November 30, 2015 / best practices, blade failure, blade life, blade selection, industry news, LIT, material costs, productivity, quality
Anyone working in the metals industry knows that use of aluminum is growing. Even with fluctuating prices, aluminum demand is still much stronger compared to other metals, including steel and copper.
Thanks to rapid growth in the transportation and construction industries, aluminum’s upward trend is expected to continue over the next several years. According to one market report, the worldwide market for aluminum alloys is expected to grow at a compound annual growth rate (CAGR) of 4.8 percent through 2020, with market revenue rising in the U.S. from $91.2 billion in 2013 to $126.5 billon in 2020. Another report states that in the global automotive industry alone, aluminum use is expected to grow at a CAGR of 7.4 percent over 2015-2020.
As key suppliers to the automotive and other aluminum-consuming industries, forges need to ensure their skills and equipment line up with market demand. Like any material, aluminum’s unique properties require manufacturers to be equipped with the right metalworking tools and techniques.
Out of all of the various groups of alloys, aluminum alloys are the most readily forged into precise, intricate shapes. As explained by the Forging Industry Association, this is because aluminum alloys are:
- very ductile at normal forging temperatures
- can be forged in steel dies that are heated to the same temperature as the workpiece
- do not develop scale during heating
- require low forging pressures
- may be forged at high or low strain rates
While these properties certainly make aluminum alloys ideal for forging, they also have different requirements compared to other forged materials. For example, as an archived article from Forging magazine explains, temperature controls and furnace construction for aluminum are different from those used with ferrous materials. Specifically, indirect-fired or electric resistance-type furnaces equipped with internal fans are often preferred for aluminum. In most cases, the article states, this usually means new furnaces for the steel forger contemplating forging aluminum.
Other forging processes such as trimming, heat treatment, and quality inspection also need to take aluminum’s distinctive attributes into consideration, as described here in the Forging article. The same holds true when sawing aluminum. Forges that cut and process metal need to make sure they understand what is needed to cost-effectively and efficiently cut aluminum.
While aluminum is a softer material, it is also abrasive, which can present some machining challenges. According to a recent article published in Canadian Industrial Machinery (CIM) magazine, aluminum’s abrasive property can wreak havoc on a saw blade, accelerating tooth wear and diminishing blade life. This not only increases blade costs and downtime due to constant blade changes, it can also affect cut quality and overall productivity. However, smart blade choices can help overcome this common cutting challenge.
To combat aluminum’s abrasive quality, most manufacturers recommend carbide-tipped band saw blades over bi-metal blades. This is because carbides are harder, tougher, and more durable, Matt Lacroix of LENOX explains in the CIM article. “Carbide tips are slower to wear and better suited to handle the high machining speeds,” Lacroix writes. Other blade factors, such as backing steel and tooth geometry, can also help improve the efficiency of sawing aluminum, he adds.
As the use of aluminum grows, it is more critical than ever for forges to fully understand the material’s unique characteristics and machining requirements. For more information on how to cut aluminum, you can read the full CIM article, “Taking the Hard out of Cutting Soft,” here. The Aluminum Association also provides a brief overview on aluminum forging here.
October 5, 2015 / blade life, Cost Management, industry news, LIT, material costs, operations metrics, ROI, Safety
For years, manufacturers were bombarded with the “green movement.” Everything from conference keynotes and annual reports to football commercials centered on sustainability and the many ways manufacturing leaders were “going green.”
And while the trend has died down in recent years—replaced by buzzwords like “big data” and “connectivity”—the issue is still very relevant. In fact, the U.S. Environmental Protection Agency (EPA) just implemented a new ozone rule that will affect the metals and larger manufacturing community. Under the new regulation, “facilities may be required to install costly pollution control equipment, limit production, or forgo expansion,” according to an article from industry publication Edge.
The final ruling, which was just published this month, isn’t as strict as many manufacturers feared it would be; however, organizations like the Metal Service Center Institute (MSCI) and the National Association of Manufacturers (NAM) openly oppose the new directive. “The new ozone standard will inflict pain on companies that build things in America—and destroy job opportunities for American workers,” Jay Timmons, CEO of NAM, said in a press release.
Whether by force or by choice, the point is that sustainability efforts will continue to be important for manufacturers. If you haven’t already started changing the way your metal service center operates, now is the time to make some environmentally conscious changes. Below are just a few ideas to get you started:
- Change Your Bulbs. Kenwal Steel Corp. saved 93 percent in energy when it replaced 369 metal halide lights with high-efficiency, maintenance-free LED lights, reports Modern Machine Shop. The change, the article states, not only increased the overall lighting quality of the facility, it also reduced the total number of fixtures by 60 percent. The company also saw a return on its investment of 124 percent in less than a year by using an intelligent system that automatically turned off lights, dimmed aisle lighting in low-traffic areas, and scheduled automatic changes to the lighting behavior based on usage patterns.
- Recycle Fluids. While coolant recycling is certainly good for the environment, some experts claim it can also cut coolant waste disposal costs by up to 90 percent and extend tooling life, as we reported here. It can provide additional benefits as well. Eriez HydroFlow, a manufacturer featured in Fabricating & Metalworking magazine, found that investing in a fluid recycling program paid off through reduced costs, liability and environmental impact, improved workplace safety, and better employee health. To hear more about the company’s experience, you can check out a three-minute testimonial on the company’s YouTube channel.
- Consider Minimum Quantity Lubrication. One “green” coolant choice that many metal-cutting companies overlook is Minimum Quantity Lubrication (MQL). This alternative option sprays a very small quantity of lubricant precisely on the cutting surface, eliminating any cutting fluid waste. In fact, many consider it a near-dry process, as less than 2 percent of the fluid adheres to the chips. Benefits of MQL include less waste, lower long-term costs, and less maintenance. You can read more about this coolant option here.
- Track Consumption. The idea of tracking your carbon footprint is nothing new, but with new technologies and software updates it’s easier than ever to measure everything from water usage and energy consumption to carbon emissions. “Companies that may have been interested in these types of metrics in the past now have an easier way to measure them and make changes,” reiterates a recent article from Quality Magazine. “As technology continues to advance, it may make green manufacturing more common. As leaders from around the world look at ways to reduce carbon pollution, manufacturers should take notice and be prepared to make their operations more energy efficient.”
What changes have you made to make your service center more environmentally friendly?
September 25, 2015 / LIT, material costs, product liability, quality, root cause analysis, supplier relationships, supply chain, workflow process
When most managers think about quality, they tend to think about their internal operations and the competency of their employees. Quality control is largely based on the processes that managers have put in place to ensure that tolerances are met, cosmetic expectations are achieved, and errors are kept to a minimum.
However, it is important for managers to remember that quality begins with the supply chain. According to the white paper, Top 5 Operating Challenges for Forges That Cut and Process Metal, operations managers need to be sure they are tracking the quality and accuracy of the material coming from the supplier. Product liability and traceability continue to be huge concerns for forges and other metal-cutting companies, and raw material mix-ups can be both expensive and dangerous. Even major organizations like Boeing and NASA have learned this lesson the hard way.
Put simply: thorough inbound inspection processes are just as critical as outbound quality processes. By taking the time to confirm what is coming in the door, forges can confidently supply products that are both accurate and fail-safe.
The most successful way to ensure inbound quality is to devise a standard operating procedure (SOP). If you don’t already have one in place, an archived article on alloy verification from thefabricator.com provides a good starting point. According to the article, a good SOP should include the following six components:
- positive material identification (PMI)
- inspection frequency
- test methods
- acceptance criteria
- marking and documentation
- resolution of discrepancies
(For a detailed explanation of these six components, check out the full article here.)
If you already have a standardized inbound quality process in place, another article from Quality Magazine suggests ten ways manufacturers can optimize this critical procedure. Below are a few best practices that will likely apply to your forging operation:
- Share inspection plans with suppliers. Be upfront and honest with suppliers about what features you plan to inspect at incoming inspection. A good supplier will incorporate inspections in their control plan to verify those features. Sharing the inspection criteria will build a sense of teamwork between the customer and the supplier, and drive defect detection upstream to the supplier.
- Understand your supplier’s measurement system in depth. Where practical, “accept” based on the supplier measurement data. The supplier is the expert in the type of component they produce. In many instances, they will have a superior measurement system (i.e., equipment that is able to measure more precisely). Use your measurement system to confirm supplier data.
- Ensure only confirmed nonconforming parts are returned to suppliers. Alpha risk, also known as producer’s risk or Type I error, refers to the situation where conforming parts are rejected. Oftentimes suppliers report “no problem found” after analyzing a rejected shipment. Install a double check system where an engineer or senior inspector confirms the out-of-tolerance condition. Doing so will eliminate unnecessary shipping costs, line downtime, and reinspection associated with returning conforming parts to the vendor.
- Incoming inspection is to protect the customer, both internal and external customer. This is the fundamental purpose of the incoming inspection process. Reinforce the importance of this purpose. Doing so will create an environment where quality is more than just an activity. It will become part of the organization’s culture
In the end, quality starts well before a piece of material even makes its way to the shop floor. Don’t underestimate the value of verification—or the cost of assumption. By implementing, enforcing, and optimizing inbound quality inspection processes, managers can stand behind every product that comes in—and goes out—their doors.
August 5, 2015 / best practices, blade failure, blade life, blade selection, cost per cut, industry news, material costs, preventative maintenance, productivity, quality
Over the next few years, experts anticipate growth in the use of high performance alloys or “superalloy” materials such as Inconel and Hastelloy. The high-performance metals, which are known for their outstanding corrosion and high temperature resistance, continue to find uses in aerospace and aircraft applications, and more recently, are expanding into the oil and gas industries.
“Growing corrosion as a cost concern in exploration and production in offshore drilling rigs is expected to propel use of high performance alloys such as superalloys in oil and gas applications,” states one study from Grand View Research, Inc. “Non-ferrous alloys such as nickel and titanium are also expected to witness above average growth due to their high mechanical strength coupled with increased use in aerospace, oil & gas and gas turbine applications,” the study continues. Specifically, Grand View Research forecasts that superalloy demand will experience an annual compound growth rate of more than 3.0 percent from 2014 to 2020.
While there is certainly a science to cutting any metal material, tackling tough-to-cut materials like superalloys can be even more challenging as managers try to balance cutting speed, finish quality, and blade life. However, with the right tools and know-how, service centers can efficiently and cost-effectively handle tough-to-cut materials without compromising quality.
The following are three key tips for service centers that want to cut superalloy materials:
- Use the right blade. Although it is possible to use bi-metal band saw blades to cut superalloys, carbide-tipped blades are typically better suited for the task and offer longer life, faster cutting, and better part finish. As with bi-metal blades, carbide-tipped blades are designed with multi-metal tooth constructions to provide high performance and prolonged blade life. In a carbide blade, the more durable tooth tips are welded to a high-strength alloy backing, enabling it to cut even the toughest metal. While carbide blades are more expensive, they are designed to take more bite and more chip load, which allows for faster cutting and can improve productivity and cost per cut. Aeordyne Alloys, a service center featured here in a LENOX case study, found this to be the case. Working with hard-to-cut metals like Inconel 718 and Hastelloy X, the service center decided to upgrade from bi-metal blades to carbide-tipped blades to get higher performance out of its band saws. By using a carbide blade, Aerodyne was able to tackle the hard, nickel-based alloys, while also improving cutting time on easier to cut materials like stainless steel.
- Coolant is key. There is no question that tougher metals take a toll on blade life, but this issue is even more compounded if operators fail to use coolants. As explained in an article from Canadian Industrial Machinery (CIM), choosing the right coolant, as well as getting the coolant into the cut, will extend blade life and improve cut quality. While some experts suggest highly compounded straight oil coolants for the more difficult tocut metals like superalloys and certain stainless steels, Matt Lacroix, director of marketing, LENOX Industrial Products & Services, says the choice isn’t always that simple. “There’s an inverse relationship between the lubrication and cooling effect of the fluid,” Lacroix tells CIM. “A water-soluble oil or straight oil is good for lubrication, but not as good for cooling. The synthetics and semisynthetics are better for cooling, but offer less lubricity than fluids with a higher oil content.” In the end, Lacroix says selecting the right coolant depends on the application.
- Break in blades. As discussed in a previous blog post, when it comes to band sawing, it always pays to break in blades. This is especially true when getting ready to cut harder materials that quickly wear down band saw blades. A new blade has razor sharp tooth tips, and in order to withstand the cutting pressures used in band sawing, tooth tips should be honed to form a micro-fine radius. Failure to perform this honing will cause microscopic damage to the tips of the teeth, resulting in reduced blade life and poor-quality cuts. When done correctly, performing this simple task can extend blade life by up to 30 percent.
August 1, 2015 / best practices, industry news, LIT, material costs, predictive management, productivity, strategic planning
As we reported in our Metal Service Center Outlook for 2015, non-residential construction—one of the steel industry’s biggest markets—was expected to finally register some growth this year. While this market has been slow to respond to the improving economy, the American Institute of Architects (AIA) predicted an 8.1% increase in non-residential construction in 2015, driven by double-digit increases in commercial construction. Healthy gains were also expected in institutional projects such as schools and health care facilities.
So far, predictions are lining up with current data. Although poor weather curtailed construction activity in the first quarter of the year, the “overall construction market has performed extremely well to date,” according to a late-July report from AIA. “The greatest amount of activity was seen in the building of commercial properties – most notably offices and hotels – with an unusually high spike in manufacturing construction spending triggered by the surge in domestic oil and natural gas production,” AIA said.
According to the most recent data released by the U.S. Census Bureau non-residential construction spending was up a staggering 11.5 percent in June on a year-over-year basis—the largest year-over-year growth during a calendar year’s first six months since the Census Bureau began tracking construction spending in 2002. Anirban Basu, Associated Builders and Contractors Chief Economist, says the data “serves as further proof of the recovery for non-residential construction.” In addition, exactly half of the 16 non-residential construction sectors experienced growth in June, and on a yearly basis, 15 of those 16 sectors have expanded.
“However, the one sector that failed to grow during the past year, power, happens to be the largest,” Basu adds. “Had power simply remained unchanged during that time period — it’s down 16.5 percent largely because of the fall in oil prices — non-residential construction spending would currently stand at its highest level ever.”
Of course, all of this good news should mean good business for steel service centers and other industrial metal-cutting companies. However, orders for steel beams and other structural steel products have not been following the demand trend. Citing data from Metal Strategies, Inc., Metal Center News recently reported that shipments of structural steel are forecast to dip by 3.3 percent this year, despite increased construction activity. Service center executives also told the industry publication that steel beam sales in the first half of the year did not meet expectations.
Why aren’t steel orders following the upward curve of construction? According to the Metal Center News report, there are three likely reasons: uncertainty about the economy, high import levels, and excessive inventories. While all three factors will have caused some unexpected speed bumps, experts believe that metals companies can still benefit. “As long as imports don’t surge further and both service centers and mills remain disciplined, there is money to be made from the coming growth in construction,” Metal Center News concludes.
As service centers and other industrial metal-cutting companies wait for orders to catch up, there are a few other industry developments happening within in the non-residential construction segment. From new applications to new materials, the following are some cutting-edge trends worth noting:
- New applications for tube and pipe. According to a recent article from MetalForming magazine, a growing number of architects are designing elaborate structures that are using structural-steel tube and pipe in new ways. The famous Millennium Wheel (or London Eye), for example, was built using structural tube fabrication. HGG, a European supplier of tube-processing machinery quoted in the MetalForming article, anticipates this trend to continue and forecasts demand for round pipe to grow by 15 percent from the North American sector alone.
- Modular building systems continue to gain popularity. In an article from the American Society of Mechanical Engineers (ASME), Jim Snyder, director of operations for construction company Warrior Group, states that permanent modular construction will be a huge trend in the coming years. Snyder says modular construction—the process in which a building is constructed off-site and then shipped to its end destination — is reliable, faster, and helps buildings earn LEED certification (the green building certification that recognizes best-in-class building strategies and practices). “It also allows you to have an easier time doing the building as you go,” Snyder says. “Instead of building 100,000 square feet, you can do 25,000 and then later, add on.” Snyder expects the trend to affect every construction segment, from commercial fast-food establishments to high-rise buildings.
- Possible “super steel” of the future? A new alloy discovered by Korean researchers is said to make steel as strong as aluminum at almost the exact same cost, reports Fast Company. According to the article, a team of material scientists at Pohang University of Science and Technology has discovered a new type of “flexible, ultra-strong steel that has the same strength-to-weight ratio as titanium alloys, but at just a tenth the cost.” While the breakthrough has the potential to be used in buildings of the future, the new material still has a few kinks to work out before it can be mass produced. You can read a complete copy of the study here in the February 5 issue of Nature.
Making the Cut
While only time will tell whether or not metal-cutting companies will benefit from the expected growth of non-residential construction, industry leaders know that staying competitive starts with staying informed. Whether following economic data to prepare for increased demand or simply gaining insight into future material trends, success requires industrial metal-cutting companies to both know and adjust to the needs of the customers and industries they serve.
June 25, 2015 / bottlenecks, Cost Management, lean manufacturing, material costs, productivity, quality, resource allocation, root cause analysis, workflow process
As most manufacturing executives know, inventory is one of the eight deadly wastes of lean manufacturing. Unfortunately, many metal-cutting companies tend to either ignore inventory or intentionally stock up on material “just in case.”
But there is a reason lean experts consider inventory as deadly. Excess inventory is costly in more ways than one: it requires space, equipment, measurement, and management, not to mention the initial cash expenditure.
Perhaps the greatest danger of surplus inventory, however, is that it often hides other forms of waste and inefficiencies existing within your forging and metal-cutting operations. As an archived article from Modern Machine Shop explains, inventory provides the perfect mask for a host of workflow problems. “With enough inventory, we do not need to be concerned with problems; in fact, we probably will not even know they exist,” the article says. “After all, with lots of inventory, who needs to worry about long vendor delivery times, critical machine breakdowns, long equipment setup times, production schedules not being met, absenteeism or even quality problems that lead to low production yields?”
Of course, that is exactly why managers need to take a closer look at their inventory. According to an editorial from IndustryWeek, inventory optimization can “unearth huge process improvement opportunities that will impact both the balance sheet and the income statement in a positive way.” Below are just a few of the process improvement opportunities the author says may be hiding underneath your raw material and work-in-process inventory:
- Raw Material Inventory: How much of your raw material is only necessary because of quality, extended lead times and delivery performance issues by your suppliers? How often are you having excessive scrap or missed customer deliveries because of supplier problems? These are typically issues where much of the heavy lifting can be done for shop floor people by the materials/sourcing team and a quality engineer. They can significantly better plants by improving flow and eliminating cost and customer issues.
- Work-in-Process Inventory: The level of work in process reflects flow interruptions. Why the interruptions? Perhaps your team doesn’t understand or use proper value stream mapping and line balance engineering. Processes are interrupted because of rework and scrap issues, and these unfavorable numbers can be enormous. How much are you losing on scrap (labor, material, overhead)? And, how much capacity is being wasted as a result?
In most cases, digging deeper into your inventory will reveal a list of process areas in need of improvement. The question then becomes: What can managers do to keep their inventory low? While there are several ways to accomplish inventory optimization, below are three simple strategies to consider:
- Use Remnants. According to the white paper, Accounting for Operator Inefficiencies in the Metals 2.0 Environment, many forges and other metal-cutting companies are training operators to use remnant materials first before pulling new material for a job. Industry leaders are finding that picking quality-but-leftover materials from a previous job (often known as “pick for clean”) is an effective way to improve overall system efficiency.
- Rethink Your Storage. One metal fabricator, featured here in thefabricator.com, found that a new inventory rack system was well worth the investment. According to the article, the company estimates value-added output per square foot increased by 220 percent since the completed implementation of the inventory management system.
- Invest in Software. While inventory management and other business system software have historically been too expensive for small- and mid-sized manufacturing operations, the cloud is changing all of that. According to an article from Fabricating & Metalworking, cloud-based software deploys mission critical data (inventory, accounting, capacity, estimating or work order management) in a way that allows smaller metalworking shops to compete on the business side with systems that are affordable and easy to use.
Regardless of the strategies you adopt, the bottom line is that inventory management should be a priority. Even if you are consistently filling customer orders, that doesn’t mean you doing it efficiently. By taking a closer look at what lies underneath piles of inventory, forging operations can save costs, improve productivity, and finally get to the root of some operational issues that may have been there all along.
April 21, 2015 / best practices, continuous improvement, human capital, industry news, LIT, maintaining talent, material costs, operator training, root cause analysis, strategic planning
Will 2015 be a year of growth for machine shops, as many are predicting? Recent data is sending some mixed signals. Gardner’s most recent metalworking business index (MBI), for example, showed that conditions in the metalworking industry expanded in March for the 15th consecutive month and the 17th time in 18 months. New orders and production increased have also increased for the 18th month in a row.
This of, course, is good news. However, as Modern Machine Shop reports, compared with one year ago, the MBI index has actually contracted for three straight months. “So, the metalworking industry is growing but not as fast as it was at the beginning of 2014,” the industry publication says.
Meanwhile, industrial production decreased 0.6 percent in March after increasing 0.1 percent in February, according to the Federal Reserve. For the first quarter of 2015 as a whole, industrial production declined at an annual rate of 1.0 percent, the first quarterly decrease since the second quarter of 2009.
But not all hope is lost. Many experts are still anticipating growth in industrial production this year and next year. As the LENOX Institute of Technology reported in the 2015 Industrial Metal Cutting Outlook, the Manufacturers Alliance for Productivity and Innovation (MAPI) forecasts that manufacturing production will grow by 3.7% in 2015 and 3.6% in 2016.
Also, according to Shopfloor, the blog of the National Manufacturers Association (NAM), manufacturers remain mostly upbeat about additional demand and production in the coming months. “We have started 2015 on a softer-than-desired note,” the blog states, noting that a strong U.S. dollar, weakened economic markets abroad, lower crude oil prices, the West Coast ports slowdown, and weather have all eased growth in activity. The blog concludes, “Hopefully, we will see better production numbers in the months ahead.”
Regardless of how the year shakes out, the fact is that machine shops need to continue to optimize their operations. Continuous improvement does in fact mean continuous, regardless of business conditions. The goal is to strategically approach those improvements with industry trends and forecasts in mind.
How can you be successful in 2015? A recent article Production Machining offers three strategies for increasing your chances for success this year:
- Recalibrate Your Plan. According to the article, most customers, suppliers, and competitors are planning for a year of growth. This should play a huge role in how you operate. “Are you prepared for growth, or are you still in hunker-down, play-it-safe mode?” the article asks. “You need to calibrate your plan on the emerging reality that we really are in an industry-led economic recovery.”
- Invest in Training Your Talent. If there is one consistent message in manufacturing right now, this is it. As the article states, there are two things that help manufacturers create unlimited wealth—eliminating root causes of problems, and deploying unused employee talent and creativity. “It is up to us to equip our people with the knowledge they need so they can achieve their highest and best potential in, and for, our shops,” the article states.
- Plan for Mill Leadtime Issues. This is perhaps one of the trickiest challenges metal-cutting companies face. However, the article states that there is a way to “intelligently” manage the risks associated with raw materials. “Losing half a year waiting for raw material is not a plan for success,” the article states. “Neither is speculation and hoarding of materials for price hedging purposes. The key, the article suggests, is identifying critical materials that are likely to be unobtainable in an up market—as well as those materials with historically long leadtimes—and taking steps to assure continuity of supply.
There is no crystal ball for what will happen in 2015, and as the last few years have taught manufacturing executives, nothing is ever certain. But hoping for a better year isn’t really a plan. To strategically approach today’s market, managers need to consider what is happening in the market, while also proactively improving what is happening inside their doors.
April 5, 2015 / agility, customer delivery, industry news, material costs, strategic planning
Like most sectors of the metal-cutting industry, metal service centers are hoping that experts are right about the growth prospects for 2015. After 2014 fell short of expectations and with recent data showing less than favorable numbers, most companies are trying to stay optimistic about the months ahead.
The latest figures from the American Iron and Steel Institute show that February steel shipments from U.S. steel mills were down 10.8 percent compared to January 2015 and decreased by 9.1 percent compared to February 2014. Shipments year-to-date were down 5.3 percent compared to 2014 shipments.
According to data from the Metal Service Center Institute (MSCI), U.S. service center steel shipments declined in the first three months of 2015 compared to the same months in 2014, although March shipments were only down by a tenth of a percent. Shipments of aluminum products, on the other hand, increased in both February and March after being down in January. Meanwhile, steel and aluminum inventories grew in the first three months of 2015, MSCI reports.
Even with a rough start to the year, analysts remain optimistic that there will be growth in 2015. As we reported in our 2015 Industrial Metal Cutting Outlook, forecasts for steel demand are positive, but growth rates will not be as strong as they were in 2014. According to the Short Range Outlook 2014-2015 from the World Steel Association (worldsteel), U.S. steel demand is expected to increase by 1.9% in 2015—much lower than the 6% growth the U.S. experienced in 2014. Globally, worldsteel forecasts that global apparent steel use will increase by 2.0% this year.
Many industry leaders are also fairly optimistic about this year. In a mid-February statement announcing its 2014 financial results, Reliance Steel & Aluminum Co. said that it expects the U.S. economy to continue to improve throughout 2015. The Los Angeles, CA-based service center believes high levels of metal being imported into the U.S. will continue given the strong U.S. dollar and weaker economies in other parts of the world, which will continue to put downward pressure on steel prices. In addition, due to normal seasonal trends and an improving demand environment, Reliance expects higher tons sold in the first quarter of 2015 versus the fourth quarter of 2014, but lower average selling prices and margins.
Of course, no one really knows how this year is going to shake out. Perhaps the greatest gauge for how metal service centers might fare in 2015 is to look at segment forecasts. Below are outlooks for three OEM categories that will likely play a large role in determining demand in 2015:
- Automotive. In 2014, the automotive industry registered gains it hasn’t seen since 2006, and growth is expected to continue in 2015. According to an April 1 from manufacturing.net, auto sales are on track to reach 17 million this year, their best performance since 2005. Low interest rates, low gas prices, the improving economy, and new models will all drive growth, the report says. In addition, the material war between steel and aluminum will likely continue in 2015 as automotive companies seek ways to meet federal emission standards.
- Non-residential construction. Metal Center News recently reported that non-residential construction—one of the steel industry’s biggest markets—is expected to finally register some growth in 2015. While this market has been slow to respond to the improving economy, the report states that the American Institute of Architects predicts an 8.1% increase in non-residential construction this year, driven by double-digit increases in commercial construction. Healthy gains are also expected in institutional projects such as schools and health care facilities. You can download the full Metal Center News forecast report here.
- Energy. The energy sector will likely receive the most attention in 2015. While steel demand from energy companies has been growing at a fast pace, some experts believe the sector’s steel demand could be subdued in 2015. “Globally, higher crude oil prices drove a lot of energy companies to invest in shale formations,” states one analysis from Market Realist. “However, lower crude oil prices dampened the mood among energy exploration companies.” Low oil prices may also have larger effects on the industry, including decreased steel prices and increased U.S. steel imports. To read more about the impact crude oil pricing may have on the steel industry, check out Modern Metals February cover story, “Brooding Over Crude.”
February 15, 2015 / agility, blade selection, Cost Management, customer delivery, industry news, material costs, productivity, resource allocation, strategic planning
It’s no secret—the U.S. automotive industry is doing well. In 2014, the industry registered gains it hasn’t seen since 2006, and the momentum doesn’t seem to be slowing. According to a recent report from the New York Times, sales of automobiles rose 14 percent over January of last year, with several major auto makers posting double-digit increases in a month that is traditionally slow for U.S. dealerships. Sales forecasts for the next five years are even better. One analyst has even predicted sales will hit 20 million vehicles by 2020, reports Automotive News.
This is no doubt good news for any supplier serving the automotive space, including industrial metal-cutting companies. However, ramped up demand usually means ramped up customer expectations, and suppliers need to be ready to not only meet the needs of automotive makers, but also stand out from competitors vying for the same business.
To help companies strategically approach this market, below are some of the major trends impacting automotive manufacturing. From materials to robotics, customer needs and processes are evolving, and suppliers looking to win (and perhaps keep) the business may need to adjust accordingly.
- Aluminum vs. Steel. One of the biggest shifts happening within automotive manufacturing has been the growing use of aluminum over steel. To meet new federal emission standards, a growing number of U.S. auto makers (i.e., Ford) are using aluminum to decrease the weight of their vehicles and, therefore, increase the fuel economy. Key aluminum suppliers like Alcoa have been reaping the rewards and expect growth to continue on a global scale. However, Tim Triplett, editor of Metal Center News, says that despite the hype around aluminum, the steel industry isn’t losing any ground in the automotive sector. “Just as many headlines heralded new developments in lightweight, advanced high-strength steels,” Triplett says here in an editorial. He adds, “Steelmakers claim the auto industry can meet the government mileage standards by using the new steel alloys, in combination with power train innovations, and at a lower cost than switching parts to aluminum.”
- Tooling Advancements. Regardless of whether or not the use of aluminum outpaces steel, the fact that more and more aluminum is being used by the automotive industry means that metal-cutting companies need to ensure they have the right tools for the job. As a general rule, thefabricator.com offers the following advice when choosing the right tool for aluminum jobs: “Circular saws generally are suitable for cutting aluminum between 0.5 and 6 in. diameter, for high-volume jobs (up to 5,000 parts per shift), and for the best possible finish on the cut piece. Band saws generally make sense for aluminum stock of 6 in. diameter and larger and for shops that are interested in high-speed cutting of aluminum but also frequently cut other materials.”
- Automation Trends. A recent study by Grand View Research Inc. states that the booming automotive industry, climbing labor costs, and market demands for rapid and efficient manufacturing processes are increasing the need for automation in industrial manufacturing. As a result, the research firm expects the global industrial robotics market to exceed $40 billion by 2020. Many industrial metal-cutting companies are following this trend and are investing in automation and computerized controls to make all aspects of the sawing process more efficient. Simple controllers are allowing companies to assign operators to run more than one machine at a time, and higher level advancements in areas like robotics are also improving productivity. For example, Parsan Steel Forging and Machining Co., a Turkish manufacturer of automotive parts, is using robotics to gain production flexibility and efficiency. According to an article from Forging magazine, better programming features, range of movement, and motion control are creating new efficiencies and cost savings at the forge. You can read the full case study here.
December 10, 2014 / best practices, blade failure, continuous improvement, Cost Management, cost per cut, human capital, material costs, operator training, Output, preventative maintenance, productivity, quality, resource allocation
There is no question that coolants should be considered a critical part of your metal-cutting operations. They save you maintenance time, improve cut quality, and extend tooling life. However, not all lubricating options are created equally. As this blog post describes, managers have a wide range of fluid options available to them. And while coolant selection may seem like a small detail, it should be treated like any other operational purchase, with both strategy and cost in mind.
One coolant choice that many fabricators overlook is Minimum Quantity Lubrication (MQL). This alternative option sprays a very small quantity of lubricant precisely on the cutting surface, eliminating any cutting fluid waste. In fact, many consider it a near-dry process, as less than 2 percent of the fluid adheres to the chips.
MQL is great for smaller saws and for structural applications, both of which are popular in fabrication shops. This type of coolant application is most commonly used in precision circular saw operations, but it can also be used in band sawing as well.
Below are just a few of the key benefits to using MQL over traditional flood coolants:
- Lower long-term costs. Although MQL fluids typically cost substantially more per gallon, less than 1/10,000 of the amount of fluid is used. It also eliminates the need to invest in reclamation equipment such as sumps, recyclers, containers, pumps, or filtration devices.
- Less waste. Another major benefit is that MQL is a much more sustainable option. As this article from Fabricating & Metalworking discusses, metal chips produced during MQL machining are much cleaner than conventional approaches. Near-dry chips are easier to recycle and more valuable as a recycled material. Conversely, “wet” processes like flood coolants produce “increased and on-going lifecycle costs in the form of energy consumption, chemical maintenance, water make-up, disposal of used cutting fluids, and then starting the cycle of waste/recovery all over again by replenishing consumed fluids,” the article states.
- Less maintenance. The smaller amount of coolant means that less fluid sticks to the part. This reduces the need to clean parts after cutting. Also, MQL fluids do not have to be diluted with water. Flood coolants, however, have to be mixed with water, and operators need to monitor the concentration as fluid is lost, water evaporates, etc.
Managers need to be aware, however, that MQL application is a more sensitive process than flood cooling. Mist must be aimed precisely at the tool to be effective. Fluid selection, equipment, and material type also play key roles in proper MQL application. For a full description of what is needed to use MQL, including equipment and fluid types, download The MQL Handbook. This helpful resource also offers some “rules of thumb” and other important tips to consider before transitioning to MQL.
As stated in the handbook, changing over to MQL is not as simple as just plugging in a lubrication system. It will require some research, upfront investment, and some training. However, it can offer significant advantages to your business, your employees, and the environment—three major reasons to at least consider using it in your fabricating and metal-cutting operations.