April 2016 | Craftsman’s Cribsheet #43
Here are six factors that can affect tool life in your shop.
Month: April 2016
April 2016 | Craftsman’s Cribsheet #43
Here are six factors that can affect tool life in your shop.
With 80 companies responding, the PMPA Business Trends Index in March 2016 climbed 14 points or twelve per cent to 131, only the third time the index has been above 130 in its history.
This is surprising given that the FED’s Industrial Production (IP) index fell 0.6 percent in March. (The manufacturing component-ex mining and utilities- dropped 0.3 percent). The FED also reported manufacturing capacity utilization was lower, down from 75.4 percent to 75.1 percent, its lowest level in nearly two years.
PMPA members that participate in our monthly Business Trends Reporting also weigh in on 4 indicators of future sentiment- Outlook for the next three months for Sales, Lead Times, Employment, and Profitability.
Opinions for the next three months compared to today:
The March 2016 PMPA Business Trends Report shows that our precision machining industry sales have turned positive. Lead Time sentiment shows we have the capacity to further grow sales which is supported by the fact that our hours of first shift scheduled are below last year’s calendar year average.
Mechanical properties of a given steel under compression compare closely with its tensile properties. An upset can be performed to determine how the steel will perform under compressive load.
A brittle steel under compression will ultimately fail by breaking along cleavage lines at an angle approximately 30 degrees from the axis of pressure being applied.
A more ductile steel flattens out, rather than cleaving, showing vertical cracks around the outer circumference. This ductile steel will not break, but will continue to flatten as more stress (load or force) is applied.
This compression or upset test is helpful for assuring that a steel will successfully cold work.
It can also be used to determine the extent of seams, laps or other surface imperfections on the surface of the bar. That’s what I used to do when we were producing drawn wire for cold heading applications.
Lousy forecasting by OEM customers beats Lean and JIT every time, leaving the OEM’s supply chain bloated with inventory and starving for releases.
Ryan Kutz of PMPA member company Aztalan Engineering asks “Since a better portion of our customers have adopted lean, JIT, or quick response manufacturing practices-where inventory is dock to stock and stock levels are managed daily, making inventory almost none existent- is there any evidence of this in the year to year trend? Are sales figures becoming even closer to real time with manufacturing orders? “
Ryan asks this in response to our post February Precision Machining Shipments Level With January .
Ryan, we agree with your premise that most of our industry’s customers have adopted programs such as Lean, JIT, Quick Response Manufacturing, and other dock to production (as opposed to dock to stock) programs. These programs are designed to reduce cost of possession for the OEM. However, we see these as being essentially a blunt instrument used to beat the supplier rather than as a means to truly coordinate supply chain effectiveness. We feel that despite these programs, our OEM customers lack valid insight into market demand, causing inventories to rise and then their orders to our shops to plunge concurrently. Take a look at the following chart from Dr. Ken Mayland of Total Business Sales vs Total Business Inventories:
This graph shows that in first three quarters of 2014, our customers had a great handle on their demand and their orders and invetories tracked quite closely.
From 4Q 2014 forward, however, the % Change in Total Business Inventories continued to remain in the positive Year over Year, while the % Change in Total Sales year over year plummeted through end of Q1 2015, when they “leveled off” at around negative 2-3%.
I think that we err when we overestimate the power of Lean, Just in Time, and Quick Response Manufacturing in the hands of our customers.
These tools seem to be a blunt instrument at best.
To your question “Are sales figures becoming even closer to real time with manufacturing orders?” the graph above does seem to show that the change in sales and in inventories are converging at end of 2015 and 2016 year to date.
My conclusion is that it doesn’t really matter how fine a resolution our customers have in their Lean, Just In Time, or Quick Response Manufacturing processes and procedures, if their ability to forecast is so poor, especially during market declines.
Lousy forecasting by OEM customers beats Lean and JIT every time, leaving the OEM’s supply chain bloated with inventory and starving for releases.
Thanks for the great query.
Mike Reader, President of Precision Plus, shares his take on PMPA’s recent 2 day Capitol Hill Fly-in.
On Tuesday, March 15th, I flew to our nation’s capital to join nearly a dozen other business leaders from our trade association, Precision Machined Products Association (PMPA), for 2 days of work on the hill. The purpose of the trip was to continue our engagement with elected officials in order to keep them aware of legislative and regulatory matters impacting our ability to compete globally. As always, the pace is fast and the time passes far too quickly to accomplish all we set out to do.
For those of you who have not been to Washington D.C. to participate in our political process, let me share a few observations. Every American citizen should make the trip at least once to experience the madness of it all. It is like a giant anthill that has just been attacked by small children. Every special interest group on the planet is there lobbying for their cause. How anyone gets anything done in the midst of the chaos is unknown to me. More than likely, not enough does get done. While I was not interested in the political process for many years, it became clear to me during the great recession that we must all get involved or be silent about the consequences others have imposed upon us.
Central to our conversations were these three advocacy issues:
Without common sense agreement on the top two items, we will continue to lose our workforce as jobs and businesses are exported in exchange for cheap taxes, labor, and greater global pollution. It is time to have this honest, yet respectful, conversation before it is too late.
– Mike Reader President of Precision Plus
Published April 2016
By PMPA Staff
Manufactured goods are an integral part of our life at home and work.
Published April 2016
By PMPA Staff
Zach came to work for NEM in January 2015, as part of a co-operative position that was developed to have a junior and senior employee share a full-time machinist position.
Published April 2016
By PMPA Staff
In July 1966, two engineers, Richard Lawton and Ernie Corts, with over 50 years combined experience working in the screw machine industry, partnered to start Buell Automatics Inc.
Published April 2016
By Miles Free III
The commercial demands of keeping our shops busy, machines up and running and employees working means that many of us spend just enough time to get the job to the floor, but no more.
“Economic activity in the manufacturing sector expanded in March for the first time in the last six months, while the overall economy grew for the 82nd consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.”
“The March PMI® registered 51.8 percent, an increase of 2.3 percentage points from the February reading of 49.5 percent. The New Orders Index registered 58.3 percent, an increase of 6.8 percentage points from the February reading of 51.5 percent. The Production Index registered 55.3 percent, 2.5 percentage points higher than the February reading of 52.8 percent.”
This is good news for the precision machined products industry. Our products make most manufactured technologies function and perform whether, electrical, electronic, hydraulic or fluid power, or simply utility control.
Of the 12 markets reporting growth in March, Furniture & Related Products; Miscellaneous Manufacturing; Machinery; Plastics & Rubber Products; Fabricated Metal Products; Primary Metals; and Computer & Electronic Products are served by our industry. Of the remaining markets reporting contraction, Electrical Equipment, Appliances & Components; Transportation Equipment are markets heavily served by our industry.
The resumption of manufacturing expansion is welcomed, and we hope will put to rest the speculation of a recession just around the corner. Manufacturing represents almost a third of our economy see our article here
ISM report here
Calculated Risk (Graph)