August 20, 2017 / best practices, blade failure, blade life, blade selection, bottlenecks, continuous improvement, LIT, operator training, predictive management, preventative maintenance, productivity, quality, workflow process
While some downtime is inevitable, more and more forges and other industrial metal-cutting companies are discovering that proper maintenance and proactive care of equipment can significantly reduce its occurrence.
The problem is that maintenance departments are typically busy putting out fires, which pushes anything “preventative” to the side. Why take the time to stop a potential problem when there are enough real problems happening right now?
However, as stated in the eBook, Five Performance-Boosting Best Practices for your Industrial Metal-Cutting Organization, proactively addressing maintenance issues allows managers to reduce costs, increase blade and tooling life, and, most importantly, avoid costly mistakes. “With a simple check-list, operators can enhance their knowledge base and positively affect performance on the shop floor,” the eBook states.
What does this look like in practice? According to the white paper, Accounting for Operator Inefficiencies in the Metals 2.0 Environment, operators can conduct daily preventative maintenance (PM) checks in less than 10 minutes. Programs can be as detailed as a manager feels is necessary, but in a band saw environment, the following are a few key checkpoints to include:
- checking coolant levels
- cleaning saw blades of debris
- visual tests of critical tooling elements such as the feed system and lasers
- double-checking parameter settings (i.e., speed and feed rate)
Although many shops conduct PM checks at the start of each shift, there are several ways managers can schedule their PM procedures. In a recent blog, maintenance software provider SM Global offers four possible PM schedules:
- Date based: Schedule PM checks every X amount of days, weeks or months. So, for example, you can have a maintenance task scheduled every 5 business days, on every Friday, the second Monday of every third month, every January on the first Wednesday and so on.
- Meter based: There are two different meter types. In one, you schedule maintenance every time a meter reading increases or decreases by a certain amount. For example, an oil change when a meter reading increases by 3000 miles. The second type is a batch meter. You schedule maintenance after an equipment processes X number of units. For example, replace a bearing every time the equipment produces 500 widgets.
- Alarm based: You schedule a maintenance task every time an alarm condition happens. For example, an alarm could be excessive vibration on a machine. You can schedule a PM check on the machine when this alarm occurs.
- Relative to another task: Start a new maintenance task when another task completes. For example, order more coolant every time you clean your fluid/lubricant reservoir and screen (typically every 3 months).
If your metal forging operation doesn’t have a current PM program in place, you may want to consider working closely with your equipment and tooling supply partners to set up daily, monthly, quarterly, and annual PM schedules. In addition to helping you create checklists, many provide complimentary annual or bi-annual PM check-ups, which can provide more in-depth equipment diagnostics.
August 15, 2017 / best practices, blade failure, bottlenecks, continuous improvement, human capital, LIT, operator training, productivity, quality, Safety, workflow process
A top goal of every operations manager is to reduce error on the shop floor, whether it be mechanical error or human error. While 0% error rates are pretty hard to achieve, the reality is that even a small percentage of error can quickly add up.
An article from Competitive Production puts this into perspective:
“If things are done correctly 99 percent of the time, that equates to two unsafe landings at Chicago’s O’Hare International Airport each day; 16,000 pieces of lost mail each hour; 20,000 incorrect drug prescriptions each year; or 500 incorrect surgical procedures completed each week. In manufacturing, the slightest of errors, for example one-tenth of a percent, can have a significant impact on a company’s financial performance and profitability.”
When it comes to band sawing, error remains a top concern for managers. As Matthew Lacroix of LENOX explains here, fabricators and other metal-cutting shops have three main areas of concern regarding their band saw processes. “The top frustrations that we repeatedly hear from fabricators are machine downtime, blade failure, and operator error,” he tells Canadian Metalworking. “In each case, there are steps they can take within their own organizations to manage the problems.”
The white paper, Accounting for Operator Inefficiencies in the Metals 2.0 Environment, provides a few steps managers can take to reduce error in their band saw department:
- Optimize workflow. Reducing error and increasing productivity often go hand-in-hand, and taking steps to optimize workflow often accomplishes both. This typically includes analyzing equipment placement, material flow, and ergonomics. Even something as simple as adjusting the height of staging tables can make a difference. By reducing the amount of times an operator handles the material, managers can improve operator efficiency, reduce the chance for error, and improve safety.
- Implement accountability procedures. Without a paper trail, there is no way to account for errors when they happen. One-over-one verification procedures can be used to ensure that operators are following the correct procedures and running saws at the proper settings. Band saw operators, for example, could be required to sign-off on paperwork once they have set up equipment and performed the initial cuts. Another operator or supervisor can then sign off to verify that proper procedures have been followed.
- Make operator training an ongoing procedure. Most shops have multiple shifts, which means that inexperienced night-shift operators may be running the same machinery as seasoned day-shift operators. This often causes inconsistencies in quality and productivity. By instituting regular operator training, managers can level the shop floor talent and add consistency to production procedures. Managers can discuss topics such as proper blade selection and use, scrap rates, and material requirements. What other strategies has your machine shop implemented to reduce error?
August 10, 2017 / best practices, continuous improvement, employee incentives, Employee Morale, human capital, lean manufacturing, LIT, operator training, productivity, resource allocation
Continuous improvement and lean manufacturing are certainly not new concepts to today’s fabricators. The numerous benefits of “getting lean” have been widely accepted, which means that most shops have already undergone some type of improvement initiative. In many cases, understanding the benefits of lean manufacturing is not the challenge. The real challenge is making the initiative stick long enough to produce results.
Unfortunately, that is often not the case. Using a hypothetical example, an article from The Fabricator explains that it is not uncommon for a fabrication company to go through four or five different improvement initiatives, none of which end up successful. The problem, the article states, is that engineers and managers may make changes to the way employees do their work, but they really don’t spend enough time helping operators and other employees understand why or how to do it. Even if everyone is often willing to take on the lean transformation, managers need to teach everyone the “what, why, and how” behind the lean principles.
In addition, there are often employees that are hesitant to embrace improvement initiatives like lean manufacturing. Some may even actively fight against it, even while performing their assigned lean tasks.
The goal for any manager should be to not only get workers to adopt lean principles, but to fully embrace them. Getting everyone—from the top down—is the only way a shop will start seeing results. As explained in the eBook, Five Performance-Boost Best Practices for Your Industrial Metal-Cutting Organizations, for lean to be successful, “it must permeate the business silos and receive universal backing amongst senior management and employees.”
How can managers accomplish this? A recent article from IndustryWeek offers four ways fabricators can get even the toughest employees on board with lean initiatives:
- Don’t Gloss Over the Fact that Challenging Times Lie Ahead. Instead of minimizing potentially negative consequences of the looming change, state flat out that some individuals will face more adversity than others. Much of this has to start from the top. The unknown intimidates, frustrates, and creates emotional insecurity. If leadership communicates and exhibits its vision, then change becomes the catalyst for improvement.
- Evaluate Current Staffing. Lean management is not synonymous with layoffs. However, some team members are not open to working in a lean culture. They may not agree with lean philosophies, nor do they want to better understand these principles. If you retain these individuals as company culture evolves around them, you are not benefiting them by allowing them to continue working for a lean company. Consider respectfully transitioning recalcitrant team members out of their positions.
- Pre-plan Team Communications. Use rich communication mediums to announce change. Face-to-face communication cannot be overvalued as a means to convey positivity, commitment, and optimism. An “all hands” meeting is an appropriate venue for the initial announcement. Do not make a habit of distracting teams from their primary responsibilities with frequent updates.
- Highlight Empowerment Versus the Increase in Responsibilities. Team members accustomed to traditional workplace cultures will not readily evaluate their own actions and suggest process improvements. This type of self-evaluation may be completely foreign to them. Initially, many team members will find the concept of increased responsibility daunting rather than empowering. To teach lean thinking, strive to make lean ambassadors out of the organization’s influence drivers. Focus on those who can deliver change and who will become not only the informal leader on the floor, but also the industrial athlete of the cell.
While changing processes is certainly a huge part of any lean manufacturing journey, getting people to accept, embrace, and understand the changes is the first and most important step a shop can take. As many fabricators have discovered, missing this critical step could mean the difference between seeing results and hitting another dead end.
August 5, 2017 / best practices, continuous improvement, Cost Management, industry news, LIT, operations metrics, operator training, productivity, quality, Safety, strategic planning
Safety is one of those issues that every manufacturer knows is important, yet as evidenced by the unending list of OSHA fines, it is pretty clear that it often slips through the cracks. Even big name companies like Exxon can fall short.
Put simply, your manufacturing operation can never be too safe. Like any other process or initiative, safety should be approached with continuous improvement in mind. This means that service centers, as well as any other manufacturing operation, need to continually reevaluate their safety procedures and processes to look for areas for improvement.
The manufacturing industry as a whole is promoting this type of mentality, knowing that “safety first” needs to be more than just an underlying principle. It needs to be an ongoing, active practice. The Metals Service Center Institute (MSCI), for example, recently teamed up with the National Safety Council to offer ongoing, relevant safety tools and resources to its members. “Advocating for an industry-wide safety culture is a critical part of all that we do at MSCI,” said M. Robert Weidner, III, MSCI president & CEO. (You can access MSCI’s resources here.)
To help service centers keep safety at the forefront, the LENOX Institute of Technology (LIT) has researched some best practices being used by industry leaders. Read below to discover some safety strategies and the additional benefits they can bring to your service center:
- 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. 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.
- Use Visual Devices. Don’t underestimate the power of visual safety reminders. LENOX Tools, for example, has implemented a Safety Sticker program, which visually displays whether or not its operation has had any safety incidents. Sticker dispensing stations and a safety calendar are located at every entrance to the facility, and every employee is required to put on a green sticker with the number of days “accident free” written on it. When a recordable accident occurs, everyone in the facility changes from a green sticker to a red sticker for a seven-day period. After seven days, everyone reverts back to the green sticker. According to LENOX, the program has been “a good rallying point for the facility and builds energy around safety.”
- Leverage Mobile Technology. Another way to encourage and enforce safety procedures is to utilize mobile technology. As discussed in this article from LNS Research, a growing number of manufacturers are using mobile devices and apps that require operators to log-in before using a particular machine, either as part of training or everyday tasks. Once logged in, the system can validate if that operator has completed a required training, read an update to a quality specification, and so on. If that person has not done so, the system will not let him or her proceed. Many companies are also utilizing digital checklists. Shops can use this digital approach to keep a record of what items an operator has checked off, as well as anything that has to be overridden on the checklist for a process to move forward (for auditing purposes).
- Undergo an Ergonomic Study. According to the U.S. Occupational Safety and Health Association (OSHA), ergonomics is defined as fitting a person to a job to help lessen muscle fatigue, increase productivity, and reduce the number and severity of work-related injuries. By making ergonomic improvements, your operation will almost automatically be safer. That was the case for California-based Earle M. Jorgensen Company (EMJ), featured here in a white paper from LIT. After performing an in-depth ergonomic study at one of its metalworking facilities, EMJ made several changes on the shop floor, including repositioning band irons and adjusting the height of staging tables. As a result, the service center was able to reduce employee injuries, improve operator efficiency, and increase output.
- Track Near Misses. As Modern Machine Shop reported in a column by Wayne Chaneski, one way to increase safety in a manufacturing environment is to report what he calls “near misses.” A near miss is an incident that didn’t result in medical attention or time away from work, but could have. Tracking near misses can predict potential workplace accidents and provide an opportunity to prevent them from occurring in the first place. Some common causes of near misses include electrical cords, hoses, or tubing on the floor; sharp objects inside a drawer; low-hanging objects; unsecured ladders; a hot tool or piece of equipment left out without a warning tag; and improperly secured items in cabinets. According to Chaneski, the best way to track near misses is to encourage employees to report them and to add them as a category during internal safety audits.
- Talk About It—Often. 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 here, is intentional about making sure that employees know that safety is a critical aspect of the metal products it fabricates, and that mindset has evolved into an overall culture of safety within the company’s two North Carolina facilities. The manager holds a safety meeting every morning with the operators and a safety committee meeting every month. In addition to enforcing the safety message, this constant communication provides ample opportunities for the manager to discuss any other production issues that need to be addressed.
August 3, 2017 / best practices, continuous improvement, lean manufacturing, LIT, production planning, productivity, strategic planning, workflow process
Over the last 20 years, lean manufacturing, Six Sigma, and other improvement techniques have changed the face of manufacturing. Kaizen programs, 5S, value-stream mapping, and other lean strategies have rendered impressive results in high-volume manufacturing plants around the world. However, not every lean principle is an off-the-shelf solution for operational efficiency. This is especially true for high-mix, low-volume manufacturing environments.
Industrial metal-cutting shops are often juggling multiple jobs—many of them custom and almost none of them the same. Production requirements, lead times, and due dates can vary, which makes forecasting and traditional lean concepts difficult to apply. In fact, according to the eBook, Five Performance-Boosting Best Practices for Your Industrial Metal-Cutting Organization, many small, high-mix operations don’t even attempt to implement traditional lean techniques because they are typically more successful in higher production environments.
The good news, however, is that lean manufacturing is evolving. “A growing number of high-mix, low-volume operations are tweaking traditional lean methodologies to their specific situation,” the eBook notes. “Lean manufacturing techniques can be modified to increase efficiency in even the most customized metal-cutting operations.”
For example, according to an article from Canadian Metalworking, one way to achieve operational excellence in a high-mix manufacturing environment is to create a mixed-model value stream. This begins by creating “product families” or groups of products that have similar process flow and work content. “The next step is to create one current-state map per product family and then a future-state design for that family that can achieve operational excellence,” the article states.
There is no question that this task can be complicated when dealing with a variable product mix. To help managers successfully achieve operational excellence in mixed model production, Canadian Metalworking offers the following 10 guidelines: (You can read the full article here.)
- Do you have the right product families? Create product families based on similar processing steps and work content, not brainstorming.
- What is the takt time at the pacemaker? Determine how often the pacemaker must produce a part to keep up with customer demand for the product family.
- Can the equipment support takt time? Determine if existing machine capacity can support the product family within the established takt time.
- What is the interval? Calculate how often the pacemaker will cycle through and produce all the parts in the product family.
- What are the balance charts for the products? Balance the work content, per operator, to takt time to create continuous flow through the pacemaker process. There will be different balance profiles for each product within the family.
- How will we balance flow for the mix? Determine how variation within customer demand and the product family will be handled, either by adjusting labor, sequencing, or work balancing.
- How will we create standard work for the mix? Standard work means establishing one standard way to build the products in the family, and then having everyone follow that method.
- How will we create pitch at the pacemaker? Pitch is a visual time frame that tells everyone in the value stream if they are on time to customer demand. The pitch created is tied to how often work is released to and taken away from the pacemaker.
- How will we schedule the mix at the pacemaker? Determine the mix that can be supported at the pacemaker, and schedule the pacemaker to handle variation within the product family.
- How do we deal with changes in customer demand? Customer demand can vary, and we need to pre-establish a Plan B to use when it does. Plan B might involve pulling a product or rebalancing the pacemaker.
Of course, this is just one example of how lean can be applied to smaller, variable manufacturing environments. For more strategies, check out the book Made to Order Lean by Greg Lane or these links of archived case studies published by Modern Machine Shop and The Fabricator.
While high-mix, low-volume operations certainly present a unique set of production challenges, there are several custom methods managers can put in place to reduce waste, optimize flow, and improve productivity. It may take a little research and some creativity, but leading-edge shops are finding that in today’s competitive market, the benefits are well worth the investment.
July 20, 2017 / continuous improvement, Employee Morale, lean manufacturing, LIT, maintaining talent, operator training, productivity, quality, strategic planning
Like most industrial manufacturing segments, metal forges have embraced lean manufacturing and the benefits it can bring. Although not every operation has the resources to undergo a total lean transformation, industry leaders like Jorgensen Forge have adopted simple lean tools and practices to eliminate waste, lower costs, and improve customer responsiveness.
One lean manufacturing tool that continues to gain popularity among operations managers is “going to the Gemba” or taking a “Gemba walk.” This practical lean tool gives management a clear view of what is happening on the plant floor and, more importantly, reveals areas for possible improvement. As explained in the eBook, Five Performance-Boosting Best Practices for your Industrial Metal-Cutting Organization, “Gemba” is the Japanese term for “actual place,” but has been redefined by lean thinkers as the place where value-creating work actually occurs. In a manufacturing environment, this is typically the shop floor. Many lean experts advise manufacturing executives to make time to visit this place—known as taking a “Gemba walk”—so they can see their operation from the front lines.
There are several ways managers can “go to the Gemba.” According to a Target Online article from the Association of Manufacturing Excellence, there are three types of Gemba visits:
- Leadership Gemba Visits. In these visits, the focus is on the culture, developing trust, learning more about the operations, and finding ways to improve the working conditions of the team members. These Gemba visits are typically conducted by managers and executives (individually or in pairs). They don’t usually have an agenda or follow a prescribed process. The leader simply goes to the Gemba to engage with the team members in a meaningful way and searches for opportunities to make their work less frustrating and more fulfilling.
- Leader Standard Work Gemba Walks. These Gemba walks typically have an agenda or a theme and occur on a regular cadence. These are structured and can be done individually or in groups. Many management teams have standard processes for visiting team huddles, checking hour-by-hour charts, doing 5S audits, or doing safety observations. Others visit the Gemba with a specific theme in mind for the walk, such as reviewing autonomous maintenance practices, learning about kaizen activities, discussing safety procedures, reviewing visual management practices, etc.
- Problem-Solving Gemba Visits. Typically, the purpose of a problem-solving Gemba visit is to go to the source of a problem in order to observe it first-hand, talk to those closest to the problem, and determine if countermeasures are needed while working to determine the root cause of the problem. This is also a great opportunity for leaders to talk to team members about the problem-solving process and root cause analysis.
Why are Gemba visits so important? This article from The Leadership Network lists a few ways Gemba visits can be beneficial:
- First-hand knowledge is the highest form of information. A regular Gemba walk will give managers transparent and unmediated knowledge that is needed to challenge and validate assumptions made by data.
- Perspective is gained through experience. A regular Gemba walk allows managers to understand the challenges employees need to overcome on a daily basis to deliver the results that are being promised in the boardroom.
- Both people and process matter equally. A regular Gemba walk will help develop a culture that fixes the problems in a process and not one that blames the people performing the process.
If Gemba visits aren’t currently part of your management strategy, perhaps it is time to explore the ways in which it could improve your operation. To read more about this lean manufacturing tool, check out the slideshare presentation, Gemba 101, or read this overview article from iSixSigma.
July 10, 2017 / best practices, continuous improvement, Cost Management, industry news, LIT, maintaining talent, operator training, productivity, quality, skills gap, strategic planning
Historically, the trend has been for metal companies to put process over people. The manufacturing industry’s shortage of workers with the necessary skills (also known as the “skills gap”), however, is forcing companies to allocate resources back to their workforce.
For many companies, this means changing the way they train and maintain talent, whether that means beefing up training programs or rethinking their hiring tactics. Rockwell Automation, for example, is working to recruit military veterans and leverage their unique skill sets. “We’ve been able to develop a truly groundbreaking program that will help solve a challenge critical to fueling the future growth of the manufacturing sector,” Blake Moret CEO of Rockwell Automation, states here in a press release. “Military veterans possess a unique combination of technical savvy and core work skills that makes them well-positioned for careers in today’s advanced manufacturing environments.”
Companies are also reevaluating how they are maintaining their talent. As lean manufacturing expert Jamie Flinchbaugh says here in IndustryWeek, you can’t “just hire talent and then leave it alone.” Continuous improvement applies to all areas of an operation, including training and maintaining talent.
According to Flinchbaugh, when it comes to building a strong team, manufacturers should consider the following:
- Put the right talent in the right place. Hiring is part of this, but so is organizational design. Too often Flinchbaugh says he sees organizations reward talent by taking them out of the place they perform the best. That’s like taking your best hitter on the team and making them a team coach before their retirement as a reward. So top salespeople become sales managers, and top engineers become engineering managers. Is that the best use of their talent?
- Talent is responsible for its own improvement. Your talent should hold the primary responsibility for their own development. A lean thinker should be encouraged to improve their talent in any skill that matters, whether personal or professional.
- Coach and train. Making the development of talent a core part of your business means integrating it into your management systems. This is not something to delegate to human resources. The hardest part of this is how you leverage your top talent. While not everyone is suited to coaching and training, leveraging your top talent to build more talent is the long-term play.
In a metal-working environment, it is also critical that operators and other employees feel valued. 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 invaluable. According to the brief, “Strategies for Training and Maintaining Talent in Industrial Metal-Cutting Organizations,” operator “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 feel disconnected, those same business areas can be negatively affected. Strategies such as collecting feedback, goal setting, and incentives are good ways to encourage employee ownership from the start.
As the skills gap has proven, investing in talent is just as important as investing in technology and process. Metal-cutting companies—not to mention the manufacturing industry at large—can’t afford to neglect one of its greatest assets. In the end, building and cultivating high-quality talent is necessary for building and cultivating high-quality services and products.
May 10, 2017 / best practices, continuous improvement, customer service, human capital, industry news, maintaining talent, productivity, skills gap
Based on expert forecasts and industry sentiment, the outlook for 2017 continues to be hopeful. As stated in LIT’s 2017 Industrial Metal-Cutting Outlook, metal fabricators and other industrial metal-cutting organizations are getting more and more optimistic about the near future, and recent market data looks promising.
While the latest outlook from the Manufacturers Alliance for Productivity and Innovation (MAPI) expects “relatively sluggish” output growth for the manufacturing industry as a whole, the near-term forecast for Fabricated Metal Parts is positive. Specifically, MAPI forecasts that output growth for the Fabricated Metal Parts sector will register 1.8 percent in 2017 and 3.4 percent in 2018. In addition, March data from the U.S. Census Bureau shows that both new orders and shipments of Fabricated Metal Parts were up 5.5 percent compared to 2016.
Recent data from the Institute for Supply Management (ISM) is also encouraging. As stated here in a press release, economic activity in the manufacturing sector expanded in April. According to the Manufacturing ISM Report on Business, 16 out of 18 manufacturing industries reported growth in April 2017, with the Fabricated Metal Products sector nearing the top of the list. In fact, one survey respondent from the Fabricated Metal Products sector stated, “Business is definitely improving. Profit margins are increasing.”
This type of optimism seems to be prevalent throughout the industry. The first quarter Fabricating & Forming Job Shop Consumption Report from Fabricators & Manufacturers Association International (FMA) revealed that 61.9 percent of metal fabricating managers and shop owners see improving conditions for the coming quarter and another 34.3 percent expect things to stay the same. A mere 3.7 percent expect things to get worse. “This is the most confident the sector has been in a while,” says Chris Kuehl, FMA’s economic analyst.
That’s not to say that fabricators don’t have some concerns. After attending FMA’s Annual Meeting in March, Kuehl reports here that he noticed three key trends among attendees, including:
1. Cautious optimism. According to Kuehl, most fabricators appear to be optimistic but many remain cautious. “The years of an administration that was at best ambivalent toward business and at worse downright hostile are over,” he writes. “There are definitely mixed opinions about what happens under Trump, but thus far the promises are looked upon as encouraging. That said, there is doubt that many of the promises will be kept because of fierce opposition from many quarters and lack of faith in Trump’s diplomatic skills. Still, there is hope that some of the big issues will get the attention deserved—trade patterns, regulation, and taxes at the top of the list.”
2. People will stay at the top of the list of worries. The manufacturing skills gap continues to be an issue for most fabricators, according to Kuehl’s analysis. “It is harder than ever to find the employees needed,” he says. “Manufacturers aren’t finding qualified and eager job seekers no matter what they offer to pay. The powers that be have not yet addressed this problem, and that is immensely frustrating.”
3. Concerns about the future. Even with some renewed confidence, Kuehl says that fabricators and manufacturers are still concerned about the future and whether the industry is ready for developments it hasn’t seen in over 10 years. “Interest rates will be higher for the first time in over a decade, and inflation will be rearing its ugly head sooner rather than later,” he writes. “Add in the ramifications of a trade war or two, and the concern many have expressed [is] that the progress seen thus far could come to a screeching halt.”
Even with some potential challenges ahead, most fabricators remain focused on growth. Over the last few years, automotive has been a huge growth market for fabricators, but some experts believe that sales are slowing and the market is stabilizing. However, as stated in a blog post from Branam Fastening, there is still plenty of opportunity for growth in the following customer segments:
- Construction. The non-residential construction market is expected to grow an additional 6% in 2017. Metal roofing, HVAC, steel supports, and other complementary building products will also see an increase in demand.
- Oil. The price for a barrel of oil is expected to exceed $60 in 2017. Many experts believe that once it surpasses this threshold, it becomes advantageous for domestic oil producers to reignite exploration and production operations. New pipelines, rigs, storage containers and other metal fabricated products are expected to be in greater demand throughout the industry in 2017.
- Electronics: The electronics industry is expecting a 3.1% positive bump in domestic production in 2017 and 5.3% growth in 2018. This paves the way for an increase in metal fabricated products like custom encasements.
- Infrastructure: Estimates predict infrastructure budgets to grow between $275-$500 billion over the next 5 years. A big part of this spending will comprise airport repairs and construction, road repairs, bridges, railways, new stations, and waiting platforms. Opportunities for metal fabricators can be found throughout.
A Bright Future
Does the future look bright for metal fabricators? According to MAPI, there are certainly “glimmers of light,” and recent data certainly reflects that assessment. However, preparation and continuous improvement should still be a top priority for fabricators. As stated in the white paper, Best Practices of High Production Metal-Cutting Companies, industry leaders need to remain focused on optimizing every aspect of their internal operations—regardless of market conditions—so they can be ready for whatever the future holds.
In what ways can you position your operation for growth in 2017?
April 1, 2017 / benchmarking, best practices, continuous improvement, Cost Management, industry news, LIT, maintaining talent, operations metrics, optimization, performance metrics, productivity, skills gap, supplier relationships
While no one would likely call it a “boom,” recent months have provided good news for industrial manufacturing. Reports have been positive, and business confidence among metal-cutting companies and other industrial manufacturers is up. Experts admit that some challenges and risks remain, but most believe that growth will continue in 2017 and well into 2018.
There is no question that uncertainty has plagued the manufacturing sector for the last several years. Hints of recovery followed by sluggish growth have made it hard for many companies to trust that business was fully rebounding. Last year, terms like “cautiously optimistic” were being thrown around, but many were still wondering — “Are we there yet?’”
Reports and forecasts indicate that we are at least heading in the right direction—both globally and within the U.S. The JP Morgan Global Purchasing Managers’ Index (PMI) has remained above the neutral 50.0 mark throughout the past 13 months and registered 53.0 in February and March—its highest level in 69 months. According to the bank, the expansion in March “remained broad-based by product type, with PMI readings for the consumer, intermediate, and investment goods sectors all signaling further solid growth.”
Forecasts from Manufacturers Alliance for Productivity and Innovation (MAPI) also point to growth, although slower than some would like. According to the latest outlook, manufacturing growth is expected to be 1.2% in 2017 but then accelerate to 2.6% in 2018. Average annual manufacturing output growth is expected to be 1.5% between 2017 and 2020.
Recent data show U.S. manufacturing expanded in March, following a very strong February. The Institute for Supply Management Purchasing Managers’ Index (PMI) hit 57.2% in March, a 0.5 percentage point reduction from a record-setting 57.8% in February 2017. Of the 18 manufacturing industries, 17 reported growth in March, including Fabricated Metal Products and the Primary Metals industries. According to one survey respondent from the Fabricated Metals segment: “Regional business is strong. Hiring qualified team members has improved.”
Cliff Waldman of MAPI says that March data adds to mounting evidence that U.S. manufacturing output performance is on track for moderate improvement, relieving the factory sector from the sluggish growth that has plagued it since 2013. “Data on actual manufacturing output from the Federal Reserve are basically in sync with the recent ISM data as they show an acceleration of growth in U.S. manufacturing since the beginning of 2017,” Waldman said in a blog post. “However, the year-over-year improvement thus far is moderate. Nonetheless, the reasonably broad-based nature of factory sector growth in both January and February suggests growth stability.”
Business confidence among industrial metal-cutting companies and other manufacturers is also up. The first-quarter Manufacturers’ Outlook Survey from The National Association of Manufacturers (NAM) revealed that manufacturers’ optimism rose to a new all-time high in the survey’s nearly 20-year history.
According to NAM, the rising confidence stems from the hope that the new administration in Washington, D.C. will bring much-needed regulatory relief, as well as tax code reforms and a significant infrastructure package. “Indeed, business leaders are cautiously hopeful that pro-growth policies from Washington will allow the country to emerge from the sluggish expansion seen in the years since the Great Recession,” the association said in the report.
Metal companies are confident as well. According to industry leader ArcelorMittal, global apparent steel consumption is estimated to have expanded by 1% in 2016. Based on the current economic outlook, ArcelorMittal expects global apparent steel consumption to grow further in 2017 by between 0.5% and 1.5%.
In the U.S., Mittal says that apparent steel consumption (ASC) declined in 2016 by approximately 1.0% to 1.5%, driven in large part by a significant destock in the second half of 2016. “However, underlying demand continues to expand and the expected absence of a further destock in 2017 should support ASC growth in the U.S. of approximately 3.0% to 4.0% in 2017,” the company said in its 2016 Annual Report.
Sentiment about customer markets is also positive. Mark Millett, president and CEO of Steel Dynamics Inc., told Modern Metals that he expects growth in the energy sector and continued growth in construction spending, “especially for larger public sector infrastructure projects.”
And although there have been reports that automotive manufacturing peaked in 2016 and will decline in 2017, metals companies don’t seem too worried. AK Steel told MM that a richer product mix, including the premium pricing that can be obtained on newer, more specialized or custom grades, should help offset declines. “Our volumes are going to be fairly stable, and fairly steady compared to what they were last year,” Kirk Reich, AK Steel president and COO, said in the MM article.
Trends to Watch
That’s not to say that companies don’t still have some concerns. In late January, M. Robert Weidner III, president and CEO of the Metals Service Center Institute (MSCI), urged the new Trump administration to take serious and immediate action to restore growth and to help the industrial metals supply chain fully recover from the lingering effects of the Great Recession and government policy.
“The industrial metals sector needs action now,” Weidner said, noting that service center aluminum shipments are registering 20 percent below their pre-Great Recession peak, and carbon steel shipments from service centers are still down 30 percent. “The erosion in the U.S. industrial metals supply chain hurts our communities; erodes local, state, and federal tax revenue; and reduces the pool of well-paying U.S. jobs,” Weidner continued.
The strong dollar and reduced capital spending are also concerns. “Signs of wide, yet modest, improvement in global growth are the key drivers of better performance in U.S. manufacturing,” Waldman of MAPI says. “Unfortunately, the problems of a high dollar, a long-term capital spending malaise, and significant policy uncertainty remain to challenge the magnitude of the U.S. manufacturing improvement, even as the world finally provides much-needed support for U.S factories.”
Many industrial manufacturers also remain risk averse. In a recent PwC survey, only 30 percent of U.S.-based industrial manufacturing senior executives said that their companies were planning to increase spending on information technology in the subsequent 12 months. “There is a remarkable opportunity here,” PwC says in a blog post. “Yet the industrial manufacturing sector remains risk averse, unwilling to spend on new machinery, software, and talent during a period of protracted slow growth and limited proven solution.”
According to PwC, there are six actions industrial manufacturers can take to be more profitable in 2017. You can read the full list here, but the following four strategies are the most applicable to industrial metal-cutting companies:
- Leverage data and analytics in a new business model. By upgrading their technical capabilities, industrial manufacturers can bundle a variety of services enabled by connectivity and data, replacing the increasingly outmoded model of selling one big complex machine under warranty and a service agreement for maintenance and repair.
- Develop strategic partnerships. Industrial manufacturers must become more active players in the technology ecosystem, seeking expertise outside the industry in order to develop equipment connectivity, data analysis, and software that are beyond their current abilities.
- Mine operational data. If connected machines—the primary components of the Internet of Things (IoT)—are to be the backbone of industry in the near future, industrial manufacturers will have to figure out how to manage the data coming from an avalanche of sensors, integrated equipment and platforms, and faster information processing systems. There is a critical need to hire people who can mine these bits and bytes of information and work more closely with customers to use the data to improve equipment performance and open new revenue streams.
- Create strategies for talent development and retention. industrial manufacturers must purposefully map out an exciting technology strategy with specific benchmarks and achievements anticipated for the next 18 to 36 months—and then communicate this story clearly to job candidates. Even companies that have not yet felt the shortage of technology-savvy staffers need to take steps to prepare for it as the number of job openings in this field will continue to outpace the number of available hires for the foreseeable future.
Of course, a major technology overhaul may not be possible for every shop, but there are always improvements that can be made. As stated in the eBook, Five Performance-Boosting Best Practices for your Industrial Metal-Cutting Organization, thriving in today’s market requires companies to embrace change and focus on continuous improvement in all areas of their business.
“Whether implementing a lean manufacturing tool to improve processes or investing in training to develop people, proactive leaders are focused on making positive changes in their operations so they can quickly respond to today’s changing customer demands,” the eBook states.
Yes, the sentiment among industry players and experts is positive, but that doesn’t mean companies should put improvement activities on the backburner. Industrial metal-cutting organizations that keep a close eye on mega trends while continuing to optimize their internal operations may not only do well in 2017, but exceed expectations.
March 25, 2017 / best practices, continuous improvement, human capital, industry news, lean manufacturing, LIT, maintaining talent, operator training, optimization, productivity, Safety, strategic planning
For years, manufacturers have relied on lean processes to improve productivity and to reduce waste. This is certainly a good thing from an operations standpoint. However, from a safety and health perspective, lean manufacturing can have a few drawbacks.
For example, lean practices make jobs highly repetitive. As pointed out in this article from Industrial Engineer, repetitive jobs often eliminate critical rest time for employees. “The repetitive jobs take their toll on employees as stressful postures and high forces are repeated over and over throughout the day,” the article says. “In the long run, the financial savings from the productivity gains and quality improvements are used to pay for the higher cost of workers’ compensation claims.”
This is why many forges and other industrial metal-cutting organizations have incorporated ergonomics into their production processes. According to the U.S. Occupational Safety and Health Association (OSHA), ergonomics is defined as fitting a person to a job to help lessen muscle fatigue, increase productivity, and reduce the number and severity of work-related injuries. Strategic equipment placement and improved ergonomics not only keep employees safe and healthy, but they are key aspects of high productivity and optimized workflow. The fewer times an operator touches a material, the fewer chances for injury and human error, both of which contribute to productivity.
Not sure where to start? An article from IAC Industries describes possible workplace risk factors and suggested solutions. For example, there are at least six different types of musculoskeletal risk factors operators may face:
- Forceful exertions and motions.
- Extreme or repetitive exertions, postures and motions.
- Duration of exertions, postures, motions, vibration and cold.
- Insufficient rest or pauses.
- Work factors (for instance, close performance monitoring, wage incentives, machine-paced work).
- Environmental factors.
The article then goes on to describe an example of an ergonomic workstation design. According to IAC, incorrect working height is often responsible for extreme postures and motions at the workstation. Recommendations for the appropriate working height are as follows:
- Six inches above elbow height for fine work such as proofing documents or inspecting small parts.
- Four inches above elbow height for precision work such as mechanical assembly.
- Same height as elbow for writing or light assembly,
- Four inches below elbow for coarse or medium work such as packaging.
Of course, this is just one of the many ways a manufacturer can improve ergonomics within their operation. Another article from Ergonomics Plus, an Indianapolis, IN-based company, offers a 10-point checklist to help managers create a framework for building a successful ergonomics process. According to the company, a solid ergonomics process doesn’t have to be complicated to be successful, but it can be challenging to get all the right pieces in place and achieve sustainable results. You can review the entire checklist here.
If these suggestions feel overwhelming or you don’t quite know where to start, you may want to consider bringing in some professional help. Earle M. Jorgensen Company (EMJ), a metal service center featured here in a white paper from the LENOX Institute of Technology, decided to perform an in-depth ergonomic study at one of its metalworking facilities. With the help of a third-party resource and input from its shop floor employees, the company made several changes to the shop floor to eliminate unnecessary handling and transportation of material. Ergonomic improvements ranged from repositioning band irons to adjusting the height of staging tables. By optimizing the workflow, EMJ has seen a reduction in employee injuries, improvements in operator efficiency, and increased output. The service center has also seen an increase in shop floor morale, as operators feel they are playing a critical role in helping the facility succeed.
In what ways could you incorporate ergonomics into your forging operations?