January 15, 2016 / benchmarking, best practices, blade failure, bottlenecks, continuous improvement, LIT, predictive management, preventative maintenance, productivity, strategic planning
The U.S. manufacturing landscape is changing, and industrial metal-cutting companies are no exception. Technology has created an increasingly connected industry, and manufacturers are realizing that while traditional lean practices have proved successful in the past, when it comes to operational efficiency, data and other advanced “smart” technologies are the wave of the future.
One area that is quickly gaining popularity is the use of predictive technologies. As reported in a recent Manufacturing.net article, nearly three dozen manufacturing company executives and national research facility directors identified predictive data analytics as the number one advanced manufacturing technology critical to growth, as part of a study conducted by Deloitte Global and the U.S. Council on Competitiveness.
Predictive analytics utilizes a variety of statistical and analytical techniques to develop mathematical models that “predict” future events or behaviors based on past data. As the study explains, this allows companies to uncover hidden patterns, relationships, and greater insights by analyzing both structured and unstructured data.
Several industries are already benefiting from the use of predictive technologies. Healthcare, for example, is using predictive analytics to improve the effectiveness of new procedures, medical tests, and medications. Manufacturing companies are using the technology to identify quality and production issues, as well as optimize delivery and distribution. Other industries, such as aerospace, automotive, and consumer products, are also finding interesting applications.
Thyssen Krupp, for example, recently used predictive analysis to improve the reliability of more than 1.1. million elevators it maintains worldwide. With the help of Microsoft cloud technology, the company gathered data from thousands of sensors and systems in its elevators to measure motor temperature, shaft alignment, cab speed and door functioning. After being sent to the cloud, the data is then displayed on a single dashboard in real-time. The data is also used in predictive model formulas, helping technicians know when and where a failure may occur.
The trend is also finding its way into industrial metal cutting. Data from the LENOX Institute of Technology’s Benchmark Survey of Industrial Metal-Cutting Organizations suggests that investing in smarter, more predictive operations strategies can help companies gain additional productivity and efficiency on the shop floor.
Although not through the use of analytics, the benchmark survey found that industry leaders are using strategies such as planned maintenance and blade care to prevent downtime and predict blade failure. Specifically, the benchmark study found that:
- 67% of industrial metal cutting operations that follow all scheduled and planned maintenance on their machines also report 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.
- 51% of organizations that “always” follow scheduled and preventative maintenance plans say that blade failure is predicted “always” or “mostly.”
While there is no question that predictive analytics is still an emerging area, it is clear that proactive strategies are key in today’s uncertain market. Whether you invest in advanced predictive analytics software or simply stick to your preventative maintenance program, finding ways to anticipate future events and reduce unplanned downtime can help your operation gain efficiency and, more importantly, stay competitive.
What predictive operational strategies are you using to make your operation more efficient?
January 10, 2016 / best practices, blade life, bottlenecks, continuous improvement, Cost Management, customer delivery, customer satisfaction metrics, customer service, LIT, predictive management, preventative maintenance, productivity, strategic planning
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:
- lower maintenance costs
- increased capacity and revenue
- lower inventory (less safety stock for unplanned events)
- improved customer satisfaction (with more on-time shipments)
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?
January 5, 2016 / best practices, continuous improvement, Cost Management, industry news, KPIs, operations metrics, performance metrics, predictive management, preventative maintenance, productivity, quality, strategic planning, workflow process
The economic uncertainty from 2015 is unfortunately spilling over into 2016. As reported in a recent IndustryWeek article, the head of the International Monetary Fund Christine Lagarde said “global growth in 2016 will be disappointing and patchy” due to rising interest rates in the U.S. and a slowdown in China, among other reasons.
The most recent metal service center shipments confirm the gloomy forecast. According to data from the Metal Service Center Institute, service center shipments of both steel and aluminum were down—albeit at slower rates—in November compared to both the previous month and year prior.
Given current economic conditions, it’s not surprising that metal service centers are using metrics and data to improve their operations—the only aspects of their businesses they can control. As reported in a white paper from LENOX Institute of Technology, market leaders know that proactive—not reactive—improvement is the key to being successful in today’s market.
When it comes to metrics, more and more companies believe key performance indicators (KPIs) are the best means for gathering quantifiable and traceable measurements because they are tied directly to business strategy. In fact, KPIs are so popular that the University of Tennessee’s Reliability and Maintainability Center (RMC) started an initiative called “Six Metric Areas to Best Practices” to help companies focus on the right metrics and align them to their organization.
As reported by Plant Services, Tennessee’s RMC initiative focuses on three guidelines:
- Work on what matters. There can be hundreds of KPIs, but only a few of them can dramatically improve an initiative. Make sure these KPIs are aligned with the company’s business goals and strategy. Tasks should be explicit and all actions should support a larger goal.
- Data should be industry specific. While using an average is a good place to start when determining improvement goals, it is important to look at industry specific data to ensure those goals remain realistic. Averages provide a guideline, but specific data provides meaning and context as to what is attainable or not, depending on market, costs and other industry related factors.
- Use benchmarks. Other data, according to industry, should act as a guideline and provide focus for ongoing improvements. RMC plans to publish competitive gaps and summarize results for participating companies.
As part of its initiative, RMC has also identified six universal KPIs that all companies, regardless of industry, should consider adopting. These include the following:
- Percent Reactive Maintenance, including data on predictive, preventive, and capital projects
- Maintenance Cost/Replacement Asset Value, expressed as a percent
- Overall Equipment Effectiveness (OEE), including availability, performance, and quality
- Inventory Turns for both overall product and maintenance, repairs and operations (MRO) spare parts
- Mean Time Between Failure (MTBF)
If your service center isn’t already using some of the above KPIs, now is the time to consider identifying at least a few, if not all, of them. If the process feels overwhelming, do some research, ask for help, and start measuring. In today’s uncertain economy, manufacturers can’t afford to ignore the operational areas that need improvement. As they say, you can’t improve what you can’t measure.
Are you using KPIs to optimize your operations? What metrics have resulted in the most improvement for your metal service center?
September 15, 2015 / continuous improvement, industry news, KPIs, LIT, operations metrics, performance metrics, predictive management, production planning, productivity, strategic planning
A brief look around at any public establishment quickly reveals just how much connectivity has changed the world. Whether checking an email on the train, texting a family member outside a restaurant, or posting photos on social media during a concert, almost every adult—and teen—rely on some type of connected device to function. It has, at this point, become a social norm in first-world culture.
However, could the same be said when looking around your shop floor? In some cases, the answer would be yes. Some industry leaders grabbed onto connectivity years ago, making the strategic decision to connect their production equipment to the Internet and/or back office functions to streamline processes or to gain access to valuable data.
Others haven’t quite caught on. As one article from Forbes reported, some industry leaders are saying that as little as 10 percent of industrial operations are currently using the connected enterprise. That number, which may or may not be accurate, seems surprisingly low when publications like the Harvard Business Review are saying that the use of smart, connected products “is perhaps the most substantial change in the manufacturing firm since the Second Industrial Revolution.”
In fact, 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 a little traction in the U.S as well.
What is Industry 4.0?
Because this is a newer term, the definitions for what comprises Industry 4.0 vary greatly. An article from ZDNet outlines the four major shifts in industrial manufacturing as follows:
- Industry 1.0: Water/steam power
- Industry 2.0: Electric power
- Industry 3.0: Computing power
- Industry 4:0: Internet of Things (IoT) power
In general, many use Industry 4.0 as a collective term that refers to all of the technologies that will help foster the next-generation “smart factory”—a place where machines communicate with each other and their users in real-time, and factory processes become visible and controllable in virtual space. This typically includes technological concepts like embedded systems, automation and robotics, and the Internet of Things (IoT) and the Internet of Services (IoS).
According a report from Deloitte, there are four characteristics that define Industry 4.0:
- Vertical networking of smart production systems
- Horizontal integration via a new generation of global value chain networks
- Cross-disciplinary “through-engineering” across the entire value chain
- Acceleration through exponential technologies
For a great primer on Industry 4.0, including its distinction from terms like “Industrial Internet,” read this article from Industry Week.
How Can You Prepare?
Regardless of how you define or categorize the evolution of manufacturing, the point is that most experts agree that connectivity has the power to change manufacturing as we know it. Research also shows that many manufacturers are not prepared or equipped to be part of this next industrial revolution. A 2014 Smart Manufacturing Technologies Survey, for example, found that 40 percent of the survey participants have no visibility into the real-time status of their company’s manufacturing process. Adrian Jennings, Chief Technology Officer (CTO) of software provider Ubisense, which conducted the survey, says this reveals a major blind spot among today’s manufacturers.
“The manufacturing world is talking about Industry 4.0, but this survey confirmed that most manufacturers are far from embracing cyber-physical systems which define the next Industrial Revolution,” Jennings said.
How can your shop transition to what is likely the future of manufacturing? A contributed article appearing manufacturing.net provides some helpful tips and provides the value story for moving your operation from Industry 3.0 to Industry 4.0. Specifically, the article suggests the following:
“Start small and start local — trying to create large scale cyber-physical systems as a single effort presents too many challenges to be successful. Pick a problem or pain point and tackle it to prove that these solutions work and provide value. As benefits surface, roll this out to other processes keeping the ultimate goal of end-to-end visibility in mind. Be sure to invest in the right infrastructure at the outset and create islands of cyber-physical systems throughout the operation.”
Another article from Modern Machine Shop simplifies it further:
- Take heed. The Industrial IoT is real and taking shape here and now.
- Keep your eye on the prize. Better decision-making is the main benefit of creating a connected factory in which machines and people are smarter.
- Start small, but plan big. Whether it is machine monitoring or cloud-based CAM programming, the initial steps have to be manageable, transparent and respectful of the individual.
And if you think this transition isn’t already happening in the metal-cutting world, think again. According to a white paper from the LENOX Institute of Technology, one metal service center has developed 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.
In what ways has your metal-cutting organization prepared for this next phase of industrial manufacturing? Are you ready to usher in “smarter,” more connected operational strategies?
August 20, 2015 / benchmarking, best practices, continuous improvement, Cost Management, LIT, operations metrics, performance metrics, predictive management, preventative maintenance, productivity, resource allocation, strategic planning
With changing customer requirements and an increasingly competitive marketplace, leading manufacturers are finding it pays to be proactive—not reactive—in their strategic approaches. Instead of simply measuring performance, many companies are taking the next step and using measurement to anticipate and prevent future challenges—a concept known as predictive operations management.
This trend has found its way into industrial metal cutting. According the LENOX Institute of Technology’s benchmark study of more than 100 machine shops and other industrial metal-cutting organizations, companies can gain additional productivity and efficiency on the shop floor by “investing in smarter, more predictive and more agile operations management approaches.”
One such approach is predictive maintenance. Not to be confused with preventative maintenance, which uses planned maintenance activities to prevent possible failures, predictive maintenance (also known as condition based maintenance) uses tools to predict failures just before they happen.
Reliable Plant defines predictive maintenance as “the application of condition-based monitoring technologies, statistical process control or equipment performance for the purpose of early detection and elimination of equipment defects that could lead to unplanned downtime or unnecessary expenditures.” By using tools to predict and then correct possible failures, operators can keep machines running while eliminating unnecessary preventative maintenance downtime and reducing reactive maintenance downtime.
Monitoring tools typically include vibration analysis, infrared thermography, motor circuit analysis, sonic and ultrasonic analysis and other technologies that can find defects while the machine is in normal operation. In most cases, condition-based monitoring won’t interfere with production schedules—a huge plus for any manufacturer.
If predictive maintenance is effective, maintenance is only performed on machines before failure is likely to occur. According to www.maintenanceassistant.com, this brings several cost savings, including:
- minimizing the time the equipment is being maintained
- minimizing the production hours lost to maintenance, and
- minimizing the cost of spare parts and supplies.
While this can translate into less maintenance downtime compared to preventative maintenance, predictive maintenance also has some drawbacks, including:
- high upfront investment for condition monitoring equipment and software, and
- high skill level and experience required to accurately interpret condition monitoring data
According to an article from Life Cycle Engineering, creating an effective predictive maintenance program is a bit more complicated than it appears. The magazine poses four questions managers need to address before implementing a predictive maintenance program:
- Can predictive maintenance technologies provide real value to your preventive maintenance program?
- What is the most effective predictive technology for your plant?
- Can you provide the right training?
- Will you actually use the information?
In the end, predictive maintenance may not be an option for every shop or every piece of equipment, but many manufacturers find it worth the investment for machines that have a critical operational function and have failure modes that can be cost-effectively predicted with regular monitoring.
August 15, 2015 / continuous improvement, employee incentives, lean manufacturing, LIT, operator training, predictive management, preventative maintenance, productivity, quality, strategic planning
As manufacturing leaders aim for continuous improvement, they typically find themselves juggling multiple initiatives at once to reach the performance and quality level expected in today’s market. It isn’t uncommon for a shop to simultaneously implement a lean practice like 5S while also bumping up its productivity goals. Or, as revealed in a case study on high production metal-cutting companies from the LENOX Institute of Technology, managers may be overseeing ongoing initiatives like ISO 9001 certification, training, and preventative maintenance.
While these best practices are typically worth the effort, the challenge is making sure each is managed well enough to actually be effective. If not handled correctly, employees and even management can end up overwhelmed and uninspired, which typically adds up to little or no results.
According to an article from Plant Engineering, the problem is that most managers have not been properly trained on how to manage multiple improvement efforts. Instead of leading, many turn into micromanagers that have their hands in every initiative, making it hard for supervisors and employees to “buy into” or take ownership of whatever is being asked of them. As Muriel Maignan Wilkins, coauthor of Own the Room and managing partner of Paravis Partners, recently told the Harvard Business Review: “Micromanaging dents your team’s morale by establishing a tone of mistrust—and it limits your team’s capacity to grow.”
To help managers navigate today’s continuous improvement landscape, the following is a condensed list of Plant Engineering’s “dos” and “don’ts” for managing multiple improvement initiatives:
1. Delegate. While managers and supervisors should sponsor teams to make sure they have what they need to accomplish their work, the reality is that the managers and supervisors need to let go and get out of the way so the teams can get their work done. Your job is to remove roadblocks, provide resources, and report progress.
2. Stop having meetings about meetings. Team progress reports can all be accomplished through electronic communication in the form of team notes that can be sent in an email. If you’re having meetings about meetings, you are headed in the wrong direction and wasting people’s time.
3. It’s all about the business case. Every effort should have a business case, and as a manager, you need to request the business case for every new initiative or directive that comes from corporate.
4. Set behavior-based goals and rewards. Working in a safe and environmentally responsible way is about behaviors and rewarding the right behaviors is what helps to improve performance in these areas. Reward things like near misses reported or mistakes discovered in a lockout/tagout procedure and the performance of safety audits. Odds are you will notice not only an improvement in performance, but your people will clearly see that Employee Health, Safety, and Environment are truly the top priority.
5. Stay out of the way! Nothing will slow the wheels of improvement faster than a manager who believes he/she has to be involved in everything. Simply demand a business case from each team; if there is a business case for mitigating or eliminating the problem, then give them the green light to go to work. Reinforce them for meeting on a regular basis, for showing that they are using a structured approach to solving problems, and for providing open communications.
Is your shop juggling multiple improvement efforts? What strategies are you using to ensure they all receive equal attention and profitable results?
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.
May 25, 2015 / benchmarking, best practices, continuous improvement, customer satisfaction metrics, KPIs, LIT, operations metrics, performance metrics, predictive management, preventative maintenance, productivity, root cause analysis
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:
- Invest in technology. Top performers automate the collection and sharing of data to support predictive decision-making.
- Identify risks. Top performers pinpoint high-risk plant assets and production processes, establish a threshold value to monitor the risk, and notify employees if the value deviates.
- Plan ahead. Top performers develop company strategies to ensure that predetermined thresholds remain accurate.
- Prioritize. Top performers identify and fix problem areas.
- Constant measurement. Top performers continuously track improvements in risk management by comparing current performance against baseline measures.
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.
April 1, 2015 / agility, best practices, blade failure, Cost Management, human capital, industry news, KPIs, LIT, operations metrics, performance metrics, predictive management, preventative maintenance, productivity, skills gap, strategic planning, value-added services
Like most manufacturers, industrial metal-cutting companies went into 2015 with both optimism and caution. While all signs seem to be pointing to a full economic recovery, concerns surrounding an unstable political landscape, foreign markets, and pricing continue to keep many metals companies on their toes.
Some Growth Ahead
As we enter the second quarter of 2015, most experts anticipate growth in the metals industry. Early predictions painted a positive picture for the year, and recent reports are confirming that the industry will, at the very least, see slight improvements over 2014.
According to the Manufacturers Alliance for Productivity and Innovation (MAPI), industrial production increased at a 3.8% annual rate in the fourth quarter of 2014 and posted 3.6% growth for the year as whole—over a percentage point higher than the 2.4% gain in the overall economy. The manufacturing outlook for 2015 and 2016 calls for a minor acceleration from the 2014 growth rate. According to the MAPI Foundation’s most recent U.S. Industrial Outlook, manufacturing production is forecast to grow by 3.7% in 2015 and 3.6% in 2016.
MAPI’s outlook also predicts that 21 out of 23 industries will show gains in 2015. This includes growth in metals industries such as iron and steel products (5%), alumina and aluminum production and processing (7%), and fabricated metal products (3%). The top industry performer will be housing starts, which is expected to increase by 16%.
Forecasts for steel demand are also 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. This is a downward revision from previous forecasts, due to a slowdown in emerging economies like China.
“Recoveries in the EU, United States and Japan are expected to be stronger than previously thought, but not strong enough to offset the slowdown in the emerging economies,” stated Hans Jürgen Kerkhof, chairman of worldsteel’s Economics Committee. “In 2015, we expect steel demand growth in developed economies to moderate, while we project growth in the emerging and developing economies to pick up.”
Concerns and Challenges
Buying into the positive forecasts, most metals manufacturers expect business to improve this year. According to an annual survey of metals executives by American Metal Market (AMM), 42% of respondents expect the economy to turn around in 2015 and 67% expected business to improve overall, mostly due to growth in the auto and energy sectors.
However, AMM reports that respondents did have some reservations. Political events, cheap imports, and foreign markets were all causes for concern, as well as uncertainty about “where important industry segments like construction might be headed,” AMM states in its survey report.
In his State of the Industry address earlier this year, Robert Weidner, president and CEO of the Metals Service Center Institute (MSCI), listed several trends that will affect the metals industry in 2015 and beyond. Below are the five challenges he outlined, as reported by thefabricator.com (You can read the full coverage here.):
- Market Intelligence – Volatile markets and increasing competition have heightened the need for trustworthy data and analysis tools, as well as the need for cybersecurity resources and training to secure market intelligence.
- Business Disruption – World events have an even bigger impact on local economies than before, creating a need for topic- and area-specific experts and information and enhanced vehicles and technology to provide information.
- Congressional Gridlock – U.S. partisan politics have stalled action in the legislative branch, often resulting in extreme actions through regulators that have impeded manufacturing growth.
- Safety and Risk Management – Slow market growth has left companies cautious to invest.
- Skilled Labor and Changing Demographics – Attracting a skilled workforce remains a challenge for the industry.
With both forecasts and anticipated challenges in mind, industrial metal-cutting companies can strategically approach the market from both a business and operational standpoint. In fact, as we reported here, it is critical for today’s managers to develop operational short-term plans that are effective in achieving the overall strategy set forth in the business plan. For instance, if the goal is continuous improvement, then make sure your metrics, your daily practices, and communication with your team all point to that overall strategy.
As a global company serving the industrial metal-cutting industry, we at LENOX Tools have a unique vantage point of what is happening in the marketplace. We have watched some metal companies barely survive, while others have found ways to thrive. The difference, in most instances, seems to be the company’s commitment to making improvements. Whether investing in new equipment to improve cutting time and quality or investing in training to improve and empower their human capital, industry leaders are continuing to focus on making positive changes on the shop floor so they can be ready to respond to changing customer demands. In other words, the only way to offset external uncertainties is to focus on making internal improvements.
Based on industry trends and our own experience, LENOX sees the following as key strategies for industrial metal-cutting companies that want to be successful in today’s marketplace:
- Invest in Operators and Training. In light of the manufacturing industry’s ongoing skills gap, experts like MSCI’s Weidner are stressing the importance of employee safety and ongoing training as a means of attracting and maintaining workers. In addition, LIT’s benchmark survey of industrial metal-cutting companies provides evidence that investing in areas like training can provide additional benefits, including better quality, faster on-time customer delivery, higher revenue per operator, and lower rework costs.
- Embrace Proactive Care and Maintenance. No matter how efficient an operation, some machine downtime is inevitable. The key is to be proactive and minimize it as much as possible. This includes practices such as breaking in blades and regular coolant checks. By adhering to a preventative maintenance schedule, managers can actually anticipate maintenance bottlenecks and turn “interruptive downtime” into “predictive downtime.”
- Form Strategic Supplier Relationships. Whether you need help with training, gathering metrics, or de-costing, help is likely no further than your closest supplier. And if that’s not the case, you may want to rethink your supply chain. By utilizing value-added services from trusted suppliers and making them more of a partner than simply a supplier, metal-cutting companies can improve quality and productivity—both of which impact the bottom line.
- Seek New Opportunities. Market trends such on re-shoring and an automotive boom could translate into new opportunities for your metal-cutting company. Are there value-added processes you can add to your operation to stay competitive? Are there previous customers that could now benefit from the convenience and cost benefits of your U.S. manufacturing base? Is there new equipment or tooling that could help you better serve a certain customer base? Asking critical questions such as these may reveal new prospects for growth. Start brainstorming.
March 20, 2015 / benchmarking, best practices, continuous improvement, human capital, KPIs, lean manufacturing, LIT, operator training, Output, predictive management, preventative maintenance, productivity, quality, skills gap, strategic planning, workflow process
In an age of information overload, most managers know how their shops should run. They’ve read case studies about successful lean initiatives, benchmarking studies confirming the benefits of preventative maintenance, and forward-thinking editorials endorsing the “smart” factory. Yet, in the midst of in the day-to-day grind, it is often difficult to find the time and resources to make any real improvements, let alone put a plan in place to make them happen. As a recent article from Canadian Metalworking quips, many shops are too busy working on their business to work on their business.
However, taking the time to make strategic decisions for your shop is critical to its success. Maintaining status quo is no longer enough in today’s market. Modern machine shops need to have both short- and long-term plans, and they need to make the time to see them through.
But where do you start? At this year’s The MFG Meeting, Laurie Harbour, president of manufacturing consulting firm Harbour Results, Inc. (HRI), shared five best practices for leaders who want to start making real changes in their operations:
- Strategic Planning. Do you have a strategic plan? It’s not a mission or a value Your company needs a strategy that outlines what its focus is and why that focus is important. Additionally you need a plan with actionable one-year objectives that are communicated at all levels of your organization. And, of course, metrics need to be in place to drive each employee’s role and responsibility in meeting the plan.
- Market Intelligence. To be successful you must be informed. Companies can no longer afford to guess or rely on “luck.” It is critical that you gather and review both internal and external data. Triangulation of customer information, industry knowledge/historical performance/experience and external market intelligence are critical to a successful demand plan.
- Demand Planning. Although difficult, demand planning can lead to driving significant efficiency gains within your business. Utilize market intelligence; talk with your customer and implement demand planning in your facility. Those that are doing so improve throughput by 20 to 30 percent, making profitability soar.
- Manufacturing Efficiency. Rather than just improving the efficiency of one or more machines, you need to look at the entire system for optimization. Rather than scheduling each and every piece of equipment that supports making the product separately, it is critical to schedule the system and how all the pieces interact. Analyzing the entire manufacturing operation as a whole helps identify opportunities for efficiency gain and process improvements.
- Labor. The manufacturing industry is facing a skilled-labor shortage and it is only predicted to get worse. To be competitive and maintain a productive workforce, you need to have a plan and be prepared to attract, train and retain a younger generation.
To help leaders take a deeper look at their operation, HRI also offers a Strategic Planning Worksheet, which lists some questions leaders can use to identify opportunities for improvement in each of these five areas. You can download the worksheet here.
Are you addressing these five major areas in your machine shop? In what areas could you use some improvement? Taking the time to ask critical questions like these—and those listed in the HRI worksheet—is the first step in optimization and, even more so, putting you on the right path to becoming one of those shops you always read about.