Rail Shipment Indicator- Manufacturing and the Tangible Economy

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When I was a blast furnace burden clerk at USS back in the 1970’s, the hot metal production that I reported was the CEO’s critical indicator for the Company. He knew that he couldn’t possibly track every product and process in the far flung USS empire.
However, he did know that he couldn’t get more finished steel production out of his company than was originally produced as hot metal in the blast furnaces.
So blast furnace production was the single most important production indicator that was used to manage the business.

: 2010 remains above 2009 and 2008 data.

Rail shipments are an equally valid indicator to those of us in manufacturing- raw materials such as iron ore, semi finished products such as steel, and finished goods such as motor vehicles are all a component of the Monthly Carload Report compiled by the Association of American Railroads.

U.S. freight railroads originated an average of 284,407 carloads per week in November 2010, for a total of 1,137,626 carloads for the month.

That’s up 4.5% over November 2009.

Year-to-date carloads the end of November 2010 were 13.46 million, up 7.1% from the 12.57 million through same time period in 2009.

The following chart shows us just how well the “tangible economy” has come back:

November 2010 was the ninth straight month with higher year-over-year average weekly rail carloads something that hasn’t happened since 2004. I like where we are!

According to the AAR comparing shipments in November 2010 to November 2009,

Metallic ores shipments are up 86%;
Primary Metal prodyucts (mostly steel) up 26%;
Waste and Scrap (largely scrap) up 11.4%.

There are a lot of conflicting and confusing indicators being circulated in the media today. We continue to be a fan of rail shipments as an indicator of the real status of the ‘Tangible Economy’ of manufacturing. Just like the iron production numbers I helped track back in the day, These rail shipments are a great proxy for manufacturing to come (ore and scrap shipments) and present manufacturing (Motor vehicle and parts shipments) as well as a proxy for the larger economy that is built of the ‘stuff’ carried by rail.

Economic Patriotism- The Girl Scout Way

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On my honor I will try to serve God and my country…

girl scout uniform — This is what they wore when I was still in school.

So imagine the brouhaha when the Girl Scouts of America put up their uniform contract for bid and two of the potential bidders were Overseas companies.
Imagine the concerns that farming out the work to a place like China could result in Girl Scout uniforms being made by child labor in poor working conditions. Girls who, by our standards, probably ought to be in a scouting program, not exploited in abysmal working conditions in a sweatshop.
Imagine the phone calls, emails and letters the Girl Scouts must have received.
Happy Ending?
Girl Scouts spokeswoman Michelle Tompkins said the organization, which has its national headquarters in New York City, had been contacted by parents, members and volunteers urging it to keep the uniforms American-made. She said the contract hadn’t been awarded but the bid request had been modified to require that the uniforms be made domestically and that companies adhere to strict guidelines regarding worker age, treatment and safety. This was reported here.
Girl Scouts of America Spokesperson Michelle Tompkins had this to say: “We thank the many Girl Scout parents and volunteers who stood up for their beliefs and showed our 2.4 million girls that every voice makes a difference. They are the role models who help build girls of courage, confidence and character who make the world a better place.”
Every voice makes a difference. Every choice has a consequence. When you buy, how do you choose?
Economic patriotism is official policy in China (indigenous innovation is what they call it) and many other places.
Is economic patriotism part of your thinking?

OSHA, Noise, And Your Precision Machining Shop

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Summary: A change in the interpretation of the word ‘FEASIBLE’ by OSHA could cause all shop owners whose shops noise level exceeds 85 dB to be REQUIRED by OSHA under this new definition to install expensive engineering or administrative controls to abate the noise to levels below the action level. PPE could no longer be acceptable as the sole means of addressing noise exposure in our shops.
Action You Need to Take:
1)      Determine the noise level in your shop to see if it exceeds 85dB TWA.
2)      Determine cost to install noise guarding on machines necessary to abate noise levels to below 85dB (engineering control)
3)      Determine how many machines must be taken out of service at a time to prevent the noise level from exceeding the 85dB level ( administrative control )
4)      Perform a business case analysis to see if your company can remain in business if this change to the definition becomes law, requiring you to purchase sound dampening or reduce production.
5)      Document the cost to comply, loss of jobs, and any reduction in competitiveness, capacity or other issue that is a result.
6)      Send to Miles Free gro.apmp@eerfm so that I can include in PMPA’s formal comments.
7)      Send a letter to the Docket for comments on this proposed change in interpretation as well as one to your congressman and please copy PMPA.
Submit comments at http://www.regulations.gov. Individuals who mail or deliver comments must submit three copies to the OSHA Docket Office, Docket No. OSHA-2010-0032, U.S. Department of Labor, Room N-2625, 200 Constitution Ave., N.W., Washington, D.C. 20210. Submissions not longer than 10 pages may be faxed to 202-693-1648
Don’t delay.
PMPA and other metalworking associations requested, and received an extension on the Comments deadline so that we could obtain facts needed to properly assess the consequences of this new interpretation. Comments are now due by March 21, 2011. We need your facts to make our case!
We need your data now to effectively represent you on this potentially shop closing issue.
All data that we have seen from Member shops so far has shown that these shops will need to add sound dampening equipment.
Links: Extension letter:
Notice of Proposed Reinterpretation:
PMPA Extension Request Letter:
The shop (and machininst jobs) you save may be your own.

Red Ribbon Poka Yoke

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Speaking of assembly…

Last weekend I bought a table that my wife wanted, to replace the classic old drop leaf which had seen better days.

Picking up the carton, I was fascinated by the red ribbon that was strung out of the box itself and a few inches proudly waving around for all to see.

firepunkindrlisa 110 — What's up with the Red Ribbon?

When I opened the carton, guess what was on the end of that ribbon?

: The blister pack containing the nuts, washers, and assembly wrench.

Too bad I didn’t take the photo before I assembled the table…

What a splendid poka yoke. The red ribbon sticking out of the package was proof positive that the necessary blister pack was in fact in the carton.

No x rays ~~or TSA groping~~ needed.

That’s what I like about visuals.

Visuals are simple, elegant, and can save you a whole bunch of time (time=money).

Just by showing up, being red, and waving around.

How about you?

Any elegant “visual solutions” that you have deployed to make a difference in your manufacturing, assembly or packaging operations?

P.S. She loves the table…

Where's the Jobs?

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Guest post by Peter Morici.
Only 39,000 new jobs created is awful.
After we back out health care and social services, which are largely gov’t funded, the private sector is not creating permanent jobs.
None, zero, nada.

After health care, social services and temp services are backed out, the private sector ACTUALLY LOST lost 24,000 jobs
Ugh! (SpeakingofPrecision asks-IS THAT A TECHNICAL TERM?)
So much for the gradual recovery.
Meanwhile Congress and President negotiate extending the tax cuts–which everyone knows will end in a compromise in the range of $500,000 to $1,000,000 for the cutoff or a temporary extension or both, and extending unemployment benefits, again.

Titanic-Deck-Chairs — Deck chair anyone?

Rearranging the chairs on the deck of the Titanic!
The economy must add 13 million private sector jobs by the end of 2013 to bring unemployment down to 6 percent.
President Obama’s policies are not creating conditions for businesses to hire those 350,000 workers each month, net of layoffs.
Peter Morici
703 618 4338
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.
Photo credit.
Actual photo of Titanic Deck Chairs

Apprenticeships vs Education?

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There are a lot of things to consider in the chart below, but as a manufacturing guy, I believe that the strong economic performance by Germany, compared to Ireland at the current moment, might be partly explained by Germany’s strong apprenticeship programs, as opposed to sending everyone off to University.
Making people who can make things as opposed to churning out masses of “symbol managers.”
Q: Who would have thought of “Post Secondary Educational Achievement” a possible negative economic indicator?

A: Professional Journeymen in the trades, perhaps.
So why is the German economy, with its relative lack of large numbers of well educated citizens in the 20-24 year old age group so far ahead of Ireland?
Perhaps –Manufacturing.
Perhaps- Apprenticeships.
Perhaps.
Chart courtesy of Clusterstock Who captioned this Graph” The Irish Collapse Is An Embarrassment To Everyone Who Loves Education”
Further Reading: Shopcraft as Soulcraft

Why Demand for Precision Machined Parts for Appliances May Not Recover Soon

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New appliances are part and parcel of home sales.
And home values.
“Home prices are down from their peak in June/July of 2006 through the trough in April 2009, the 10-City Composite is down 33.5% and the 20-City Composite is down 32.6%. Through September, they have recovered by +7.2% and +5.9%, respectively. The peak-to-date figures through September 2010 are -28.7% and -28.6%, respectively.“- S&P news release for the Case Shiller Home Price Index for September 2010
That doesn’t bode well for home appliance sales…

chart-of-the-day-case-shiller-nov-2010 — Double dip is here for home prices.

“Looking deeper into the data, in the monthly indices, 18 MSAs and both Composites were down in September over August. This is worse than August when 15 were down month-to-month. The only two which weren’t down in September were Las Vegas, which managed to stay a touch above the low set in July, and Washington DC. Overall, there are few, if any, good numbers in this month’s data.”

“As of the third quarter of 2010, average home prices across the United States are at similar levels to what they were in the middle of 2003. The 2010 third quarter values fell by 2.0% over the second quarter, with a corresponding annual rate of return of -1.5%. Since its 2009 Q1 trough, nationally home prices have only grown by +4.9%.”

Now you can see why on PMPA’s Business Trends reporting, we refer to this as “The Lost Decade.”

Chart
Announcement

Blue Brittleness, Temper Embrittlement, 400-500 Degree C Embrittlement And More

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What a difference a temperature range can make! Some plain carbon steels, some martensitic (quenched) carbon and alloy steels, and some high Chromium content steels can become embrittled if the wrong temper temperature is used.

This means premature failure in impact applications.
Blue Brittleness
Upon heating some plain carbon and alloy steels-not necessarily those that have been quenched to martensite or bainite-can exhibit both an increase in strength and a substantial decrease in ductility/ impact strength.
In this low temperature range, we call this effect blue brittleness.
Blue Brittleness is a strain aging mechanism that occurs in this blue heat temperature range.

Temper Embrittlement

Martensitic (Quenched) steels can become embrittled if the wrong temper temperature is used.

Link to graph.
In the range of 700 to 1070 degrees F ( 375 to 575 degress C) most common low alloy steels show an increase in their ductile to brittle transition temperatures- regardless of whether they are heated into this range, or slowly cooled through it.
(Think large section parts/weldments).
Lower Manganese (below 0.30 wt %) containing plain carbon steel grades do not seem to be susceptible, although elevated levels of Tin or Phosphorus can make even these grades somewhat suceptible.
For these reasons, we would NOT use any tempering cycle below 1100 degrees F (~595 degrees C) for the common carbon and alloy constructional steels typically designated by AISI and SAE in North America.
This gets us past the ductility troughs seen on the above figure.
500 Degree F Embrittlement
500 degree F Embrittlement also occurs in quenched and tempered High Strength Low Alloy (HSLA) steels when they are subjected to a temperature range between 400- 700 degrees F (~ 200-370 degrees C). This differs from Blue Brittleness in that it is a phenomenon of tempered martensite, it is not related to strain aging. I was taught that it is rather a result of precipitation along prior austenitic grain boundaries.
Proper selection of steel chemistry is the best defense against this type of embrittlement, with Aluminum additions above 0.1 weight % usually effective at preventing the problem. (Some steel producers lack the ability to add Aluminum to their steel melt due to technology constraints on their casters…)
400 to 500 Degree C Embrittlement
If the steel is high Chromium content (15% or more by weight) it can be subject to embrittlement when held in a 400-500 degree C (~750 -930 Degrees F) range for a long enough time.
(Think heat affected zone in welding Stainless steels.)
This embrittlement can be eliminated by a proper soak at a higher temperature to redissolve the carbide (and possibly nitride?) precipitates.
Conclusion
These are the primary forms of embrittlement that I have encountered in my career. Other types of embrittlement can include Liquid Metal Embrittlement, Sigma Phase Embrittlement and Embrittlement driven by neutron irradiation, or environmental factors such as hydrogen absorption, (often in plating) or Stress Corrosion Cracking where outside chemical attack and mechanical stress produce fine cracks in the steel.
Bottom line: Thermal treatments, and post quench temper treatments below 1100 degrees F are not recommended because of their possible embrittling effects on susceptible steel grades in common use in North America.

With increasing temper temperature, the plasticity of a quenched martensitic structure increases up to around 400 degrees F; decreases to a minimum in the 450-700 degree F (230-370 degrees C) range, and then continues to increase.

What Are You Thankful For?

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As an American, a dad, a son, a husband, a professional, and as a guy, I have much to be thankful for.
I am grateful that the member companies of the PMPA continue to find value in my work. It is the basis of my family’s economy.
I am grateful for the service of the men and women of the armed forces, my daughter and son in- law included, who put duty, honor and country ahead of all the stuff in my list below.

DSCF9710 — Just another guy thankful for the tools he can use.

I am thankful that I was born an American and am thankful that my life choices have resulted in a life worth contemplating.
I hope you’ll take a few minutes this Thanksgiving Day to contemplate what makes your life worth living too.
A few of the things I am thankful for include:
Still having a couple of $20’s in your wallet the day before payday.
Nobody in front of you in the passing lane.
Waking up after surgery.
The smell and taste of the summer’s first burgers on the Grill.
A high draft number.
Honest gratitude when your kid says “Thanks Dad.”
Solving a million dollar process problem with your brain, and a pencil and paper.
New Friends. OLD FRIENDS.
Meals by Candlelight.
Dropping the deer with a clean single shot using iron sights.
It’s A Girl.^2
It’s A Boy.
The whole body wiggle and smile you get when the baby sees that you are going to pick them up.
The squeal in your little girl’s voice when she realizes that you aren’t holding her bike up…
Having a customer you haven’t heard from in years track you down in another state to ask your opinion.
The sound of the carabiner snapping onto the bungee cord at the top of the tower.
Being able to say “We handled that,” when the boss rushes in with that look in his eyes.
Great optics, space on the chip, and adquate light.
Being elected president of the club that didn’t want to let you join.
Hearing the piano coda in Layla emerge from the layers of guitar.
The smell and feel of real leather- work gloves or baseball gloves.
Flying to Washington D.C. with the CEO to handle “That Department of Commerce issue.”
Strawberries from your own garden.
The flash of headlights in the driveway 5 minutes before your daughter is due back from her date.
A graph that makes sense.
Getting the tool on center with the first ‘tap.’
Hearing Carlos Santana bend and sustain a high guitar note for what must be 200 heartbeats.
Pepsi right out of the fountain.
The thoughtful email you get in the middle of a 7 alligator morning from your friend who “just knew.”
New Books. Old Books.
Solving a problem that no one else in your industry has ever solved.
The wind and scenery rushing by as you pedal your bike.
Not winning the election, but having received the endorsement of the local paper and the Chamber of Commerce.
Watching your son put on an exhibition on how to play first base during a playoff game.
The awe in your father’s eyes when you show him the plant that you run.
Hearing the change in her voice when she realizes it’s you on the phone.
Watching your kids graduate and knowing that their grades were WAY better than your own.
The look on your daughters’ faces as they started down the aisle with you, when you tell them how many heartbeats they had had since you first welcomed and loved them into our world.
Eliminating the root cause forever as a result of what you learned from your designed experiment.
Kneeling at the Liberty Bell in Philadelphia, in your suit, while on a break from a trade show, taking a moment to reflect and be thankful for all of your blessings, and all of your problems, happiness, and tribulations, while a busload of foriegn tourists try to figure out what the heck you are doing.
Happy Thanksgiving!

I am grateful the members of the PMPA continue to find value in the work that I do for them. It is the basis of my family’s economy.

5-S Your Material Procurement Process

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When its all about delivery, how many SKU’s of raw material can your shop effectively manage?

Punk accountant — Hey, I'm askin you a question here!

Precision machining shops have been applying 5-S principles in operations for a number of years.
PMPA’s NATIONAL TECHNICAL CONFERENCE in 2003 featured a session on Lean setup’s that focused on a 5-S approach.
But applicability of lean tools and 5-S isn’t limited to only shop operations. The raw material procurement process seems like a great place to try to lean your system and improve your competitive advantage by saying “yes” quicker than the shop waiting for a specific size of barstock.
With materials markets and customer demand in a very confounding state, now is a great time to apply 5-S to your raw material procurement system.
Here’s How:
Sort your material requirements into material grade and size categories. With today’s prices and longer lead times, minimizing the number of specific sizes that you need per grade will get you to yes quicker than waiting for each particular starting size of bar stock. This will permit flexibility to make parts from the same grade in a similar size range from two or three stock sizes rather than having five or six item-specific sizes to order, inventory, track and expedite.
Straighten your existing materials inventory and orders to give you a clear view of your raw material on hand and on order. Can any of your “orphan items” be applied to make another product. You need to know your inventory.
Sweep your inventory and order book of unnecessary items and orders. Will having a material “tag sale” make sense on items that you are unlikely to use?
Standardize your material order procedures and quoting process. You want to consistently order materials that can be used for multiple-applications, in easier to find standard sizes. You are not well served by trying to manage multiple orders of long lead time-specific items. This is where engineering can add real value to your company! Create a team to determine your needs by reviewing order book and customer commitments as well as supplier lead times and flexibility.
Sustain the process. Now that you have done all you can to minimize waste in your system of excess material item counts, it’s time to get customers to help you to further reduce the waste. Show your customers how you are standardizing stock sizes to minimize lead time and maximize your ability to say “yes.” Ask for their assistance to help shrink the negative consequences by giving you firm commitments that reflect the material market’s lead times. Then you and they can be more confident in your ability to meet their ever changing needs.
Applying the 5-S system to your material procurement system will create savings that should more than cover the increased yield loss of the additional stock removal:

It will also help you get a higher percentage of quotes, as you will be able to quote earlier delivery dates than someone who has to find a particular starting size in the market.
I think that when you see your customers accept your price for soonest delivery (based on an appropriate price that reflects the cost to whittle the part out from a larger-diameter “mother size”) you will be convinced that it is delivery not price that is driving todays customers.
How much can you save if you reduce the number of raw material items on hand, increasing inventory turns? Less is more. What is the cost to place and follow up a purchase order? To hold multiple items in inventory? What are your current inventory turns? What should they be?

5-S your raw material procurement system. Everyone will thank you for it.
Even your accountant.
Original article