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Cost Management

Long Term Solutions for Improving Cut Quality in Metal Fabrication

June 10, 2014 / , , , , , , , , , , , , ,


When quality hiccups or bottlenecks occur, the first instinct is to blame the machine. A quick blade replacement or tooling adjustment is the go-to response, and in the short-term, the problem is addressed. Production continues, and the order is eventually filled.

However, industrial metal-cutting leaders know that quick fixes are not doing anyone any favors, especially when quality is involved. Fabricators with high quality standards need to be sure that all areas of their cutting operation are optimized; otherwise, their costs are going to go through the roof. For instance, an operator that doesn’t understand the proper speed setting for a specific type of metal might end up going through a half a dozen blades to maintain a square cut, when the job should have only required two blades.

The harsh reality is that today’s customers are demanding tighter tolerances and higher quality without the added cost. While it is tempting to make knee-jerk responses to meet tight timetables, fabricators that want to remain competitive need to focus on long-term solutions to improve cut quality. Really, you can’t afford to do it any other way.

With the right strategies in place, maintaining premium cut quality doesn’t have to cost a premium. Here are a few to consider:

Cost Management

Metal Cutting Tips and Tricks for Forges

May 25, 2014 / , , , , , , , , , , , ,


As any industrial metal-cutting leader knows, optimization is not only about high-level thinking and strategy. In a manufacturing environment, it often starts with having the right tools for the job.

In band saw cutting, for example, proper blade selection is key to optimizing cut times, cut quality, and blade life. This is especially true when cutting tougher metals like super alloys, and it is even more critical when cutting forged materials, which require aggressive blades that can get underneath any scale buildup. While a low-cost blade may get the job done, the “right” blade should be efficient, effective, and reliable. It should help keep tooling and maintenance costs under control, quality high, and production flowing.

In some cases, optimization may mean upgrading tooling and equipment. For example, one metal-cutting company featured in a white paper from the LENOX Institute of Technology (LIT) found that switching from a bi-metal to a carbide-tipped band saw blade provided a substantial improvement in productivity. With the bi-metal blades, the company was having difficulties cutting stainless steel and was missing productivity goals. However, after switching to the carbide-tipped blade, the company reduced cut times by one half and doubled blade life. While the short-term cost of the newer blades was higher, the long-term productivity benefits made it a worthwhile investment.

However, new tooling isn’t always the answer. As this IndustryWeek article explains, a common misconception among managers is that getting “leaner” requires investment. “Lean is not about spending money,” the article states. In fact, the IW author says that “proper lean mindset first looks to avoid spending the capital in the first place.”

While it is fundamentally important to have the right tool for the job, proper utilization of the tool is just as important. In fact, it could help save you money. If you are a forge that cuts and processes metal, here are a few tips and tricks we gathered to help you optimize your cutting operations:

For more cutting tips and tricks, you can download the complete white paper, Understanding the Cut: Factors that Affect the Cost of Cutting, here.

Cost Management

2014 Trends Affecting Forges that Cut and Process Metal

April 28, 2014 / , , , , , , , ,


For most of the industrial metal-cutting industry, things are staring to look up. Earlier this month, the World Steel Association released its Short Range Outlook for 2014 and 2015. The forecast projects that global apparent steel use will increase by 3.1% in 2014 and by 3.3% in 2015. Regional projections are also positive. While the U.S. showed a decrease of -0.6% in apparent steel use in 2013, the global association forecasts that apparent steel use in the U.S. will grow by 4.0% in 2014 and by 3.7% in 2015.

However, even with its positive forecast, World Steel expects continued volatility and uncertainty to create a challenging environment for steel companies this year. And many metals executives are feeling that uncertainty. As stated in LIT’s 2014 Outlook for Industrial Metal-Cutting Companies, most industrial metal-cutting companies are only cautiously optimistic about today’s market.

This is especially true of many forging industry executives, who were encouraged by sales increases in 2012, only to be disappointed with no growth and some decreases in 2013. Specifically, the Forging Industry Association (FIA) reports that total industry shipments for the custom impression die forging industry were at $7.313 billion in 2013, down slightly from $7.337 billion in 2012. Meanwhile, 2012 total industry shipments by the custom open die forging industry were 15% below 2012, and shipments for the custom seamless rolled ring forging industry were basically flat. (You can view FIA’s final sales data here.)

As forging executives move into the second quarter, there are some trends unfolding in 2014 that they should be watching closely.  A recent column from IndustryWeek does a good job of describing five higher level trends that are affecting most of the manufacturing industry. These include the following:

On an operations level, there is perhaps one prevailing trend—the relentless push for continuous improvement. In an uncertain market, operations managers are realizing they have no choice but to optimize and become more agile. In some cases, this requires capital investment, but many industry leaders are discovering alternative ways to improve operations. LIT’s benchmark study of industrial metal-cutting companies, for example, identifies three key areas where managers can make improvements without adding new capital expense:

Of course, there is no crystal ball for what 2014 will bring, and as the last few years have taught manufacturing executives, nothing is ever certain. In the end, the key will be for forging companies to strategically consider industry trends (i.e., smaller orders), while also proactively improving what is happening inside their doors.

Cost Management

What Metal Fabricators Can Expect in 2014

April 10, 2014 / , , , ,


Late last month, the LENOX Institute of Technology (LIT) published its 2014 Industrial Metal-Cutting Outlook. Echoing the sentiments of many industry analysts, the report expects 2014 to be another year full of uncertainty. Metal fabricators, as well as every other manufacturing segment, are finding it difficult to anticipate what this year might hold, which makes planning extremely challenging.

There are, however, several trends that fabricators should keep in mind as they attempt to strategically navigate this unpredictable market. Here are a few we gathered from the industry’s top resources:

Cost Management

2014 Industrial Metal Cutting Outlook

March 30, 2014 / , , , , , ,


Steel has a rich history in America and around the globe. It has often been called both the backbone of manufacturing and the building block of society—and rightly so. We rely on steel in many industry sectors, including automotive, aerospace, infrastructure, and consumer durables. The health of our sector is critical to the economy, as well as the quality of life that many of us enjoy.

As a global company that services the industrial metal-cutting industry, we at LENOX Tools have a unique vantage point of what is happening within the larger metals market. We have watched some companies barely survive these last few years, and we have also seen leaders rise to the occasion. And while there is still a lot of uncertainty within the marketplace, we are confident that with the right tools, 2014 can be a year of opportunity for many of our customers.

Cautiously Optimistic
According to the Steel Manufacturers Association, the short-term prospects for the steel industry are no more certain in 2014 than they were in 2011, 2012, or 2013. While 2012 was a good year for the industry, with significant increases in both crude steel production and consumption, 2013 wasn’t as good as everyone had hoped. According to the World Steel Association, U.S. steel production was down 2% in 2013 compared to 2012, and forecasts estimate that apparent consumption only grew a mere 0.7% in 2013 over 2012. (Final data has not been released.)

But there are some promising signs. The World Steel Association’s October outlook stated that steel demand is expected to increase by 3.0% in 2014, aided by the improving global economy and activities in the automotive, energy, and residential construction sectors. In addition, as reported by Modern Metals, both automotive sales and construction housing starts are expected to increase in 2014.

Even with these positive indicators, most metals companies remain cautiously optimistic about the near-term future. According to an annual survey of metal executives by American Metal Market, the majority of respondents expected business to improve, with only 8% stating they were less optimistic about business as they headed into 2014. However, three in four respondents said political events have heightened uncertainty, and only 30% of executives expected the economy to turn around this year.

Strategic Shifts
As the industry continues to wait for a true economic comeback, we are seeing some major strategic shifts in the businesses that we service. Unfortunately, a few businesses just could not find a way to survive, but many others were able to adapt and found smarter ways to work. They became leaner, more productive, and made investments where they mattered. We have also seen the emergence of several industry trends, such as consolidation and an influx of new services and products, as companies attempt to remain profitable.

One trend that we hear a lot about is “on-shoring” or “near-shoring”—the process of moving a business operation from overseas back to the local country. China, of course, has been the common landing spot for outsourced manufacturing in recent history. However, with rising labor and energy costs, China’s cost advantage is disappearing. That, along with the difficulties in managing a business across the globe in countries with vastly different work and social cultures, is helping drive the “on-shoring” trend. This is great news for the U.S. metal-cutting industry, as we will help rebuild America one business at a time.

When the market does finally rebound, companies need to be ready. Based on our experience, we at LENOX Tools see the following best practices as critical action items for companies that want to be prepared for quick growth:

Another Year of Improvement
The reality is that no one knows what 2014 will bring, which makes agility and strategy critical. In fact, uncertainty is perhaps the only thing that is certain in this market. However, there are two things the last few years have taught us: you can never be too prepared, and there is always room for improvement.

Industrial metal-cutting leaders know they cannot afford to rest on their laurels—not in 2014 or in the future. Continuous improvement is the only way to succeed in today’s market, and best-in-class managers are proactively encouraging change at all levels of their organization. We at LENOX Tools are ready for another year of improvement, and we look forward to helping equip our customers and their employees with the tools they need to make this year one of their best.

Cost Management

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:

Cost Management

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:

 

Cost Management

Allocating Resources in Forges

January 25, 2014 / ,


Strategic allocation of resources is critical in today’s competitive marketplace. As customers continue to demand tighter tolerances and faster turnaround, operations managers need to be tactical with their existing assets while also knowing when it is time to make some upgrades. The challenge, of course, is making the right call by investing in the areas of your operation that will bring the best return.

While there is always an element of risk to any strategic decision, the following are a few best practices today’s managers should consider as they allocate resources in their operations:

 

Cost Management

New Approaches to Cost Management

December 10, 2013 / , ,


In an ideal world, a fabricator wouldn’t list cost management as a challenge. If production is running smoothly, maintenance is under control, operators are trained, and customers are satisfied, then costs should be relatively stable. However, at a time when the industry hasn’t fully rebounded and uncertainty about market conditions remain, cost is a concern for even the most efficient industrial metal-cutting operations.

The question, then, becomes: How can today’s fabricators better manage their costs? When many companies are already “running lean,” what other measures can they take to keep costs under control or, better yet, save money?

Unfortunately, there are no “one size fits all” answers when it comes to cost management, but the LENOX Institute of Technology (LIT) was able to find a few strategies currently being used by industry leaders. Below are some of the ways top performers are approaching cost:

 

 

All three of these methods suggest that successful cost management in today’s marketplace requires managers to look at cost from a high level before implementing any initiatives. In other words, gone are the days of “quick fixes.” By taking the time to approach cost strategically, fabricators can make improvements that have a long-term—and more importantly, sustainable—impact on the bottom line.

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