Metalworking shops in 2020 and beyond can take steps today to stay competitive. According to Grainger Metalworking Specialist Justin Hagerty, the lack of skilled labor available to run more technologically advanced machinery means deeper investment in automated solutions that run day and night. Facilities that invest in internships or advanced degree programs can create a workforce ready to take on technical roles and run this new machinery. Quality improvement across the supply chain can further maintain your uptime and efficiency. Metalworking demands new technologies and specialization to beat higher material costs and capture talented labor.
Preparing for the New Decade
Rapid change and growth in the metalworking industry are impacting production processes and staffing, according to Hagerty. Raw materials have gone up in price, and orders and contracts are down.According to the Institute for Supply Management, the last six months of 2019 showed “general contraction” across the entire industry as more shops competed for fewer contracts.Traditional technologies can’t keep up and are being replaced by highly specialized and computerized alternatives. Today's workforce needs updated, specialized skills to be effective, but often lacks them.
Shops of every size are now empowered to take a step forward and adopt new practices, according to Hagerty. The technological advancements profiled in Grainger’s 2018 Metalworking Today report are now more widespread. The ability to specialize, create skilled labor and maintain strong supply chain management can prepare shops to capture more contracts and cut costs.
Specializing Equipment and Operations
Metalworking shops looking to get ahead of costs and competition are likely to specialize. Rather than producing a wide range of products or completing all production steps, these shops are instead focusing on a small group of highly complex parts, such as orthopedics or aerospace components. According to Hagerty, shops increasingly “take on what they’re good at” and then pass work along to other specialized vendors to complete the product, for instance a machine shop sending out fabricated parts. This strategy, according to Hagerty, can reduce material and tooling spend along with time to complete an order, as multiple vendors can work consecutively to fill an order.
Specialization traditionally demanded significant investments in highly complex machinery and software, but the cost to purchase advanced, automated metalworking equipment has fallen since 2018. Computer Numerical Control (CNC) systems can cost less than $100,000 today, according to Manufacturing Tomorrow. This price point is a more modest investment that allows some smaller metalworking shops access to modern equipment. According to Fairlawn Tool, these systems can deliver .0001mm accuracy and cut labor and processing time. Hagerty adds that CNC machinery can also now operate for days at a time without the need for a human operator or resupply. All of these advantages, according to Hagerty, are requirements to stay competitive.
Creating Skilled Labor
According to the U.S. Bureau of Labor Statistics (BLS), metalworking jobs are expected to grow above 8 percent in the next decade, higher than the average growth of the labor market. Yet, as metalworking specializes, you may lose the ability to hire labor without providing additional training or apprenticeships. Hagerty says that employers will need to take even more steps to train workers on advanced, high-tech machinery. In some shops, unmanned equipment is replacing operators altogether.
How can metalworking shops best prepare for these changes? According to the BLS, companies can invest in secondary training in specialized areas such as CAD and CNC to better prepare their employees to succeed. Because these skills are not taught in high school and are often overlooked in advanced degrees, metalworking shops will need to provide on-the-job training and internships for new workers. Hagerty notes that some employers pay a percentage of the cost of training programs to generate the right talent while paying those employees competitive wages to both learn and work. Employers that offer this type of training do not need to change standard apprenticeship approaches but need to adapt them to new techniques and technologies to create the labor pool they need.
Improving Efficiency Across Production
From the supply chain through manufacturing, continuous improvement helps metalworkers reduce costs and waste. With material costs only getting higher in 2020, metalworking shops that invest in both supply chain visibility and machine-to-machine communication can see what they are producing and change it rapidly to respond to market demand. According to the BLS, the cost of metal materials is currently above historical highs, and with continued international trade tension and low domestic supply, costs are not expected to drop.
Shops can combat this issue by specializing operations toward one type of part or material, and purchasing highly efficient, low-waste machinery such as 3D printers and water jet cutters. According to Hagerty, the most modern CNC machinery can achieve and typically maintain an 85-90% uptime by incorporating quick change fixturing and tooling for minimal downtime for tasks such as part change out time. These machines also allow maintenance staff and operators to remotely monitor performance and uptime without the need to shut down production. According to Modern Machine Shop, these technologies are now becoming common and interoperable, so that machines of different types and brands can communicate openly with each other and with operators.
According to Grainger Consulting, enhancing supply chain visibility and efficiency can be a major cost-cutting factor. Time spent managing inventory, drafting purchase orders and wondering what is in stock adds up quickly, and under-stocking critical items can slow production. Procurement of a product alone can require over 40 steps and six handoffs to complete. If not used immediately, half of all inventory sits on the shelf and your budget for over a year. According to Hagerty, more metalworking shops of all sizes are looking at their supply chain and inventory to find any opportunity to cut costs, plugging in digital tools to continually monitor inventory and change suppliers immediately as orders or costs change.
As you head into 2020, your metalworking operation can invest in new and emerging trends to stay competitive. When you optimize your supply chain, invest in new, specialized technology as soon as possible, and encourage workforce development, you can more rapidly respond to the market and capture more orders. Learn how Grainger’s solutions for metalworking shops can help you improve efficiency and cut costs.
Justin Hagerty is a metalworking professional specializing in multi axis CNC machining. He has held numerous positions in the manufacturing field, with diverse experience in operations management, CNC product training, customer relations, product development, sales and business management. His work has resulted in efficient, streamlined and profitable operations in the manufacturing sector.