October 10, 2015 / best practices, continuous improvement, customer delivery, Employee Morale, operations metrics, operator training, performance metrics, productivity, quality, ROI
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:
- Connection. A correctly installed Ethernet network is a must and all equipment should be connected to it. A hardwired network usually provides better connection than wireless networks.
- Compliance. Machines must be MTConnect compliant or compatible. Software and hardware adapters may be required. OEMs can provide step-by-step instructions on how to upgrade equipment.
- Software. Third-party monitoring software collects, organizes, and translates data to create custom reports. Ideally, it should also store and archive collected data on a dedicated server or cloud system.
- Goals. Set goals on what information you want to collect, what should be done with that data, and what production metrics you want to achieve.
- Big Brother Effect. Employees may think their every move is being watched. Dispel any myths with upfront and transparent communication and training about the technology.
- Continuously Improve. Once up and running, your job isn’t over. Keep looking for improvements and dig deeper into processes to continuously improve.
Do you think MTConnect is a valuable standard? What technologies have driven your operational efficiencies, and is MTConnect part of that plan?
October 1, 2015 / Employee Morale, industry news, LIT, maintaining talent, operator training, skills gap, strategic planning, value-added services
All year long, the manufacturing industry has had its sights set on a healthy 2015. As we reported in April in our 2015 Industrial Metal Cutting Outlook, all signs pointed to a full economic recovery. According to the latest data from MAPI, GDP is growing and will continue to grow in 2016.
The good news is that many manufacturers and industrial metal-cutting companies have felt the benefits of the improving economy and experienced increased demand; however, others are a little disappointed with the way the year is turning out.
According to the Institute for Supply Management’s September PMI report, economic activity in the manufacturing sector expanded in September for the 33rd consecutive month, and the overall economy grew for the 76th consecutive month. However, 11 industries, including primary metals and fabricated metal products, contracted in September. One fabricated metal producer told ISM that it had “concerns about the China downturn and its effect on our consumer confidence.” Another manufacturer in the primary metals segment said that it continues to feel the impact of the oil and gas market slowdown. “Aerospace demand has also been slower than expected,” the company added.
Meanwhile, factors like the upcoming presidential election and unstable foreign affairs continue to feed into uncertainty, leaving manufacturers conflicted about how they should manage their operations. Should they prepare for increased demand or play it safe now that growth has been slower than expected?
Of course, there is no silver bullet answer to this question, but there are some ways that companies can strategically navigate the ups and downs of the market. Below are just a few ways industrial metal-cutting companies can adjust to market “ups” and expand when needed, while also preparing for the potential “downs” and changing conditions.
When business is booming and orders are up, it’s easy to get overwhelmed by increased demand—especially after several slow months. However, there are ways manufacturers can adjust. U.S.-based automaker Ford, for example, recently cut its traditional two-week summer break short to meet demand.
IndustryWeek offers five ways manufacturers can take advantage of the uptick without making any monumental changes to their operation:
- Round up your top talent. A shortage of skilled talent is a business risk for one-third of businesses, according to manufacturing.net. Case in point, training and maintaining talent is one of the three operating challenges in industrial metal cutting, according to this white paper from the LENOX Institute of Technology. Establishing ongoing operator training can help balance the skill level on the shop floor and across shifts. Enlisting your top performers and asking for their input on projects will go a long way when it comes to motivation and morale.
- Stick to what you know. Although it’s tempting to start adding new specialties when demand is up, don’t be too quick to jump on the bandwagon. Be selective and choose projects that can easily be added to your line-up and offer the most profitability.
- Pick your projects carefully. Again, don’t accept work for the sake of work. Accept projects that you can execute quickly and easily without huge disruptions in your current production processes and workflow.
- Revisit recognition. Ensure motivation stays high by recognizing those who go above and beyond expected responsibilities. A simple “thank you” goes a long way.
- Create incentives. Hard work pays off—make it a reality for your team. Tie rewards to specific goals, timelines, or projects and be timely with the reward.
In a cyclical business like manufacturing, a slowdown is inevitable. However, most manufacturers don’t know how to prepare for market shifts and, as a result, fail to strategically adapt when conditions change. The answer, according to one Forbes article, is to embrace uncertainty.
“In our experience, the most effective leadership teams develop a clear and actionable portfolio of strategic actions that balance commitment with flexibility,” Martin Toner, a partner at Bain Insights, writes in the Forbes article. “Instead of relying on a planning exercise defined by conditions at a discrete point in time, they commit to a cycle of ‘execute, monitor and adapt,’ redirecting the company toward the best opportunities over time.”
Toner goes on to offer four ways companies can form a strategy around uncertainty:
- Define uncertainties. Make a list of the uncertain things you face and then prioritize them.
- Create probable scenarios. Imagine how the future might look. Discuss the possible threats and opportunities of each.
- Develop strategic options. For every scenario, plan an action that would help balance threats while maintaining flexibility to adjust to others.
- Identify signals. Determine what indicators signal market changes and know when to start making those scenarios a reality.
How do you navigate the ups and down of the market? What strategies do you find are the most successful?
August 25, 2015 / best practices, Employee Morale, human capital, industry news, LIT, operator training, Output, productivity, quality, Safety
Almost every manufacturer understands the importance of maintaining a safe operation. Although high safety scores won’t typically win an operation more customers, low incident rates are often a sign that an operation is efficient and that workers are well trained. A good safety record can also result in lower maintenance and insurance costs, as well as higher quality and employee satisfaction. As a previous blog revealed, some forges even consider safety a strategy.
However, as recent headlines have shown, even the most successful manufacturing operations can let their standards slide. If managers don’t continue to put safety first—or have audit processes in place—the reality is that a shop may find itself in a full-blown safety crisis that could have been avoided.
To help forges maintain a safety-first operation, the LENOX Institute of Technology (LIT) researched some of best practices being used by industry leaders. Read below to discover some simple safety strategies that can easily be adopted by any forging operation:
- Implement Ongoing Safety Training. Almost every manufacturer requires new hires to undergo initial safety training; however, it doesn’t take long for an operator to take safety for granted and minimize its importance. That’s why many companies are starting to expand their safety training requirements. For example, McInnes Rolled Rings, a forging operation featured here in Forging magazine, says that instead of just requiring new employees to have basic safety training session on day 1, it now requires additional safety training on Day 8, Day 30, Day 60 and Day 90. In addition, the company tells Forging that it conducts annual safety training for all associates (including office personnel) and has team leaders conduct “Toolbox Talks” throughout the year.
- Initiate Safety Audits. According to an article published by Modern Machine Shop, one of the most effective means of assuring a safe workplace is to conduct an audit of the area. “The purpose of an audit is to discover and record potential safety problems or violations of current safety practices,” the article states. In most cases, management assigns a team to complete the audit on a regularly scheduled basis. This is critical for ensuring that current safety standards are met. However, in the spirit of continuous improvement, it also offers an opportunity for the team to discuss any new ideas and find the root cause of any violations. Once an audit is complete, Modern Machine Shop says the key is to prioritize the findings so that the most critical issues are addressed first. It also suggests posting the results for all employees to see. “Posting the results of the safety audit along with the corrective actions planned is an effective means of assuring safety consciousness throughout the organization and promoting that much-needed culture of safety,” the article explains.
- Create Visual Reminders. Another strategy for keeping safety at the forefront of everyone’s minds is to create visual reminders. This tactic has been especially effective for the LENOX team. About a year and a half ago, LENOX implemented the 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 Matt Howell, senior manager, the program has been effective in several ways. “This system is a good rallying point for the facility and builds energy around safety,” Howell explains. “It has a strong behavioral impact as well. It puts safety on people’s minds when they put the sticker on at the beginning of the day and when they take it off at the end of the day. This ultimately promotes thought on safety and prompts people to think twice before engaging in an unsafe behavior or act.”
July 15, 2015 / best practices, Employee Morale, human capital, industry news, LIT, maintaining talent, operator training, skills gap, strategic planning
Over the last few years, manufacturing experts and industry leaders have been discussing the shortage of skilled production workers. From Forbes and IndustryWeek to the Harvard Business Review, everyone is weighing in on the “skills gap” and how the manufacturing industry should be addressing it. In fact, the LENOX Institute of Technology has written a white paper and several blogs about the hot-button topic.
However, with all of this “talk,” one has to wonder if the so-called “skills gap” truly exists, or if it is just an industry trend that is being fabricated or blown out of proportion. To dig into this issue, the LENOX Institute of Technology turned to a few industrial metal-cutting companies to discuss the skills gap, whether or not it is affecting their organization, and, if so, how they are handling it.
The Gap is Real
All three organizations we interviewed agreed that there is indeed a skills gap in the industrial metal-cutting industry. “I have felt the impact of this,” says Matthew Dobratzl, production supervisor at Thyssen Krupp. “It seems that as more of the skilled guys are retiring, they are being replaced by employees who have not had the proper training.”
Barry Grider, operations manager at Standard Locknut, LLC, and Brandon Dodds, operations manager at EMJ, part of the Reliance Group, admit they are also feeling the affects of the skills gap. Specifically, Dodds says it is getting harder and harder to find workers that meet the level of quality his company expects.
To tackle this issue, Dobratzl, Grider and Dodds say it is imperative for companies to be both proactive and strategic. Below are three ways they are addressing—and filling—the skills gaps within their own organizations:
- Screen New Hires. According to Grider, bridging the skills gap starts with making quality hires. He accomplishes this at Standard Locknut by putting potential employees through a “very thorough screening and interviewing process.”Dodds of EMJ says he also relies heavily on screening. “In this current climate, we usually choose potential employees from temporary agencies and put them to work for several months to ‘feel’ them out and see if this is the right fit for them,” Dodds explains. “We usually see potential or non-potential in the first three days and then make decisions based on performance and work ethic.
- Focus on Training. The most critical aspect of filling the skills gap is training, according to Dobratzl of Thyssen Krupp. “Our strategy is to provide the best hands-on training with our new hires and teach them best practices,” Dobratzl says. “This is extremely important to our success, as we need our employees working error free.” Grider of Standard Locknut agrees, adding that his company actively invests in internal and external training for both new and existing employees.Dodds believes training should always be a focus for manufacturers, skills gap or not. “If your organization does not focus on training, then you can’t expect your employees to produce a quality product,” Dodds says. “Building a strong organizational team to meet the ever-changing customer demands will go far, but in the end, it all boils down to quality training.”
- Value Employees. With a small talent pool, it will also serve manufacturers well to intentionally work at maintaining and valuing their current employees. Grider says Standard Locknut does this by continually investing in employees and by “treating them with respect and providing them with all the tools necessary to perform their jobs.”Dodds echoes this sentiment and adds that good managements boils down to “training your employees well, treating your employees well, and compensating your employees fairly.”
As the above feedback confirms, industrial metal-cutting companies are feeling the effects of the manufacturing skills gap. With more and more workers retiring, this gap stands to only grow larger, unless companies start acting now.
Today’s managers will need to be strategic in the way they hire, train, and maintain their employees if they want to successfully move forward. These days, industry leaders are finding that human capital is not just valuable, but an essential part of success.
How is your metal-cutting organization approaching and equipping its next generation of workers?
June 30, 2015 / best practices, continuous improvement, employee incentives, Employee Morale, maintaining talent, operator training, skills gap, strategic planning
As any successful manager understands, a company is only as good as its employees. Although metal companies have traditionally spent more on equipment than on people, the tide is changing. With a shortage of skilled production workers, manufacturers are finding that it is not only beneficial but necessary to invest in their workforce.
For example, according to results from a 2014 survey from Prime Advantage, a buying group for manufacturing firms, companies stated that while they are growing and looking to hire, finding qualified workers is becoming harder. In fact, survey respondents listed “access to qualified workers” as the top growth barrier for small and mid-sized industrial manufacturers.
Attacking this “skills gap” will require many companies to change the way they train and maintain talent, whether by beefing up training programs or rethinking hiring tactics. Below are a few strategies roller ball and bearing manufacturers can use to fully equip new employees, while also optimizing the skill set of their existing workforce:
- Train. As more and more baby boomers retire, managers are quickly losing expertise on the shop floor. According to the white paper, The Top Five Operating Challenges Ball and Roller Bearing Manufacturers Face in Industrial Metal-Cutting, implementing a strong, ongoing training program is essential to fill the skills gaps left by retired employees. Programs should include both skills and leadership training for new and existing operators. Just like existing customers are often the greatest source of new business, the underdeveloped potential of existing employees can be an operation’s greatest source of new talent.
- Partner. On top of retirement, manufacturers are also struggling to attract new talent. Younger generations are typically less attracted to careers in manufacturing than other industries, which means companies must proactively work with outside sources to ensure access to good talent. Leading bearing manufacturer Timken Co., for example, is working with Apprenticeship 2000, an apprenticeship partnership located in the Charlotte, NC region. The goal of the program is to offer technical career opportunities to high school students and employment after graduation. Timken and other sponsoring companies provide students with onsite training that goes toward a technical degree students earn upon graduation. In return, the partnering companies have access to highly skilled employees who have been trained to fit their technical needs.
- Engage. Of course, a trained employee is only beneficial if he or she sticks around. To maintain good talent, more and more manufacturers are focusing on employee engagement. As an editorial published in IndustryWeek asserts, “Employees want to think, learn and contribute to improving their work.” Companies that fail to embrace this ideology, the article states, are limiting their success. Collecting feedback from operators, walking the floor, offering bonuses and other incentives are a few ways managers can encourage employee ownership and build employee loyalty. Put simply, operators who feel valued are more likely to value their jobs, their work, and their employer.
June 15, 2015 / best practices, continuous improvement, Employee Morale, operator training, productivity, quality, resource allocation, ROI
In any manufacturing environment, managers are faced with the challenge of balancing speed with quality. However, with today’s demanding market, this challenge is becoming increasingly difficult to manage. As metal-cutting leaders try to balance customer requests for faster turnaround and tighter tolerances, they must take strategic steps to ensure that productivity gains do not come at the expense of quality.
For example, according to a white paper from the LENOX Institute of Technology, many metal-cutting companies are undergoing ISO 9001 certification to both maintain and improve their internal quality standards. In most cases, ISO certification is used to strengthen existing quality programs by making it a formal, documented procedure. As described in the white paper, this has become a best practice among many industrial metal-cutting companies, with some shops showing quality improvements up to 30 percent after going through ISO certification.
However, some experts are saying that too many companies rely on certifications as a quality “quick fix” instead of focusing on laying the foundational elements of a strong quality program. In a recent editorial in Quality magazine, industry expert Jim Stone explains:
“Most organizations concentrate on the ‘merit badge’ subjects (certificates, awards, trophies) of quality before they build a culture. This impatient approach doesn’t lay the proper foundation so it tends to produce a ‘flavor of the month’ cycle, which accomplishes little but keeps everyone extremely busy with non-essential tasks. Few people seem to be concerned that very little gets accomplished as long as they are getting ‘badges.’”
According to Stone, a successful quality program begins with creating a culture of quality. This requires managers to intentionally incorporate quality into the day-to-day work activities of an operation, and, more importantly, it requires them to nurture that culture continuously. Only then can companies have a quality program that produces reliable results.
To build a quality culture, Stone recommends that managers implement the following four components:
- Policy. A company’s quality policy should be straightforward, such as, “We will deliver defect-free products and services to our customers and co-workers on time.” This eliminates any misconceptions that it is acceptable to do otherwise.
- Education. This component aims to keep everyone on the same page by providing a common language. Many companies utilize quality guru Philip B. Crosby’s “Absolutes of Quality Management” as a starting point.
- Requirement. The requirements describe the work of the organization from needs down to the actual work transactions. The goal is to ensure that customer needs are being described by acts that produce useful and reliable outputs.
- Insistence. This last component requires managers to show by example that the policy, education, and requirements are taken seriously. Communication and consistency are key.
Once these four elements are implemented and followed, Stone says that organizations can then use the “merit badge” components that are valuable when implemented on top of a sound philosophical base.
Of course, most managers are wondering whether or not it is worth investing such a large amount of time, energy, and resources in creating quality-first culture. While the theoretical benefits of high quality are obvious (i.e., fewer errors and higher customer satisfaction), data suggests that there is, in fact, a measurable cost advantage to building a culture of quality.
According to research cited in the Harvard Business Review, a company with a highly developed culture of quality spends, on average, $350 million less annually fixing mistakes than a company with a poorly developed one. In addition, the research found that many of the traditional strategies used to increase quality (i.e., monetary incentives and training) have little effect. Instead, the results revealed that companies that “take a grassroots, peer-driven approach develop a culture of quality, resulting in employees who make fewer mistakes—and the companies spend far less time and money correcting mistakes,” according to the HBR article.
So is it worth it to build a quality of culture within your metal-cutting organization? Based on Stone’s suggestions and industry research, perhaps the better question is: What will it cost you if you don’t?
June 10, 2015 / best practices, employee incentives, Employee Morale, human capital, lean manufacturing, LIT, operator training
While the idea of empowering employees sounds a bit cliché, a growing number of managers are finding that operators who take ownership of their process or work area are truly invaluable. As discussed in a white paper from the LENOX Institute of Technology, employee “buy-in” can positively affect all aspects of an industrial metal-cutting operation, including quality, productivity, and in the end, the bottom line. Similarly, when employees don’t “buy-in” or feel disconnected from their job, those same business areas can be negatively affected.
Unfortunately, the latter seems to be more common. According to ongoing research from Gallup, about 70 percent of American employees are not engaged. Based on Gallup’s definition, this means that the majority of U.S. employees do not feel involved in, enthusiastic about, or committed to their work and workplace.
As a manager, the data may seem a bit disheartening. However, the good news is that U.S. companies have a prime opportunity for growth sitting right underneath their noses, or in the case of fabricators, standing right on their shop floor.
Bob Du Fresne, CEO of metal sheet fabricator Du Fresne Manufacturing, discovered this firsthand. About five years ago, Du Fresne was struggling to keep his fabrication business afloat, and the executive needed a new way to stay profitable. The executive, featured here in the Star Tribune, found that his employees were the answer.
Instead of his typical top-down management approach, Du Fresne decided to adopt a more employee-centered strategy that included shop-floor suggestions and innovation, lean manufacturing, and continuous improvement. The results are impressive: Sales at the fabrication shop are growing, employment is up, old customers are returning, and workers are earning overtime.
“The employees focused their passion and talent and saved this company,” Du Fresne told the Star Tribune. “Employees have made thousands of suggestions, and we used 99 percent of them. That led to productivity and quality improvement.”
With results like that, it’s hard to argue against the impact employees can have on profitability. How, then, can you get your employees more engaged? While there are a variety of ways to accomplish this, the below strategies from EHS Today provide some solid best practices managers should follow:
- Communication: Consistent communication leads to greater engagement. Employees with managers who hold regular meetings with them are nearly three times more likely to be engaged. But the most engaged employees are those who have some form of daily communication with their manager.
- Performance Management: The most disengaged employees are those who aren’t clear about what their expectations at work are. Those employees, thus, often consider annual reviews to be superficial. Instead, employees need to understand what they’re supposed to be doing and how that work meshes with everyone else’s work.
- Strengths over Weaknesses: Managers who help employees develop their strengths are twice as likely to have engaged workers.
As the Gallup research shows, many managers are missing the mark when it comes to employee engagement, and as a result, they could be hurting the overall performance of their company. In De Fresne’s case, taking the time to engage employees built a new level of trust among employees and management—a trust that he says “opened doors to a transformation journey for the company.” Perhaps employee engagement is the key to your shop’s transformation as well.
May 15, 2015 / best practices, continuous improvement, Cost Management, Employee Morale, human capital, lean manufacturing, LIT, maintaining talent, operator training, productivity, quality
The clock is always ticking—the race to become a bigger, better, and faster metal-cutting company is never ending. Any competent manager knows the pressure to continuously improve; however, too many managers are focusing so much on processes that they are missing the other half of the equation—their human capital.
By focusing only on the individual processes, operations managers can only achieve one half of what continuous improvement is by definition. As this benchmark study of industrial metal-cutting companies confirms, investing in your operators is just as important as investing in process and technology; it’s the other half of the continuous improvement equation.
Even the late W. Edwards Deming knew this to be true. In his well-known 14 Points for Transformation of Management, more than half of Deming’s “points” are focused on the people (i.e., training, leadership, etc.), not process.
Why should today’s metal-cutting companies invest in human capital? Because people and process are so closely related. In its list of “Deadly Wastes,” leanProduction.com has added an eighth waste—unused human potential—to the more recognized list of seven deadly wastes. According to the web site, managers who don’t focus on improving their workforce produce low employee engagement, which ultimately leads to lower production, quality, and profits.
Part of the problem is that many managers don’t understand what it means to be a good leader. They don’t know how to properly engage and encourage their staff. For example, number 10 in Deming’s 14 Points for Transformation suggests the following: “Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the workforce.”
There are several other common behaviors that managers should be avoiding. Consider the following list from IndustryWeek, which highlights five behaviors of toxic leaders—those that result in unmotivated and unengaged employees:
- Inability to conceptualize or commit. When you can’t (or refuse) to understand anything based on theory, you lose your ability to make decisions and ultimately toss your authority and trust to the wayside.
- Distrust and a compulsive need to control. Without trust, there is no cooperative effort and it is truly every person for themselves. Congratulations, you’ve just promoted backstabbing, corporate maneuvers and finger pointing across the shop floor.
- Lack of empathy. When you don’t treat people like they are people, they harbor resentment and hostility—bringing production down with them.
- Prejudging and pigeonholing. Ensure a bad reputation with the entire operations floor by making assumptions, and good luck trying to change it later.
- Jekyll/Hyde personality. You make an effort to walk the shop floor, learn about people’s home lives, but when it gets down and dirty with meeting the bottom line, so do you. This is sure-fire way to destroy any fruits of your well-intended labor. Be genuine in both your motive and everyday actions.
To truly continuously improve operations, managers need to first understand the importance of investing in people and then learn how to effectively do that. In other words, you need to believe in the potential of your workforce and then find ways to nurture that potential. Only then can you expect to see any real improvement.
April 10, 2015 / agility, best practices, Cost Management, cost per cut, customer delivery, customer satisfaction metrics, Employee Morale, human capital, industry news, maintaining talent, Output, productivity, strategic planning
As we reported in our 2015 Industrial Metal Cutting Outlook, most manufacturers are expecting some growth in 2015, although no one expects it to be a banner year. “Modest improvement,” “slight gains,” and “steady” are just a few of the words being used to describe 2015 business prospects.
Based on recent data, those words seem fairly accurate. According to the latest report from Institute for Supply Management (ISM), activity in the manufacturing sector expanded in March for the 27th consecutive month, and the overall economy grew for the 70th consecutive month. However, it is worth noting that ISM’s readings for March were lower than February’s readings. Specifically, March PMI registered 51.5 percent, a decrease of 1.4 percentage points from February’s reading of 52.9 percent and, even more noteworthy, the fifth consecutive monthly decline. The New Orders Index registered 51.8 percent, a decrease of 0.7 percentage point from the reading of 52.5 percent in February. Even so, PMI and the New Orders Index readings were above the set thresholds of 43.1 and 52.1, respectively, which indicate overall growth.
Of the 18 manufacturing industries covered in ISM’s report, 10 reported growth in March, including fabricated metal products. As one respondent from the fabricated metal products segment told ISM, “Our business is still strong and on projection. Dollar strength is challenging for our international business.”
Planning for Growth
According to industry publication The Fabricator, most fabricators went into 2015 expecting steady growth, and many planned on investing in capacity-building equipment to prepare for increasing customer demand. “The fabricating industry is looking to add capacity to gear up for the unexpected,” the magazine said in its 2015 Metal Fabrication Forecast. “Custom fabricators are all too familiar with demand variability, and demand has become even more variable in recent years.”
Quoting findings from FMA’s 2015 Capital Spending Forecast, The Fabricator says most fabricators are planning to build capacity with more equipment. “Projected capital spending growth has slowed from the dramatic rebound seen postrecession—2015 projections are up only 3.5 percent over 2014—but the spending has shifted,” the magazine says. “Specifically, fabricators are expecting to spend much less on consumables and supplies (down almost 30 percent) and more on capacity-building machinery, especially in cutting and forming, where spending has jumped past prerecession levels.”
Ready for Anything
Regardless of whether or not you entered the year bullish or cautious, most industry leaders would agree that being proactive is the only way to approach today’s marketplace. While you may or may not be planning to add capacity this year, there are several other strategies you can use to prepare your operation for whatever 2015 brings.
In fact, a recent article from IndustryWeek suggests that there are five tests every manufacturer should run quarterly to gauge “factory readiness.” These include the following:
- Utilization versus capacity: Are utilization and capacity running even?
- Per-project profitability: Is per-project profitability acceptable?
- Client mix: Could the client mix be improved?
- Workload diversity: Will the current and expected workload allow for learning new skills and expanding the business?
- Sick time and personal time off: Are workers motivated to deliver exceptional work? If not, why not?
As the IW articles notes, forecasting the future with any measure of precision is difficult under the best of conditions, and manufacturing tends to have less visibility than most industries. However, by regularly following and measuring your operation’s performance, fabricators can not only be better prepared for what might happen in the near future, but more importantly, be prepared to handle unexpected changes.
March 10, 2015 / best practices, continuous improvement, Cost Management, Employee Morale, human capital, LIT, operator training, Output, productivity, quality, Safety
Every fabricator knows that safety is important. Unfortunately, many companies fail to understand that safety needs to be more than just a priority. Instead, it needs to be viewed as a value—something that carries a cost. Injured workers can’t be productive, which means safety directly affects your operations and your profitability. In fact, some fabrication experts argue that safety is a primary component of operational effectiveness.
And, of course, if you value your employees at all, then treating their safety as a value should really be a no-brainer.
But how do you position safety as a value? How do you ingrain it into the culture of your fabrication shop? Below are a few strategies that should help get you and your operation on the right track:
- Set goals. Like any strategic endeavor, it starts by looking at your goals. For example, according to a recent article from Occupational Health & Safety, if your goal is to hit zero injuries, then you may need to re-evaluate. “Zero injury goals are often more fodder for company posters and financial and vision statements than real, meaningful direction for an organization,” the author states. Instead, the article suggests that the real goal should be safety excellence. “Zero injuries are a qualifier of our safety improvement efforts, not the primary goal if excellence is our journey’s purpose,” the author says.
- Lead by example. Positioning safety as a value also starts with leadership, according to an article from EHS Today. Quoting research from Jim Spigener, a senior vice president at consulting firm BST Solutions, the article states that culture is the ultimate predictor of safety performance, and senior leaders make or break the culture of the company. “To create a safety culture, leaders must behave differently,” the article states. To do that, Spigener believes that leaders need to “’get connected to their value for safety.’” Is safety only about meeting OSHA standards, or do you, as a leader, truly understand its value?
- Make it visual. Another strategy for keeping safety at the forefront of everyone’s minds is to create visual reminders. This tactic has been especially effective for the LENOX team. About a year and a half ago, LENOX implemented the Safety Sticker program, which visually displays whether or not its operation has had any safety incidents. Here’s how it works: 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 Matt Howell, senior manager, the program has been effective in several ways. “This system is a good rallying point for the facility and builds energy around safety,” Howell explains. “It has a strong behavioral impact as well. It puts safety on people’s minds when they put the sticker on at the beginning of the day and when they take it off at the end of the day. This ultimately promotes thought on safety and prompts people to think twice before engaging in an unsafe behavior/act.” While Howell admits it is hard to quantify the exact impact of the program, he says that it has played a huge role in recent safety gains: Thanks to the sticker program and a variety of other safety/behavior-based programs, LENOX has reduced the number of OSHA recordable accidents in its facility in 2014 by 73 percent.
- Talk about it. Perhaps the best way to reinforce the safety message is to talk about it—a lot. Structural Steel of California, a leading industrial metal-cutting company featured in a series of case studies from the LENOX Institute of Technology (LIT), is intentional about communicating to employees that safety is a critical aspect of the metal products it fabricates, and that consistent message has evolved into an overall culture of safety within the company’s two North Carolina facilities. To facilitate this, managers hold a safety meeting every morning with the operators and a safety committee meeting every month.