We asked 360 metalworking managers, owners, and engineers to describe the steps their businesses are taking to remain competitive in an increasingly high-tech, globalized industry. Our survey of CNC-equipped facilities shows the impact that advances in machining, automation, and software are having on the metalworking industry.
Our respondents represent facilities of all sizes, employing from fewer than 10 to over 500 workers. Sixty-three percent of respondents work in job shops, with the remainder at OEM or other manufacturing facilities. Sixty-nine percent of respondents report having strong influence over tool purchasing decisions, and 74% were responsible for developing new operational processes.
Business owners report feeling pressured by a tightening labor market, growing overseas competition, and regulatory overreach. But despite these challenges, most respondents anticipate an improving business climate in the coming years. Over 70% of metalworking facilities report making significant changes in their operations to remain competitive in the global marketplace.
An Optimistic Outlook
Businesses are seeing strong growth potential on the horizon. 70% of respondents forecast a steady or improving business climate in the coming year, compared to 20% predicting a slowdown. Concerns about general economic conditions have slid to fifth place on the list of “extremely challenging” problems businesses face. 65% of shops plan to add staff in anticipation of rising demand, and only 31% are currently laying off workers.
The majority of respondents believe that investments in workforce training and the acquisition of new CNC equipment will help their businesses in the coming years.
The metalworking industry’s biggest concerns are external factors—respondents believe the gravest threats to North American manufacturing will come from government intervention and overseas competition. When asked about the industry’s most pressing challenges, staffing concerns dominated: “finding and keeping qualified labor” topped the list of extreme challenges with 45% of the vote, and “employee competence” came in fourth, cited by 28% of respondents.
Investing in Employees
The decline of technical education has left metalworking businesses struggling to attract and retain qualified workers. As one respondent wrote, “Automation is only as good as the programmers, and I don’t see effective programmers coming to the scene because there are not any training programs in schools.”
Employers are taking action to fill the skills gap and cultivate a new generation of machinists. Seventy percent of respondents have launched in-house education programs; another 36% are using apprenticeship training, and 31% have partnered with local colleges and tech schools to build their workforces.
Almost two-thirds of respondents are currently hiring, and over half have instituted profit sharing or employee bonuses to improve employee retention. Only 6% believe that layoffs will play a major role in shaping their staff over the next three years.
The metalworking industry has been transformed by the advent of high-speed machining (HSM) and multi-task equipment, such as twin turret turn/mill machines.
Seventy percent of respondents said HSM has had a major or moderate impact on their operations over the past three years, and an equal number believe developments in HSM will have a significant impact on their shops over the next three years. Forty-five percent of metalworking shops report having invested in multi-task equipment, and 71% believe it will significantly impact their operations in the near future.
The impact of micromachining technology is also growing. While only 25% of businesses currently use micromachining tools, 58% anticipate adopting or expanding their use of micromachining over the next three years.
Advances in automation hold great potential. A majority of shops have already adopted quick-change tooling and CNC presetting to save labor and improve efficiency, and two-thirds of respondents believe auto-loading technologies and “lights out” operations will have a major or moderate impact on their operations within three years.
Production software is playing an increasingly important role in the metalworking industry. 60% of respondents are using CAD/CAM file revision and control tools to “bring more automation and control into the office.” Over half of shops are using virtual machining to plan operations, and 46% are helping their clients design products for easy manufacturability.
However, the difficulty of programming new automated equipment has become a concern for some. One respondent told us, “We need an Apple kind of improvement in software programming,” and another said his CAD/CAM programs “should be designed for a machinist, not a computer geek.
A majority of metalworking shops are taking steps to streamline their operations. 68% of respondents are reorganizing their shop floors to implement the principles of cellular manufacturing. Businesses are also investing in data management, process monitoring, and enterprise management software. Over 40% of respondents cited the growing importance of lean manufacturing and just-in-time supply chain management, and 49% are implementing continuous improvement programs like Six Sigma and 5S.
And while only 35% of shops have adopted “smart manufacturing” technologies, one respondent wrote that it will be “the single biggest thing we can do to improve our performance,” and another predicted that “the Internet of Things will have a huge impact on manufacturing over the next few years.”
As the metalworking industry becomes increasingly automated and shop operations grow more streamlined, the manufacturing workforce will be challenged to keep abreast with the latest technologies. The economic climate may be favorable, but metalworking businesses are aware that retaining their competitive edge will demand constant innovation.
Want to learn more? Check out the full report here.
Brad Laux is the Senior Segment Strategy Manager responsible for the Metalworking category at Grainger. Prior to leading the Metalworking Strategy, Brad launched the Metalworking Specialist Program in 2013, which has grown from 8 to 29 Specialists today. During his 7-year tenure at Grainger, Brad has also successfully led Sales Districts and Service Teams.