We all know that customers want ever decreasing prices.

GM and Chrylser bankruptcy and bailout showed us how that thinking turns out.

Ever decreasing prices! I want ever decreasing prices!

So what do customers really want? Here are my top three ideas:

Customers want solutions.  They don’t want to buy your product. They want to solve their problems.They want to see their problems go away. Are you selling products when they are looking for solutions? How is that working out?

Customers want service. They want it now. Lead time is so, so , 20th Century. It is a global, inter-networked- 24-7  world today. Some body has what they need. The first one to say yes gets the order.

 Customers want value. Not cost. Value. Customers will pay for what they value. Not just pay for what it cost you, but for what they value. Is it really a “deal” if you have to take the “gi-normous” soda when all you really want is the sandwich? How much “soda” are you pushing to your customers when all they want is the sandwich?

Now where did I put that sandwich?
Solutions. Help them solve their problems with <gasp!> the products that you can deliver this week. Service. It is no surprise that all mature economies become more and more service oriented. People want to be served. Customers are people. Value. The customer tries to get you to lower your price. you think that it is about lowering cost. What the customer really wants is higher value.
Thats what I think.
Solutions.  Not products.
Service. Not promised delivery. Delivery! 
Value.  Not a deal where they get crap stuff they don’t really need. 
These are the three things that  customers want.

What do your customers want?
What do you want?
I’ll bet its the same things.

Killer baby groan 
Big gulp credit

Here are 5 reasons to anneal steel. 
To alter the grain structure;
To develop formability;
To improve machinability;
To modify mechanical properties;
To relieve residual stresses.
The annealing process is a combination of a heating cycle, a holding period or “soak” at temperature, and a controlled cooling cycle. Atmospheric controls are generally used to protect the steel from oxidation. 
The temperatures used and the cooling rates are carefully selected to correspond with each steel grade’s chemical composition in order to produce the results desired. 
For bar steels used in our precision machining shops, there are three kinds of annealing that may be encountered:
Subcritical Anneal
Solution Anneal
Spheroidize Anneal
Subcritical Anneal 
 A subcritical anneal is the metallurgical name for what is termed a process anneal or stress relief anneal in North American commercial practice. It consists of heating the steel to a temperature close, but below, the steel’s lower critical temperature or Ac1. This simple anneal reduces stress and hardness in the material and makes modest changes in its microstructure. Steel mills often employ this to improve cold shearing or cold forming. This is sometimes used between cold forming operations to reduce hardness. 
Solution Anneal 

Lamellar Pearlite.

Solution annealing is referred to in commercial practice as ‘LP Anneal’ or Lamellar Pearlite Anneal. Lamellar pearlite is the microstructure that predominates when doing this kind of anneal. The cycle for this anneal involves heating the material above the critical range (Ac3) and holding the steel (soaking) at that temperature for a length of time followed by slow cooling below the critical range (Ar1) temperature. This cycle reduces hardness and reprecipitates the carbide phase as lamellar pearlite. Controlling the time and temperature gives the metallurgist a means to alter the resulting lamellar pearlite structure, and refine the ferritic (as rolled) grain size. 
LP anneals are usually applied to medium carbon (0.40-0.65 weight %) plain carbon and alloy steels for precision machining in order to reduce hardness and improve machinability. 
Spheroidize Anneal   
Spheroidized Microstructure.

Spheroidize annealing is the term that describes a thermal process which results in a globular or spheroidal type of carbide after heating and cooling. There are several types of spheroidize cycles which we will write about in a future post. 
Spheroidized microstructures are desireable for machinability and improved surface finish when machining higher carbon steels. Spheroidized microstructures are also preferred when the steel is to be severely cold worked: cold extruded, cold upsetting, or bent. Most bearing steels are first spheroidize annealed prior to machining. 
Lamellar Pearlite photo 
Spheroidized Photo 


In one word: “demographics.”
  Here are five reasons from Shirley A. Engelhardt, President and Founder of ORTHOWORLD Inc., a strategic services firm solely focused in orthopaedics, and Founder and Managing Member of Knowledge Ventures, LLC, an early stage musculoskeletal investment fund.
5 Reasons:
1) We’re getting older. 
2) We’re becoming more demanding, both mentally and physically.
3) We’re not taking such good care of our bodies, even at a young age.
4) We’re continuing to believe, at 40 or 50, that we’re still 25.
5) We’re prone to falls, accidents and other foibles of daily living (and always will be).
Shirley Englehardt has plenty of facts and data to back that up, and if you are in (or thinking about entering) the medical orthopedic parts market, the article  at the link below will be Gold for you.
Orthoworld article.
Thanks to Jeff Remaley at Orthoworld for sharing the great article.

Up substantially over same month last year.

All of the crucial raw materials that we track are up double and triple digits compared to same month last year. Material cost component of our manufactured products is up, and holding in the short term, but subject to variability of global forces as well as local and market demands.
See the full report here.

Here are 5 benefits of cold working of steels that make a difference to your machining operations.

  1. Increased strength
  2. Improved surface finish
  3. Controlled dimensional tolerance and concentricity
  4. Improved straightness
  5. Improved machinability.

Increased Strength
It is widely known that cold working strain changes the properties of most metals. When as rolled steel bars are cold worked by cold drawing through a die, a significant increase in yield and tensile strength is obtained. At the same time, The reduction in area and percent elongation are reduced.
The graph below shows the effect of cold drawing on the tensile properties of 1 inch round diameter steel bars.

Mechanical Properties % Change resulting from % Cold Work

There are two important lessons in this graph: 1) As strength properties increase, ductility measures decrease; 2) Up to about 15% cold reduction, yield strength increases at a much greater rate than tensile strength. The first 5% of cold work results in the greatest increase in strength.
Improved Surface Finish
Hot rolled steel bars are finished at high temperatures, and so the surface has a hard abrasive scale made up of various oxides of Iron. This scale is hard and abrasive ranging from 270 – 1030 DPH (Vickers) microhardness depending on the type of oxide (s) formed. In order to cold draw the bars, cold finshers typically remove the sacle by shot blasting  or acid pickling. This results in the removal of the hard abrasive scale.
By pulling the bars though the die, the surface finish is also improved,  with Cold Drawn bars typically running 50 microinches maximum and modern equipment typically working at 25-30 micro inches. Compare this to a roughness height of  250 or more for hot rolled bars.
Controlled Dimensions
Because the bars are cold reduced at room temperature by pulling through an oil lubricated die, the dimensional conformance of the steel is much more easily controlled. Typical tolerances for cold drawn 1 ” low carbon steel bars are +0.000″/ – 0.002″. this compares favorably to +/- 0.010 for hot rolled steel of the same chemistry and diameter. Concentricity is improved by the cold drawing operation.
Improved Straightness
The straightness of hot roll bars is generally 1/4″ max deviation in any 5 foot length. In cold drawn bars,  depending on size and grade this  deviation can be held to as little as 1/16″ in 10 feet.
Please see our post here for a more complete discussion of bar straightness.
Improved Machinability
Improved machinability is really the synergistic result of all of the above improvements made by cold work (cold drawing).
Higher yield to tensile ratio means the tool has less work to do to move the metal in the workpiece to its ultimate strength when it will separate as a chip. This translates into less force on the tool and greater tool life and productivity. Not putting hard abrasive scale and oxides into your cutting fluids nor on to your tool because the bar has been cleaned results in longer uptime and  less maintenance for tools, workholding, and machines. More tightly controlled dimensions and concentricity means that the bars can be run at higher speeds without creating harmful vibrations and chatter. Finer tolerances can be held by your equipment when bars are sized properly going into the machine. Similarly, improved straightness results in less runout and permits higher speeds in production.
Bottom line: Hot roll bars may be cheaper by the pound, but machining them will cost your company a lot more because they lack the benefits of cold drawing:

  • Increased strength
  • Improved surface finish
  • Controlled dimensional tolerance
  • Improved straightness
  • Improved machinability.
  • Graph and data: AISI Cold Finished Steel Bar Handbook, 1968. (Out of print)

    Guest post by Peter Morici
     “The fact is nothing the Fed does can appreciably accelerate U.S. economic recovery or stem deflation as long as China continues to print yuan, buy dollars and U.S. securities, and make its products woefully cheaper than its comparative advantage warrants in the United States and Europe.”
    Significant revaluation unlikely, credit claimed for victory by Administration- a certainty!

    Through the boom years of the last decade, Beijing printed yuan to purchase hundreds of billions of dollars in foreign exchange markets. That made the yuan and Chinese products on U.S. store shelves artificially cheap, and imports from China, coupled with higher prices for imported oil, pushed the U.S. trade deficit to more than five percent of GDP from 2004 to 2008.
    When Americans spend that much more abroad than foreigners purchase in the United States, American goods pile up in warehouses and a steep recession will result, unless Americans spend much more than they earn or produce.
    During the boom, China facilitated such folly by using its dollars to purchase U.S. Treasury securities, and that kept U.S. long interest rates artificially low, even in the face of Federal Reserve efforts to reign in spending.
    From 2003 to 2006, easy terms prevailed on mortgages, homeowner lines of credit, car loans, and credit cards even as the Fed raised the federal funds rate. Americans borrowed against their homes, pushed real estate prices to unreasonable levels, and spent on Chinese goods at Wal-Mart until the credit bubble burst in late 2007 and 2008.
    China continues to recklessly print yuan to buy dollars and U.S. Treasuries, and all those yuan are creating inflation and real estate speculation in China that Beijing can’t contain.
    With the dollar still overvalued by some 40 or 50 percent against the yuan, the U.S. trade deficit with China, and other Asian countries practicing similar currency mercantilism, is growing again. This deficit saps demand for U.S. goods and services, slows U.S. recovery, and suppresses U.S. land values and fuels fears of deflation in the United States, even though the U.S. banking system is flush with cheap credit from the Fed.
    The fact is nothing the Fed does can appreciably accelerate U.S. economic recovery or stem deflation as long as China continues to print yuan, buy dollars and U.S. securities, and make its products woefully cheaper than its comparative advantage warrants in the United States and Europe.
    Coupled with its high tariffs and administrative barriers to imports on anything the Chinese can make themselves, no matter how awkwardly or inefficiently, Beijing is hogging growth and jobs, and spreading unemployment and budget misery among workers and governments from Sacramento to Athens.
    This past weekend, Beijing announced it will permit some more exchange rate flexibility but we have heard those words before. China will likely permit the yuan to rise slightly against the dollar-much less than six percent a year-while the true value of the yuan rises much more, thanks to Chinese modernization and productivity improvements.
    China’s announcement is a cynical ploy to assuage critics less than a week before G20 meetings, and without a substantial one-off revaluation of the yuan, Beijing’s words are hypocritical and selfish.
    China’s yuan policy makes the Fed nearly irrelevant but for crisis management-bailing out big banks and European governments that make fatal mistakes.
    Worse, President Obama’s failure to take strong action against Chinese currency manipulation-for example, a tax on dollar-yuan conversion to make the price of Chinese products reflect their true underlying cost-crippled the jobs creation effectiveness of his $787 billion dollar stimulus package and delivers ineffective his broader efforts to resurrect the U.S. economy.
    Obama’s exclusive reliance on diplomacy forfeits U.S. monetary policy to Beijing, renders impotent U.S. fiscal policy, and visits enormous pain on American workers.
    Peter Morici is a professor at the Smith School of Business, University of Maryland School, and former Chief Economist at the U.S. International Trade Commission.


    Here are 12 good ideas for you and your safety program.

    The new sheriff in town continues to make enforcement OSHA’s top priority.
    Here are 12 good ideas  from American Safety and Health Management Consultants,Inc. to help you and your team avoid the new sheriff’s thirst for fines and penalties.

    1. Make safety a key priority. Really.
    2. Be ready for an inspection. Do not be caught off guard. Even if you aren’t there- have a plan.
    3. Review all written programs and update where necessary.
    4. Ensure that all employees receive the OSHA required training, document the training and follow up to assure they “got it.”
    5. Inspect your facility, or have a safety professional do it for you.
    6. Correct any and all violations as soon as practical.
    7. Follow up on employee safety related concerns.
    8. Establish supervisor responsibilities and hold them accountable.
    9. Know what to do in case of an OSHA inspection. Have assigned personnel to handle this.
    10. Audit your safety programs at least annually and develop a safety action calendar for each new year.
    11. Enforce you company safety policies fairly and consistently.
    12. Recognize and reward employees for good safety performance.

    Photo of eggs.
    (Actually, they aren’t really eggs.  And fining employers isn’t really about safety.)

    423,000 jobs, $24.6 billion in annual payroll, $136 billion worth of products sold.
    Just the facts on the medical technology industry.

    These three facts alone make a compelling case for medical technology focus as part of your precision machining business plan- but wait- there is more.
    12.5% increase in number of workers in this industry 2005-2008;
    11.4%- increase in payroll;
    11.6% – increase in value of products sold.
    Medical Technology Industry Salaries: 40% above National Average.
    These are just a small sampling of the facts in the latest report from AdvaMed prepared by The Lewin Group.
    Top ten states for Medical Technology Industry Employment: California, Minnesota, Massachusetts, Pennsylvania, Florida, new Jersey, Indiana, New York, Texas, and Wisconsin.
    You can get the full report on the Medical Technology Industry HERE.
    Nothing like the facts…
    Joe Friday photo credit.

    Austenitic Grain size is an important aspect in the specification and selection of steel for our engineering projects.

    This makes a difference!

     Here are five points to help you make sense of austenitic grain size and its influence on our work.
    1) The variation in mechanical properties, response to simple heat treatment, and many other properties cannot be explained solely by chemical composition.
    2) While the matter of grain size does not take away from the importance of chemical composition of steels, grain size  does shed light on how the steel may be expected to perform in fabrication or service.
    3) The method most widely used in steel is called the McQuaid Ehn test, and it uses plate IV in section 10 of  ASTM E112 Standard Test Methods for Determining Average Grain Size. A full discussion of the procedure can be found in Annex A3, Paragraph A. (and subsequent) of ASTM E 112.
    4) In ASTM E 112, grain sizes can range from grain size number 1 (coarse grain) to grain size number 8 (fine grain).
    5) Impact strength at a given hardness, yield strength, % elongation, distortion in heat treatment , machinability,and ability to be plastically deformed are all material characteristics that are influenced by grain size.
    While the origins of grain size determination were visual and chart based, today many laboratories use software to perform automatic image analysis. Utilization of semi-automatic digitizing tablets or automatic image analyzers to measure grain size is described in ASTM Test Methods E 1382.
    For more information about the role of fine grain size in your machine shop, click here.
    For more information about coarse grain size in your machine shop, click here.
    Image of microscope reticle courtesy of  Klarmann Rulings Inc. 

    The topic of  heat treatment is one part science and often it seems, two parts smoke and one part black magic.

    Oh yes, and fire too.

    If the definition of heat treating that you have is close to the definition of  steel that my neighbor has: “It’s dirty, it’s heavy, a magnet sticks to it and its made in fire,” then maybe you too could use an assist in figuring out how to communicate successfully with your heat treater.
    We were pleased to see an article entitled ” How to Best Communicate Your Needs to the Heat Treater”  co- written by  PMPA Technical Member Nevada Heat Treating  Vice President Patrick McKenna.
    It was feature article  in  the  April 2010 print edition of Industrial Heating magazine.
    I predict that you will add it to your file of ‘articles you can use’ for sensemaking in this ever more complicated technical world that we harness for our customers.
    You can read it at the link above.
    Or contact Patrick at Nevada Heat Treating or Miles Free at PMPA and we’ll email you the article as a .pdf.
    It will really be worth  your time before you send that next batch of parts out to take a ride through the Fire…