Institute for Supply Management’s December 2011 PMI increased 1.2 percent over November, coming in at 53.9. This is the 31st consecutive month of expansion in the manufacturing sector. Manufacturing is still expanding according to this indicator.
Facts keep us bullish on manufacturing.
Facts like these ISM Numbers support our continued belief that manufacturing continues to lead the recovery and is the place to be if you are looking for a career. Otherwise, facts supporting this bullish attitude are hard to find, until our end of the month figures show up.
The ISM numbers showed Fabricated Metals, of which Precision Machining is a sub-sector, to report decline or contraction in December.
New Orders, Production, Employment, Prices, Order Backlog, Exports and imports all grew in December according to ISM.
Supplier deliveries remained the same, while inventories fell by 1.2 percent, and Customer Inventories fell by 7.5 %.
The drop in Customer Inventories is a signal that our order books will be picking up in the first quarter of 2012.
Pricing of raw materials remains highly uncertain, with respondents reporting both increasing and decreasing prices for Aluminum, Plastic, and Steel.
Why are you bullish about manufacturing? Do you feel like a bull with a blindfold?
Here is a safety lesson learned from one of my Facebook Friends.
So the lesson today is……Don’t take off the guard on the giant belt sander and then adjust the belt half off the guide and then duct tape it in place so you can grind that knife “Juuuuuuuus riiiight”
The Chinese yuan or ‘remninbi’ hit a record high against the US dollar on Monday amidst the strong volatility visible in the country through December. Yuan gained for a second straight day, reaching a record of 6.3287 in morning trading, after the central bank guided the currency stronger via its daily reference exchange rate, set 0.07 percent higher at 6.3167 per dollar.
In December, the yuan touched the bottom of the daily trading range of 0.5 percent on 12 out of the month’s 18 trading days. The currency also posted a record one-day gain of 0.4 percent on Dec 16.
Bloomberg reports that Japan and China will promote direct trading of the yen and yuan without using dollars and will encourage the development of a market for companies involved in the exchanges, the Japanese government said.
There is no doubt in my mind that there are going to be dire things happening in Euorozone currencies this year; this news of the Yuan is something that all U.S. Manufacturers should think about as it’s direct impact on us will be greater than all that Eurozone drama, in my opinion.
Selection of materials for precision machined parts should be held to a higher standard than just “cheapest price per pound.”
Here are 4 questions to help decide if a grade of steel (or other material) is appropriate:
Is it economical in assuring a satisfactory end product?
Does it provide sufficient safety factor for the properties called upon in the design?
Does it provide the most economical means of production?
Is it the lowest cost raw material?
The order in which these questions are asked is critical. Answering number 4 first puts the entire company in jeopardy for product liability lawsuits if the first three questions are ignored in the buyer’s holy quest for cheapest raw material price.
In steel, with many possible carbon and alloy grades, qualities, and finishes (cold drawn, turned and polished, ground and polished, or combinations of these) the end use is of particular importance in arriving at the grade, type, and quality of the steel.
Human safety critical components (airbags, anti lock brakes, climbing equipment) require different thinking than parts for less critical applications where failure is merely inconvenient, not life threatening.
Components for expensive machines and production equipment also fall into this category, where the failure of a part purchased under the assumptions of “false economy” result in extensive downtime of a very high value production asset.
Once the suitability for the end use and safety factor as designed has been determined, then the suitability of the material for the production method becomes the next selection criteria. In high volumes of relatively simple parts, for example, very low carbon, plain carbon steel is the appropriate choice using cold heading. If the volumes are not there, attempting to use this same steel on screw machines would result in inferior finishes and far more expensive parts than if a free machining grade of steel were chosen. Selecting for Manufacturability can help lower the total cost over the entire supply chain as well as for the final consumer.
The final criteria then becomes transactional cost. But even this is more than just dollars and cents- it is both dollars and sense! Is the supplier a legitimate source? Do they have statistically controlled systems? Do they have a mature quality system that has demonstrated it’s strength over time? Do they limit their number of suppliers so that you will not be subjected to the full range of variability of inputs possible in an increasingly global, interconnected world?
If buying for mere cheapness was the point, we could replace all purchasing agents with third graders. By third grade, most kids know which number is larger, and which is smaller.
It might take some effort to get them to choose the lower number, though...
The professional value that purchasing adds is by establishing and following a process that assures an optimum outcome for the entire value chain, not just one part of it.
PMPA members have a great relationship with the Great Manufacturer at the North Pole. But we heard that it isn’t quite so nice for other folks who don’t make Santa’s “Nice” List.
A few ways you can tell if I hate your shop...
10. Santa leaves you a ribbon wrapped folder of jobs to bid. They are all cam-swiss jobs, lots of drilling and threading, and the materials are Waspaloy, Refractaloy 26, beta Titanium (Ti-3Al-13V-11Cr), and Pure Tungsten.
9. Santa drops off 10,000 bags of money. Unfortunately it is overstock of 2009 Zimbabwean currency and the total value of the $Z2,621,984,228 notes he left is a little less than $1. And their weight caves in the roof and mezzanine over your Q.A. Dept.
8. Your P.O. for raw materials at firm pricing to North Pole comes back stamped, “Dream on, Chester!”
7. You ask Santa for a new order, what you really get is a new government regulation.
6. When Santa drops off your stuff, he also leaves a hefty bill for Air Freight and expedited (overnight) handling.
5. By the time Santa gets to your shop, all he has left on his sleigh is foam packing which he spills all over your parking lot as he overfills your dumpster while looking for that one box of special inserts he had on his list for you.
4. Week after Christmas you get a citation in the mail from the State Dept. Of Commerce. Seems their field guy caught Santa smoking on your premises.
3. Instead of “Naughty” or “Nice,” Santa has put you on the “Do Not Call” list.
2. Labels on all the packages Santa delivered read “Work in Process” not “Passed Q.C.” And they are in tubs with red tags…
1. Santa tells your inside sales gal “If I wanted them Saturday, I would have ordered them Saturday!”
The DOT has just finalized a rule restricting mobile phone use by drivers of commercial motor vehicles (CMV’s). The new rule goes into effect Jan 3, 2012. The rule restricts CMV drivers from reaching for or holding mobile telephones while operating their vehicles, or pushing more than one button to operate the device.
What's the problem?
This rule, which goes into effect on January 3, 2012, was adopted by the Federal Motor Carrier Safety Administration and the Pipeline and Hazardous Materials Safety Administration, which are part of the Department of Transportation. It amends both Federal Motor Carrier Safety regulations and Hazardous Materials regulations. The rule restricts CMV drivers from reaching for or holding mobile telephones while operating their vehicles, or pushing more than one button to operate the device.
The popular Push-To-Talk (PTT) feature used by many drivers is prohibited by this new rule. While, functionally, the PTT feature is similar to the use of a CB or two-way radio (neither of which is addressed by the new rule and therefore still permissible), the final rule advises that PTT is prohibited because the device used for PTT comes squarely within the definition of a mobile telephone prohibited by the rule, and it also requires the driver or user to hold it and push a button more than once. Therefore, its use while driving a CMV is the same as that of a hand-held mobile telephone and is prohibited.
Exception: Emergencies. Using a hand-held mobile telephone is permissible by drivers of a CMV when necessary to communicate with law enforcement officials or other emergency services.
Bottom line, your driver is still OK to use the CB but using the cell phone to get back to you while driving is verboten.
Why should the consumer have to deal with extraneous materials or content?
In our shops, too many gages on the table slows down the operator, increases variability, and reduces output.
Over 25 million sold- no waste here.
When something is extremely popular, using as little as possible becomes the sustainable thing to do:
It maximizes profit.
Minimizes waste.
Reduces exposure to shortages of materials.
Reduces the cost and burden of disposal.
Our industry is in the business of producing large numbers of components, so the threat of multiplication of waste or inefficiencies is very real for us.
It has been my observation that abundance (of stuff) can be a competitive disadvantage.
Extraneous tools, packing materials, supplies, gages, rags, dunnage, and other tangibles get in the way of the work and can distract the worker.
Here are 6 tools that PMPA members use to calibrate their business to the industry and markets.
Calibration assures our values are correct and consistent...
Every precision machining shop has a calibration system to assure that their products are dimensionally compliant and meet the expectations of their customers. Calibration systems assure that when they say “0.0001 inch,”- that it is in fact 0.0001 of an inch.
How do you calibrate the business of your business? How do you know that you are getting the same share of sales into a market as your peers? How do you know that you are paying the wages that the talent you have deployed are worth? How do you know that what you are seeing for material prices are in fact the trend in the market and not an anomaly?
PMPA members calibrate their businesses by participating in PMPA surveys and reports:
Monthly Business Trends: Sales / Shipments/ Hours scheduled/Overtime/Prospects for Sales, Lead times, Employment, Profitability
Annual Shop Hourly Wage Survey and Report
Administrative and Clerical Wage Survey and Report
Executive Compensation Survey and Report
Material Impacts Report
Annual Business Forecast Survey and Report
Our Business Trends Index correlates well with the markets that determine industry’s shipments. Data and inferences from it have been reblogged on Wall Street Journal online.
How do you know if the wages you are paying are competitive and sustainable? Participants in PMPA’s various wage surveys know because they are calibrated with precision machining shops just like theirs.
Our Annual Business Forecast Survey and Report
looks at participants reports and forecast of sales in various market segments served by our industry. This report includes a longitudinal view as many participants provide data each year so that the trend over time, not just point in time is apparent.
Yes we flood oil and sometimes put a film of lime or borax on our steel hot roll, but the fact is that our cold drawing process is essentially “unlubricated.”
The film between the die and the rod is probably less than three or four molecules thick...
Here are five attributes of Dry Friction and how they apply to cold drawing:
Frictional resistance is nearly proportional to pressure. Check. In cold drawing, friction is not only proportional to pressure, it is also proportional to total area.
Friction is nearly independent of speed at low pressures. While we would be challenged to identify “low pressure” s in cold drawing, the fact that we can start drawing by “pointing” the bar at low speed makes this point. Check.
Friction is not greatly affected by temperature. The first draw bar of the day with equipment at ambient and those drawn mid shift when the dies are reading in the 300-400 degrees Fahrenheit range do not vary in “pull” required. Watch the ammeter. Check.
Friction depends on the nature of the surfaces. If you don’t believe that this is true, just rough up the die and start drawing. This is why die maintenance is so important. Check.
Friction of rest is slightly greater than the friction of motion. Again watch the ammeter. It takes just a small amount more of power to start a pull than it does to sustain the pull. Check.
Bottom line: Only a fool would try to cold draw steel without lubrication. But the fact of the matter is that the cold drawing is essentially an unlubricated process, if one thinks about the attributes of dry friction given above, as applied to our process.
I tend to think of the “lubricants” that we apply as being inert pressure agents that merely separate the surfaces of the die and the work with a few molecules of material to physically prevent the two materials from welding under the extreme pressure. The steel never touches the die- the die just provides a backup for the lube which is really doing the deformation of the steel by hydrodynamic pressure.
