The precision machining industry is generating strong sales and positive prospects going into calendar year 2014.
PMPA’s January Business Trends Report’s Index of Sales bounced back up to 126 from December 2013’s high for any December of 100.
January 2014 ‘s 126 was just 2 points shy of January 2013’s 128.
Precision Machining Businesses had a great month in January.
Outlook for sales remains positive with 87% of respondents expecting the level of sales to remain the same or increase over the next three months.
Profitability is expected to remain the same or improve by 93% of respondents.
Fifty-eight percent (58%) of shops scheduled overtime- 36% scheduled 45 hours or more. Get the full report here. Note: This report was our inaugural issue of the Business Trends Reporting using our newly updated secure, online reporting system. Effective with this move to the new system, we have established the year 2010 as our index base.
An improperly defined Repeatability and Reproducibility (R&R) program can drain a company of resources and reduce the effectiveness of the shop. ISO/TS16949:2009 states that variation studies “shall apply to measurement systems referenced in the control plan.” Here is a suggested approach to applying logic to the requirement.
“With aerospace function and safety criticality, we absolutely need to know the status and location of every piece that could be considered a part. We have definitely upped our performance in the accuracy, flow and knowledge of status of “what’s in the bin.””-Tammy Wilson. Permac Industries recently announced that they were just awarded their AS9100 certification, on their first try. AS9100 Certification is required by many OEM’s in the Aerospace industry.
I asked a group of employees at Permac what were the unexpected challenges and what made their efforts work.
If you are a manager, you might want to jot a few of these down. Challenges
Weren’t able to foresee many of the additional requirements.
Weren’t able to understand the impact of some of these requirements on our processes;
Weren’t really expecting additional paperwork- Our previous experience with Quality System implementations were that they helped us lean out our paperwork;
Really had to embrace the Authority of piece count and build processes based on count.
Enablers of Success
We really did have the right people in place;
Those people had both the responsibility and authority to make the system and process improvements demanded by the AS9100 standard;
They had management support when the changes were difficult to implement
They felt that management was confident in their ability to make the changes.
Members of the team told me that
Having strong existing systems made their job easier- they didn’t have to reinvent anything.
They did need to tighten up procedures;
They did need to add some additional procedures;
They have focused more on supplier and production control
Congratulations to the team at Permac for getting this done right first time.
Do you have a success story to share?
I am sitting at my desk preparing my day and this thought came to me, who trained you?
My mentors go back to the 1970’s working with my father in his sawmill which helped develop my work ethic and safety awareness.
As I progress 35 years I think about the key contributors along the way Tom Nelson, Lee Fuller, Bill Clippard and Bob Clippard….. the question that I am having trouble answering today is- Who am I training and am I helping people as much as my mentors helped me?
This morning, I am going to our local high school for a trades competition.
These students have worked diligently with their instructors and volunteers (mentors) to prepare for this competition.
I am thinking about what many of our shops need, and what they think about this young talent waiting to be guided in our shops. And even more importantly, what are they doing to develop their talent?
The first two things that come to my mind are Training and Education.
The PMPA’s Technical Program Committee has put together a program for our National Technical Conference that is focused on Training and Education!
This year’s conference is in Indianapolis April 5-8 and is going to be full of opportunities to TRAIN and EDUCATE our staffs. It is important to get your rooms booked by March 5th to take advantage of the $149 room rate. The prices will go up on March 6.
I am challenging myself to meet everyone in attendance at this conference. I would love to hear how you have been mentored and how you are making an impact on the people around you. Networking is part of the conference that I have gained the most from. Who trained You? Who mentored You? Who are you training? Who are you mentoring? If you love Manufacturing as I do, you will have answers to these four questions. “Education, mentorship and experience will take mediocre and make them good; will make the good great; and make the great world class!”- David Thuro
You may not know it but on this day in 1973 Ohio became the first state in the U.S. to post metric distance signs along I-71.
These new signs showed the distance in both miles and kilometers. The metric system, though standard in many nations around the world, never quite caught on in the United States, except on major-league baseball stadium fences — and on that highway in Ohio.
And that is why Richard and Joan Parker in the Summer of 1973 decided to call our company Metric Machining when the company began on September 1, 1973.
They wanted their company to be on the cutting edge………… and they’re still waiting for the rest of the country to catch up! Sign
Don’s inferences about the changes to come in the distribution industry could very well affect our provision of parts to our customers. His inferences about the employment situation are certainly in agreement with what we are seeing in our shops. 1 minute takeaway:Cultural unemployment occurs when the jobs available are not desired by unemployed workers due to cultural patterns. Factory and truck driving jobs were desirable jobs a generation ago, but the culture has changed and now a large portion of the available labor pool is avoiding these careers.
Guest Post by Don Ake. FTR (Freight Transportation Research) “In December I attended the Chicago FED Economic Outlook Symposium. During a presentation on the steel industry, the speaker noted that companies are having problems hiring enough production workers. Then, during a presentation on the housing industry, the speaker noted that builders can’t find enough skilled tradesmen for the jobs available. Finally, an auto industry analyst stated that there are unmet employment needs there as well.
“This certainly isn’t good news for the trucking industry. My company, FTR (Freight Transportation Research), is estimating the current driver shortage at 200,000 and, based on the presentations in Chicago, trucking fleets will not only be competing for workers inside the industry, they will be competing with many other industries. And this situation will only get worse, considering the potential of stronger economic growth and that we are only at the start of the baby-boomer retirement wave.
“I recently found a newspaper article from 2007 that predicted a huge worker shortage (in general) beginning in 2010. While initially I found the headline humorous, the Great Recession did not eliminate this worker shortage, it only delayed it. It would seem the worker shortage predicted in the article began in 2013.
“But how can there be a widespread labor shortage with unemployment still near 7% (and “real unemployment much higher)? One factor is “structural unemployment.” Structural unemployment occurs when unemployed workers lack the skills needed for the jobs available or do not live in the part of the country where job openings exist.
“The Great Recession created significant structural unemployment. Many workers lost jobs they had worked in for 10, 20, or even 30 years. Their jobs skills are either not transferable to other industries or not adequate in a changing, high-tech oriented economy. In addition, the housing bust made workers less mobile. It is difficult, in some cases impossible, to sell your house if you are “underwater” or if you live where housing prices are depressed. (I identified the structural unemployment problem created by the recession in October 2009, one of the first people to do so).
“But structural unemployment cannot fully explain the labor shortage. I believe there is a new factor which I will call “cultural unemployment.” Cultural unemployment occurs when the jobs available are not desired by unemployed workers due to cultural patterns. You could also call it “Ugly Job Syndrome.” Factory and truck driving jobs now fit is this category. These were desirable jobs a generation ago, but the culture has changed and now a percentage of the available labor pool is avoiding these professions.
“Also, government policies have contributed to this cultural unemployment. Cheap college loan money led to an over-supply of college graduates (and an under-supply of blue collar workers), and an increase in the social “safety-net” allows more people to eschew physical and more demanding labor. And the recent report by the Congressional Budget Office predicts that the Affordable Care Act will motivate people not to work full-time, if at all.
“So as bad as you think the driver shortage is, it probably is even worse given the overall labor market. And due to regulation, demographics, and economic cycles, it will continue to exacerbate. This is going to cause significant changes in the trucking industry as companies respond to the changing labor economics. There is no single solution to this problem. Yes you will see higher wages and shorter routes, but you will also see changes in the distribution system (more warehouses, perhaps) and more and different types of intermodal. It will also force carriers and shippers to develop creative solutions that maximize the number of drivers and maximize the efficiency of these drivers. This will take some hard thinking and analysis. Time to start thinking now.”
Don’s focus is on the Transportation industry, but his insights validate what we are seeing in the precision machining advanced manufacturing industry.
I think Don makes a great point about the issue being more than just structural unemployment, what he identifies as “cultural unemployment.”
American Honda Motor company is a major employer in Ohio with about 13,700 employees and three major plants. Now Honda is exporting more cars than it imports.
We wrote about the opportunity to embrace “The New Domestics” as customers as well as presented a business case analysis at a meeting of a number of PMPA member Automotive Focused Parts Producers in 2009.
So we were not surprised to see a small article in our local paper that American Honda is now exporting more vehicles than it imports. And our follow-up search turned up the fact that they are also the only manufacturer with THREE car lines selling more than 300,000 vehicles in 2013. According to Autofieldguide.com, Honda sold 366,678 Accords, 336,180 Civics, and 303,904 CR-Vs.
When I was working for the steel company, we put multiple truckloads of high quality steel into Honda and its suppliers’ plants every week. High quality, high-tech, highly engineered steel. We love foreign direct investment. We love the fact that Honda is paying the wages of about 13,700 employees here in Ohio. We love the fact that Honda is exporting more vehicles than it is importing. And we love knowing that they are purchasing highly engineered, performance and safety critical components from PMPA members around the country. Congratulations Honda. Congratulations, U.S. Manufacturing!
Does your business plan include the New Domestics?
Michael Tamasi was called to the White House to share AccuRounds’ successes in building a partnership to re-employ local residents in the manufacturing industry. A number of organizations promoting the national expansion of sector partnerships were also in attendance, including National Skills Coalition, (National Fund for Workforce Solutions), and Business Leaders United for Workforce Partnerships. Other event participants included CEOs from national corporations such as Boeing Co., Bank of America and Ebay, small and medium-sized employers, foundations, and other local organizations working to help the long-term unemployed in a variety of ways.
Secretary of Labor Tom Perez and Secretary of Commerce Penny Pritzker joined President Obama at the event to discuss a number of new efforts by the Obama Administration to bring attention to the long-term unemployed. President Obama announced he is dedicating $150 million in funding from the U.S. Department of Labor for “job-driven training partnerships,” also known as sector partnerships, to help the long-term unemployed get back to work, building on the successful models developed by such organizations as AccuRounds.
Prior to this event, President Obama, along with Vice-President Biden, Secretary Perez and Secretary Pritzker, convened twenty of the top CEO’s in the country to share best practices and strategize on how to collaborate in moving successful initiatives forward. Tamasi was one of only two small businesses to participate in this forum. This intimate roundtable discussion was productive, with Tamasi providing input from a small business perspective, asking the Fortune 100 CEO’s to include SME’s in future dialogue to assure that the entire supply chain has a voice.
“It was an honor to represent AccuRounds, and small businesses across the country, at the White House”, said Tamasi. “It’s encouraging that small business had a voice at the CEO roundtable, and that needs to continue. The skills gap is a serious issue and sector partnerships are the best opportunity to close that gap.” Later that afternoon, Tamasi was a guest on the Fox Business News show “After the Bell” further stressing the importance of sector partnerships in closing the huge skills gap in America.
AccuRounds, located in Avon, MA, is a contract manufacturer that machines and assembles precision turned components for industries including medical, aerospace, semiconductor and emerging technology. For more information, visit www.accurounds.com
Burrs and foreign object damage are consideration that are increasingly critical as precision machined parts are engineered from more challenging materials and to demanding geometries and applications.- Guest Post by John Halladay of Vectron, Inc. Burrs are unwanted raised material remaining on a machined part as a result of prior manufacturing operations. Link here
Foreign Object Damage (FOD):Any damage attributed to a foreign object that can be expressed in physical or economic terms which may or may not degrade the product’s required safety and/or performance characteristics.
“Cause damage, degrade product’s safety or performance characteristics, and economic damage” – These are serious issues to manufacturers and their customers making critical human safety reliant systems- like automotive, aerospace, fluid power, or medical devices or systems.
So how do we deal with Burrs, and FOD? John Halladay of Vectron explains:
“Based on my experience (a few more years than I care to admit) there are some things to consider with difficult to see FOD and burrs. Number one, hand deburring is typically out of the question—even with magnification. If hand deburring does happen to remove the burr, the dislodged burr magically transforms itself into yet another source of FOD. Mass finishing techniques (vibro, tumbling, Spinner, bead blast/water jet) will fall into the same trap. They may be able to dislodge the burr or foreign object, but then that dis lodged item creates damage to the surface finish or features you fought hard to create in the part.” “Thermal deburring is a batch process involving very intense heat in very short durations. It’s like being inside an explosion. Because it utilizes combustible gases under pressure, it has been proven to be extremely effective at removing the hard to see burrs we often encounter on the less machinable materials and alloys we see in our shops today. One advantage of Thermal Deburring is that it does not create FOD, and the process will seek out other sources of FOD that may be lurking in some of the tightest geometries in the part. There is nothing quite like an explosive gaseous mixture to see and vaporize and remove all unwanted debris on or in our parts! “Electro-Chemical Deburring, is usually referred to as ECD. It applies an electrical current to the areas where the burrs are located. The current carried by the electrolyte actually dissolves the burr material. This process can actually create a controlled radius on the workpiece by its action.”
Electro-Chemical deburring is therefore quite useful for removing burrs at internal intersections, especially when a radius is either desired or required. The downside of ECD is that it may not completely take care of other sources of FOD. This is easily resolved with the addition of a special wash process in conjunction with ECD to get to “Yes” with your customer.
Due to the expense and engineering associated with these processes, and the intermittent need for them, these processes are seldom performed in house in contract manufacturer’s operations. They are readily available from a number of job shops across the continent. You will find that most shops will provide a no-charge feasibility analysis including sample processing, so there’s really no down side to investigating these options while you continue to search for possible in-house solutions.
While economic activity in the manufacturing sector expanded in January for the eighth consecutive month, and the overall economy grew for the 56th consecutive month, the actual level of manufacturing activity declined substantially in January compared to December. According to the latest Manufacturing ISM Report On Business®:
The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee.
“The January PMI® registered 51.3 percent, a decrease of 5.2 percentage points from December’s seasonally adjusted reading of 56.5 percent.”
“The New Orders Index registered 51.2 percent, a significant decrease of 13.2 percentage points from December’s seasonally adjusted reading of 64.4 percent.”
“The Production Index registered 54.8 percent, a decrease of 6.9 percentage points compared to December’s seasonally adjusted reading of 61.7 percent.”
Of the 18 manufacturing industries, 11 are reporting growth in January in the following order: Plastics & Rubber Products; Primary Metals; Textile Mills; Wood Products; Printing & Related Support Activities; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Machinery; Furniture & Related Products; and Food, Beverage & Tobacco Products.
What commodities were reported to be in short supply/ up in price?