a mid-February statement announcing its 2014 financial results, Reliance Steel & Aluminum Co. said that it expects the U.S. economy to continue to improve throughout 2015. The Los Angeles, CA-based service center believes high levels of metal being imported into the U.S. will continue given the strong U.S. dollar and weaker economies in other parts of the world, which will continue to put downward pressure on steel prices. In addition, due to normal seasonal trends and an improving demand environment, Reliance expects higher tons sold in the first quarter of 2015 versus the fourth quarter of 2014, but lower average selling prices and margins.
Of course, no one really knows how this year is going to shake out. Perhaps the greatest gauge for how metal service centers might fare in 2015 is to look at segment forecasts. Below are outlooks for three OEM categories that will likely play a large role in determining demand in 2015:
- Automotive. In 2014, the automotive industry registered gains it hasn’t seen since 2006, and growth is expected to continue in 2015. According to an April 1 from manufacturing.net, auto sales are on track to reach 17 million this year, their best performance since 2005. Low interest rates, low gas prices, the improving economy, and new models will all drive growth, the report says. In addition, the material war between steel and aluminum will likely continue in 2015 as automotive companies seek ways to meet federal emission standards.
- Non-residential construction. Metal Center News recently reported that non-residential construction—one of the steel industry’s biggest markets—is expected to finally register some growth in 2015. While this market has been slow to respond to the improving economy, the report states that the American Institute of Architects predicts an 8.1% increase in non-residential construction this year, driven by double-digit increases in commercial construction. Healthy gains are also expected in institutional projects such as schools and health care facilities. You can download the full Metal Center News forecast report here.
- Energy. The energy sector will likely receive the most attention in 2015. While steel demand from energy companies has been growing at a fast pace, some experts believe the sector’s steel demand could be subdued in 2015. “Globally, higher crude oil prices drove a lot of energy companies to invest in shale formations,” states one analysis from Market Realist. “However, lower crude oil prices dampened the mood among energy exploration companies.” Low oil prices may also have larger effects on the industry, including decreased steel prices and increased U.S. steel imports. To read more about the impact crude oil pricing may have on the steel industry, check out Modern Metals February cover story, “Brooding Over Crude.”
April 1, 2015 / agility, best practices, blade failure, Cost Management, human capital, industry news, KPIs, LIT, operations metrics, performance metrics, predictive management, preventative maintenance, productivity, skills gap, strategic planning, value-added services
Like most manufacturers, industrial metal-cutting companies went into 2015 with both optimism and caution. While all signs seem to be pointing to a full economic recovery, concerns surrounding an unstable political landscape, foreign markets, and pricing continue to keep many metals companies on their toes.
Some Growth Ahead
As we enter the second quarter of 2015, most experts anticipate growth in the metals industry. Early predictions painted a positive picture for the year, and recent reports are confirming that the industry will, at the very least, see slight improvements over 2014.
According to the Manufacturers Alliance for Productivity and Innovation (MAPI), industrial production increased at a 3.8% annual rate in the fourth quarter of 2014 and posted 3.6% growth for the year as whole—over a percentage point higher than the 2.4% gain in the overall economy. The manufacturing outlook for 2015 and 2016 calls for a minor acceleration from the 2014 growth rate. According to the MAPI Foundation’s most recent U.S. Industrial Outlook, manufacturing production is forecast to grow by 3.7% in 2015 and 3.6% in 2016.
MAPI’s outlook also predicts that 21 out of 23 industries will show gains in 2015. This includes growth in metals industries such as iron and steel products (5%), alumina and aluminum production and processing (7%), and fabricated metal products (3%). The top industry performer will be housing starts, which is expected to increase by 16%.
Forecasts for steel demand are also positive, but growth rates will not be as strong as they were in 2014. According to the Short Range Outlook 2014-2015 from the World Steel Association (worldsteel), U.S. steel demand is expected to increase by 1.9% in 2015—much lower than the 6% growth the U.S. experienced in 2014. Globally, worldsteel forecasts that global apparent steel use will increase by 2.0% this year. This is a downward revision from previous forecasts, due to a slowdown in emerging economies like China.
“Recoveries in the EU, United States and Japan are expected to be stronger than previously thought, but not strong enough to offset the slowdown in the emerging economies,” stated Hans Jürgen Kerkhof, chairman of worldsteel’s Economics Committee. “In 2015, we expect steel demand growth in developed economies to moderate, while we project growth in the emerging and developing economies to pick up.”
Concerns and Challenges
Buying into the positive forecasts, most metals manufacturers expect business to improve this year. According to an annual survey of metals executives by American Metal Market (AMM), 42% of respondents expect the economy to turn around in 2015 and 67% expected business to improve overall, mostly due to growth in the auto and energy sectors.
However, AMM reports that respondents did have some reservations. Political events, cheap imports, and foreign markets were all causes for concern, as well as uncertainty about “where important industry segments like construction might be headed,” AMM states in its survey report.
In his State of the Industry address earlier this year, Robert Weidner, president and CEO of the Metals Service Center Institute (MSCI), listed several trends that will affect the metals industry in 2015 and beyond. Below are the five challenges he outlined, as reported by thefabricator.com (You can read the full coverage here.):
- Market Intelligence – Volatile markets and increasing competition have heightened the need for trustworthy data and analysis tools, as well as the need for cybersecurity resources and training to secure market intelligence.
- Business Disruption – World events have an even bigger impact on local economies than before, creating a need for topic- and area-specific experts and information and enhanced vehicles and technology to provide information.
- Congressional Gridlock – U.S. partisan politics have stalled action in the legislative branch, often resulting in extreme actions through regulators that have impeded manufacturing growth.
- Safety and Risk Management – Slow market growth has left companies cautious to invest.
- Skilled Labor and Changing Demographics – Attracting a skilled workforce remains a challenge for the industry.
With both forecasts and anticipated challenges in mind, industrial metal-cutting companies can strategically approach the market from both a business and operational standpoint. In fact, as we reported here, it is critical for today’s managers to develop operational short-term plans that are effective in achieving the overall strategy set forth in the business plan. For instance, if the goal is continuous improvement, then make sure your metrics, your daily practices, and communication with your team all point to that overall strategy.
As a global company serving the industrial metal-cutting industry, we at LENOX Tools have a unique vantage point of what is happening in the marketplace. We have watched some metal companies barely survive, while others have found ways to thrive. The difference, in most instances, seems to be the company’s commitment to making improvements. Whether investing in new equipment to improve cutting time and quality or investing in training to improve and empower their human capital, industry leaders are continuing to focus on making positive changes on the shop floor so they can be ready to respond to changing customer demands. In other words, the only way to offset external uncertainties is to focus on making internal improvements.
Based on industry trends and our own experience, LENOX sees the following as key strategies for industrial metal-cutting companies that want to be successful in today’s marketplace:
- Invest in Operators and Training. In light of the manufacturing industry’s ongoing skills gap, experts like MSCI’s Weidner are stressing the importance of employee safety and ongoing training as a means of attracting and maintaining workers. In addition, LIT’s benchmark survey of industrial metal-cutting companies provides evidence that investing in areas like training can provide additional benefits, including better quality, faster on-time customer delivery, higher revenue per operator, and lower rework costs.
- Embrace Proactive Care and Maintenance. No matter how efficient an operation, some machine downtime is inevitable. The key is to be proactive and minimize it as much as possible. This includes practices such as breaking in blades and regular coolant checks. By adhering to a preventative maintenance schedule, managers can actually anticipate maintenance bottlenecks and turn “interruptive downtime” into “predictive downtime.”
- Form Strategic Supplier Relationships. Whether you need help with training, gathering metrics, or de-costing, help is likely no further than your closest supplier. And if that’s not the case, you may want to rethink your supply chain. By utilizing value-added services from trusted suppliers and making them more of a partner than simply a supplier, metal-cutting companies can improve quality and productivity—both of which impact the bottom line.
- Seek New Opportunities. Market trends such on re-shoring and an automotive boom could translate into new opportunities for your metal-cutting company. Are there value-added processes you can add to your operation to stay competitive? Are there previous customers that could now benefit from the convenience and cost benefits of your U.S. manufacturing base? Is there new equipment or tooling that could help you better serve a certain customer base? Asking critical questions such as these may reveal new prospects for growth. Start brainstorming.
March 15, 2015 / agility, benchmarking, best practices, blade selection, circular sawing, continuous improvement, Cost Management, cost per cut, LIT, operations metrics, operator training, preventative maintenance, quality, resource allocation, ROI, strategic planning
In a mature manufacturing operation like circular sawing, it is easy for managers and lead operators to rely on trusted and proven techniques. Unfortunately, today’s competitive market has upped the ante, which is why so many operations have stopped depending solely on tribal knowledge and are now embracing continuous improvement and the changes that come along with it.
Today’s leading operations managers know that being successful requires both innovation and re-evaluation. In other words, they understand that their way may not always be the best way, and that, instead, their aim should be to stay open to a better way. As a recent leadership article from Forbes notes, “Top performers are top performers because they consistently search for ways to make their best even better.”
In a circular sawing operation, this may mean testing a new blade on the shop floor, while other times, it may mean adopting a new management technique. Or, as this article from manufacturing.net suggests, it may mean basing your decisions on “real-time data versus institutional memory.”
The point is that bar is always moving, and it would serve most operations well to be open to new ideas and, more importantly, to learn from others. What are other circular sawing operations doing to stay competitive? The LENOX Institute of Technology (LIT) interviewed two high production metal-cutting companies and asked them for some of the best practices they are using to stay competitive. Read below to discover a few of the strategies they are using to become industry leaders.
Jet Cutting Service, Inc.
Based out of a 69,000-sq-ft facility in Bedford Park, IL, the metal processor currently runs 10 circular cold saws and eight band saws and primarily serves steel service centers, machine shops, and some producing mills. When it comes to strategy, vice president Mike Baron focuses on three key strategies:
- Technology. According to Baron, his team is always testing new advancements to ensure the shop is using the most advanced cutting tools. Last year, for example, Baron had eight different circular saw blade manufacturers come into his factory to see which blades performed the best. While the project was time-consuming, Baron said it was a huge learning experience for his team and it ended up giving him a 20-percent cost savings.
- Ongoing training. Like most shops, new operators are “put through the rigors,” Baron says, and seasoned employees are retrained every time new equipment or software is purchased.
- ISO Certification. Baron says maintaining ISO certification helps his shop keep quality high and plays a critical role in achieving continuous improvement. “If you don’t track it, you can’t measure it, and then you can’t improve upon that,” Baron says.
A.M. Castle & Co.
In addition to distributing a wide range of metal and plastic materials, the leading metal service center also performs simple sawing operations at several of its locations, including its main distribution center in Franklin Park, IL. Glen Sliwa, who is responsible for keeping saw operations up and running, describes three ways the shop stays productive:
- Continuous Improvement. Sliwa says the company’s focus is on continuous improvement and is “always doing something to upgrade.” About 7 years ago, the operation underwent a lean transformation, which included major changes in workflow and equipment placement as well as simple improvements like color-coding material. The facility also constantly uses the lean tool known as 5S, which eliminates waste by keeping work areas clean and organized.
- Preventative Maintenance. According to Sliwa, preventative maintenance is critical to keeping production moving. Operators perform daily maintenance on machines by following a check list that they have to verify and sign at the end of every job. Sliwa and his team also perform more in-depth PM checks on quarterly basis.
- Strong Supplier Relationships. Sliwa works closely with his suppliers and relies on their expertise any time his team has a cutting issue or is looking to improve performance. In one instance, operators were having a hard time reaching productivity goals when cutting several grades of stainless steel. A technical representative from Sliwa’s blade supplier came out to evaluate the problem and suggested a new blade type. Not only did the new blade cut Sliwa’s cutting time half and double the blade life, the supplier also trained his team and tuned up his saws.
To download the full case study, Best Practices of High Production Metal-Cutting Companies, visit LIT’s circular saw resource page.
February 15, 2015 / agility, blade selection, Cost Management, customer delivery, industry news, material costs, productivity, resource allocation, strategic planning
It’s no secret—the U.S. automotive industry is doing well. In 2014, the industry registered gains it hasn’t seen since 2006, and the momentum doesn’t seem to be slowing. According to a recent report from the New York Times, sales of automobiles rose 14 percent over January of last year, with several major auto makers posting double-digit increases in a month that is traditionally slow for U.S. dealerships. Sales forecasts for the next five years are even better. One analyst has even predicted sales will hit 20 million vehicles by 2020, reports Automotive News.
This is no doubt good news for any supplier serving the automotive space, including industrial metal-cutting companies. However, ramped up demand usually means ramped up customer expectations, and suppliers need to be ready to not only meet the needs of automotive makers, but also stand out from competitors vying for the same business.
To help companies strategically approach this market, below are some of the major trends impacting automotive manufacturing. From materials to robotics, customer needs and processes are evolving, and suppliers looking to win (and perhaps keep) the business may need to adjust accordingly.
- Aluminum vs. Steel. One of the biggest shifts happening within automotive manufacturing has been the growing use of aluminum over steel. To meet new federal emission standards, a growing number of U.S. auto makers (i.e., Ford) are using aluminum to decrease the weight of their vehicles and, therefore, increase the fuel economy. Key aluminum suppliers like Alcoa have been reaping the rewards and expect growth to continue on a global scale. However, Tim Triplett, editor of Metal Center News, says that despite the hype around aluminum, the steel industry isn’t losing any ground in the automotive sector. “Just as many headlines heralded new developments in lightweight, advanced high-strength steels,” Triplett says here in an editorial. He adds, “Steelmakers claim the auto industry can meet the government mileage standards by using the new steel alloys, in combination with power train innovations, and at a lower cost than switching parts to aluminum.”
- Tooling Advancements. Regardless of whether or not the use of aluminum outpaces steel, the fact that more and more aluminum is being used by the automotive industry means that metal-cutting companies need to ensure they have the right tools for the job. As a general rule, thefabricator.com offers the following advice when choosing the right tool for aluminum jobs: “Circular saws generally are suitable for cutting aluminum between 0.5 and 6 in. diameter, for high-volume jobs (up to 5,000 parts per shift), and for the best possible finish on the cut piece. Band saws generally make sense for aluminum stock of 6 in. diameter and larger and for shops that are interested in high-speed cutting of aluminum but also frequently cut other materials.”
- Automation Trends. A recent study by Grand View Research Inc. states that the booming automotive industry, climbing labor costs, and market demands for rapid and efficient manufacturing processes are increasing the need for automation in industrial manufacturing. As a result, the research firm expects the global industrial robotics market to exceed $40 billion by 2020. Many industrial metal-cutting companies are following this trend and are investing in automation and computerized controls to make all aspects of the sawing process more efficient. Simple controllers are allowing companies to assign operators to run more than one machine at a time, and higher level advancements in areas like robotics are also improving productivity. For example, Parsan Steel Forging and Machining Co., a Turkish manufacturer of automotive parts, is using robotics to gain production flexibility and efficiency. According to an article from Forging magazine, better programming features, range of movement, and motion control are creating new efficiencies and cost savings at the forge. You can read the full case study here.
January 30, 2015 / agility, ball and roller bearings, best practices, blade failure, bottlenecks, circular sawing, Cost Management, customer service, LIT, productivity, quality, ROI, strategic planning, workflow process
The key to customer satisfaction has always been finding a balance between fast turnaround and high quality. Growing demand has made this even more of a challenge for many of today’s ball and roller bearing manufacturers. With the economy poised for recovery thanks to stronger demand from the transportation and industrial manufacturing industries, industry analysts are anticipating increased demand for ball bearings. According to a report from Freedonia Group, global demand for bearings is projected to rise 7.3 percent annually through 2018, with ball and roller bearings registering the fastest gains.
This increase in demand is certainly good news for manufacturers, but it also means that companies need to make sure they remain focused on quality. Speed and agility will always be key attributes of any leading high-production operation, but they cannot come at the expense of accuracy.
To help ball and roller bearing manufacturers ensure quality in their metal-cutting operations, below are a few highlights from the paper, The Top Five Operating Challenges Ball and Roller Bearing Manufacturers Face in Industrial Metal Cutting, written by the LENOX Institute of Technology:
- Think of the long-term cost impact of short-term production gains. Ball and roller bearing production requires high-speed, precision cutting, and pushing machinery too hard can directly impact the quality of a cut and long-term costs. In circular 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 demands of the material, the end result will be premature blade failure. These actions are costly in terms of process flow and equipment. When blades cost several hundred dollars, going through twice as many blades just to get 50 more cuts just isn’t cost effective. In addition, shorter blade life creates more unplanned downtime for blade changes.
- Many industry leaders are also finding that becoming ISO 9001 certified can help them maintain quality standards. The ISO standard is based on a number of quality management principles, including a strong customer focus, the motivation and implication of top management, and continuous improvement. The basic goal of the standard is to help companies provide customers with consistent, good quality products and services, which, in turn, often brings business benefits like improved financial performance. It most cases, it is used to strengthen an existing quality program by making it a formal, documented procedure.
- Close supplier relationships can also help ball and roller bearing manufacturers improve quality. Many supply chain partners are willing to lend their expertise to help optimize processes and ensure that 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, managers have another means of improving both quality and productivity. In fact, this is one of the eight key principles on which the quality management system standards of the ISO 9000 series are based.