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A Look at Industry 4.0 in Your Fabrication Shop

October 10, 2016 / , , , , , , , , , , ,

Thanks to advancements in machine-to-machine (M2M) and communications technology, many believe the manufacturing industry is on the brink of the “fourth industrial revolution,” also known as Industry 4.0. This concept has been widely discussed and promoted in Europe, especially by German manufacturers Siemens and Bosch, but the term is starting to gain traction in the U.S as well.

What is Industry 4.0?
Because it is a newer term, definitions for what comprises Industry 4.0 vary greatly. A report from Deloitte states that there are four characteristics that define Industry 4.0:

  1.   Vertical networking of smart production systems
  2.   Horizontal integration via a new generation of global value chain networks
  3.   Cross-disciplinary “through-engineering” across the entire value chain
  4.   Acceleration through exponential technologies

An article from Forbes defines Industry 4.0 as “a combination of several major technology innovations, all maturing simultaneously, and expected to have a dramatic impact on manufacturing sectors.”  More specifically, the article states that technologies such as advanced robotics and artificial intelligence, sophisticated sensors, cloud computing, and the Internet of Things, are joining together to integrate the physical and virtual worlds.

Simply put, Industry 4.0 is the advent of the long-awaited “smart factory,” in which connectivity and advanced technologies are being used to streamline decisions, optimize processes, eliminate waste, and reduce errors.

Industry 4.0 In Practice
According to the Forbes article, Industry 4.0 has the potential to offer manufacturers three major benefits:

What could this look like in your fabrication shop? EVS Metal, a precision metal fabricator headquartered in Riverdale, NJ, says here in a blog post that Industry 4.0 “will eventually impact the way we fabricate and machine both single items and finished products, from start to finish, including warehousing and shipping, whether we’re manufacturing full production runs, or single prototypes.”

On a small scale, fabricators can start by equipping components and machines with necessary Industry 4.0 features, such as sensors, actuators, machine-level software, and network access to measure productivity of metal-cutting equipment. For example, one metal service center, featured here in a white paper, is using an internal software system to automatically track the number of square inches processed by each band saw and each blade. At any point, the operations manager can go to a computer screen, click on a saw, and see how many square inches that saw is currently processing and has processed in the past. This has allowed the service center to easily track trends and quickly detect problem areas.

This, however, is only the beginning. Once a manufacturer starts capturing relevant data from multiple machines, this data can be further analyzed to detect patterns, helping managers forecast and, eventually, automate decision-making processes. In a metal-cutting environment, this might include predicting blade life and equipment maintenance needs, which would essentially turn disruptive, unplanned downtime to more anticipated, planned downtime. This could translate into more jobs completed on time.

The Time is Now
Like any trend, it will take a while for Industry 4.0 to fully take hold. However, many experts are saying that industry leaders are embracing this next generation of manufacturing and, more importantly, are starting to make investments.

A PwC survey encompassing 2000 participants across nine industry sectors has concluded that Industry 4.0 will revolutionize industrial production and that first movers are transforming into digital enterprises. According to the study, 33% of companies say they’ve achieved advanced levels of digitization today, and 72% of companies expect to achieve advanced levels of digitization by 2020.

While no one believes the changeover to Industry 4.0 capabilities will come cheap, more than half of companies in PwC’s survey expect a return on investment within two years. “The payoff will potentially be enormous, as competitive landscapes get redefined,” PwC states. “Industrial companies need to act now to secure a leading position in tomorrow’s complex industrial ecosystems.”

Is your fabrication shop ready to invest in Industry 4.0?

customer satisfaction metrics

How to Optimize Metal Service Center Operations with Operator Accountability

October 5, 2016 / , , , , , , , , , , , ,

Industrial metal-cutting companies know running an efficient and productive operation is imperative to keeping up with and, more importantly, staying ahead of the changing industry and customer demands. However, in industrial metal cutting—as well as any manufacturing process—an operation is only as good as its operators.

This is why operator accountability is so important. As reported in the white paper, The Top Five Operating Challenges for Metal Service Centers, as more metal service centers rely on automated technology, managers need to work closely with machine operators to ensure their knowledge and skill sets align with the company’s technology assets and productivity goals. The objective is to encourage employees to take ownership of their impact on the operation so they not only care about the quality of their work, but also understand the role they play in the company’s overall success. Working closely with employees to create a culture of accountability can help metal service centers achieve the operational excellence they desire.

According to an article from IndustryWeek, accountability can be a powerful manufacturing tool because it is a broad-based effort to define and track an organization’s standards. “Accountability systems serve to prompt and encourage people to keep their promises to each other,” Jon Thorne, senior consultant, Daniel Penn Associations, says in the IW article. “Accountability monitors whether promises are being kept and reminds us to hold up our end of the bargain. When we all keep our promises to each other the result is human reliability. And with human reliability, your organization can accomplish anything.”

While using accountability to improve your metal service center operations is not an exact science, it is systematic. In fact, accountability is a set of systems that overlap and reinforce each other, according to the IW article. The following three systems are just a few ways manufacturers can boost accountability (You can read the full list here):

  1. Customer satisfaction. Measuring your service to internal customers puts interdepartmental cooperation on an objective basis: You confront issues rather than people. The plant manager’s role is to insist that the organization seek out and satisfy its customer’s needs, but it is the customers and suppliers who decide how to do it.
  2. Weekly staff meetings. The idea sounds simple, but having a regular and consistent forum where information can flow both ways enables employees to hold management accountable by asking questions and discussing any issues. Two meetings per week are recommended.
  3. Action item lists. Many times, regular staff meetings result in new policies and processes, or changes to those that are existing. Keeping an action list or planner helps prioritize activities, highlights important information, and enables employees to hold each other accountable for keeping the agreements they’ve made.

Another simple strategy is to regularly share performance reports with employees by either posting them or discussing them in staff meetings. As stated in the white paper, Accounting for Operator Inefficiencies in the Metals 2.0 Environment, sharing report results encourages accountability, provides motivation, and reminds operators that they are a critical aspect of the company’s success. This approach falls in line with the culture of lean production environments, and research has shown it positively affects employee morale.

How does this help optimize operations? Although employee investments are often hard to quantify, the following two manufacturers have seen measurable results after implementing accountability practices:

Running an efficient operation is essential to every metal service center, but far too many managers fail to understand the role their operators play in their optimization efforts. By implementing a few processes that hold operators accountable for their actions, managers can create a culture in which employees care about their jobs and, even more so, the long-term success of the company.

What accountability practices have you implemented at your metal service center?

customer satisfaction metrics

One Way to Make Your Machine Shop Stand Out

May 20, 2016 / , , , ,

For most machine shops, marketing and branding are not top priorities. However, in today’s competitive market, industrial manufacturers are starting to see that creating a company brand or message can be an important part of the business strategy.

According to a report from Lippincott, more and more industrial companies are seeing strong brand management as a key for standing out from competitors and expanding into adjacent markets. “Leading industrials are starting to practice many of the elements of B2B branding, from identifying the key audiences for their messages to ensuring that their approaches to branding align with their business strategies,” the consultant firm states.

Of course, hiring a firm to develop a cutting-edge marketing campaign is likely not in your shop’s budget; however, you may want to consider developing a unique selling proposition (USP). As this article from explains, a strong USP, also known as a value statement, clearly articulates why a customer should buy from you instead of a competitor. The goal of this type of messaging is to attract customers on an emotional level that goes beyond cost.

“Without a compelling message, nothing about a shop stands out,” the article explains. “And when nothing about a job shop stands out as better than the others, it’s basically a commodity that can only compete on price.”

Ask yourself: What is unique about your company and its values? How do your services translate those values? Most importantly, how are you communicating this message to your customers? The answers to these questions can provide a good starting point for developing your company’s USP.

As stated in the Thomasnet article, an effective USP should meet the following criteria:

What does this look like in practice? D&J Technologies, a machine shop featured here in a LENOX white paper, lists the following USP on its website:

“Combining unparalleled quality, on-time shipping, and excellent communication, D & J Tech exists to make the manufacturing process effortless.”

Below are two more examples, as listed in the Thomasnet article:

These are just a few examples. At the end of the day, all managers should periodically ask the question: Why do customers choose to do business with us? Taking the time to turn the answer into a clear, concise, and marketable message could be a lot more valuable than you realize.

For more information on developing a USP, you can download a free worksheet here, or check out this article from Fabricating & Metalworking, which provides more than 20 tools to help you build your organization’s brand story.

customer satisfaction metrics

How to Use Data in Your Industrial Metal-Cutting Organization

May 1, 2016 / , , , , , , , , , ,

As companies look for new ways to stay competitive, more and more manufacturers are utilizing “big data” and analytics in their operations. In fact, according to the results of a survey from Deloitte and the Council on Competitiveness, these types of advanced technologies have the power to put the U.S. back on the map as the most competitive manufacturing nation.

“CEOs say advanced manufacturing technologies are key to unlocking future competitiveness,” the report summary states. “As the digital and physical worlds converge within manufacturing, executives indicate the path to manufacturing competitiveness is through advanced technologies, ranking predictive analytics, Internet-of-Things (IoT), both smart products and smart factories via Industry 4.0, as well as advanced materials as critical to future competitiveness.”

Specifically, the report states that the application of these more advanced and sophisticated product and process technologies will help the U.S. and other traditional manufacturing powerhouses of the 20th century (i.e. Germany, Japan, and the United Kingdom) reclaim their spots as the most competitive nations in 2016. The U.S. in particular is expected to take the number one spot away from China by the end of the decade.

What does this mean for industrial metal-cutting organizations? It means that if you haven’t already considered using data and software analytics in your facility, it may be time to revisit the idea. If data-driven manufacturing has the ability to make nations more competitive, that certainly says something about what it can do for individual companies.

Metrics that Matter
For many industrial manufacturers, the thought of using data may seem a bit daunting; however, it doesn’t have to be as complicated as it sounds. For example, a metal service center featured here in a white paper started by developing an internal software system that automatically tracks the number of square inches processed by its existing sawing equipment. At any point, the manager can go to a computer screen, click on a particular band saw or circular saw, and see how many square inches each saw is currently processing and has processed in the past. Gathering this type of data allows the service center to easily track trends and quickly detect problem areas.

Richards Industries, a Cincinnati, OH, company that manufactures industrial valves, is using data in a similar way, according to a recent article from Modern Machine Shop. Although the company has been practicing lean manufacturing for years, it recently installed a machine-monitoring system that enables shop floor personnel to track activities and record the performance of its machine tools. “Like readings from a Fitbit or Jawbone, the data gathered and analyzed by this system is making the company more aware of how well machine time and manpower count toward productivity,” Modern Machine Shop reports.

Of course, these are just two examples. There are many other ways manufacturers can utilize data and advanced analytics to improve their operations. An article from IndustryWeek calls out a few key metrics industrial metal-cutting companies should consider as they implement data and analytics tools into their factory:

Get Going
Whether you decide use data to gain productivity, monitor machines, or improve quality, the point is that data-driven manufacturing is here, and companies big and small are taking advantage of its many benefits. If you haven’t jumped on the bandwagon yet, don’t get overwhelmed. Just get started.

How are you utilizing data to improve your operations and stay competitive?

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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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Why Ball and Roller Bearing Manufacturers Should Consider ISO 9001 Certification

December 30, 2015 / , , , , , ,

With the New Year upon us, everyone is starting to think about goals. For manufacturers focused on continuous improvement and customer service, higher quality is likely at the top of the list. While speed may help you gain new customers, industry leaders know that quality will help you keep them.

As we reported in a previously published blog, many industrial manufacturers are improving their quality by becoming ISO 9001 certified. In fact, the LENOX Institute of Technology (LIT) found it to be a best practice for several leading industrial metal-cutting organizations.

There are several reasons to consider undergoing ISO 9001 certification. The standard, which was just updated in September 2015, is designed to help companies provide customers with consistent, good quality products and services, which, in turn, often brings business benefits like improved financial performance. According to ISO’s quality management principles, there are seven strong reasons to consider adopting the standard:

Perhaps the biggest benefit, however, is that ISO 9001 certification helps companies make quality a formal, measureable process. As reiterated in an article from Quality Digest, registration to ISO 9001 helps establish “a coherent standard by which managers can measure their procedures and streamline processes.”

Mike Baron, vice president of high production metal processor Jet Cutting Service, Inc., has found this to be true. In a case study published by LIT, Baron says that maintaining ISO certification has improved quality in his shop and helped them stay focused on continuous improvement. “If you don’t track it, you can’t measure it, and then you can’t improve upon that,” Baron says.

However, ISO certification isn’t a quick fix nor should it be taken lightly. Like any company-wide initiative, it requires time, money, and strategic planning. The eBook, Five Performance-Boosting Best Practices for Your Industrial Metal-Cutting Organization, offers three key considerations ball and roller bearing manufacturers should take into account before undergoing ISO certification:

Is it time for your shop to up its game? Could improved quality be part of the answer? If that’s the case, ISO 9001:2015 is worth consideration. As Baron of Jet Cutting Service has found, formal processes like ISO 9001 certification can help your operation achieve some real, measureable, bottom-line improvements.

For more information on ISO 9001:2015, visit the ISO website here.

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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.  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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How Industrial Metal Companies Can Prepare for the ISO 9001:2015 Revision

June 29, 2015 / , , , , , , ,

As competition in the industrial metal-cutting sector rises, companies are now forced to compete on both speed and quality. In fact, the struggle to balance speed with quality is one of the top operational challenges facing industrial companies today, according to a white paper produced by the LENOX Institute of Technology. One way metal-cutting companies are addressing this challenge is through ISO 9001 certification. According to BSI, there are currently 1.2 million certified organizations; however, if your company helps comprise this number, it will soon be time to go through the process again.

Preparing for Change

Currently, the International Standard Organization (ISO) is in the process of updating ISO 9001. The new version will be finalized in September 2015, and companies will have three years to become recertified.  The 2015 version will look and feel very similar to ISO 9001:2008, with a few minor changes and a new focus on risk management.

The simplest of changes comes in the form of new vocabulary. As listed in this Quality Digest article, there are a couple minor shifts in wording:

Apart from terminology changes, ISO 9001:2015 also includes important updates to its fundamentals, with a new focus on risk-based management. Dr. Nigel Croft, chairman of the ISO revision subcommittee, recently gave an interview clarifying these changes, and according to a recent blog post from California Manufacturing and Technology Consulting (CMTC), these changes can be boiled down into the following three core concepts:

Benefits of ISO 9001:2015 Certification

In light of the recent revisions, companies are now faced with the decision to update their quality systems or forgo their certification. Is becoming recertified worth the cost and hassle?

Typically, companies with ISO certification reap many benefits, predominantly because organizations are required to meet strict quality standards to obtain certification. To meet such high standards, many companies implement a quality management system within their organization, and in turn, this system often leads to better long-term performance. According to research from the Chartered Quality Institute, companies that invest $1 on a quality management system on average increase their revenue $6, reduce costs by $16, and increase profits by $3. Furthermore, companies also benefit from the actual certification itself. The certification serves as a mark of consistent quality, and as stated in a report from ISO, organizations with the certification enjoy access to new markets, increased market share, and boosted sales. If you would like to estimate your ROI of becoming ISO certified, BSI provides an ISO 9001 “Return on Investment Calculator.”

While ISO certification is beneficial for many companies, there are several points to consider before becoming recertified or receiving the certification for the first time. As written in this previous blog post, it is essential for companies to fully understand the purpose of ISO 9001 certification and reach out to other shops before making a decision.

Planning Your Next Steps

If becoming recertified makes financial and strategic sense for your organization, it is time to begin planning. While companies will be granted three years to officially become recertified, it is possible to undergo the process sooner. The International Accreditation Forum created a transition planning document that lays out the following five steps for companies preparing to meet the new ISO requirements:

While it is tempting to delay recertification, it is essential for industrial metal companies to start preparing now. Three years will come quickly, so companies cannot postpone updating their quality systems or re-evaluating the cost-benefit of obtaining an ISO certification.


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Predictive Operations Management Holds Benefits for Forges

May 25, 2015 / , , , , , , , , , , ,

Benchmarking, peer reviews, and ongoing analyses are considered universal best practices among leading organizations, regardless of industry or industry segment. However, in today’s competitive marketplace, companies need to know more than where they stand among their peers; they need to know where their company is headed.

In other words, today’s leading manufacturers must be proactive in their strategic approaches, not reactive. That’s why a growing number of forges are now transitioning to using predictive operations management strategies, allowing them to not only measure performance, but to also predict and prevent future challenges. Based on research, this approach is paying off for many companies.

For example, the LENOX Institute of Technology’s Benchmark Survey of Industry Metal-Cutting Organizations found that investing in smarter, more predictive operations management could result in additional productivity and efficiency on the floor. The study, which surveyed more than 100 industrial metal-cutting companies, found that 67 percent of industrial metal-cutting operations that follow all scheduled and planned maintenance on their machines also report an upward trending job completion rate 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.

Manufacturers are also benefiting from more advanced, data-based predictive management strategies. As reported here, research from Aberdeen Group shows that 86 percent of top performing manufacturers are using predictive analytics to reduce risk and improve operations, compared to 38 percent of those companies with an average performance and 26 percent of those with less then stellar results. The research firm also notes that companies that use analytics to measure their data can more easily obtain a “big picture” of their operations, identify risks, and figure out where to focus their efforts.

According to Aberdeen, these best performing companies also report 18 percent higher overall equipment effectiveness and 13 percent less unscheduled asset downtime compared to the lowest performing organizations. The following are a few other traits the top performers have in common, according to the research:

So how does your forging operation measure up to these “top performers?” Are you simply responding to operational challenges, or are you equipped to identify risks before they negatively impact your bottom line?

By following a strict preventative maintenance schedule or using advanced tools like data analytics, today’s forges can easily identify hidden problem areas or looming operation failures. As research shows, these types of predictive operations management practices can help you reduce risk, improve productivity, and maybe even make you a top performer among your forging peers.

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How Fabricators Can Prepare for Whatever 2015 Brings

April 10, 2015 / , , , , , , , , , , , ,

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.

On Track
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:

  1. Utilization versus capacity: Are utilization and capacity running even?
  2. Per-project profitability: Is per-project profitability acceptable?
  3. Client mix: Could the client mix be improved?
  4. Workload diversity: Will the current and expected workload allow for learning new skills and expanding the business?
  5. Sick time and personal time off: Are workers motivated to deliver exceptional work? If not, why not?
  6. 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.

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