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Trends Affecting Forges in 2016 and Beyond

April 25, 2016 / , , , , , ,


As we reported in our 2016 Industrial Metal-Cutting Outlook, forging shops and other industrial metal-cutting companies entered the year fairly optimistic. Unfortunately, expansion in the industrial manufacturing sector has been slow moving. While current conditions have left many companies cautious, long-term forecasts point to better times ahead.

Positive Thinking
While not everyone anticipated huge growth in 2016, very few expected it to be worse. According to an annual industry survey from Forging Magazine, almost half (49.2%) of forgers entered the year with a positive outlook, while 41.5 percent expected 2016 to be “about the same.” Based on the survey results, aluminum forgers (61.1%) and impression-die forgers (62.5%) were the most optimistic about rising shipments in 2016.

Confidence was also seen in forgers’ spending plans for 2016. According to Forging, 53% of all survey respondents have plans in place to add new manufacturing equipment at their operations; for nearly 14% of these respondents, the investment will encompass new building construction, either an addition to a plant or a separate, new plant. However, for those forgers affirming capital spending plans, 47.6% indicate the value of their investments will be about equal to their 2015 totals—an indication that many companies may still be a little hesitant to make huge investments.

Confident but Cautious
Based on current data, that hesitation is founded. Monthly data on manufacturing activity has been up and down this year, leveling out to little or  no growth. According to the Manufacturers Alliance for Productivity and Innovation (MAPI), manufacturing industrial production will likely register zero growth in the first half of 2016, with 1% to 2% growth in the third and fourth quarters. For the entire year, the research firm forecasts only 1.1 % growth.

Still, forges have reason to keep their positive attitude. Short-term forecasts for the manufacturing industry may be grim, but the forging industry has historically shown an ability to outperform the broader trends. In addition, a recent uptick in manufacturing activity in March provides some hope. The monthly Purchasing Manufacturers’ Index (PMI) from the Institute for Supply Management (ISM) increased by 2.3 percentage points in March, putting the index above the 50-percent growth threshold for the first time in 2016.

Long-term prospects for forgers are also hopeful. According to a report from Zion Research, North America’s demand for the forging industry is expected to reach $15.4 billion in 2020, growing at a compound annual growth rate (CAGR) of 4.76% between 2015 and 2020. Global forecasts are even brighter. A report from TechNavio predicts that the global forging market will exhibit a healthy CAGR of around 8% between 2016 and 2020.

Tracking Trends
That’s not to say, however, that the industry doesn’t have some concerns. Based on Forging Magazine’s survey, forging producers expect to face the following challenges in 2016:

Like other industrial manufacturers, forges will have to approach the current market strategically by balancing internal improvements with external influences. According to the TechNavio report, there are four key trends forges should keep an eye on in 2016:

  1. Movements in Automotive. As the biggest end-user of forged parts, the automotive industry will continue to play a crucial role in boosting demand for forged products. However, the automotive segment is reaching a mature stage in the forging market, and the global economic slowdown has adversely affected its growth. As a result, sales of forged parts in this industry fell in 2015, compelling many vendors of the forging market to reduce their shares and investments in the automotive industry. Even so, the automotive sector is expected to grow at a CAGR of around 7% during the forecast period of 2016-2020.
  2. Expanding Business Opportunities. Recent trends suggest that major vendors are investing in R&D to explore avenues in the non-automotive sector to increase the market revenue. In fact, according to the report, “other non-automotive sectors will mostly contribute to the growth of the global forging market until 2020.” This includes sectors such as aerospace and defense, agriculture, construction, mining, general industrial equipment, and material handling. Some companies are also looking at fresh ways to approach the automotive market, including addressing the trend toward lightweight design.
  3. Technology Improvements. Following larger manufacturing trends, forges are looking to new technology to improve operations. “Vendors are developing new and improved die material interfaces and increasingly using new die designs and modeling software,” an analyst from the report’s research team said. “The market is also implementing controls and sensors to monitor the forging process in a bid to automatically sense and compensate for any variation in the process.”
  4. Growth in Asia-Pacific. The Asian and Pacific Coasts (APAC) region accounts for the largest share of the forging industry, contributing about 61% of the total revenue generated. The report expects the region to grow at a CAGR of around 9% between 2016 and 2020. “Increasing outsourcing of forging activities to low-cost countries in the region is expected to drive this regional market,” the report states. “Demand for infrastructural development in developing countries and the emergence of India as the manufacturing hub for the automotive industry will propel the growth of the market in this region.”

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Using Visual Devices to Improve Your Forging Operation

February 25, 2016 / , , , , , , , , ,


Workplace organization is one of those management principles that everyone knows is a good idea, yet it often falls by the wayside as managers focus on more pressing priorities like meeting deadlines and customer expectations. However, manufacturing experts continue to stress the importance of having a clean and organized manufacturing floor—not as a slap on the wrist, but because organizational tools are simple to implement and can offer a big return.

One tool that is often overlooked but can offer huge improvements is the use of visual devices. In fact, according to visual management expert and author Gwendolyn Galsworth, the visual workplace is one of the most misunderstood opportunities for a safer, more efficient, and reliable manufacturing operation.

“The entire world of work now strives to make work safer, simpler, more logical, reliable and linked, and less costly,” Galsworth writes in an article appearing in Fabricating & Metalworking. “Central to this is the visual workplace – not a brigade of buckets and brooms or posters and signs, but a compelling operational imperative, central to your shop’s war on waste and crucial to meeting daily performance goals, vastly reduced lead times, and dramatically improved quality.”

Specifically, Galsworth says in the article that managers should use visual cues to create a work environment that is self-ordering, self-explaining, self-regulating, and self-improving where what is supposed to happen actually does happen.

What does this look like? According to Galsworth, an effective visual workplace should follow some basic guidelines:

As an article from Modern Machine Shop explains, visual tools can include everything from different-color walkways marked for pedestrians and motorized vehicles, to foam cut-outs used as tool drawer organizers. One industrial metal-cutting company, featured here in a white paper, color-coded its blade stocking process. Each blade is marked with a colored tag, which corresponds to a chart that helps operators easily determine the right blade for the job. Stocking shelves are also color-coded, allowing operators to quickly locate and restock blades. This has improved operator efficiency, reduced the occurrence of operator blade selection errors, and prolonged overall blade life.

Visual tactics can also be used to improve safety. LENOX Tools, for example, has implemented a Safety Sticker program, which visually displays whether or not its operation has had any safety incidents. Sticker dispensing stations and a safety calendar are located at every entrance to the facility, and every employee is required to put on a green sticker with the number of days “accident free” written on it. When a recordable accident occurs, everyone in the facility changes from a green sticker to a red sticker for a seven-day period. After seven days, everyone reverts back to the green sticker. According to Matt Howell, senior manager, the program has been “a good rallying point for the facility and builds energy around safety.”

No matter what visual strategies you decide to institute in your forging operation, the goal is to use them to enhance communication and foster learning. The concept may seem a bit simplistic, but research shows it is effective. Studies by educational researchers suggest that approximately 83% of human learning occurs visually, with the remaining 17% occurring through the other senses. To put it another way: Your operators learn to work with their eyes first and their hands second.

What visual devices could you use to improve efficiency and safety at your forging operation?

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Automation Options for Low-Volume Machine Shops

February 20, 2016 / , , , , , , ,


The question of whether or not to automate is a difficult decision for any operations manager. As we covered here a previously published blog, the challenge is not only ensuring a good return on investment, but also figuring out how to effectively balance the allocation of technology and process automation with shop floor personnel.

In most cases, deciding whether or not to automate is neither a simple nor straight forward process and requires strategy, careful consideration, and a little bit of risk. This is especially true for low-volume/high-mix machine shops. While research has shown that many small manufacturers still believe that automation is reserved for mass production operations, more and more low-volume shops are finding that automation can work for them as well.

According to an article from Canadian Industrial Machinery, just-in-time manufacturing has made automation in low-volume/high-mix a growing trend. “Automation is suitable even for job shops, where the shop owner often doesn’t know what jobs will be running from week to week until an order request arrives,” CIM reports. The key, the article states, is investing in a flexible automation system that can be set up and changed over quickly.

As listed in the white paper, The Top 5 Operating Challenges Facing Today’s Machine Shop Metal Cutting Operations, today’s shops have at their disposal a number of automated metal-cutting options, including:

Another more advanced automation trend that is starting to show up in low-volume shops is collaborative robotics. In fact, ABI Research estimates that the collaborative robotics sector will increase roughly tenfold between 2015 and 2020. The robotic systems, which are designed to work safely in close proximity and cooperatively with human coworkers, are said to save space and money, as well as permit more flexible manufacturing practices.

High-mix/low-volume electronics manufacturer Scott Fetzer Electrical Group (SFEG), for example, has benefited from collaborative robotics. According to a recent article from Fabricating & Metalworking, the robots helped the manufacturer optimize production by 20 percent. SFEG used the robots to take over monotonous and potentially hazardous tasks from employees, who were then reallocated to more rewarding jobs.

“One of our biggest challenges is that we’re a high mix-low volume producer, most of our lines don’t run all the time, so trying to find a way to put robots on the line in the traditional sense was a very big challenge,” Matthew Bush, SFEG’s director of operations, tells Fabricating & Metalworking. “We wanted to build a mobile, flexible robot force. The only way we would accomplish this was with a collaborative robot.” (You can read the full article here.)

Of course, shops don’t have to invest in high-tech robotics to automate their metal-cutting operations. Thanks to software advancements, there are plenty of other tasks that can be automated as well.

As described in another white paper from the LENOX Institute of Technology, one metal-cutting company developed a software system that connects the sawing equipment to  its order-tracking system. Historically, employees would input order information into the company’s system, print out a report, and deliver it to the operator. The operator would then have to reenter the data into the sawing equipment. By creating a communication bridge between the saw and the computer system, the company no longer needs to enter the same data twice. This has not only reduced the chance of human error, it has also eliminated an unnecessary production step.

Is automation a good option for your machine shop? That is a question only you can answer, but the good news is there is a growing number of options available for low-volume operations. In the end, the deciding factor should really boil down to one key question: Will it help you better serve your customers?

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Bringing Mobility into Your Machine Shop

January 20, 2016 / , , , , , , , , , , ,


As smart phones and other mobile devices become ubiquitous among consumers, it’s not surprising that mobile technologies are also finding their way onto the shop floor. In fact, according to PwC’s 18th Annual Global CEO Survey, mobility is the top technology priority among industrial manufacturing CEOs.

For many companies, the choice to make their manufacturing operation “mobile” is strategic. As a recent article from Forbes explains, companies are designing mobility into new production strategies, processes, and procedures to gain greater accuracy and speed. “Augmenting existing processes with mobility is delivering solid efficiency gains,” the Forbes article states. “The net result is greater communication, collaboration and responsiveness to customer-driven deadlines and delivery dates than has been possible before.”

Of course, how you choose to use mobility in your operation will truly dictate its impact—both positive and negative. There are still a lot of managers who are hesitant to allow mobile devices on the shop floor, fearing that workers will be distracted and less productive. In some cases, those fears are warranted. One machine shop, featured here in Modern Machine Shop magazine, found that it was beneficial to completely ban cell phone use on the shop floor. While some employees resisted the change at first, the ban allowed the shop to avoid a hike in their insurance premiums, increased productivity, and eventually helped improve employee morale.

There are plenty of other ways, however, that manufacturers are using mobility for their benefit. Kawasaki Motors Manufacturing Corp., featured here in a case study, recently replaced its card-based Kanban system with a more efficient electronic method that could better manage its just-in-time parts system. Using tablets and a custom mobile software application, Kawasaki eliminated the waste of 4,500 Kanban cards per day, which ultimately led to $3,500 in operational savings per day and a quick ROI, the article states.

How can your shop incorporate mobility into your operation? LNS Research, a consultancy based in Cambridge, MA, lists nine key ways companies are using mobile devices in manufacturing environments. Below are the top-five uses (you can read the full list of nine here):

 

 

 

If mobility is something you want to bring into your shop, but you aren’t sure where to start, check out the feature, “7 Tips for Taking Your Operation Mobile,” published by American Machinist.

If mobility isn’t on your radar, you may want to reconsider. Slowly but surely, industrial manufacturers are finding that there is indeed “an app for that,” which means your shop may be missing out on some prime opportunities for cost savings or efficiency gains. In fact, according to Mike Roberts of LNS Research: “If you’re not on the path to using mobile apps to better manage your production operations, you’re seriously at risk of being stuck in the past.”

How could mobility help your machine shop function better?

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Fabricators Stay Competitive By Proactively Addressing Downtime

January 10, 2016 / , , , , , , , , , , , ,


It’s no secret that downtime is the enemy of any fabrication shop and, really, any manufacturer. Huge volumes, continuous sawing, and extremely tight tolerances are characteristic of many fabrication environments, so any process or workflow bottlenecks that slow production can cause quality issues, slow delivery schedules, increased maintenance costs, and hurt overall business performance.

In the white paper, The Top 5 Operating Challenges Facing Fabricators’ Metal-Cutting Operations, Jim Davis, corporate operations services manager at O’Neal Steel, explains why today’s shops can’t afford any unplanned downtime. “Downtime affects us heavily,” Davis states. “When you’re cutting five- to six-thousand pieces for a customer or you’re doing ‘just-in-time’ production where you’re taking orders on the previous day and guaranteeing delivery the next day, downtime will affect us heavily.”

However, instead of finding new ways to react to unplanned downtime events, several leading manufacturers are attacking the issue head on by using proactive strategies. In fact, according to a recent blog published by ARC Advisory Group, Inc., four industrial manufacturing leaders are aiming for “zero downtime”—a goal that may seem a bit lofty and unrealistic. However, with the help of technology, these big name companies seem to believe it is within reach.

For example, late last year, Cisco and Fanuc America announced a 12-month Zero Downtime (ZDT) pilot project with a major automotive manufacturer. The goal was to achieve zero downtime by proactively detecting equipment issues that could cause downtime.

According to a press release, the pilot was a success. Using cloud-based technology, Fanuc and Cisco’s solution detected and informed the automotive manufacturer of potential equipment or process problems before unexpected downtime occurred, allowing the maintenance issue to be addressed in a planned outage window. The end result was a significant decrease in related production downtime and increased overall equipment effectiveness. (To learn more about Fanuc’s technology solution, check out this video).

There are other types of proactive strategies metal-cutting leaders are using to turn “interruptive downtime,” which can hurt performance and impact on-time customer delivery, into “predictive downtime,” which can actually improve cutting performance and extend equipment life. Research shows that simple strategies such as breaking in band saw blades and other preventative maintenance are helping fabricators and other metal-cutting companies predict blade failure and, as a result, better plan for downtime.

In a benchmark survey of industrial metal-cutting organizations, 67 percent of operations that claimed to follow all scheduled and planned maintenance on their machines also reported that their job completion rate is trending upward year over year – a meaningful correlation. “The implication is that less disruptive, unplanned downtime and more anticipated, planned downtime translates into more jobs being completed on time,” the study states. “Slightly more than half (51 percent) of organizations that ‘always’ follow scheduled and preventative maintenance plans say that blade failure is predicted ‘always’ or ‘mostly.’”

What could be the business impact of near-zero unplanned downtime? According to the ARC blog, there are at least four key benefits, including:

Even if the concept of zero downtime still seems impossible, the above examples show that proactive—not reactive—strategies can help eliminate unplanned downtime. Whether using high-tech solutions like Cisco and Fanuc’s cloud-based application or simple preventative strategies like breaking in blades, today’s fabrication shops have the opportunity to reduce unplanned downtime and achieve real, bottom-line benefits.

What strategies does your fabrication shop use to reduce or predict downtime?

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How Fabricators Can Improve Response Times

December 10, 2015 / , , , , , , , ,


With the rise of online retail giant Amazon, nearly anything—from batteries to furniture (and more)—can be delivered to front doors across America within the same day of ordering. With free two-day shipping and even the introduction of drone deliveries, consumers are increasingly becoming used to clicking and receiving.

In fact, there’s a name for this focus on responsiveness. It’s called the “Amazon Effect,” and according to manufacturing consultant Lisa Anderson, this mentality is creeping its way into manufacturing. For example, one of her clients, a building product manufacturer, ships out a product within 24 hours as a worse case scenario, while another ships within two days.

Industrial metal-cutting companies and fabricators are no exception to this trend. Customers are now expecting orders to be completed in half the time they were just 5 years ago. Like all manufacturers, today‘s fabricators are faced with doing more (increased demand) with less (efficient resource allocation) as quickly as possible.

As reported in the LENOX Institute of Technology white paper, The Top 5 Operating Challenges Facing Fabricators’ Metal Cutting Operations, customer service and delivery continue to be a top challenge for fabricators as they attempt to balance quality with speed. Forecasts and schedules can help fabricators estimate delivery times, but when it comes to improving response time, the proof is usually in the process.

To get orders out the door faster, managers need to take the time to evaluate their processes and observe where and how product travels on the shop floor. A recent article from manufacturing.net provides four key areas fabricators should focus on:

  1. Rethink the manufacturing footprint. While ordering raw materials offshore helps save costs, it can extend lead times from 30 days to more than 180 days. To deliver faster, consider bringing operations back stateside. Talent can be recruited with new facilities or by relocating operations to maintain a competitive advantage.
  2. The right product for the right customer. To ensure you have the right product for the right customer at the right price, fabricators need to reduce complexity in their operations. Start by cleaning inventory and assessing SKUs to determine which ones should stay in the portfolio. Then, work with customers and stakeholders to assess the impact of new launches and discontinued products. Tracking customer schedules, including exceptions to lead time, order minimums and costs will help provide customer profitability. Equipped with knowing which customers and products create the most value, fabricating operations can then reduce the number of suppliers to better manage materials flow and delivery.
  3. Improve material flow and inventory accuracy. Simplify operations and reduce inventory to shorten lead times. Keep inventory organized so it’s easy to find when needed and easy to see when it’s time to reorder.
  4. Continuously improve. Lean manufacturing and an efficient process is the foundation of improving response time. Simplifying production from supply chain to delivery all adds up to shorter lead times.

Out of the four strategies offered in the article, the last strategy is probably the most important. While continuous improvement has long been touted as a best practice, it shouldn’t be overlooked. It takes time to constantly improve, but lean tools and other improvements strategies are almost always worth the effort. According to an article from Industry Week, one manufacturer cut lead-time in half—from 10.5 days down to 5 days—by taking the time to conduct a value stream map exercise. Specifically, the team mapped out each area of operations and was able to optimize production from receiving to shipping.

In a hectic fabricating environment, it’s easy to push product through and forget about the process. However, with today’s on-demand mentality, manufacturers can’t afford to miss any opportunity to improve response time. By evaluating and rethinking some of the key areas of their operation, fabricators can optimize their processes and, in turn, better meet the demands of their customers.

When was the last time you re-evaluated your fabrication processes?

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Key Considerations for Tackling Large-Part Metal Fabrication

November 10, 2015 / , , , , , , ,


As the market gets more and more competitive, a growing number of fabricators and other industrial metal-cutting companies are diversifying their services to gain an edge over the competition. For some, this might mean adding a value-added service to benefit existing customers, while for others, it might mean investing in equipment and training to serve new customers.

One specialty that could open up new opportunities is large-part fabrication. For shops that have been focused on smaller segments like home appliances and automotive, large-part fabrication could expand the customer base into areas such as agriculture, commercial construction, and aerospace.

Greiner Industries, for example, has spent the last few years investing in new technology to differentiate itself and has now earned a reputation for taking on extremely large and complex fabrication projects. According to an article from The Fabricator, the Mount Joy, Pa.-based Greiner now has the cutting, drilling, and welding capabilities to take on large railroad girder jobs.

“You have to keep looking for opportunities or areas to explore,” Frank Greiner, founder, told The Fabricator back in 2014. “That will never stop. That’s just part of growing.”

Quality Iron Fabricators, another fabrication shop based in Memphis, TN, is currently working on providing structural steel sections that will be used to build a 161-ft rocket test stand that will be used by NASA, reports Modern Metals. Like Greiner, Quality Iron Fabricators has made investments to better serve large-part customers. Specifically, the fabricator has invested in an integrated fabrication system that includes an automated material handling system and software to connect machines to each other. President Brian Eason tells MM that his company is also looking to revamp its production line to make it even more efficient.

“We always strive to get better at everything we do, and this has been a key part to improving our process,” Eason says in MM.

As both examples demonstrate, moving into large-part fabrication offers great opportunity, but it also requires careful consideration and, usually, some investment. If your fabrication shop is considering large-part fabrication, we have gathered the following considerations based on an article from Canadian Metalworking:

Even if large-part fabrication isn’t a good fit for your shop logistically or economically, perhaps it is time to consider taking on some new capabilities to better serve your customers. According to a white paper from the LENOX Institute of Technology, in addition to higher quality and tighter tolerances, a growing number of customers are asking fabricators to provide value-added services. This provides shops with a prime opportunity to differentiate from the competition.

What new services or capabilities could add value to your existing customer relationships and, more importantly, open the door to new relationships?

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MTConnect Helps Boost Production for Metal Fabricators

October 10, 2015 / , , , , , , , , ,


With manufacturing rates on the rise and a strengthening economy, many manufacturers and industrial metal-cutting companies are looking for more ways to drive operational efficiency to deliver products faster, improve quality, and remain competitive.

One way metal fabricators are meeting this challenge is by way of technology—specifically the Industrial Internet of Things (IIoT). IIoT combines machine-to-machine communication and data collection to create “smart” machines that help eliminate inefficiencies on the production floor.

For example, as reported in a white paper from the LENOX Institute of Technology, one metal-cutting company developed a software system that eliminated the need for an operator to enter order information into the sawing equipment. By connecting the company’s order-tracking system and sawing equipment, the company no longer has to enter the information twice. This saved time and reduced the chance for error.

Just like CNC communication changed the way many fabricators operate, machine-to-machine communication is expected to do even more. To accomplish integrated communication within their shops, many manufacturers start by adopting a communication standard called MTConnect. This technology enables companies to collect uniform data from various manufacturing and production equipment, including sensors and other hardware, to help increase efficiency, improve processes, and boost productivity. The idea is that with one communication standard in place, manufacturers can monitor all equipment and enable it to communicate and learn from each other. When combined with analytical software that translates raw data into reports and dashboards, MTConnect helps transform a “smart” machine into a “smart” shop.

According to a case study published by Modern Machine Shop, one machine shop’s utilization rate hit 65 percent and above after implementing MTConnect. The shop now has plans to improve to 70 percent with the ultimate goal of 85 percent utilization to be on par with world-class manufacturing.

In addition, Mazak Corp., a machine tool manufacturer, recently used the technology to increase machine tool shipments by 200 per month, reports Canadian Industrial Machinery (CIM). Not only did MTConnect help the Florence, KY-based company achieve its shipment goal, but it also increased productivity by an estimated 20 percent, improved machine utilization 42 percent, reduced operator overtime by 100 hours per month, and decreased outsourced work by 400 hours per month.

While the case for MTConnect may be convincing, Neil Desrosiers, developer of digital solutions for Mazak, admits that integration is a major undertaking. In a recent article from Manufacturing Engineering, Desrosiers offers some tips to shops that are considering adopting MTConnect:

Do you think MTConnect is a valuable standard? What technologies have driven your operational efficiencies, and is MTConnect part of that plan?

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Becoming a Top Metal Service Center

September 5, 2015 / , , , , , , , , , , ,


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:

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:

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:

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Total Quality Management in Industrial Metal Cutting

September 1, 2015 / , , , , , , , ,


For most industrial metal-cutting organizations, continuous improvement is a top priority. Case in point: two of the three organizations in our case study of top performers listed continuous improvement as an imperative operational strategy and best practice, and three other companies interviewed by the LENOX Institute of Technology (LIT) confirmed it as a key goal.

“Continual improvement is critical to our business,” Barry Grider, operations manager at Standard Locknut, tells LIT. “We must improve in everything we do to keep a leg up on our competition and to generate new business opportunities.”

Although there are many tools companies can use to achieve continuous improvement, lean manufacturing and Six Sigma typically get the most lip service. One approach that has strong roots but hasn’t received as much attention in recent years is total quality management (TQM).

According to the American Society of Quality (ASQ), TQM is the name for the philosophy of a broad and systemic approach to managing organizational quality. iSixSigma.com  defines it as “the culture, attitude and organization of a company that strives to provide customers with products and services that satisfy their needs.” The goal of TQM is to get every department—from manufacturing and marketing to the supply chain—to value quality and continually strive to perform processes right the first time (i.e., zero defects).

Some say TQM’s origins date back to the 1940s and 1950s; however, the management approach gained the most attention in the 1980s and early 1990s. Over the years, TQM principles and processes have evolved, helping to create quality standards such as the ISO 9000 series and quality award programs such as the Malcolm Baldrige National Quality Award. Although many believe that the philosophy will continue to evolve with each generation, below is a basic overview of the key principles of TQM and the benefits it can offer companies today.

Key Principles
The key principles of TQM, as defined by ASQ, are as follows:

Like Six Sigma, TQM is a quality improvement system aimed at meeting customer needs. However, the two approaches differ in focus, scope, and application. An article from Chron describes three key differences between TQM and Six Sigma:

  1. TQM concentrates on individual departments and more specific quantitative goals, but its ultimate focus is customer satisfaction. The path that takes the business toward that final goal is secondary. Six Sigma, however, aims at continuous improvements and is self-propelled.
  2. TQM is run by the quality control department and professionals who specialize on quality improvements, usually, for their entire career. Six Sigma projects, on the other hand, are managed by “black belts” who have gone through formal training and typically return to their previous jobs after a few years.
  3. TQM pursues “soft” objectives such as customer satisfaction and long-term strategic excellence that are harder to boil down to a single figure, whereas Six Sigma is often driven by a focus on cutting costs and tends to work best if it has specific financial goals.

For an interesting debate on the virtues of total quality management (TQM) vs. Six Sigma, check out this archived article from Quality Digest.

Implementation and Benefits
Like any improvement strategy, TQM implementation will vary based on an organization’s culture, goals, and management philosophy. In fact, ASQ says there is “no one solution to every situation” and describes five different implementation strategies here.

Regardless of the specifics of a company’s TQM strategy, an article from Inc. suggests that all successful TQM implementations require the following three elements:

When implemented successfully, the benefits of TQM range from higher profitability and productivity to increased customer satisfaction and loyalty. (You can read a few case studies of successful implementations here and here.)

Quality First
In the end, TQM is about putting quality and customers first to achieve long-term success. If quality and customer satisfaction are the top focuses at your company, odds are you are already applying some of the founding principles of TQM. To read more about how to make TQM a formal strategy, check out ASQ’s resource page.

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