August 25, 2016 / benchmarking, best practices, blade failure, bottlenecks, continuous improvement, LIT, operator training, Output, performance metrics, preventative maintenance, productivity, quality
Any manufacturing executive tracking industry trends will no doubt run across terms like “big data,” “cloud computing,” and the “Internet of Things.” In fact, according to the results of a survey from Deloitte and the Council on Competitiveness, these types of advanced technologies have the power to put the U.S. back on the map as the most competitive manufacturing nation.
“CEOs say advanced manufacturing technologies are key to unlocking future competitiveness,” the report summary states. “As the digital and physical worlds converge within manufacturing, executives indicate the path to manufacturing competitiveness is through advanced technologies, ranking predictive analytics, Internet-of-Things (IoT), both smart products and smart factories via Industry 4.0, as well as advanced materials as critical to future competitiveness.”
As a forging executive, however, the question becomes: How does this technology apply to my operation? Or to put it another way: How do these “buzz words” play out on the shop floor?
One technology application, featured here in Forging magazine, gives a good indication of what cloud-computing and connectivity could look like in a metal-cutting operation. Specifically, the article features a cloud-based bandsaw monitoring system that offers three key features:
- Blade Life Assessment. Monitoring and alert notification of a saw blade’s remaining useful life. The technology will provide advance notice of required saw blade replacement.
- Increased Machine Efficiency & Machine Life. The technology provides real-time analysis of individual components and overall machine health status. It can send notifications of abnormal conditions from motors and bearings. It also alerts on frequent consumable items like hydraulic and cutting fluid.
- Increased Operational Efficiency. The technology can provide production reports to aid in identifying best practices and training needs. An advanced monitoring and notification system alerts the operation when machine maintenance is needed which aids efficiency in the scheduling of planned events.
These are no small benefits. In fact, they fall right in line with two of the strategies listed in the Benchmark Study of Industrial Metal-Cutting Organizations from the LENOX Institute of Technology. According to findings from the study, forges and other industrial metal-cutting organizations can gain additional productivity on the shop floor by investing in smarter, more predictive operations management approaches and by taking a more proactive approach to equipment and blade maintenance. By using cloud-based monitoring to track blade life and machine health status, managers can do just that by anticipating downtime, which, as the study states, “translates into more jobs completed on time.”
Of course, bandsaw monitoring is just one possible application. As we reported here in our annual forging industry forecast, controls and sensors are also being developed and implemented to monitor the forging process in a bid to automatically sense and compensate for any variation in the process. This type of consistency not only boosts efficiency, but could have some major quality benefits as well.
An article from IndustryWeek provides a few more application examples. The article describes how three leading companies are using advanced technologies to connect just about everything and anything—video cameras to monitor workflow process, safety helmets to track employees, and end products to predict reliability—all of which shows that the potential applications are only as limited as a manufacturer’s creativity.
What possible applications could cloud-based monitoring and other advanced technologies have in your forging operation?
August 15, 2016 / benchmarking, best practices, bottlenecks, continuous improvement, KPI, lean manufacturing, performance metrics, productivity, quality, supplier relationships, value-added services, workflow process
As part of the push toward continuous improvement, more and more industrial metal-cutting companies are measuring overall equipment effectiveness (OEE). This is definitely a good trend, as measurement is the first step in making quantifiable change. However, some companies have jumped on the OEE bandwagon without being fully informed, which can cause a lot of misunderstanding and misuse of this important metric.
Knowing what OEE is—and what it isn’t—is the only way to make sure you are using it effectively. The following is a quick primer.
What is OEE?
According to leanproduction.com, OEE is a best practices metric that measures the percentage of production time that is truly productive. It takes into account all six types of loss, resulting in a measure of productive manufacturing time.
In simple terms, OEE can be described as the ratio of fully productive time to planned production time. According to leanproduction.com, it can be measured in one of two ways:
(Good Pieces x Ideal Cycle Time) / Planned Production Time
Availability x Performance x Quality
(You can find a more detailed description of the calculation here, as well as a sample calculation.)
A plant with an OEE score of 100 percent has achieved perfect production—high quality parts as fast as possible, with zero down time. While that’s ideal, it’s not quite possible in the real world. According to oee.com, studies show that the average OEE rate among manufacturing plants is 60 percent, which leaves substantial room for improvement. Most experts agree that an OEE rate of 85 percent or better is considered “world class,” and many companies use that number as a long-term goal for their operations.
Managers can use OEE as both a benchmark and baseline. Specifically, leanproduction.com says it can be used to “compare the performance of a given production asset to industry standards, to similar in-house assets, or to results for different shifts working on the same asset.” It can also be used as a baseline “to track progress over time in eliminating waste from a given production asset.”
How to Use—and not Use—OEE
It’s important to note that OEE is not necessarily a useful metric for every manufacturing operation. “Measuring OEE only makes sense if you are trying to meet a certain demand on a daily basis,” explains Paul Bryant, senior OPEX manager, LENOX Tools. “If you have a problem with yield, then I would definitely suggest OEE.
“If you have a problem with inconsistent production output and/or downtime on a piece of manufacturing equipment, OEE is a great way to measure and identify how to where to improve your operations,” Bryant continues. However, for smaller metal-cutting operations that are more custom and low volume, Bryant says OEE probably isn’t worth measuring.
Bryant also says that a lot of shops use OEE incorrectly. Specifically, he says there are two common ways metal-cutting operations misuse the metric:
- Too Focused on the Benchmark. “Everyone knows that world-class OEE is 85%, but too many people get hung up on that number and how their shop compares to it. When I look at OEE, the number doesn’t mean much to me. I look at three components—availability, performance, and quality—and then break them apart and look for opportunities. That is the true essence of OEE: To find opportunities that help keep your machine and production system optimal.”
- Too Focused on the Operator. “Another misuse is that people use OEE to measure the operator. OEE is used to measure equipment. If you run into an issue with the metric, look at the machine first. There are so many variables, don’t always assume it is the operator. Once you’ve evaluated the machine, look at the material and then the operator last.”
An article from IndustryWeek (IW) adds that OEE should be used as an improvement measure, not a Key Performance Indicator (KPI). It also states that it is best used on a single piece of equipment or synchronized line.
Finally, if your shop is ready to start measuring OEE but doesn’t know where to start, enlist the help of some key suppliers. As stated in the eBook, Five Performance-Boosting Best Practices for Your Industrial Metal-Cutting Company, many companies don’t possess all of the knowledge, resources, or infrastructure necessary to do in-depth measurement. This is where a willing supply partner can help. In today’s competitive market, there are plenty of equipment and tooling suppliers that are willing to share their knowledge and experience as a free, value-added service.
A Helpful Tool
There is no question that OEE can be misused and misunderstood, but as the IW article reiterates, it is not a “bad metric.” When calculated and applied correctly, OEE can be a very useful tool to help industrial metal-cutting companies quantify and uncover new improvement opportunities.
August 1, 2016 / best practices, Cost Management, Employee Morale, lean manufacturing, LIT, productivity, quality, Safety, strategic planning
Over the last decade, the term “lean” has become synonymous with “success” in manufacturing. In today’s market, only the “leanest” survive.
This trend has hit almost every segment of manufacturing, although some have jumped on the bandwagon faster than others. At this point, most leading industrial metal-cutting organizations have incorporated some form of lean principle into their operation, and those that haven’t are starting to consider it. In fact, our eBook, Five Performance-Boosting Best Practices for Your Industrial Metal-Cutting Company, recommends that lean manufacturing should be at least part of your operational strategy.
However, is it possible for your metal-cutting operation to be too lean? According to a recent article from EHS Today, the answer to that question is yes. “The more you reduce costs – the more you do with less – the more you believe is accomplished and the closer you approach maximum efficiency,” the article states. “The drawback of this popular leadership strategy is that the line of acceptance is a moving target with the point of failure centered about the moment of imbalance.”
The article goes on to say that over time, “the reduce-reduce strategy” can stretch an organization beyond the elastic limit, usually without anyone noticing. “Like our bodies, organizations need minimal resources to function properly,” the article explains. “Year-over-year reductions compounded with additional performance requirements will cause the organization to rely on calories they do not have to burn.”
How do you know if your organization has reduced beyond its limits? Below are a few warning signs, according to EHS:
- Untimely and numerous early retirements by the most knowledgeable resources.
- Unexpected and voluntary separations from early and mid-career professionals.
- Organizational culture indifference to change.
- Missed commitments.
- Lower quality productivity.
- Higher injury experience.
- Lower customer satisfaction.
- Higher absenteeism.
- Lower standard of excellence.
- Loss of leadership credibility.
- Long working long hours.
- Organizational undercurrents of frustration.
Another dangerous outcome of being “too lean” is being unable to adjust to changing market conditions. An article from Lean Manufacturing Tools explains: “Too many people in the past have used a lean definition that concentrates purely on waste reduction and have created anorexic processes that fail as soon as customer demand changes.”
This is not to say that lean manufacturing tools are short-term and cannot be used over a long period of time. Instead, experts suggest that lean manufacturing tactics should evolve as a company evolves and improves. In addition, this article from IndustryWeek says that management needs to be sure they treat lean manufacturing as “a way of life,” not just a project.
Like anything, the key is finding a balance. Efficiency and waste reduction should be a priority, but they can’t come at the cost of safety, quality, or the overall financial health of the company. As the article from EHS explains, “Success comes in realizing how much ‘efficiency’ is the right amount to preclude organizational excellence from reaching the point of inevitable failure.”
Are there any areas of your industrial metal-cutting organization that have become too lean?
July 5, 2016 / best practices, continuous improvement, customer delivery, customer service, LIT, productivity, quality, ROI
Mobile technology is impacting every industry, including the manufacturing and the industrial metal-cutting segments. In fact, VDC Research estimates that the number of mobile connections in global factories is expected to double by 2017, reports Business Solutions magazine.
Manufacturing leaders are integrating mobile technology into their production processes and procedures to gain better communication, collaboration, and responsiveness. In addition, manufacturing environments with hazardous conditions are forecast to use mobile apps more to improve worker safety and productivity. As metal service centers hold safety as a top priority, mobile technology can help reduce incidents while optimizing overall productivity.
To realize the benefits of mobile technology, it is important for manufacturers to consider how, when and where it will be used throughout the operation. An article from Fabricating & Metalworking magazine suggests that manufacturers answer the following questions before they implement any mobile technology on the shop floor:
- What do I use the device for? Data entry, looking at diagrams, work instructions, etc.?
- Can I do my job when I have my device in hand, pocket or wherever?
- Who uses the device?
The answers to these questions will help guide managers toward the technology set-up that will work best for their shops’ specific needs and requirements. For example, an operator in your service center will likely need to move around easily and would benefit from a smaller, hand-held device, whereas, an assembler may be better suited with a full-sized tablet to read detailed drawings and schematics. According to the Fabricating & Metalworking article, tablets or large phones offer both portability and convenience for many tasks and can still be easily placed in a holster or pocket.
There is more than just choosing the right mobile device when it comes to mobile technology, however. To truly optimize production, metal service centers need to also choose and implement the technology so that it truly meets the needs of the operations.
According to Merit Solutions, an IT consulting and development firm, there are four best practices manufacturers should consider when selecting and implementing mobile technology to ensure it benefits the business:
- Put problem-solving first. Before deploying mobile technologies within your manufacturing organization, ask what problems you’re trying to solve. Be sure to get feedback from employees on the needs the challenges they face. Their input is valuable and will likely guide you toward the right solution.
- Evaluate current infrastructure investments. When considering mobile technology for manufacturing, it’s important to assess what infrastructure already exists. Your current infrastructure will determine whether certain technologies are supported or if they are compatible and will function properly. Knowing your current set-up will also prevent wasting dollars on a duplicate investment or one that is similar to what you already have.
- Don’t neglect security. Security is a vital component of any mobile technology solution that prevents hackers from accessing confidential data. Make sure your mobile technology solution has a built-in security feature to help protect your business.
- Educate your employees. Mobile technologies will only make a business more efficient and productive if the end users accept and adopt the technology. If employees feel forced to use something they don’t understand, the technology will go unused. Be sure to explain why the service center is implementing the technology and, more importantly, how to use it before it is implemented. Employees should also know the proper security guidelines and adhere to them.
Like any investment, it’s also important to ask how the use of mobile technology could benefit your customers. As advised in the white paper, The Top Five Operating Challenges for Metal Service Centers, a rule of thumb before investing in any technology upgrade is to consider whether or not it enhances customer service. For example, how could it be used to help improve quality or increase delivery time?
While mobile technology can provide benefits such as improved portability and efficiency on the shop floor, implementing the technology so that it truly optimizes your shop’s set-up and production can be challenging. By understanding what your operation needs, how your employees will use mobile technology, and how it can improve customer service, metal service centers can better position themselves to get a full return on their investment.
To read more about using mobile technology on the shop floor, check out the blog post, “Adopting Mobile Technology within Your Industrial Metal-Cutting Operation.”
Choosing Between Lean Manufacturing and Six Sigma for your Ball and Roller Bearing Manufacturing Operation
June 30, 2016 / best practices, continuous improvement, lean manufacturing, productivity, quality
At this point, most high production manufacturers know that continuous improvement (CI) is imperative to their success. However, knowing where to start can often be both intimidating and frustrating. Active change takes time and costs money, so managers need to be sure they are strategically choosing the right methods to achieve their operational goals.
For many companies, achieving CI includes applying some type of formal methodology. Two of the most widely used tools are lean manufacturing and Six Sigma. While both of these methods can be used to improve productivity and profitability, their approaches are not the same. Understanding the difference between these two methods is important not only for managers trying to choose the right organizational improvement program, but for those who are considering combining the two.
To help ball and roller bearing manufacturers make the right choice, the following is a quick primer on lean manufacturing and Six Sigma:
Over the last ten years, the term “lean” has moved beyond an industry buzzword to an industry expectation. As stated in the eBook, Five Performance-Boosting Best Practices for Your Industrial Metal-Cutting Company, most manufacturers have incorporated some form of lean principles into their operations. From ball and roller bearing manufacturers like Timken and CPM Bearing to manufacturing giants like Toyota and Nike, leaders are applying lean principles to every aspect of their business to achieve productivity and agility.
But what does it mean to be “lean?” According to leanproduction.com, lean manufacturing is “a collection of tips, tools, and techniques that have been proven effective for driving waste out of the manufacturing process.” Toyota is credited for developing it in the 1980s, and over the years it has been used by manufacturers worldwide to improve all facets of the manufacturing business, from quality assurance to human resources.
Below are some key attributes of lean manufacturing, as defined here by The Process Excellence Network:
- Focuses on Eliminating Waste. The main goal of lean manufacturing is to eliminate waste and superfluous processes in order to reduce production time and costs. Toyota defined seven types of waste, including transport, inventory, motion, waiting, overproduction, over-processing, and defects.
- Uses Simple Tools. Lean tools are relatively easy to understand and can be used by anyone in the organization. Examples include 5S, value stream mapping, kanban, and poka-yoke (error proofing).
- Culture-Oriented. For Lean to be successful, experts agree it has to permeate the business silos and receive universal backing amongst senior management and employees. It typically is only used in manufacturing applications.
- Fast implementation. Lean’s strength is its quick turnaround. Immediate benefits relate to productivity, error reduction, and customer lead times. Long-term benefits include improvements to financial performance, customer satisfaction, and staff morale.
iSixSigma defines Six Sigma as “a disciplined, data-driven approach and methodology for eliminating defects in any process, from manufacturing to transactional and from product to service.” It was developed in the mid-1980s by Motorola engineers who were unhappy with traditional quality metrics. In response, they developed a new standard, as well as the methodology and needed cultural change associated with it. Six Sigma gained popularity in the 1990s after General Electric adopted it as part of its business strategy.
Below are some key attributes of Six Sigma, as defined by The Process Excellence Network:
- Focuses on Quality. The main purpose of Six Sigma is to limit defects and variability in business processes to achieve overall process improvement. Using statistical methods, teams identify errors and then work to eliminate them as much as possible. Perfect performance is the goal.
- Uses a Sophisticated Toolset. Six Sigma tools typically require more extensive training, including formal engineering skills and use of sophisticated software. It uses two project methodologies: DMAIC (define, measure, analyze, improve, control) and DMADV (define, measure, analyze, design, verify).
- Built Around Process Improvement Teams. Six Sigma’s implementation is based on a dedicated improvement team. This team is divided into hierarchies based on a “belt” accreditation system that ranges from “black belts,” who lead teams, down to “white belts,” who are still learning the basics and can’t yet participate in project teams.
- Multifaceted Methodology. Six Sigma can be used in a manufacturing environment, but it also can be used for error reduction in non-manufacturing fields. Broadly speaking, it provides companies with a framework to train its employees in key performance areas, shape strategy, align its services with customer needs, and measure and improve the effectiveness of business processes.
The above is just a brief overview of two of the most widely used improvement methodologies and only touches on some of their main characteristics. For some industry perspectives on the pros and cons of each method, read this series of editorials published by the American Society of Quality (ASQ). For information on how managers can strategically utilize lean and Six Sigma methods together, check out the recent article, “Lean and Six Sigma: Synergy at Work,” from Modern Machine Shop.
How are you applying lean manufacturing or Six Sigma tools in your manufacturing operation?
June 5, 2016 / benchmarking, best practices, bottlenecks, continuous improvement, Cost Management, lean manufacturing, LIT, operations metrics, Output, performance metrics, predictive management, preventative maintenance, productivity, quality, strategic planning, workflow process
Manufacturers know that downtime results in lost productivity and profits. However, thanks to technological advancements in predictive maintenance, service centers and other industrial metal-cutting companies can nearly eliminate downtime altogether.
Unlike preventative maintenance, which uses anticipated and planned downtime to prevent unplanned breakdowns and minimize cost impacts, predictive maintenance aims to predict breakdowns before they even occur. Software and sensors collect data, and algorithms identify not only the anticipated failure, but also calculate the probable time that failure will occur. This enables companies to repair or replace parts before failure and helps eliminate both planned and unplanned downtime.
Several industries are adopting predictive maintenance as part of their operations. An article from the Harvard Business Review provides a few examples:
- Airlines can now predict mechanical failures in advance and can reduce flight delays or cancellations based on data sources such as maintenance history and flight route information.
- The oil and gas industry can use real-time data to predict the failure of electric submersible pumps used to extract crude oil.
- Banks can use sensor data to predict the failure of an ATM cash withdrawal transaction.
The manufacturing industry is also adopting predictive maintenance, but research shows it is doing so at a slower rate compared to others. For example, a recent survey by the Manufacturing Enterprise Solutions Association and LNS Research concluded that manufacturers have some work to do to catch up to current capabilities—only 14 percent of survey respondents said they used manufacturing data in their analytic program.
Of course, building a predictive maintenance program requires both time and money, but many manufacturers are finding that the benefits outweigh the cost. An article from American Metals Market lists just a few of the many potential benefits of using predictive maintenance:
- Reassurance of safe, continued plant operation
- Improved operating efficiencies
- Reduced lost production
- Reduced cost of maintenance
- Less likelihood of secondary damage to equipment
- Reduced inventory of spare parts
- Extension of the life of plant and mill equipment
- Improved product quality
According to the AMM article, several metals leaders are reaping the rewards of predictive maintenance, including:
- U.S. Steel Corp. uses machinery diagnostic services for oil analysis, vibration analysis, electrical thermographic analysis and more to keep its operations up and running.
- ArcelorMittal is using thermal imaging cameras to ensure proper operation of its production plants, saying it improves efficiency, safety, and helps avoid breakdowns and minimizes downtime.
The trend is also starting to gain traction in industrial metal cutting. The LENOX Institute of Technology’s benchmark study of more than 100 metal service centers and other industrial metal-cutting organizations found that companies are gaining additional productivity and efficiency on the shop floor by “investing in smarter, more predictive and more agile operations management approaches.”
While there is no question that predictive maintenance is proving beneficial in the metals industry and beyond, some companies may be hesitant to adopt the technology due to the investment and the training required for implementation. However, if your goal is to reduce downtime and increase the chances of future success, this may be one technology worth considering.
For more information on predictive maintenance, check out this overview article, which lists common tools and techniques, as well as a video.
May 1, 2016 / best practices, customer satisfaction metrics, industry news, KPIs, lean manufacturing, LIT, operations metrics, performance metrics, productivity, quality, strategic planning
As companies look for new ways to stay competitive, more and more manufacturers are utilizing “big data” and analytics in their operations. In fact, according to the results of a survey from Deloitte and the Council on Competitiveness, these types of advanced technologies have the power to put the U.S. back on the map as the most competitive manufacturing nation.
“CEOs say advanced manufacturing technologies are key to unlocking future competitiveness,” the report summary states. “As the digital and physical worlds converge within manufacturing, executives indicate the path to manufacturing competitiveness is through advanced technologies, ranking predictive analytics, Internet-of-Things (IoT), both smart products and smart factories via Industry 4.0, as well as advanced materials as critical to future competitiveness.”
Specifically, the report states that the application of these more advanced and sophisticated product and process technologies will help the U.S. and other traditional manufacturing powerhouses of the 20th century (i.e. Germany, Japan, and the United Kingdom) reclaim their spots as the most competitive nations in 2016. The U.S. in particular is expected to take the number one spot away from China by the end of the decade.
What does this mean for industrial metal-cutting organizations? It means that if you haven’t already considered using data and software analytics in your facility, it may be time to revisit the idea. If data-driven manufacturing has the ability to make nations more competitive, that certainly says something about what it can do for individual companies.
Metrics that Matter
For many industrial manufacturers, the thought of using data may seem a bit daunting; however, it doesn’t have to be as complicated as it sounds. For example, a metal service center featured here in a white paper started by developing an internal software system that automatically tracks the number of square inches processed by its existing sawing equipment. At any point, the manager can go to a computer screen, click on a particular band saw or circular saw, and see how many square inches each saw is currently processing and has processed in the past. Gathering this type of data allows the service center to easily track trends and quickly detect problem areas.
Richards Industries, a Cincinnati, OH, company that manufactures industrial valves, is using data in a similar way, according to a recent article from Modern Machine Shop. Although the company has been practicing lean manufacturing for years, it recently installed a machine-monitoring system that enables shop floor personnel to track activities and record the performance of its machine tools. “Like readings from a Fitbit or Jawbone, the data gathered and analyzed by this system is making the company more aware of how well machine time and manpower count toward productivity,” Modern Machine Shop reports.
Of course, these are just two examples. There are many other ways manufacturers can utilize data and advanced analytics to improve their operations. An article from IndustryWeek calls out a few key metrics industrial metal-cutting companies should consider as they implement data and analytics tools into their factory:
- Line speed by product. Take note of when and how often your line manufactures certain types of products; and then use tools to track the time and effort required to generate meaningful output for each. That way, you’ll have a better handle on what mix would produce the greatest profit.
- Granular utilization data. Look at the specific days and hours your factory produces its greatest output, as well as at what mix and with which operators on the floor. In other words, study the conditions that lead to the very best outcomes and then seek to reproduce those outcomes on a regular basis.
- Error rates correlated by product and employee. Avoiding mistakes is every bit as important as optimizing your mix and hours on the floor. Use Big Data and analytics tools to study error rates and then correlate the results by product and employee.
- Assembly speed by product and employee. Careful and error-free production is important, but so is speed, especially for facilities that deal with high volume. By using data and analytics tools to segment production, you can get a clearer understanding of what products are easier to produce and then ask your floor leaders why.
Whether you decide use data to gain productivity, monitor machines, or improve quality, the point is that data-driven manufacturing is here, and companies big and small are taking advantage of its many benefits. If you haven’t jumped on the bandwagon yet, don’t get overwhelmed. Just get started.
How are you utilizing data to improve your operations and stay competitive?
April 1, 2016 / agility, continuous improvement, human capital, industry news, lean manufacturing, LIT, maintaining talent, operator training, preventative maintenance, quality, strategic planning, supplier relationships, supply chain
Although many hoped that 2016 was going to be a year of full recovery and growth, expansion in the industrial manufacturing sector has been slow moving. High inventory levels, a strong dollar, falling commodity prices, and a slowdown in China have left many industrial metal-cutting companies disappointed and more than a little cautious.
Evidence of slow growth started at the end of 2015. According to estimates from the Manufacturers Alliance for Productivity and Innovation (MAPI), manufacturing industrial production was unchanged from the third to the fourth quarter of 2015. Monthly data has shown erratic patterns of growth and decline that have pretty much cancelled out any movement forward—a trend that is expected to continue.
“We expect the volatility to continue through the first half of 2016, a situation that will result in essentially no manufacturing production growth,” MAPI stated in a recent report. “Manufacturing production should be flat in the first and second quarters of 2016 before accelerating to a 3-percent annual rate in the second half of 2016.”
For the entire year, MAPI expects manufacturing production to decelerate rather than accelerate compared to 2015. “Production increased 2 percent last year, and we forecast only 1.1-percent growth in 2016,” MAPI states. The good news is that MAPI predicts growth in industrial manufacturing of more than 2 percent for both 2017 and 2018.
Unfortunately, the forecast for steel demand also shows little to no growth, although 2016 is expected to be an improvement over 2015. According to the Short Range Outlook 2015-2016 from the World Steel Association (worldsteel), global steel demand decreased 1.7 percent in 2015 but is expected to grow by 0.7 percent in 2016.
“It is clear that the steel industry has, for the time being, reached the end of a major growth cycle which was based on the rapid economic development of China,” Hans Jürgen Kerkhoff, chairman of the worldsteel Economics Committee, said. “Combined with China’s slowdown, we also face low investment, financial market turbulence, and geopolitical conflicts in many developing regions.”
The only bright spot is that steel demand in developed countries is expected to show positive growth of 1.8 percent this year. The U.S. in particular should see demand increase by 2 percent in 2016, worldsteel predicts.
While no one wanted the year to start off slow, most manufacturers aren’t too surprised. In a roundtable discussion with Metal Center News (MCN), Michael Bush, a vice president at Esmark, Inc., was quoted as saying that he didn’t expect the market to pick up until at least May. “Even though it will pick up in the second half, we expect 2016 to be down 1 percent for the year,” Bush told MCN. “That’s our general feeling going into the market.”
Bush isn’t alone. The American Metals Market annual survey of metals executives showed that 30 percent of respondents in the steel, aluminum, and other metals sectors expected business to be worse in 2016, and 70 percent predicted that the domestic economy would not fully turnout until 2017 or later. (You can read the full report here.)
The reality is that the U.S. is still in the middle of an economic recovery, which means that metal-cutting companies and other manufacturers won’t likely see any major growth this year. According to MAPI, manufacturing industrial production must grow another 3 percent in order to reach the pre-recession production level achieved in the fourth quarter of 2007, which means a full recovery is expected in the third quarter of 2017. Non-high-tech manufacturing production is 5 percent below the prerecession level and will not be fully recovered until the third quarter of 2018.
On a positive note, the latest numbers from the Institute for Supply Management (ISM) show some improvement. As reported by Plant Engineering, ISM’s monthly Purchasing Manufacturers’ Index (PMI) jumped 2.3 percentage points in March to 51.8 percent, putting the index solidly above the 50-percent growth threshold for the first time in 2016.
Out of 18 manufacturing industries, ISM says that 12 reported growth in March, including Fabricated Metal Products and Primary Metals. One survey respondent from the Primary Metals segment stated, “Our business is still going strong.” Another respondent from the Fabricated Metals Products segment said, “Capital equipment sales are steady.”
The big question, of course, is will this momentum continue? Analysts believe that continued growth will depend largely on continued strong employment because it creates new income growth and a solid base of consumer spending. MAPI says that another impetus is easy credit availability, which propels big-ticket spending for motor vehicles, residential housing, and nonresidential construction.
While the overall data is certainly sobering, there are a few signs that suggest the metals sector can still snap out of the lull. As Modern Metals recently reported, “The average age of a vehicle on the road still exceeds 10 years; construction season is coming and Congress passed a long-term highway bill in December.”
Metal executives participating in MCN’s roundtable believe that automotive—which is predicted to top 17 million vehicles this year—will be the big market driver, as well as residential and nonresidential construction, white goods, and anything associated with “green energy.”
A report from Fabricating & Metalworking says that surviving 2016 will require manufacturers to use the current market conditions to their advantage. “U. S. manufacturers should be aggressive to take advantage of falling costs while at the same time finding new opportunities created by these economic forces,” the report says. Specifically, the article states that companies should consider employing two key strategies:
- Target those markets that benefit from lower energy and commodity prices such as transportation.
- Modify supply chains to reflect the new realities.
From an operations standpoint, continuous improvement activities will continue to be critical for industrial metal-cutting companies as they push through this slow period. Finding ways to optimize what is happening inside your shop doors is perhaps one of the most effective ways to balance the uncertainty of what is happening outside your doors. What does that look like? An eBook from the LENOX Institute of Technology’s lists five performance-boosting best practices that can help metal-cutting companies improve internal operations:
- Get lean. Although lean manufacturing is not a new movement, it is evolving. Companies that “got lean” years ago are focusing on continuous improvement, and a growing number of high-mix, low-volume operations are tweaking traditional lean methodologies to fit their specific situation. Regardless of your organization’s size, lean manufacturing should be at least part of your operational strategy.
- Invest in human capital. Industry data indicates that metal executives tend to invest in technology over people, but the tide is changing as the manufacturing industry deals with a serious shortage of skilled production workers. Managing this skills gap will require changing the way companies train and maintain talent, whether by beefing up training programs or rethinking their hiring tactics.
- Focus on quality as a process. There is no question that speed and agility are critical in today’s fast-paced market, but managers need to make sure that meeting demand doesn’t come at the expense of accuracy. To meet this challenge a growing number of market leaders are putting practices in place to ensure that their quality goals are met and maintained.
- Embrace preventative maintenance. In almost every manufacturing operation, machine breakdowns are one of the top causes of lost productivity. While some downtime is inevitable, proper maintenance and proactive care of equipment and tooling can reduce its occurrence. One benchmark survey revealed 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.
- Form strategic supplier relationships. In today’s competitive marketplace, it is easy to base supplier relationships on price. However, a growing number of manufacturing leaders are placing more value on their supply chain. By leveraging the knowledge and services of trusted suppliers, companies can turn vendor relationships into strategic partnerships that have a real impact on the bottom line.
Ready and Waiting
All things considered, 2016 won’t likely be a banner year for industrial metal-cutting organizations. However, not all hope is lost. Recent upticks in manufacturing may indicate some positive (albeit slow) momentum, and many experts believe growth is in the long-term future, even if we have to wait another year. Until then, metal-cutting companies can continue to apply strategies that address external trends while also improving internal operations, putting them in the best position possible when the market finally turns around.
February 29, 2016 / best practices, continuous improvement, employee incentives, Employee Morale, human capital, LIT, operator training, productivity, quality, skills gap, strategic planning, workflow process
As ball and roller bearing manufacturers strive for continuous improvement and optimization within their operations, there is no question that process improvement is a top priority. Leaders know that today’s competitive environment requires them to invest time and resources in finding new tools, technology, and strategies for increasing productivity and reducing waste.
However, managers need to be sure they are not so wrapped up in process improvements that they are neglecting the other half of the continuous improvement equation—people.
As explained in the white paper, Accounting for Operator Inefficiencies in the Metals 2.0 Environment, people affect process. “Mechanical inefficiencies can often be solved with technology, but industry leaders are finding they can no longer ignore the human variables that contribute to productivity,” the paper states. “A lack of skill sets, business knowledge, and employee morale can affect vital areas of an operation, from inventory and parts costs to output and safety.”
When managers fail to focus on their operators, they are likely hurting their processes and, even more so, missing out on a prime opportunity for improvement. According to an article from The Manufacturer, a valued workforce can make the biggest impact on a factory’s efficiency. “Creating an environment where your workforce feels valued and respected results in motivation and loyalty,” the article states. This, it adds, can add up to tangible benefits, including higher output and lower absenteeism.
“Studies have found if employees are engaged, they put in twice as much effort, and will take just two-and-a-half sick days/year instead of six-and-a-half,” the article states. “This involvement leads to staff identifying with the company, its products, and sharing the corporate values.”
Indeed, a growing number of manufacturers are finding employee engagement can be just as critical as skills training when it comes to operator productivity. According to the eBook, Five Performance-Boosting Best Practices for Your Industrial Metal-Cutting Organization, operators who take ownership of their process or work area 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,” the eBook states.
The following are three key ways managers can better engage operators and make them feel valued:
- Listen. Operators that work with equipment every day are a valuable source of information. Collect feedback and implement some of their ideas.
- Equip. Invest in an employee’s future with incentives like continued education or management training. This shows employees that you value their personal success and provides them with new skills that can benefit your operation in the long run.
- Reward. Studies continue to show that goal setting and incentives are effective motivational strategies. Empower your operators by letting them set their own goals. This also holds them accountable for their work and promotes long-term “buy-in” and loyalty.
A recent article from the Liquid Planner also encourages managers to be intentional about creating a positive work environment by simply engaging in meaningful in-person conversations. “We’re all human, and most humans respond well to the real thing—in-person communication that says ‘you matter,’” the article states.
Perhaps an article from IndustryWeek states it best: “Most employees don’t need a $10 gas card; they just need to know that they can have an impact, their ideas matter, and they are appreciated.“
Yes, the idea of engaging and empowering employees sounds a bit cliché, especially as technology advances and competition intensifies. However, managers are finding that operators who feel valued are able to bring more value to the business.
In what ways could you better engage your operators?
February 25, 2016 / continuous improvement, Cost Management, customer delivery, lean manufacturing, operator training, productivity, quality, Safety, strategic planning, workflow process
Workplace organization is one of those management principles that everyone knows is a good idea, yet it often falls by the wayside as managers focus on more pressing priorities like meeting deadlines and customer expectations. However, manufacturing experts continue to stress the importance of having a clean and organized manufacturing floor—not as a slap on the wrist, but because organizational tools are simple to implement and can offer a big return.
One tool that is often overlooked but can offer huge improvements is the use of visual devices. In fact, according to visual management expert and author Gwendolyn Galsworth, the visual workplace is one of the most misunderstood opportunities for a safer, more efficient, and reliable manufacturing operation.
“The entire world of work now strives to make work safer, simpler, more logical, reliable and linked, and less costly,” Galsworth writes in an article appearing in Fabricating & Metalworking. “Central to this is the visual workplace – not a brigade of buckets and brooms or posters and signs, but a compelling operational imperative, central to your shop’s war on waste and crucial to meeting daily performance goals, vastly reduced lead times, and dramatically improved quality.”
Specifically, Galsworth says in the article that managers should use visual cues to create a work environment that is self-ordering, self-explaining, self-regulating, and self-improving where what is supposed to happen actually does happen.
What does this look like? According to Galsworth, an effective visual workplace should follow some basic guidelines:
- Information is converted into simple, commonly understood visual devices, installed in the process of work itself, as close to the point of use as possible.
- All employees have instant on-demand access to information that is vital to their own work, and the business is infused with intelligence that you can literally see.
- Floors do not exist simply to walk on or hold things up. They function by showing us where it is safe to walk, where materials are, and where we are supposed to work.
- Tools become vocal partners in the production process. By creating equipment that “speaks,” machines can assist in their own quick changeovers.
As an article from Modern Machine Shop explains, visual tools can include everything from different-color walkways marked for pedestrians and motorized vehicles, to foam cut-outs used as tool drawer organizers. One industrial metal-cutting company, featured here in a white paper, color-coded its blade stocking process. Each blade is marked with a colored tag, which corresponds to a chart that helps operators easily determine the right blade for the job. Stocking shelves are also color-coded, allowing operators to quickly locate and restock blades. This has improved operator efficiency, reduced the occurrence of operator blade selection errors, and prolonged overall blade life.
Visual tactics can also be used to improve safety. 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 Matt Howell, senior manager, the program has been “a good rallying point for the facility and builds energy around safety.”
No matter what visual strategies you decide to institute in your forging operation, the goal is to use them to enhance communication and foster learning. The concept may seem a bit simplistic, but research shows it is effective. Studies by educational researchers suggest that approximately 83% of human learning occurs visually, with the remaining 17% occurring through the other senses. To put it another way: Your operators learn to work with their eyes first and their hands second.
What visual devices could you use to improve efficiency and safety at your forging operation?