2 Rules For Effective Benchmarking

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Benchmarking is not a comparison of numbers or indicators. Benchmarking is an ACTIVITY or PROCESS to determine Best Practice, and your relationship to that Best Practice.
Benchmarking is an activity that employs a systematic and continuous effort to identify important measureables (benchmarks). It employs a defined process to compare your organization’s status to that of a best-in-class company or companies. Benchmarking is a tool that helps you identify, improve and implement the practices or methods that will enable you to become the new ‘best-in-class.’
Two rules for effective Benchmarking are:

If Benchmarking does not lead to a specific action, it is a waste of your company’s resources;
If you aren’t Benchmarking to the best, your Benchmarking will be under effective.

Competitive analysis can tell you what the differences are between you and another company, but it does not give you any insight into how that difference exists. Benchmarking focuses on best practices and methods, resulting in process changes and improvements that will achieve improved customer satisfaction.
Site visits in my experience result in some limited information sharing and collection of novel ideas, but after the visit, these are recognized to be a smorgasbord of unfocused facts. While these facts may be interesting, they may or may not be applicable to your firm or what you are trying to accomplish. This is especially true if the facility that you are visiting is not a best in class peer.
PMPA members have a Benchmarking ‘tool they can use’ to measure their company’s performance against their peers in manufacturing.

PMPA's iLumen Benchmarking Service is secure and easy to use.

Called PMPA iLumen Benchmarking Service, this safe, secure online tool allows participating members to compare their company’s financial and operating performance against that of their peers or other manufacturing companies. Seeing the difference between their firm’s and other firms’ performance in key areas gives the PMPA members a focus for their company’s improvement activities.
In the April Issue of PMPA’s Business Trends Report, almost half of the companies that reported double digit sales increases over the prior month were PMPA iLumen Benchmark participants.These companies have used the intelligence of the PMPA iLumen Benchmarking data to show them where to address improvements in their organization.
Participation in PMPA iLumen Benchmarking is no extra charge for PMPA members- it is a member benefit.
Numbers may be the language of Benchmarking, but they are merely raw material that drives the real activity- continuous improvement and transformation of your people, processes, and systems. These improvements will result in higher quality, lower costs, and ultimately, improvement of your company’s products and services. PMPA’s iLumen Benchmarking Service can provide you too, with “tools you can use” to drive improvements in your companies processes and performance.

Medical Manufacturer Challenges- 3 Keys To Keep You In The Game

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The medical industry will continue to develop new products, require new capabilities from their suppliers, and maintain their drive for continuous improvement in technology, costs, and quality.
Production of precision parts for medical applications is constantly changing. More challenging materials, geometries, and ways to assure conformance / performance are what’s ahead in this market.
What are the keys to meeting these challenges if this is your market?
Key #1- Technology
Technology is certainly a key part of a sustainable commercial strategy. With tolerances, finishes, and geometries standard that were unheard of in other markets years ago, modern equipment is a must- capable, productive, precisely controlled equipment.
Key #2- Zero Defects not just Zero PPM.
Zero PPM tells us about your process. Or Processes. Zero Defects is a condition of your products. In the surgery, they don’t have the ability to analyze your ppm. They need defect free. Zero Defects. And that means anticipating and preventing latent defects… so close communication with design is a must, as well as process control and understanding.
Key #3- Knowledge and Training
Knowledge and Training not just for operators. Engineering, Programming, Toolmakers, Quality Assurance as well as Operators all need upgraded skills to successfully manufacture complex geometries from materials such as Titanium and Stainless Steels such as 316L. Simple form tooling is no longer adequate for the complex forms now being generated by whirling or interpolation of milling cutters. This requires higher skills and process knowledge.
Which of these is most important?
If any of these is missing, it would be a showstopper for your medical market business. They are all important. But if one had to be ranked most important, I would say that it would be knowledge and training. With a knowledgeable and well trained crew, you could find the technology and reinvent the mistake proof processes needed to succeed in the business.
Without knowledge and skills, all you would really have is a technology showroom or museum.
What do you think? Is knowledge and training first among equals? Or is it silly to rank any of these as more important?

Manufacturing Growth Suggested by ISM Survey

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The Institute of Supply Management said its index of the manufacturing sector, also known as the Purchasing Managers Index, rose to 48.9 percent from 44.8 percent in June.
That figure was better than Wall Street’s expected level of 46.5 percent and closer to the 50 percent level that separates expansion and contraction. 48.9% is knocking on 50%’s door…
The ISM said that although the factory sector contracted for an 18th consecutive month, the decline was modest and suggested the slump is ending.
“It would be difficult to convince many manufacturers that we are on the brink of recovery, but the data suggests that we will see growth in the third quarter if the trends continue,” according to ISM survey chief Norbert Ore.
Additionally, the survey showed growth in both the new orders and production sub-indexes. The survey also indicates that the headline index was pulled down by weakness in inventories and lingering declines in employment.
We don’t think that it would be difficult to convince our members that “Now is the time,” for the orders to appear. We just hope that we can all have access to credit to cover our payrolls while we wait for payment on the new business that is imminent.
According to the NSBA’s July Report , access to capital continues to be a major issue, with 80 percent of small-business owners negatively impacted by the credit crunch—up from 67 percent one year ago. Sixty-eight percent reported worsening terms on their credit cards and 38 percent were subject to a decrease on their lines of credit or credit cards.
It takes energy, machinists, materials and supplies to keep our machines running. And all of those require working capital.
Recovery may be imminent, but its duration will be measured by our ability to fund our work.
What has your shop done that is out of the box to stay ‘in the game?’

Precision Contract Manufacturers-Why Do People Buy From You?

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Unless they are family, or are under encouragement from someone on the Sopranos, people have three reasons to buy from you.
The lowest price.
The best quality.
The best delivery.
Which do you think it is?

I'll hum the Jeopardy theme while you think.

Time’s up.
When I was the newly minted quality manager at a little steel operation in Medina, Ohio, I was confident that the reason people bought from us was because of our quality (that’s the second answer shown above). I’m betting that many of you believe that too- your brochures and websites always have a big section and color photo about your quality.
My vice president at the time was convinced that customers bought solely on price. “The Sales Department is always coming in here trying to get me to lower my price.”
And that was true- it was always the outside salesmen who were trying to wheedle down the price another fifty cents or a buck, it seemed. So my VP was convinced that it was the very first answer given above.
The Wisdom of Inside Sales.
It took a veteran inside salesperson to straighten this out for me.
“It’s not your Quality,” he said to me, saying quality with a capital “Q”.
“If your Quality isn’t adequate, he’ll never call back again. You won’t get any orders. Quality is a given.”
That took the new quality manager down a peg or two…
“And it’s not price. The material will sell for the market price- what the market says its worth.”
He let me stand there and think for a moment.
“Hmm, I’m wrong, the VP is wrong, and the outside sales guys are wrong?” I asked.
“I take orders from customers all day long. That’s what I do. None call me and say, ‘I’d like some of your quality XYZ today.’ Every customer that calls me asks me this question: “Do you have any XYZ in stock?”
“Do you have it in stock?”
“That’s why people buy from us! ‘If it’s in stock, we have it.’ It better meet the standard for quality, or they won’t call again. They won’t pay one penny more than what it would cost if they could get it someplace else- if someplace else has it in stock.”
“People buy from us because of our delivery.”
For those of you keeping track, that is the third answer.

The best delivery.

And that’s my final answer.
What is your final answer? How does the answer in your head match up with your company’s sales materials? Web site? Inventory policy?

3 Actions To Minimize Cracks In Our Shops

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Paying attention to draft, chemistry, and steel melt source processes can help you minimize the potential for cracks at your customer after cold work operations.
After a crimping, staking or swaging operation, cracks can develop. This is because the cold work needed to swage, stake, crimp, etc. was greater than the material’s available elasticity. This is the case in the part photographed here.

Cracks can develop after cold work is performed on machined parts.

In order to minimize cracking during or after crimping, or thread rolling, or other substantial cold work, take the following steps:

Specify non-renitrogenized material;
Inform your supplier of your cold work application. They can consider reducing cold draft, or changing suppliers of the hot roll to get basic oxygen process, low residual, low nitrogen steel;
Ask the customer to consider changing the grade. Resulfurized steels are capable of being somewhat cold worked, but their high volume fraction and weight percent of nonmetallic inclusions (What makes them cut so well!) is also what works against successful cold work.

To minimize the occurrence of cracks that are not a result of cold work, try this:

Assure that adequate stock removal is taken in machining;
Buying from reputable sources whose quality systems employ rototesting and eddy current testing;

When cracks are discovered in your shop, what actions do you take?

China Privatization Toll- Plant Manager Killed In China By Rioting Workers

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Transitioning to private enterprise isn’t exactly the easiest thing to accomplish. Rioting workers killed the designated plant manager at Tonghua Iron and Steel in Jilin province, and left 100’s injured according to press reports from London, NY, and Beijing .
This gives all of us a new point to use when calibrating what is going on in our businesses, industry, and market. Our sympathies go out to the family of the manager killed while trying to do his job.
This affects us because it is a setback to the Chinese government’s efforts to consolidate the Chinese steel industry. Most of the industry remains under the control of local governments. Consolidation will help the national government rein in overproduction, eliminating overcapacity, and creating larger, globally competitive enterprises out of the companies that survive.

Jilin City, Jilin Province, Peoples republic Of China — Jilin City, Jilin Province, Peoples Republic Of China

Jilin is the self -proclaimed ‘Cradle of the Chinese Automobile Industry’ as well as a major petrochemical, pharmaceutical, and high technology manufacturing center.
The elimination of surplus capacity is essential if there are to be orderly markets in steel across the globe, because China produces fully one half of all global steel tonnage. But this event shows that global thinking has local consequences.
The lesson that I get from this incident is that when you don’t have lawful and effective means for redressing grievances, the law is created on the spot by the aggrieved. And if there is one thing that can trump ‘the wisdom of crowds’ it is the “passion of the fearful.”

Bank of Canada Declares Recession Over

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How do they know?
In comments to reporters accompanying the issuance of July 23’s Monetary Policy Report Bank Governor Mark Carney declared the recession over in Canada.

“We believe the economy will grow this quarter. The rate of growth will pick up to the end of the year and into 2010.”
The bank is forecasting economic growth of about 1.3% in the current quarter through September. Three percent (3%) through next year.
Ford’s $2.8 billion earnings surprise just might be evidence to that effect, and a sign to our industry that better days are, to use Bank Governor Carney’s terminology, ‘nascent.’
PMPA’s June Business Trends Report- available to members here – showed sales up a mere three points to 68 from May’s 65. However, of the 102 shops reporting, 42 % reported double digit sales increases in June compared to May. The average increase of those shops was 32.9%.
This is one time that we certainly won’t mind if this Canadian Economic Weather makes it down to us South of the border.

China Steel Production-First Half 2009

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By our reckoning, China has produced over 11 times more steel in June 2009 than the US. Apparently their stimulus is working. We question whether their environmental laws are as effective.
GD*3153294
China produced 266.6 million tonnes of crude steel in the first six months of 2009, this is 48.6% of total world production of 549 million tons, according to a report by the World Steel Association.

According to that association, for the month of June 2009, the US produced 4.4 million tonnes, down 46.9% from June 2008. China produced 49.4 million tonnes for June 2009, up 6% from June 2008’s 46.6 million tonnes. The Chinese crude steel production figure is 11.23 times the US Crude steel production reported by WSA.
Globally, the total steel production in the 66 countries tracked by WSA decreased 21.3% for the first six months of 2009 compared to same period 2008.
What does not seem to be working is any kind of environmental restraint: see the two page fact sheet on China Steel Industry Environmental Record here:
Or get the full report.

Steel Surcharges for August

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We expect to see steel surcharges and prices on the climb as manufacturing economic activity starts to recover. The current 2.8 times increase for the scrap surcharge compared to June does not bode well for moderation in increases going forward.

Steel bars pointed in preparation for precision machining. miles — Steel bars pointed in preparation for precision machining

The scrap surcharge for August 2009 was announced to be $7.00 by Republic Engineered Products. The scrap surcharge for carbon and alloy steel cold finshed bars was $2.50 per hundred weight (cwt) when we prepared the June Materials Impact Report.
US raw steel production is up slightly at ~3% over prior week according to AISI. Exports to Turkey and lack of manufacturing activity in North America to generate new scrap are possible factors.
Chinese steel production has been on a tear- up 10% in June according to various press reports.

5 Tips to Prevent Tool Failures From Overheating

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When machining carbon and alloy steels, Crater Wear is the normal tool failure mode. Overheating is an unpredictable failure mode. It can be one of two failure modes, Thermal Checking ( or Cracking- my first boss called it “Crazing” ) or Deformation. Usually, when an irate customer ran into overheating issues, the tool they sent back to me had deformed to the point that it looked like it had been made out of lava.

The lack of predictability of failure by overheating creates issues for the shop beyond the obvious. Parts produced immediately prior to failure are suspect and must be validated prior to release, to avoid sending rejectable product to customers. Overheating can thus be a “delivery problem” in your customer’s eyes.
Here are 5 tips to get out of Overheating Tool Failure Mode and back to normal predictable Crater Wear Tool Failure Mode when machining steel:

Improve lubrication coolant delivery or formulation. Sometimes adding an extra coolant line to the position will eliminate the problem. Confirming your coolant is up to spec should be done before electing to buy a new “super duper formulation.” First things first!
Use a harder grade of carbide with more Ti (Titanium)
Increase the Feed Rate (IPR) inches per rev
Reduce the Speed (SFM)
Consider Ceramic or Cermet Tooling. Note- these are not really appropriate for low carbon (less than 0.20% C) steels. Low carbon steels become gummy and stringy at speeds typically used for ceramic tools.

These tips will address your overheating problem by reducing the friction, surface adhesion, and improving removal of heat, (improved coolant, delivery); improving the tool’s ability to withstand cutting conditions, and reducing the heat inputs by decreasing speed and increasing feed.
For more great information on this subject look at this lesson from Fox Valley Technical College.