December 15, 2015 / best practices, industry news, LIT, maintaining talent, operator training, skills gap, strategic planning
It’s no secret that the manufacturing industry is facing some serious workforce challenges. As we reported in this white paper and several blog posts, skilled production workers are one of the largest segments facing retirement. This, coupled with increased demand, is leaving industrial metal-cutting companies no choice but to find new ways to hire, train, and maintain skilled employees in order to remain successful and competitive in today’s market.
One way industrial metal-cutting companies can meet this challenge is by building a diverse workforce and tapping into a demographic that is grossly underrepresented in manufacturing—women.
According to the U.S. Bureau of Labor Statistics, women comprise nearly half of the U.S. workforce, but just over a quarter of the manufacturing workforce. Although the reasons for the skewed representation are debatable, it is likely a combination of industry bias and stigma, and based on some research, disinterest on behalf of women.
A survey conducted by the trade group Women in Manufacturing revealed that only 7 percent of women selected manufacturing as a top career choice, and an overwhelming 68 percent are not likely to consider manufacturing as a career path. However, the survey also found that of the women currently working in manufacturing, 82 percent think the field offers interesting and challenging work, and 50 percent believe it offers good compensation. In other words, once women do choose manufacturing as their career, they are satisfied and are likely to stay.
Data also shows that the financial business case for building a diverse organization is strong. Fortune 500 companies with high percentages of women officers had a 35 percent higher return on equity and a 34 percent higher total return than companies with fewer women, according to this study conducted by nonprofit organization Catalyst and published by Deloitte. Plus, women represent a skilled talent pool: They earn more than half of the associate’s, bachelor’s and master’s degrees in the U.S., according to the National Center for Education Statistics.
So how can metals companies overcome the misconceptions of the manufacturing industry and help close the skills gap with women? A report commissioned by The Manufacturing Institute, APICS Supply Chain Council, and Deloitte lists several ways:
- Start at the top. Senior leaders must be aligned for change to take place in the manufacturing industry, which can help recruit and retain women talent. One way to reinforce your commitment is to create diversity and inclusion programs, set goals across the organization and then regularly communicate the progress of those programs and goals. This shows management holds diversity as a business priority.
- Address gender bias. Actively dispel bias about gender and leadership in the manufacturing industry. Targeted training can help executives consciously adjust their behavior and decision-making process to eliminate conscious or subconscious gender bias. Some companies even remove gender-related information on resumes so reviewers can focus on skills and capabilities.
- Create a more flexible environment. Work-life balance is an increasingly important factor across all industries, including manufacturing, and not only for women, but for Millennials and Baby Boomers as well. Metal-cutting companies can shift to focusing on results versus the time a worker spends on the job to help support workplace flexibility while maintaining production.
- Foster sponsorship. A formal or informal mentor program can help attract and maintain women in the manufacturing workforce. Support can range from creating roles and identifying sponsors and participants, building awareness of the program, and providing training and resources to participants. The Alcoa Foundation, for example, recently partnered with The Manufacturing Institute, to host a networking series developed to provide women in manufacturing the opportunity to hear from women industry leaders and connect with others.
- Promote personal development. Women ranked learning and development programs as one of the most impactful talent initiatives in their organizations. Companies should encourage top talent to target a higher role within the organization and then map out a career path to achieve that.
- Develop the manufacturing workforce early. With less overall interest in the manufacturing industry—and less formal education to support it—active encouragement for female students to pursue careers in manufacturing is needed. A new Forging Industry Women’s Scholarship is doing just that by introducing women into the manufacturing industry and enabling them to achieve their career aspirations in engineering, management, marketing, manufacturing and other comparable studies.
How are you working to build a diverse workforce in your industrial metal-cutting organization? Could hiring more women help you close the skills gap at your company?
November 15, 2015 / employee incentives, industry news, maintaining talent, operator training, skills gap, strategic planning
As more and more Baby Boomers near retirement, most industrial metal-cutting organizations are being forced to replace the lion’s share of their workforce, including senior management. Unfortunately, a lot of workers that should be the natural replacement—Generation X—never really took an interest in manufacturing, so many companies are now looking to Millennials (also known as Generation Y) to fill the gap. In fact, an article from California Manufacturing Technology Consulting (CMTC) estimates that by 2025, three out of four people in the American workforce will fall into the Millennials category, which includes individuals born between the 1980s and 2000s.
The challenge for manufacturers, then, has been finding ways to attract this up-and-coming generation of workers. This has initiated several discussions within the industry about some of the characteristics of Millennials and what companies need to do to cater to their “tendencies.” On the plus side, some experts are saying Millennials are tech-savvy optimists that have a lot to offer the manufacturing industry. Others, however, are stereotyping them as self-centered and sheltered.
In an effort to find some real answers about Millennials, IBM conducted a multi-generational, global study of employees from both small and large organizations. In the study, the manufacturing giant compared the preferences and behavioral patterns of Millennials with those of Gen X and Baby Boomers. What IBM found was surprising.
“We discovered that Millennials want many of the same things their older colleagues do,” the company wrote on its website. “While there are some distinctions among the generations, Millennials’ attitudes are not poles apart from other employees’.”
Based on the study results, IBM debunks five common myths about Millennials:
- Myth 1: Millennials’ career goals and expectations are different from those of older generations.
- Fact: Millennials place much the same weight on many of the same career goals as older employees do.
- Myth 2: Millennials want constant acclaim and think everyone on the team should get a trophy.
- Fact: Millennials want a manager who’s ethical and fair. They think it’s less important to have a boss who recognizes their accomplishments.
- Myth 3: Millennials are digital addicts who want to do everything online.
- Fact: Millennials’ top three preferences for learning new skills at work are physical, not virtual.
- Myth 4: Millennials, unlike their older colleagues, can’t make a decision without first inviting everyone to weigh in.
- Fact: Gen X – even more than Millennials – believes in soliciting lots of opinions.
- Myth 5: Millennials are more likely than others to jump ship if a job doesn’t fulfill their passions.
- Fact: Employees of each generation share the same reasons for changing jobs.
Regardless of what you may or may not have believed about Millennials, here’s another fact: They will be a large part of the workforce and, as a result, will play a role in the success of your company. Some metals executives, like Bob Weidner, president of the Metal Service Center Institute, are welcoming this new influx of workers and look forward to the opportunities they offer the industry. In his editorial, “To the Class and Industry Leaders of 2015,” Weidner writes:
“We are now aggressively looking for a new generation of creative employees. A new workforce of leading edge innovators with the talent, intellect and productive energy that will keep the American metals industry ahead of the global pack in the face of a gale of disruptive forces that are altering the way we do business. We are looking for dedication, for people who want to do meaningful, socially important work in these shifting times.”
Weidner goes on to state that it is important for the metals executives to continually look at the industry and the workforce “through a new lens” and that companies should always welcome “opportunities to adapt.” As pointed out by the e-book Five Performance-Boosting Best Practices for your Industrial Metal-Cutting Organization, this may require some companies to change the way they train and maintain talent, whether that means beefing up training programs or rethinking their hiring tactics. For others, it may mean simply figuring out how to leverage the strengths of a multi-generational workforce. Either way, change within the workforce is happening. Perhaps it’s time to adapt.
How is your company preparing for the next generation of workers?
October 30, 2015 / best practices, Cost Management, Employee Morale, LIT, maintaining talent, operator training, productivity, quality, ROI, skills gap
After years of focusing on automation and processes, today’s manufacturers are starting to realize the growing importance of allocating resources to the workforce. According to the U.S. News & World Report, it is estimated that more than half a million skilled manufacturing jobs remain unfilled due to the labor skills gap in the U.S., and that number will likely increase as more Americans age out of the workforce. This shortage in skilled production workers—often referred to as the “skills gap”—is forcing managers to rethink how they spend their time and their money.
As explained in a white paper from the LENOX Institute of Technology, there are two reasons for the growing skills gap. “First, a large number of workers are facing retirement in the coming years, which will have a significant impact on shop floor experience,” the paper states. “In addition, reports state that by 2020, companies will have up to five generations in the workforce at once. This unbalanced level of skill and experience in a metal-cutting operation can have a significant impact on both
quality and productivity.”
Michael Collins, president of MPC Consulting, feels one of the root causes of today’s workforce challenge is the fact that companies haven’t invested in advanced training, either because they didn’t want to or because they didn’t have the money. “It has been at least 25 years since the alarm was sounded on skills shortages in manufacturing and the threat of retiring baby boomers,” Collins writes in an article published in IndustryWeek. “Just about everyone who follows manufacturing has known about this problem for a long time. So the question is: Why didn’t we invest in advanced skill training before it became a serious problem?”
Collins goes on to suggest that it’s time for manufacturers to learn from their mistakes and to start making changes. Specifically, he lists four ways manufacturers can acquire the highly skilled workers they need. These include the following:
- Invest in training
- Recalculate the ROI of training
- Stop the pursuit of low-cost labor
- Demonstrate that manufacturing jobs are a secure career opportunity
Some industry leaders have already started to make some changes. As we reported here, ball and roller bearing manufacturer Timken Co. is working with Apprenticeship 2000, an apprenticeship partnership located in the Charlotte, NC region, to offer technical career opportunities to high school students and employment after graduation.
Pegasus Manufacturing Inc., a Middletown, CT-based fabricator of tubing and parts for jet engines, is taking advantage of its state’s training and efficiency programs. “Our focus on maintaining the workforce here in Connecticut and adding to it, getting the pipeline out of the technical skills system, making sure we have high caliber folks, is really second to none in the United States and probably worldwide,” Chris DiPentima, the Pegasus CEO, told the Hartford Courant. Since participating in the state-wide programs, Pegasus has added 16 jobs to its payroll in less than a year.
In the end, successfully managing the skills gap will require manufacturing executives to take a hard look at how they are investing in their workforce, whether that means investing money into advanced training programs or investing time into seeking apprenticeship opportunities. Companies that fail to make real, active changes now may find themselves dealing with bigger, bottom-line challenges in the future.
How is your company actively tackling the skills gap?
October 1, 2015 / Employee Morale, industry news, LIT, maintaining talent, operator training, skills gap, strategic planning, value-added services
All year long, the manufacturing industry has had its sights set on a healthy 2015. As we reported in April in our 2015 Industrial Metal Cutting Outlook, all signs pointed to a full economic recovery. According to the latest data from MAPI, GDP is growing and will continue to grow in 2016.
The good news is that many manufacturers and industrial metal-cutting companies have felt the benefits of the improving economy and experienced increased demand; however, others are a little disappointed with the way the year is turning out.
According to the Institute for Supply Management’s September PMI report, economic activity in the manufacturing sector expanded in September for the 33rd consecutive month, and the overall economy grew for the 76th consecutive month. However, 11 industries, including primary metals and fabricated metal products, contracted in September. One fabricated metal producer told ISM that it had “concerns about the China downturn and its effect on our consumer confidence.” Another manufacturer in the primary metals segment said that it continues to feel the impact of the oil and gas market slowdown. “Aerospace demand has also been slower than expected,” the company added.
Meanwhile, factors like the upcoming presidential election and unstable foreign affairs continue to feed into uncertainty, leaving manufacturers conflicted about how they should manage their operations. Should they prepare for increased demand or play it safe now that growth has been slower than expected?
Of course, there is no silver bullet answer to this question, but there are some ways that companies can strategically navigate the ups and downs of the market. Below are just a few ways industrial metal-cutting companies can adjust to market “ups” and expand when needed, while also preparing for the potential “downs” and changing conditions.
When business is booming and orders are up, it’s easy to get overwhelmed by increased demand—especially after several slow months. However, there are ways manufacturers can adjust. U.S.-based automaker Ford, for example, recently cut its traditional two-week summer break short to meet demand.
IndustryWeek offers five ways manufacturers can take advantage of the uptick without making any monumental changes to their operation:
- Round up your top talent. A shortage of skilled talent is a business risk for one-third of businesses, according to manufacturing.net. Case in point, training and maintaining talent is one of the three operating challenges in industrial metal cutting, according to this white paper from the LENOX Institute of Technology. Establishing ongoing operator training can help balance the skill level on the shop floor and across shifts. Enlisting your top performers and asking for their input on projects will go a long way when it comes to motivation and morale.
- Stick to what you know. Although it’s tempting to start adding new specialties when demand is up, don’t be too quick to jump on the bandwagon. Be selective and choose projects that can easily be added to your line-up and offer the most profitability.
- Pick your projects carefully. Again, don’t accept work for the sake of work. Accept projects that you can execute quickly and easily without huge disruptions in your current production processes and workflow.
- Revisit recognition. Ensure motivation stays high by recognizing those who go above and beyond expected responsibilities. A simple “thank you” goes a long way.
- Create incentives. Hard work pays off—make it a reality for your team. Tie rewards to specific goals, timelines, or projects and be timely with the reward.
In a cyclical business like manufacturing, a slowdown is inevitable. However, most manufacturers don’t know how to prepare for market shifts and, as a result, fail to strategically adapt when conditions change. The answer, according to one Forbes article, is to embrace uncertainty.
“In our experience, the most effective leadership teams develop a clear and actionable portfolio of strategic actions that balance commitment with flexibility,” Martin Toner, a partner at Bain Insights, writes in the Forbes article. “Instead of relying on a planning exercise defined by conditions at a discrete point in time, they commit to a cycle of ‘execute, monitor and adapt,’ redirecting the company toward the best opportunities over time.”
Toner goes on to offer four ways companies can form a strategy around uncertainty:
- Define uncertainties. Make a list of the uncertain things you face and then prioritize them.
- Create probable scenarios. Imagine how the future might look. Discuss the possible threats and opportunities of each.
- Develop strategic options. For every scenario, plan an action that would help balance threats while maintaining flexibility to adjust to others.
- Identify signals. Determine what indicators signal market changes and know when to start making those scenarios a reality.
How do you navigate the ups and down of the market? What strategies do you find are the most successful?
July 15, 2015 / best practices, Employee Morale, human capital, industry news, LIT, maintaining talent, operator training, skills gap, strategic planning
Over the last few years, manufacturing experts and industry leaders have been discussing the shortage of skilled production workers. From Forbes and IndustryWeek to the Harvard Business Review, everyone is weighing in on the “skills gap” and how the manufacturing industry should be addressing it. In fact, the LENOX Institute of Technology has written a white paper and several blogs about the hot-button topic.
However, with all of this “talk,” one has to wonder if the so-called “skills gap” truly exists, or if it is just an industry trend that is being fabricated or blown out of proportion. To dig into this issue, the LENOX Institute of Technology turned to a few industrial metal-cutting companies to discuss the skills gap, whether or not it is affecting their organization, and, if so, how they are handling it.
The Gap is Real
All three organizations we interviewed agreed that there is indeed a skills gap in the industrial metal-cutting industry. “I have felt the impact of this,” says Matthew Dobratzl, production supervisor at Thyssen Krupp. “It seems that as more of the skilled guys are retiring, they are being replaced by employees who have not had the proper training.”
Barry Grider, operations manager at Standard Locknut, LLC, and Brandon Dodds, operations manager at EMJ, part of the Reliance Group, admit they are also feeling the affects of the skills gap. Specifically, Dodds says it is getting harder and harder to find workers that meet the level of quality his company expects.
To tackle this issue, Dobratzl, Grider and Dodds say it is imperative for companies to be both proactive and strategic. Below are three ways they are addressing—and filling—the skills gaps within their own organizations:
- Screen New Hires. According to Grider, bridging the skills gap starts with making quality hires. He accomplishes this at Standard Locknut by putting potential employees through a “very thorough screening and interviewing process.”Dodds of EMJ says he also relies heavily on screening. “In this current climate, we usually choose potential employees from temporary agencies and put them to work for several months to ‘feel’ them out and see if this is the right fit for them,” Dodds explains. “We usually see potential or non-potential in the first three days and then make decisions based on performance and work ethic.
- Focus on Training. The most critical aspect of filling the skills gap is training, according to Dobratzl of Thyssen Krupp. “Our strategy is to provide the best hands-on training with our new hires and teach them best practices,” Dobratzl says. “This is extremely important to our success, as we need our employees working error free.” Grider of Standard Locknut agrees, adding that his company actively invests in internal and external training for both new and existing employees.Dodds believes training should always be a focus for manufacturers, skills gap or not. “If your organization does not focus on training, then you can’t expect your employees to produce a quality product,” Dodds says. “Building a strong organizational team to meet the ever-changing customer demands will go far, but in the end, it all boils down to quality training.”
- Value Employees. With a small talent pool, it will also serve manufacturers well to intentionally work at maintaining and valuing their current employees. Grider says Standard Locknut does this by continually investing in employees and by “treating them with respect and providing them with all the tools necessary to perform their jobs.”Dodds echoes this sentiment and adds that good managements boils down to “training your employees well, treating your employees well, and compensating your employees fairly.”
As the above feedback confirms, industrial metal-cutting companies are feeling the effects of the manufacturing skills gap. With more and more workers retiring, this gap stands to only grow larger, unless companies start acting now.
Today’s managers will need to be strategic in the way they hire, train, and maintain their employees if they want to successfully move forward. These days, industry leaders are finding that human capital is not just valuable, but an essential part of success.
How is your metal-cutting organization approaching and equipping its next generation of workers?
June 30, 2015 / best practices, continuous improvement, employee incentives, Employee Morale, maintaining talent, operator training, skills gap, strategic planning
As any successful manager understands, a company is only as good as its employees. Although metal companies have traditionally spent more on equipment than on people, the tide is changing. With a shortage of skilled production workers, manufacturers are finding that it is not only beneficial but necessary to invest in their workforce.
For example, according to results from a 2014 survey from Prime Advantage, a buying group for manufacturing firms, companies stated that while they are growing and looking to hire, finding qualified workers is becoming harder. In fact, survey respondents listed “access to qualified workers” as the top growth barrier for small and mid-sized industrial manufacturers.
Attacking this “skills gap” will require many companies to change the way they train and maintain talent, whether by beefing up training programs or rethinking hiring tactics. Below are a few strategies roller ball and bearing manufacturers can use to fully equip new employees, while also optimizing the skill set of their existing workforce:
- Train. As more and more baby boomers retire, managers are quickly losing expertise on the shop floor. According to the white paper, The Top Five Operating Challenges Ball and Roller Bearing Manufacturers Face in Industrial Metal-Cutting, implementing a strong, ongoing training program is essential to fill the skills gaps left by retired employees. Programs should include both skills and leadership training for new and existing operators. Just like existing customers are often the greatest source of new business, the underdeveloped potential of existing employees can be an operation’s greatest source of new talent.
- Partner. On top of retirement, manufacturers are also struggling to attract new talent. Younger generations are typically less attracted to careers in manufacturing than other industries, which means companies must proactively work with outside sources to ensure access to good talent. Leading bearing manufacturer Timken Co., for example, is working with Apprenticeship 2000, an apprenticeship partnership located in the Charlotte, NC region. The goal of the program is to offer technical career opportunities to high school students and employment after graduation. Timken and other sponsoring companies provide students with onsite training that goes toward a technical degree students earn upon graduation. In return, the partnering companies have access to highly skilled employees who have been trained to fit their technical needs.
- Engage. Of course, a trained employee is only beneficial if he or she sticks around. To maintain good talent, more and more manufacturers are focusing on employee engagement. As an editorial published in IndustryWeek asserts, “Employees want to think, learn and contribute to improving their work.” Companies that fail to embrace this ideology, the article states, are limiting their success. Collecting feedback from operators, walking the floor, offering bonuses and other incentives are a few ways managers can encourage employee ownership and build employee loyalty. Put simply, operators who feel valued are more likely to value their jobs, their work, and their employer.
April 1, 2015 / agility, best practices, blade failure, Cost Management, human capital, industry news, KPIs, LIT, operations metrics, performance metrics, predictive management, preventative maintenance, productivity, skills gap, strategic planning, value-added services
Like most manufacturers, industrial metal-cutting companies went into 2015 with both optimism and caution. While all signs seem to be pointing to a full economic recovery, concerns surrounding an unstable political landscape, foreign markets, and pricing continue to keep many metals companies on their toes.
Some Growth Ahead
As we enter the second quarter of 2015, most experts anticipate growth in the metals industry. Early predictions painted a positive picture for the year, and recent reports are confirming that the industry will, at the very least, see slight improvements over 2014.
According to the Manufacturers Alliance for Productivity and Innovation (MAPI), industrial production increased at a 3.8% annual rate in the fourth quarter of 2014 and posted 3.6% growth for the year as whole—over a percentage point higher than the 2.4% gain in the overall economy. The manufacturing outlook for 2015 and 2016 calls for a minor acceleration from the 2014 growth rate. According to the MAPI Foundation’s most recent U.S. Industrial Outlook, manufacturing production is forecast to grow by 3.7% in 2015 and 3.6% in 2016.
MAPI’s outlook also predicts that 21 out of 23 industries will show gains in 2015. This includes growth in metals industries such as iron and steel products (5%), alumina and aluminum production and processing (7%), and fabricated metal products (3%). The top industry performer will be housing starts, which is expected to increase by 16%.
Forecasts for steel demand are also positive, but growth rates will not be as strong as they were in 2014. According to the Short Range Outlook 2014-2015 from the World Steel Association (worldsteel), U.S. steel demand is expected to increase by 1.9% in 2015—much lower than the 6% growth the U.S. experienced in 2014. Globally, worldsteel forecasts that global apparent steel use will increase by 2.0% this year. This is a downward revision from previous forecasts, due to a slowdown in emerging economies like China.
“Recoveries in the EU, United States and Japan are expected to be stronger than previously thought, but not strong enough to offset the slowdown in the emerging economies,” stated Hans Jürgen Kerkhof, chairman of worldsteel’s Economics Committee. “In 2015, we expect steel demand growth in developed economies to moderate, while we project growth in the emerging and developing economies to pick up.”
Concerns and Challenges
Buying into the positive forecasts, most metals manufacturers expect business to improve this year. According to an annual survey of metals executives by American Metal Market (AMM), 42% of respondents expect the economy to turn around in 2015 and 67% expected business to improve overall, mostly due to growth in the auto and energy sectors.
However, AMM reports that respondents did have some reservations. Political events, cheap imports, and foreign markets were all causes for concern, as well as uncertainty about “where important industry segments like construction might be headed,” AMM states in its survey report.
In his State of the Industry address earlier this year, Robert Weidner, president and CEO of the Metals Service Center Institute (MSCI), listed several trends that will affect the metals industry in 2015 and beyond. Below are the five challenges he outlined, as reported by thefabricator.com (You can read the full coverage here.):
- Market Intelligence – Volatile markets and increasing competition have heightened the need for trustworthy data and analysis tools, as well as the need for cybersecurity resources and training to secure market intelligence.
- Business Disruption – World events have an even bigger impact on local economies than before, creating a need for topic- and area-specific experts and information and enhanced vehicles and technology to provide information.
- Congressional Gridlock – U.S. partisan politics have stalled action in the legislative branch, often resulting in extreme actions through regulators that have impeded manufacturing growth.
- Safety and Risk Management – Slow market growth has left companies cautious to invest.
- Skilled Labor and Changing Demographics – Attracting a skilled workforce remains a challenge for the industry.
With both forecasts and anticipated challenges in mind, industrial metal-cutting companies can strategically approach the market from both a business and operational standpoint. In fact, as we reported here, it is critical for today’s managers to develop operational short-term plans that are effective in achieving the overall strategy set forth in the business plan. For instance, if the goal is continuous improvement, then make sure your metrics, your daily practices, and communication with your team all point to that overall strategy.
As a global company serving the industrial metal-cutting industry, we at LENOX Tools have a unique vantage point of what is happening in the marketplace. We have watched some metal companies barely survive, while others have found ways to thrive. The difference, in most instances, seems to be the company’s commitment to making improvements. Whether investing in new equipment to improve cutting time and quality or investing in training to improve and empower their human capital, industry leaders are continuing to focus on making positive changes on the shop floor so they can be ready to respond to changing customer demands. In other words, the only way to offset external uncertainties is to focus on making internal improvements.
Based on industry trends and our own experience, LENOX sees the following as key strategies for industrial metal-cutting companies that want to be successful in today’s marketplace:
- Invest in Operators and Training. In light of the manufacturing industry’s ongoing skills gap, experts like MSCI’s Weidner are stressing the importance of employee safety and ongoing training as a means of attracting and maintaining workers. In addition, LIT’s benchmark survey of industrial metal-cutting companies provides evidence that investing in areas like training can provide additional benefits, including better quality, faster on-time customer delivery, higher revenue per operator, and lower rework costs.
- Embrace Proactive Care and Maintenance. No matter how efficient an operation, some machine downtime is inevitable. The key is to be proactive and minimize it as much as possible. This includes practices such as breaking in blades and regular coolant checks. By adhering to a preventative maintenance schedule, managers can actually anticipate maintenance bottlenecks and turn “interruptive downtime” into “predictive downtime.”
- Form Strategic Supplier Relationships. Whether you need help with training, gathering metrics, or de-costing, help is likely no further than your closest supplier. And if that’s not the case, you may want to rethink your supply chain. By utilizing value-added services from trusted suppliers and making them more of a partner than simply a supplier, metal-cutting companies can improve quality and productivity—both of which impact the bottom line.
- Seek New Opportunities. Market trends such on re-shoring and an automotive boom could translate into new opportunities for your metal-cutting company. Are there value-added processes you can add to your operation to stay competitive? Are there previous customers that could now benefit from the convenience and cost benefits of your U.S. manufacturing base? Is there new equipment or tooling that could help you better serve a certain customer base? Asking critical questions such as these may reveal new prospects for growth. Start brainstorming.
March 20, 2015 / benchmarking, best practices, continuous improvement, human capital, KPIs, lean manufacturing, LIT, operator training, Output, predictive management, preventative maintenance, productivity, quality, skills gap, strategic planning, workflow process
In an age of information overload, most managers know how their shops should run. They’ve read case studies about successful lean initiatives, benchmarking studies confirming the benefits of preventative maintenance, and forward-thinking editorials endorsing the “smart” factory. Yet, in the midst of in the day-to-day grind, it is often difficult to find the time and resources to make any real improvements, let alone put a plan in place to make them happen. As a recent article from Canadian Metalworking quips, many shops are too busy working on their business to work on their business.
However, taking the time to make strategic decisions for your shop is critical to its success. Maintaining status quo is no longer enough in today’s market. Modern machine shops need to have both short- and long-term plans, and they need to make the time to see them through.
But where do you start? At this year’s The MFG Meeting, Laurie Harbour, president of manufacturing consulting firm Harbour Results, Inc. (HRI), shared five best practices for leaders who want to start making real changes in their operations:
- Strategic Planning. Do you have a strategic plan? It’s not a mission or a value Your company needs a strategy that outlines what its focus is and why that focus is important. Additionally you need a plan with actionable one-year objectives that are communicated at all levels of your organization. And, of course, metrics need to be in place to drive each employee’s role and responsibility in meeting the plan.
- Market Intelligence. To be successful you must be informed. Companies can no longer afford to guess or rely on “luck.” It is critical that you gather and review both internal and external data. Triangulation of customer information, industry knowledge/historical performance/experience and external market intelligence are critical to a successful demand plan.
- Demand Planning. Although difficult, demand planning can lead to driving significant efficiency gains within your business. Utilize market intelligence; talk with your customer and implement demand planning in your facility. Those that are doing so improve throughput by 20 to 30 percent, making profitability soar.
- Manufacturing Efficiency. Rather than just improving the efficiency of one or more machines, you need to look at the entire system for optimization. Rather than scheduling each and every piece of equipment that supports making the product separately, it is critical to schedule the system and how all the pieces interact. Analyzing the entire manufacturing operation as a whole helps identify opportunities for efficiency gain and process improvements.
- Labor. The manufacturing industry is facing a skilled-labor shortage and it is only predicted to get worse. To be competitive and maintain a productive workforce, you need to have a plan and be prepared to attract, train and retain a younger generation.
To help leaders take a deeper look at their operation, HRI also offers a Strategic Planning Worksheet, which lists some questions leaders can use to identify opportunities for improvement in each of these five areas. You can download the worksheet here.
Are you addressing these five major areas in your machine shop? In what areas could you use some improvement? Taking the time to ask critical questions like these—and those listed in the HRI worksheet—is the first step in optimization and, even more so, putting you on the right path to becoming one of those shops you always read about.
How Should Ball and Roller Bearing Manufacturers Allocate Resources for their Metal Cutting Operations?
February 28, 2015 / blade selection, circular sawing, Cost Management, employee incentives, Employee Morale, human capital, LIT, maintaining talent, operator training, productivity, quality, resource allocation, skills gap, strategic planning
Today’s cost-sensitive market makes it difficult for managers to gauge how they should strategically allocate resources within their industrial metal-cutting operations. Is it wise to make high-tech capital investments in an uncertain economy, or would manufacturers be better served to invest in their human capital to close the growing skills gap?
These types of questions can be especially challenging in a mature market like ball and roller bearing manufacturing, where seasoned employees may be resistant to change, both in terms of company culture and technology. However, leaders need to be sure they are making strategic decisions that benefit both the company and their employees, and avoiding the trap of making allocation decisions because “that’s the way they’ve always been done.”
To help ball and roller bearing manufacturers discern how to best allocate resources within their operations, below are some resources that discuss some of the trends and strategies today’s manufacturing leaders are using to get ahead in today’s market:
- Be Smart about Getting Smart. The ideology that industry leaders use cutting-edge technology carries some truth, but that doesn’t mean that every manufacturer should go out and invest in the latest high-tech connectivity software. That is, not without at least doing a little research. Check out this article from IndustryWeek, which does a great job of explaining how managers can start to make a business case around “smart” manufacturing investments, including data capture, connectivity, remote control and analytics. In addition, business consultancy ARC Advisory Group has developed a handful of evaluation and selection guides to help industrial manufacturers determine which technologies they should adopt to get the best return on investment.
- Small Upgrades Can Pay Off. Having the right tools for the job is critical in metal-cutting, which means that even a small upgrade in tooling has the potential to make a huge impact. According to the white paper, The Top Five Operating Challenges Ball and Roller Bearing Manufacturers Face in Industrial Metal Cutting, managers should re-evaluate their tooling choices every few years, even if they feel satisfied with current results. While testing new blade technologies can be a time-consuming endeavor, it can certainly pay off if the end result is faster cutting times and lower costs. Recent advancements in tooth geometries, wear-resistant materials, and blade life are providing significant improvements in productivity and quality. For example, the tips of many precision circular saw blades are now made with cermet, a composite material composed of ceramic and metallic materials. These blades can cost more upfront, but they are said to offer longer blade life as well as provide exceptional heat and wear resistance when cutting solid, carbon-based metals.
- Human Capital Counts. While manufacturers have historically invested in machines over people, the looming skills gap is starting to change that. As more baby boomers retire, industry reports like this one from Deloitte and The Manufacturing Institute have been suggesting that manufacturers focus on investing in their human capital, both in terms of training and recruiting. And according to a recent article from manufacturing.net, companies may also want to consider increasing the wages they pay their employees. The trend, the article states, is moving in that direction. “We have seen an increase in jobs, but not an increase in pay, but that is starting to change,” Traci Fiatte, president of General Staffing at recruiting firm Randstad, tells manufacturing.net. “Even in entry level positions, the salaries are staring to creep up, and that is what you would expect to find when demand is high and supply is low.” Regardless of how managers decide to address the skills gap, the overarching lesson it is teaching the manufacturing industry is clear: human capital counts.
February 5, 2015 / benchmarking, industry news, LIT, operator training, quality, Safety, skills gap, strategic planning
Based on recent data, the metal service center industry entered 2015 on the right foot. According the latest Metals Activity Report from the Metals Service Center Institute (MSCI), U.S. service center shipments of both steel and aluminum were higher in December 2014 than in the prior year. In addition, year-to-date U.S. steel shipments were higher than 2013 by 4.2% while year-to-date U.S. aluminum shipments were up 8.1% year over year. Canadian results for December 2014 and for the year were similar.
All of that good news falls in line with most industry forecasts. As we reported here, industry trade publication Modern Metals says the outlook for 2015 is mostly positive. However, the magazine also warns that “competition, domestic and foreign, is always the overriding force that determines whether volume, price and demand forecasts are in balance.”
Indeed, even with positive expectations, service centers need to be aware of some of the potential challenges they will face and, even more so, start finding ways to be prepared. Earlier this month, MSCI President and CEO M. Robert Weidner III discussed the top trends challenging the metals industry in his State of the Industry address. Below are the three of the five challenges that he outlined, as reported by thefabricator.com (you can read the full coverage here.):
- Market Intelligence – Volatile markets and increasing competition have heightened the need for trustworthy data and analysis tools, as well as the need for cybersecurity resources and training to secure market intelligence.
- Business Disruption – World events have an even bigger impact on local economies than before, creating a need for topic- and area-specific experts and information and enhanced vehicles and technology to provide information.
- Congressional Gridlock – U.S. partisan politics have stalled action in the legislative branch, often resulting in extreme actions through regulators that have impeded manufacturing growth. It’s imperative to continue to advocate on behalf of the metals industry in the U.S. and Canada for pro-business agenda.
In his last two points, Weidner stressed the importance of employee safety and ongoing training as a means of attracting and maintaining workers. Investing in areas like safety and education shows employees that you value them, which only encourages them to invest right back into the company. In addition, LENOX Institute of Technology’s benchmark survey of industrial metal-cutting companies provides evidence that investing in areas like training can provide additional benefits, including better quality, faster on-time customer delivery, higher revenue per operator, and lower rework costs. In other words, it’s a win-win for everyone.
Only time will tell if industry performance plays out the way everyone expects. After all, forecasts are really only educated guesses. However, managers need to be sure they remain aware of trends like those outlined by Weidner so they can make informed decisions and be as prepared as possible for whatever 2015 brings.