CEO Survey Reveals Three Key Focus Areas for Industrial Metal-Cutting Companies

December 15, 2016 / , , , , , ,

Industrial manufacturers find themselves competing in an increasing uncertain global market with rising customer expectations and ever-evolving technology, according to the 19th Annual Global CEO Survey from PricewaterhouseCoopers (PwC).

The survey found that only 24% of manufacturing CEOs think global growth will improve over the next 12 months compared to 34% last year, and 23% think it will worsen compared to 18% the prior year. In addition, just 29% of industrial manufacturers are confident of revenue growth in the next 12 months, but when given a three-year span, 46% of manufacturers think they’ll see growth.

Data also suggests that CEOs believe business risk has increased.  According to the survey, 55% of industrial manufacturing CEOs said opportunities have increased during the past three years; however, 61% believe the number of threats has increased.

The PwC survey, which interviewed 205 industrial, manufacturing CEOs in 53 countries, revealed that industrial manufacturing companies are working hard to deliver results year after year, but most understand that the future brings complex challenges. The survey highlights three key focus areas for today’s industrial manufacturing CEOs:

  1. Great expectations and influences. When asked to describe their company’s purpose, the survey found many industrial manufacturing CEOs believed it was centered on filling customer needs or developing first-class products, but others said it was creating a great place to work for employees or achieving social goals. And the influences that impact that purpose and overall strategy are many. As one would expect, customer demands drive final products, but 89% of industrial manufacturers say their customers and clients have an impact on their overall business strategy. Supply chain partners weigh-in, too, with 88% of CEOs planning to address social and environmental impacts of their supply chain. In addition, competitors and peers are also a focus, with a third of CEOs saying they too have a high impact on strategy.
  2. Technology and talent. Executives know Industry 4.0 has arrived and are working to invest in new innovations and train their workforce to capitalize on their investments. The survey found that 90% of industrial manufacturing CEOs plan to make changes in how they use technology to assess and deliver on wider stakeholder expectations. However, with new technology comes new skill requirements, and 76% of respondents say they are concerned about the availability of key skills to grow their business. In response, more than half of CEOs are changing their talent strategy.
  3. Measuring and communicating success. Data showed that 60% of survey respondents said innovation is the number one area where the business could do more to measure the impact and value for stakeholders. Not only are CEOs realizing they need to measure and track business success, but that they also need to communicate that success. The survey found that 68% of CEOs believe R&D and innovation has the potential to drive better engagement with wider stakeholders. Together with customer relationship management, data and analytics take the top three spots—validating smart manufacturing will be a driving force for industry leaders.

Like any industrial manufacturer, PwC’s survey findings can help metal-cutting organizations prepare for another challenging, but transformative, year. As reported in the case study, “Best Practices of High Production Metal-Cutting Companies,” sometimes this means investing in technology. Jett Cutting Service, for example, hit a record-setting 1.1 million cut parts last year and attributes the milestone to smart investments. “I would like to believe that our increase in sales is due to investing in the latest cutting technology, which increases our capacity and production capabilities,” Vice President Mike Baron said. “The newer technology also allows us to offer competitive pricing, which has led to many new customers.”

However, Jett Cutting also understands that it needs to be just as committed to its employees and its customers. The metal-cutting organization also has a strong training program for new employees, an ISO certification program to maintain high quality standards, and additional training for existing employees every time new equipment or software is purchased.

For many metal-cutting companies, 2016 certainly hasn’t been the best of years, but it also hasn’t been the worst. As PwC’s survey confirms, no one is confident about what next year will bring; however, industrial manufacturing leaders aren’t standing idle. Jett Cutting and many others are investing in new technology and training now to prepare for growth in the future.

How is your industrial metal-cutting company investing in the future?


Industrial Metal Companies Turn Sustainability into Business Strategy

May 1, 2015 / , , , , , , , ,

It’s no secret that any edge you can carve out against the competition in today’s challenging market will help you take the lead as a top performer. As this case study from the LENOX Institute of Technology points out, continuous improvement and best practices, including ongoing training, preventative maintenance, and ISO certification, are necessary to take the number-one spot as an industrial metal-cutting company.

While traditional operational methods are proven methods to increasing your operational success, others are moving to the forefront. Enter sustainability—the latest initiative metal companies are paying closer attention to—and for warranted reasons.

London-based sheet metal company Harlow Group, for example, recently worked with the Institute for Manufacturing Education and Consultancy Services to enhance its operational performance by improving both its energy usage and environmental impact. Using the association’s Practical & Innovative Solutions for Manufacturing Sustainability program, the company reviewed its operation to identify new opportunities that resulted in significant savings, including:

Kenwal Steel Corp. saved 93 percent in energy when it replaced 369 metal halide lights with high-efficiency, maintenance-free LED lights, reports Modern Machine Shop. This, the article states, not only increased the overall lighting quality of the facility, it also reduced the total number of fixtures by 60 percent. The company also saw a return on its investment of 124 percent in less than a year by using an intelligent system that automatically turned off lights, dimmed aisle lighting in low-traffic areas, and scheduled automatic changes to the lighting behavior based on usage patterns.

Sustainability is also imperative to business operations for Studer AG, according to another Modern Machine Shop report. In fact, the Swiss-based machine tool builder has established a four-step process that any industrial metal-cutting company can use to optimize machine design and performance. The process includes the following:

  1. Component Optimization. Choose components that can be produced and assembled with less energy. This includes machine structures and onboard subsystems that use low energy levels to operate.
  2. Standby Management. Keep subsystems in stand-by mode until needed. Much like Harlow Group, implement a shut-down mode for heavy equipment that’s not in use.
  3. Process Optimization. Like continuous improvement exercises, assess your overall processes and implement new techniques or technologies that can increase efficiency while reducing energy.
  4. Energy Evaluation for Customer Quotation. This optional step makes the call to include any energy savings and the associated costs and/or any regulatory compliance in customer-facing documentation. The idea here is to communicate the proactive energy-saving measures, which sometimes means the difference from winning or losing a bid.

Using sustainability as a strategy for success is one with very real implications—and savings—if done right. Do you consider sustainability as a bottom-line operating principle? If so, how are you using sustainability as a business strategy? What changes have you implemented to keep your industrial metal-cutting company at the leading edge?


The Importance of Work Culture in Forges

December 25, 2014 / , , , , , , , , , , ,

For many industrial metal-cutting organizations, “company culture” is nothing more than a management buzzword that brings up images of Google employees playing video games and drinking lattes. However, work culture is a critical component to any company’s success, whether you are a Fortune 100 tech firm or a family-owned forging operation.

Take GM Motors as an example. After dealing with a huge safety crisis earlier this year, the auto giant is in the midst of a corporate makeover based largely on culture change. According to an article that appeared in IndustryWeek, CEO Mary Barr is trying to create a new culture at GM based on ownership, candidness, and accountability—three traits she hopes will set a new tone for the manufacturing company. To put it another way, Barr believes that culture could indeed be the key to GM’s future success.

On a macro level, the goal for any organization is to create a positive work culture. The challenge is figuring out how to accomplish that within the confines of your operation. An archived article from Forbes gives a list of five tips for creating a successful office culture; however, they are applicable to any work environment:

Managers who think their operation doesn’t have a work culture—or that they don’t need to bother cultivating one—are quite mistaken. If there are employees, there is a culture. The real question is whether or not it is a positive culture and, even more so, if the culture reflects the long-term goals and ideals of the company. Defining an operation’s work culture requires managers to take a hard look at the DNA of their operation. Is safety a priority or a value? Do managers walk the floor and interact with operators? Do you involve plant-level staff in process improvement activities (a key element of lean manufacturing)? What are the attitudes of the staff? Are you just filling positions, or are you strategically choosing employees that reflect your company’s ideals?

What does this look like in a metal-cutting environment? Scot Forge, a metal forging operation based in Spring Grove, IL, states here that their company has a “unique culture” built on employee ownership, continuous improvement, safety, reward, camaraderie, and community.

Yarde Metals, a metal service center featured here in a series of case studies, also shows that a positive work culture doesn’t mean management can’t have high expectations. According to Greg Sioch, lead foreman, operators at Yarde know that if quality isn’t maintained, they will be held accountable. “If a piece of material is rejected by the customer, we know who cut it, so it goes back to that associate and they are held accountable,” Sioch says. “That’s our culture. The associate is expected to follow their procedures and hold that quality.”

With the new year upon us, perhaps it is time to take a closer look at your work culture and see how it lines up with your 2015 goals. By asking a few critical questions and instituting some of the strategies suggested in Forbes article, managers can objectively evaluate their facility’s current work culture and, more importantly, start to institute changes to make it better.


Valuing Your Plant Floor Operators Can Pay Off

March 4, 2014 / , , ,

For the last several years, most metals companies have been investing in technology to improve productivity. And as the industry tries to deal with the skills gap, that trend will likely continue. In fact, a report from Fabricating & Metalworking expects 2014 to be the year of “unprecedented automation.”

However, industry leaders also realize that automation isn’t going to be the panacea for their workforce challenges, nor is it the only way they can optimize their operations. A growing number of manufacturers are finding that plant floor workers can play just as much of a role in improving efficiency and, if leveraged correctly, can be more of an asset than a cost.

According to this article in The New York Times, a few years ago, motorcycle manufacturer Harley completely redesigned its production system around this concept. The company built a brand new plant, but instead of relying on robots to ramp up productivity, the well-known brand put its value in its workers and the problem-solving skills they brought to the table.

Of course, Harley is a custom, unionized shop. Can the same hold true in a high-production metal-cutting environment? A recent column from IndustryWeek says yes. As evidenced in the winners of its Best Plants Award, IW says that leading manufacturers—both union and non-union—are investing in their plant floor production staffs and are seeing positive bottom-line results.

Here are a few metals companies that also finding that to be the case:

To succeed in today’s competitive market, metalworking executives need to optimize all aspects of their operations—and that includes their human capital. Whether it’s incentivizing employees to keep quality high, leveraging their problem-solving skills to improve productivity, or providing them with the training to acquire the skills required in today’s automated plant, it pays to value your operators. Like Harley, metals companies have a choice: They can either treat their plant floor operators as costs, or they can turn them into valuable assets.


How Metals Companies Can Manage the Skills Gap

February 15, 2014 / , ,

At this point, most industrial metal-cutting executives are aware that the manufacturing industry is facing a tremendous workforce challenge. A widening skills gap is threatening U.S. businesses at large, and, according to Forbes, even the best firms are feeling the effects.

For manufacturers, the issue is two-fold. First, skilled production workers are one of the largest workforce segments facing retirement in the near future, which will have an impact on the number of experienced workers on the shop floor. In fact, recent reports say the mass “boomer exodus” has already begun.

Meanwhile, the current talent pool isn’t what is should be. Streamlined production lines and more process automation have changed the nature of manufacturing work, and the incoming generation of workers lacks the skills and technical knowledge required. What’s worse is that most young workers aren’t interested in working anywhere near a production line.

All of this is especially disheartening at a time when many companies are trying to bring manufacturing back to the United States. Industry associations like the Society of Manufacturing Engineers and major players like GE are attempting to get ahead of the problem by working closely with universities and government bodies to provide the necessary training and education to encourage students to pursue careers in manufacturing. And while these types of initiatives are certainly encouraging—and necessary—what can manufacturers do right now to help close the skills gap within their own operations?

For many companies, managing the skills gap will require changing the way they train and maintain talent, whether that means beefing up training programs or rethinking their employment strategies. This will mean different things for different companies, but here are a few of the talent strategies being used by some forward-thinking manufacturers:

The skills gap is a daunting issue for sure, and there is no “silver bullet” solution. However, manufacturers that fail to tackle this challenge now will find themselves facing bigger problems in the future. The next generation of manufacturing may offer a new set of talent challenges, but as proactive companies are finding, it also presents a new set of opportunities.


Is It Time to Change How You Allocate Resources within Your Service Center?

February 5, 2014 / , , ,

One of the most common pain points for metal service center executives is allocating resources in the most efficient and economical way. From a strategic standpoint, it would be ideal for managers to make continuous changes within their operations, in terms of both equipment and human capital resources. However, budget and time constraints have made that a challenge for many industrial metal-cutting operations.

As stated in this article from McKinsey Quarterly, most executives find themselves stuck in the trap of allocating resources the same way over and over again and expecting different results. Specifically, the management consulting firm states, “Every year, they turn the handle on the same strategy-development, capital-planning, talent-management, and budgeting processes, and every year the outcome is only marginally different from the one they reached in the previous year and the year before that.” Alternatively, McKinsey suggests that managers who refocus these processes have an opportunity to deliver different results.

A separate article from goes one step further and says that 2014 should be the year that executives dump all “tribal knowledge”— the tendency to do things simply because “it’s the way we’ve always done it” — and start using actual facts and data to make decisions. “The bottom line in today’s mobile-enabled, hyper-connected world: Companies that continue to rely on tribal knowledge and myths alone are falling further behind enterprises that are dealing in reality and actionable fact,” the article says.

Perhaps it is time to take a closer look at how you are distributing resources within your metal-cutting operation. Do you find yourself using the same resource allocation strategies you have used for years? Are you using facts and hard data to make those decisions? Are those decisions improving efficiency? And, last but definitely not least, do you know what other metal service centers are doing?

A recent white paper from the LENOX Institute of Technology (LIT) lists several ways leading metal service centers are choosing to reallocate their resources to improve efficiency. Below are two examples from the paper that show how technology investments like software can pay off:

Of course, managers can make other, non-technology related investments in areas such as training and safety and also get a high return. Every operation is different, with its own unique strengths to build on and weaknesses to improve.

The first question managers need to ask themselves is whether or not it is time for a change. Are you making strategic, proactive decisions for your industrial metal-cutting operations, or are you simply doing things “the way they’ve always been done?” As suggested in the McKinsey Quarterly article, today’s unpredictable market requires managers to be more agile in all of their business decisions, including resource allocation.


What Does It Take to Be an Industrial Metal-Cutting Leader?

January 30, 2014 / ,

Like every other U.S. manufacturer, industrial metal-cutting companies have spent the last few years focusing on mere survival. Most companies have been forced to run “lean” and, in turn, have had to make some changes. However, a few organizations have risen above the fold and emerged as industry leaders. The question is how? While your goal may not be to make it onto IndustryWeek’s Manufacturing Hall of Fame, the fact is that today’s competitive market will continue to weed out companies that remain stagnant. In other words, “getting by” just isn’t going to be enough.

So what does it take to be an industrial metal-cutting leader? Below are a few of the common traits found among best-in-class companies:

Industry leaders understand the importance of continuous improvement. Experts like consultancy McGladrey continue to find that thriving manufacturers have a “relentless focus” on continuous improvement. According to McGladrey’s latest Manufacturing & Distribution Monitor Report, this is especially true as the economy emerges from the recession. As stated in the report, industry leaders are starting to realize that continuous improvement is vital because “increased profitability will likely need to come as much from productivity improvements as it will from revenue growth.”

Industry leaders invest in training. Investing in the right machinery is an important aspect of every metal-cutting operation; however, leading manufacturers know that productivity starts with the operator. All three of the industrial metal-companies featured in this series of case studies from LENOX Institute of Technology (LIT) have thorough training programs for both new and seasoned operators. Metal Cutting Service, Inc. (MCS), for example, offers an intense 40 hours of training when operators are first hired, as well as ongoing training at least once or twice a year. According to MCS president David Viel, “You are no better than your employees.”

Industry leaders work closely with key suppliers. Perhaps one of the greatest benefits of an increasingly competitive market is that many suppliers are offering value-added services to differentiate themselves—a trend that is especially beneficial for smaller manufacturers. Support in areas such as preventative maintenance, troubleshooting, and even software tools can help improve productivity and, ultimately, save costs. As stated in this article from ThomasNet, suppliers possess deep knowledge about the products they produce, and manufacturers should tap into this expertise and use it to their advantage. Global manufacturing giants like Unilever have even established long-term supplier partnership programs to help achieve specific company goals. To read how this can work in an industrial metal-cutting environment, check out this white paper from LIT or this case study on Aerodyne Alloys, a leading metal service center.



Facing the Workforce Challenge

December 20, 2013 / , ,

While finding “good help” seems to be an age-old management challenge, it has become a critical issue for today’s manufacturing industry. It’s no secret that a large percentage of skilled manufacturing workers are facing retirement in the coming years, while only a small percentage of younger workers have an interest in filling those roles. What may be surprising, however, is that most manufacturers are doing nothing about it.

According to’s Industry Market Barometer, the manufacturing industry continues to be heavily populated by Baby Boomers, the post-World War II generation that is at or near retirement age, while workers ranging from 18-32 remain completely untapped. According to the recent survey of more than 1,200 manufacturing companies, three-quarters of respondents report that 25 percent or less of their workforce are in the Generation Y age group. And while 29 percent of respondents say they will increase employment of Generation Y workers in the next two years, 49 percent expect the numbers to stay the same. In fact, ThomasNet believes the manufacturing industry is up against a “biological clock” that is rapidly winding down when it comes to recruiting and training the next generation of workers.

An article from echoes the same sentiment, stating that “a dearth of workers will cause the manufacturing industry to hit a wall in the future.” This, the article says, is the main reason why industrial metal-cutting companies need to consider strategies that will help them cultivate future talent—and fast.

Of course, one way to address this workforce issue is for managers to actively hire a new generation of workers. However, the real challenge will be finding ways to ramp up their skills and knowledge base so that both quality and productivity are comparable to that of seasoned workers. As described in the white paper, The Top 5 Operating Challenge For Metal Service Centers, there are two key tactics managers can use to encourage a high-quality workforce, regardless of experience level:

There is no doubt that today’s industrial metal-cutting companies need to make hiring a new generation of workers a top priority. Indeed, the workforce issue can no longer be ignored. However, hiring “good help” isn’t going to be enough. To be successful, today’s operations managers need to make sure they are also training and maintaining that help.


Why You Should Invest in Your Operators

December 10, 2013 / , ,

Over the last few years, the industrial metal-cutting industry has invested heavily in technology to ramp up productivity. While this is certainly moving industrial metal-cutting forward, it has also exacerbated the workforce challenge that has been threatening the industry for years. As confirmed by a joint report from Deloitte and The Manufacturing Institute, skilled production workers are one of the largest workforce segments facing retirement in the near future, which will clearly have an impact on the number of experienced workers on the shop floor. This does not bode well for an industry that just ramped up its need for advanced skills.

The good news is that the solution is quite clear: You need to invest in your workers. While having the right tools for the job is important, it is perhaps even more critical to have people with the right skills operating those machines. In a band saw cutting environment, for example, an operator running a saw at the wrong speed and feed settings will drastically reduce blade life, increase the chances of maintenance issues, and create potential quality issues, all of which add up to wasted time and money—the exact opposite of productivity.

The only way to increase skills is to provide training. Unfortunately, this is not always as simple as it sounds. A good training program should provide new employees with a solid foundation, while also making sure seasoned employees know the latest techniques. Below are some suggestions that will help take your training program—and your workforce—to the next level.