May 2016  |  Craftsman’s Cribsheet #44


The PMPA Business Trends Report is published monthly and provides a credible means for our member shops to compare their performance with the performances of other precision machining shops. Actual net sales and hours of first shift scheduled are the two performance indicators tracked, while three-month outlook for net sales, lead times, employment and profitability document the forward-looking sentiment of your peers.



While manufacturing growth remains essentially level, certain sectors served by the precision machining industry grew nicely in the year ending in April 2016.
Dr. Chad Moutray,  Chief Economist at National Association of Manufacturers, has compiled and shared the data for the past year in Manufacturing.
The sector in which Precision Machining is classified – Fabricated metal- shows a minus 3% growth for the period of April 2015- April 2016, the fact is that our shops also provide engineered components for Motor Vehicles and Parts (up 4.3%) Miscellaneous Durable Goods (up 5.2%) and Computer and Electronic Products (up 2.9%)

Winneing and losing sectors for Manufacturing Production.
Winning and losing sectors for Manufacturing Production.

While the actual Year-Over-Year Growth for Manufacturing eked out a 0.5% growth rate, there were clearly winning and losing sectors as the chart above shows.
Here is a recap of the markets typically served by our precision machining shops: Machinery, Fabricated Metal, Aerospace and Miscellaneous Transportation Equipment, and Electrical Equipment and Appliances were down, while Miscellaneous Durable Goods, Motor Vehicles and Parts, Computer and Electronic Products showed gains ranging from 2.9%- 5.2%.
According to Dr. Moutray, manufacturing rebounded somewhat in April, as manufacturing production grew 0.3 percent, just offsetting the 0.3 percent decline in March. In April, renewed strength in the  Machinery sector (up 2.4%) and Motor Vehicles and Parts  sectors (up 1.3%) were positive signs.
According to the FED, April Industrial Production moved upward by 0.7 percent, after two months of decline.
The PMPA Business Trends Index of Sales for April 2016 declined from the year’s March high 0f 131 to April’s 122. That 122 reading is up one point from the 2015 calendar year average.
While the economic news is not bubbling with enthusiastic reports of growth, we think that the industry operating even or just above last year’s average is a positive story.
It sure beats the alternative…

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Here are  3 career planning options that give you “Home Field Advantage” discussed in the video.
Alternate Career Plan #1 Direct to Work
Alternate Career Plan #2 Apprenticeship
Alternate Career Plan #3 Military Service
Thanks to PMPA Member  Company Vanamatic Company and Ohio Means Jobs for the video and wise career counsel.

If you have an intermittent  or periodic problem, start counting frequency of occurrence, and then figure out what the order of magnitude is compared to your process.

 in our shops, order of magnitude reflects the relative scale of our processes and helps us see what is and is not applicable to the problem at hand.
In our shops, order of magnitude reflects the relative scale of our processes and helps us see what is and is not applicable to the problem at hand.

To solve periodic or intermittent problems in our shops, the first step after identifying the problem is collecting data about “When” and “How often” it occurs. Then, comparing it to the orders of magnitude that occur naturally in your shop can help you narrow down the likely causes.
Relative frequency can be a big help, when you figure out that the frequency has some relationship or equivalence to some aspect of your process. For example, if the frequency is about equal to two occurrences per bar, than it becomes relevant to look at bar ends first, With two ends per bar, or the fact that you might get just two parts out of the first bar end, this tying of frequency to an order of magnitude denominator saves a lot of thrashing about to try to identify root cause.
What are some orders of magnitude that occur in your shop that you should consider for your problemsolving efforts on intermittent or periodic problems?
Material Order of Magnitude

  • Per Piece
  • Per Bar
  • Per Bundle
  • Per Lot
  • Per Order
  • Per Heat
  • Per Supplier

Your shop processes have orders of magnitude too.
Per Machining Operation

  • Per Spindle
  • Per Stock Up
  • Per Machine
  • Per Shift
  • Per Release
  • Per Batch
  • Per Lot
  • Per Production Order

How does this work? In a prior life I had an intermittent customer complaint for a twisted square bar product. The customer was counting bad pieces cut from bars in bundles.The frequency was extremely low, it was not at one per bar or one per ten bars, nor one per twenty bars. It turned out to be approximately, slightly less than  “one piece per bundle.” Knowing that the frequency was that low, we were able to eliminate most of our upstream of bundle process steps. They would have generated much higher frequencies – more on the order of multiple occurrences per bar.
Based on our frequency being an  approximate order of magnitude of one per bundle, we focused our investigation on the product and process at and after the bundle stage.  Which was where our problem occurred-when a single bar  end was being twisted by the movement of the last strapping and clip installation as it was tightened for packaging. the balance of the bar was held securely by the prior installed starps, but the tensioning unit grabbed one corner of a bar as it secured the final band around the bars, creating a twist in the end of the bar held under the tension of the clip that locked in that last strap.
Without comparing frequency of occurrence to orders of magnitude in our process, we would probably still be trying to figure out where in our process we could twist  just one 14″ segment out of 3,260 feet of bars. We’d be in denial, and eventually lose the customer.
If you have an intermittent  or periodic problem with your products, start counting frequency of occurrence, and then figure out what the order of magnitude is compared to your process.
Image credit

Where is the oversight?

The contempt that the regulatory community has for the regulated is evidenced in the new regulatory tack- Online shaming.
The contempt that the regulatory community has for the regulated is evidenced in this new regulatory tool- online shaming.

We teach our children that online shaming and bullying are not acceptable. Sadly, our congress fails to require similar standards of decency from the executive branch regulatory agencies.
On May 11, 2016, Occupational Safety and Health Administration (OSHA) released the final Injury and Illness Recordkeeping and Reporting Rule.
We testified against several provisions of this rule  on January 10, 2014.
We are over 4 hours invested into our trying to get through the 273 pages of the federal register notice  regarding the change of rule. On page 239, OSHA handily dismisses  our time estimate of 4 hours of professional time to understand the rule as “inflated.”
Here is what NAM’s Vice President for Policy, Rosario Palmeri had to say about this rule:
“Today, this administration put a target on nearly every company and manufacturer in the United States. Manufacturers are supportive of regulations aimed at increasing transparency, and we pride ourselves on creating safe workplaces for the men and women who make things in America. However, this regulation will lead to the unfair and unnecessary public shaming of these businesses. This is a misguided attempt at transparency that sacrifices employee and employer privacy, allows for distribution of proprietary information and creates burdens for all manufacturers. We will look at all options to protect manufacturers from this certain threat to the modern shop floor.”
Imagine if we had a regulatory climate where good policy and collaboration,  rather than bullying and shaming of employers were the real work product.
Sadly, manufacturers continue to be the target for regulatory bullying and shaming, increasing the adversarial and punitive nature of workplace safety.
When the focus is strictly on compliance because of enforcement risk, the employer’s focus becomes defense, not on establishing best practices and innovatioon. Management of regulatory risk becomes paramount.  Resources are diverted to  documentation and duplicative efforts to assure inspections are passed, rather than nurturing a holistic culture of safety.
Shaming as public policy and regulatory protocol? How can these possibly improve safety outcomes?
What can employers expect next, stocks in the public square? When did shaming become acceptable government policy?
Ashamed dog photo Link

“Manufacturing registered growth in April for the second consecutive month, as 15 of our 18 industries reported an increase in new orders in April (up from 13 in March), and 15 of our 18 industries reported an increase in production in April (up from 12 in March). The April PMI® registered 50.8 percent, a decrease of 1 percentage point from the March reading of 51.8 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting. “- Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee.

50.8 reading was below expectations for April, indicating a slower pace of manufacturing expansion compared to March.
50.8 reading was below expectations for April, indicating a slower pace of manufacturing expansion compared to March.

The ISM report also highlighted that respondents in fabricated metal indicated growth in April, and reported increases in prices for steel, stainless steel, and aluminum.
Why we are optimistic for your business going forward: The ISM PMI report’s “Manufacturing at a Glance” table showed that New Orders and Production were growing; Supplier Deliveries were faster, Inventories were contracting and Customer Inventories were too low. These are all positive signs for our Precision Component making shops.
ISM PMI Chart courtesy Calculated Risk Blog
ISM PMI April 2016 News Release