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Wednesday, August 24, 2016

Bringing Training Local

Everyone is talking about a skilled workforce.  But why invest in training? Let me count the reasons!  Here are the top three:

Safety
– Ensuring that your staff is fully trained on the most up-to-date safety procedures is vital to reducing injuries.  When your staff operates safely, it protects both the employees and your company.
Productivity
– Training keeps your business ahead of the curve.  When you invest in training your staff on the current trends in your industry, it keeps your business on the forefront of technology and keeps you competitive.
Retention
– Study after study has proven that investing in your employees keeps them engaged and happy.  This will reduce turnover and make sure that you maintain a high-quality and highly skilled workforce. 

PMA districts are excellent, cost-effective resources for training.  They bring in local industry professionals and leading national experts to lead half- and full-day training seminars for everyone from the plant-floor operator to the C-suite executive.  By leveraging your local PMA district for training, you also can connect with other professionals in your industry, learn best practices and help solve your most pressing issues.

Multi-day, out-of-town seminars have their place, but be sure to supplement traditional training opportunities with local, lower-cost options offered by your local PMA district.  You may be surprised what you learn.  Check out the options in your area by visiting www.pma.org/districts.


Sources: Indigo HR, The Hawk Group, Business Insider

Monday, August 8, 2016

What Do We Mean By Bench Strength?


About Guest Blogger, Matt Roberts: Matt is an Associate at MelCap Partners, LLC, a middle market investment banking firm, where he focuses on M&A transactions. MelCap Partners helps companies in the following three areas: M&A advisory, capital raising (equity or debt), and other advisory work such as valuations or feasibility studies. Prior to MelCap, he spent several years in management consulting and accounting roles.



At MelCap Partners, we are a specialized investment banking firm that advises business owners in mergers and acquisition transactions. Over the next couple months, we would like to dive into some business issues that can have an impact on an M&A transaction. Below we’ll explore management bench strength, how it affects value, and things to consider before selling a business.

What Do We Mean By Bench Strength?

In an M&A transaction, especially in the lower middle market ($10—$250 million in sales), the strength of the management team will influence a buyer’s risk analysis of the company. Analyzing management’s strength and the owner’s importance helps a buyer understand the capabilities (or lack thereof) of the management team, and help the buyer assess if the company is a quality acquisition target. The make-up of the management team can have a significant effect on the outcome of a sale transaction and a managerial succession plan is something that all owners should think about before pursuing a successful transaction.





Three Things to Consider Before Selling Your Business 

1. Timeline 

How much longer do you want to run your company? Planning now will allow you to successfully transition and either build a management team or find a buyer that can assist with the growth of the business.







2. Bandwidth

What does your current management team look like? Are there capabilities that you want to add or replace before selling? Are there competencies or duties that you have and your management team lacks?



3. Buyers 

It is important to consider what type of buyer would be optimal for your business. If you want to exit the business without a management team, a strategic buyer in your industry or a financial buyer with operational partners might be a great fit.

Thursday, July 7, 2016

Machine Learning is Revolutionizing Manufacturing

A common theme we have been discussing over the last few months is that every manufacturer, no matter the size, has the potential to integrate smart manufacturing tech into their shop floor and increase their competitive edge in the evolving market. New data is rapidly being released on just how much smart tech is revolutionizing our industry, and we want to keep you updated. Here are some of the new statistics that are currently exciting us:

Big changes for client management. One of the most significant transitions happening outside the shop floor is in the sales side of manufacturing. No longer will “relationship management” be a common term – instead, we are moving to “relationship intelligence.” The encouragement of this new technological capability is not to eliminate the sales team, however; groups like SalesforceIQ who are spearheading these initiatives simply want to create a way to strategize best tactics and keep customer priorities at the forefront.

Increased production capacity while lowering material consumption rates. Recent data from General Electric shows that IoT on the shop floor can bring production capacity up by 20% and lower consumption rates by 4%. Since smart systems are designed to learn, understand, and predict on all scale sizes from individual machines to entire plants, we could find these rates increasing even further over time.

The Manufacturing-as-a-Service model. The trend of rapidly made, highly customized products is becoming more and more of a reality. When your machines are learning as they work, templates for customized products can be saved and revisited without needing to reinvent the wheel every time a similar order comes through. The idea that small orders of unique products will waste time and money is one that has already lost its footing in our industry.

To read more of the latest developments in the Industrial Internet of Things and see how these technologies could help your company, check out this article from Louis Columbus. Every day, new applications for smart manufacturing are found and used to revolutionize our industry. See what you can do to get involved!

Tuesday, June 21, 2016

The Pros and Cons of Local Sourcing


Guest Blogger
Kelly Barner, Editor, Buyers Meeting Point 
Think globally, act locally. – Paul McCartney
…except when to do so causes more harm than good. – Kelly Barner

As consumers of goods and services, we are constantly bombarded with feel good messages about the companies we buy from. Green production, sustainability, and local sourcing: it is easy to take for granted that these programs are in everyone’s best interests. After all, why wouldn’t we want the companies we patronize to keep the bigger picture in mind and take every opportunity to do a little bit of good in the process of making a profit?

Business to business operations have to take a different kind of approach to such initiatives as their immediate customers are usually more motivated by efficiency and innovation than socially-oriented programs. Procurement and purchasing professionals play a unique role in B2B local sourcing; we have to outline the pros and cons and help the rest of the company decide when these programs are advantageous for all parties involved and when the fit just isn’t right.

Pros of Local Sourcing

  • Convenience: There is no question that having a supplier down the road - as opposed to across the country - opens the door to new kinds of information exchange and collaboration. Meetings can be casual and frequent, and have the opportunity to foster the type of interactions that breed creativity and innovation. 
  • Public relations boost: If your company’s product or service can be consumed by local companies, hiring another firm in the community to join the supply chain will no doubt provide a positive boost to your local reputation. Employees and their family/friends will no doubt return the favor with loyalty of their own.
  • Response time/turnaround: The speed of business is showing no signs of slowing down any time soon. When a supplier is down the street rather than across the country, deliveries can be made faster and problems can be resolved in short order. In addition, there are no time zone differences to be navigated and travel fees are reduced to a minimum.

Cons of Local Sourcing

  • Breaking up is hard to do: Nothing is forever – not even contracts entered into with the best of intentions. What if your company makes the decision not to renew a contract with a locally based company? Depending on the relative size of both companies, and how much business is at stake for each party, the negative PR associated with ending the relationship could easily outweigh any positive gains from the original award.
  • What’s the ROI? Many companies invest in local sourcing programs primarily for the sake of supporting the community, but they have the secondary benefit of supporting small to medium sized or diversity businesses. These companies are rarely the most cost effective option, even when the introduce innovative new ideas. Companies looking to be able to document the ROI associated with local sourcing must be prepared to balance quantitative incremental costs with far more subjective benefits. 
  • Dependency: Again, assuming the buy side company is larger than the local supplier, there could be downside for them as well. The contract could create conflict by making it awkward for the local supplier to do business with competitors – something that we all know happens, we’re just not usually brought face to face with it. The imbalance may also cause the supplier to prioritize the feedback and ‘wants’ of their large local customer disproportionately, hurting their overall appeal to the market.

Clearly, any local sourcing program must be approached with careful forethought rather than altruistic assumptions. This is an opportunity for procurement to play a key role – not only as the point of communication between their company and the local supplier, but between the groups in the company that have differing perspectives on the program as a whole.

Buyers Meeting Point is a supporting partner of Sourcing Solutions™. Sourcing Solutions brings together buyers and suppliers of fabricated metal parts, metal stampings, tooling & dies, assemblies and more to make valuable connections, face-to-face. The 2016 program will take place on September 29 in Indianapolis, Indiana. To learn more, visit www.pma.org/sourcingsolutions

Friday, June 17, 2016

Millennials Need Manufacturing


Blogger: Allison Grealis
Vice President, Precision Metalforming Association
President, Women in Manufacturing  

We know that manufacturing needs millennials, but recent research proves that millennials need manufacturing as well. 

This is not going to be another article about the skills gap in manufacturing.  We all know about the millions of open jobs and how the number is only going up with daily retirements.  But replaying these same dire predictions and hoping they will attract new workers is like putting an unpopular song on repeat and hoping people start to dance.

I have been working with the Precision Metalforming Association (PMA) and Women in Manufacturing (WiM) for more than a decade.  Over the years, I’ve seen many workforce development initiatives come and go.  Too often, they fail because the focus is on the industry and not on the worker.  That’s the wrong strategy.  We need to flip the paradigm and start from scratch.  We need to recruit millennials into manufacturing not just to help manufacturing, but to serve millennials as well.

Not just a cog, but a view of the whole wheel.

Millennials want to feel valued and to see the impact of their work.

Everyone likes to feel that their work is meaningful and important, but data show that millennials need this reinforcement more than other workers.  They want to see the final product, and how their contribution helped achieve the team’s goal.  As Jeremy Kingsley, the author of Inspired People Produce Results, has noted, “Millennials workers are more likely to look for meaning and impact in their work and aren’t satisfied simply punching a clock.”

The manufacturing is uniquely capable of fulfilling this need for millennials.  The final product is often accessible on a shop floor and, even when it’s not, skilled managers can help millennial workers see the value of their work in producing the products that make our world work.

Not turning over, but turning up.

Millennials are  restless, always looking for new challenges and opportunities.

Research shows that more than 90% of millennial workers will leave a job after less than three years.  Rather than mastering a task and coasting, they are intent on tackling new challenges.  For millennials, boredom is a deal breaker.

This is good news for an industry like manufacturing that thrives on R&D and is being transformed by new technologies.  Automation has made today’s manufacturing unrecognizable to people familiar with the factories of even 20 years ago.  And 3-D printing and other innovations are already changing the game again.  Evolution energizes millennials and offers opportunity for young workers who often bring strong computer skills with them to the workforce.

Not just a 9-5, but a schedule that really works.

The standard 9-5 just doesn’t do it anymore.  Studies show that nearly 80% of millennials believe that flexible work hours are a key to boosting productivity.  It is clear that younger workers want less rigidity in their work environments and the ability to set a schedule that also allows them to manage child or elder care responsibilities, pursue higher education goals, and participate in their communities.

Manufacturing often scores high on industry surveys in the category of flexible work structure.  An industry driven by results – and by finished products – often has the ability to adjust hours as long as the work gets done.

Not just an individual, but part of a team

Millennials thrive with constructive feedback from effective mentors.  Studies consistently show that employees who have mentors have retention rates around 20% higher than employees who do not.

One interesting concept floated by the Kevin Grubb with National Association of Colleges and Employers is “co-mentoring” or having an employee from an older generation to help a younger team member understand work culture and processes while the younger employee helps his partner manage technology and new tools at work.  This concept and others like it have real potential for the manufacturing sector which relies on both experience and creativity.

It is incumbent upon manufacturing leaders to share the ways in which the industry suits millennials with potential and current workers and to regularly solicit their feedback and insight on how to make the work structure and workforce better.  That’s why PMA is launching MFG NXT, a network for millennials and gen Xers who are rapidly rising through the ranks in manufacturing.  MFG NXT members are hard workers who are committed to success in their companies and in the future of the manufacturing industry.  When MFG NXT members get together, they develop creative strategies and innovative solutions.  Learn more about the PMA MFG NXT program by contacting Rosemary David at rdavid@pma.org.

Thursday, June 9, 2016

Progressive Stamping Dies – A Brief History

Blogger: Pete Ulintz
Technical Director, Precision Metalforming Association 
Prior to the discovery of metal, people used simple hand tools crafted from bone, rock and wood. After fire was discovered, humans soon learned that adding heat to certain rocks (ores) would free the metal from the rock. Eventually, the art of extracting and smelting metals and forming them into usable objects evolved. This practice is commonly referred to as metalworking.

Metalworkers were considered very valuable members of early societies. As more and more items and tools began to be made out of metals, more people were needed who were skilled in the craft of metalworking. Objects made out of metals were necessary for industry, farming, jewelry making and defense purposes. 

Old coins show that the art of die sinking - a process to create a specific size or shape cavity or opening for casting or forging - was known to the ancient Greeks at least back to 800 B.C. (ref: J.L Lewis, Journal of Commerce, 1897). But these artifacts do not show that the use of punches and dies was equally well known. 

Eventually coins were made using two (2) dies - a lower die depicting the coin in a negative form, and a similar upper die. The coin blank was placed between the two die halves and then the upper die was struck with a heavy hammer rendering a positive image on the blank. Even today people occasionally speak of coins being “struck.” 

The first record of punches and dies used in a machine having guides (or ways) to ensure punch-to-die alignment, is the fifteenth century, when a German locksmith used them to manufacture hinges. In 1796 a patent was granted to a Mr. DeVere of France for “Dies for Punching and Drawing Sheet Metal,” perhaps the first of its kind. 

A significant advancement in metal stamping operations was the emergence of the progressive stamping die. The earliest published record describing a “progressive die” that I could find is in J.L. Lewis’ 1897 book, Dies and Die Making. Oberlin Smith’s treatise, The Press Working of Metals” (Wiley and Sons, 1896) provides a good likeness of the first die maker that we may ever find but it makes no mention of a progressive die. It does, however, mention “follow-on” tooling and “successive gang cutting,” which are described in a manner that suggests they could be early predecessors to the progressive die. 

Progressive die use in the United States during the first half of the twentieth century appears to be limited; primarily to large companies producing products in very high quantity, such as electric motor components. The first edition of Die Design Handbook (American Society of Tool and Manufacturing, 1955) contains an entire chapter on progressive dies with numerous examples and illustrations of progressive die designs and die strips for electrical and electric motor components. 
Following World War II, the U.S. economy grew rapidly. Most contract metal stampers of the time produced metal stamping in single operation dies and presses. Material came to the press in strips and was hand fed into a blanking die. The blanks ended up in containers which were later brought to the next die operation. The parts were then hand loaded into subsequent forming and cutting operations and then hand unloaded into another container. 

As production demand increased, production speed became more important. Operator safety became a problem because operators were often injured while putting their hands into the die when loading and unloading parts. By the 1950s, single operations in single presses made it difficult to keep up with rising production demands.

In 1953, an design engineer named Ed Stouten, along with a partner, started a die design business in Grand Rapids, Michigan called, Capitol Engineering Company. Stouten looked for ways to overcome some of the problems contract manufacturers were having with single hit dies (safety, inefficiency, low productivity) and began to promote the idea of leaving some scrap material between parts to carry them through a single multi-station to some of his customers.

The idea of carrying parts in a strip through a single multi-station die was a foreign concept to many local tool & die job shops and contract stamping companies. Many of Capitol’s customers scoffed at the idea and were unwilling to risk investing their time, money or reputations in the idea. According to Stouten, it took many attempts to find a shop owner who would consider his idea. Stouten made a paper strip layout and showed it to one of the local shop owners. The owner said he would try the idea only if Stouten agreed to pay for the die if it did not work.

Stouten did not have to pay for that die because it worked just as he had planned. What he had not planned was how quickly word would spread among shop owners in the area regarding the success of this idea of retaining the part in a strip. Soon, many stamping companies wanted to run stampings in progressive dies. This created a new problem: Many die designers at that time did not know how to make progressive dies work, so they had to be trained.

 In 1970, the Grand Rapids chapter of the SME asked Stouten to speak about progressive dies at their monthly meeting. One of his die designers, Arnold Miedema, accompanied him to that meeting. Over the next two years Stouten and Miedema were invited to speak at every SME chapter in Michigan and one in Sarnia, Canada. They made drawings to use on an overhead projector to illustrate their concepts and soon attendees asked if they could get copies of the materials. This was the beginning of Capitol Engineering’s 266 page training course, Progressive Dies for Designers, Engineers and Managers.

In 1972, Capitol Engineering was asked to present a three day seminar for SME on progressive dies in Dayton Ohio. For the next 30 years they conducted seminars from the east coast to the west coast in the U.S, from Canada to Mexico and even as far away as Singapore; a total of 133 three-day seminars in all.

We can never know exactly how large an impact people like Stouten and Miedema made on the metal stamping industry, both as innovators who were willing to take chances and as educators willing to share what they learned with others, but what we do know is that they played a significant role in progressive die history in terms of what many of us know and learned about designing and building progressive dies.  Although both men are no longer with us, their materials continue to be used in industry seminars, die design books, die making texts, professional association handbooks (e.g., ASM, SME), trade magazine columns and university course work. 

Monday, May 23, 2016

Outsourcing Metal Stamping Dies

Blogger: Pete Ulintz
Technical Director, Precision Metalforming Association 
Many contract stamping manufacturers have the ability to build their own stamping dies onsite, in their own tool room. On occasion it may become necessary to buy tooling from an outside source. This is commonly referred to as outsourcing.

Outsourcing may be the required due to excessively high workloads in the tool room or short delivery requirements from the customer. For some companies, outsourcing may be part of an emerging or existing business strategy.  Sometimes, it is simply be a better economic choice.

When considering to outsource any tooling, either domestically or internationally, you should first conduct a “make-or-buy” study first. A high-quality make-or-buy study ought to include a thorough evaluation of the following:

Design and Engineering Capability: Does the project require you to have die designers and engineers on staff with varied experiences? Does the project require unique processes engineering skills that your company does not possess? Does your engineering department have the full range of capabilities and design tools (CAD, CAM and CAE) needed for the project being considered? Will the project require extensive communications with internal management, manufacturing, engineering and quality disciplines? Do you have experienced project managers that can effectively communicate with internal and external customers and tool sources?

Cost, Price and Delivery: Are your fully allocated internal fixed and variable costs higher than outside supplier costs? Would your internal marginal costs be lower or higher using an outside supplier? Are the overhead costs associated with your in-house processes higher or lower? Are your internal labor rates lower? Can you purchase raw materials at a lower cost than your supplier due to economies of scale? Is your in-house operation competitive in delivery, service quality and price?

Other Considerations:  Airfare, car rentals, hotel bills and meals can add up quickly, especially if the project develops problems. Depending on your supplier's location, in-bound freight, taxes and duties can offset any perceived savings, not to mention transportation time.

You may have projects that would not be advisable to outsource. Products or processes that are part of a core business activity and those based on intellectual property would be two examples. Customers that require you to have in-house capability and capacity would be another.

A qualified supply base should consist of no more than three or four suppliers. When your suppliers know they only have two or three competitors they can to do a better job for you. Each company has a 25-33% chance of winning your business. If there are five or six other competitors bidding the same job, each has roughly a 15% chance of earning the business. When a supplier’s proposal department becomes very busy, attention will likely be devoted to the piece of business with a 33% opportunity rather than one offering 15% or less.

Don't rely on suppliers to do your estimating: The chances of receiving accurate quotes diminish dramatically for jobs you have not been awarded. It is not uncommon to see pricing vary by 50%, 100% or even 200% between suppliers.

The reason for this disparity is quite simple: If your company is bidding a job against four other competitors, the likelihood of you winning that business is one-in-five, or 20%. Your four tooling suppliers each have a one-in-four chance to win the business from you. But, it is a one-in-four chance at your 20% opportunity. The bottom line for your tool suppliers is a meager 5% chance at the business. Tooling suppliers that realize they are acting as your estimating department may be quick to no-quote your business, or refuse to do business with you at all.

Establishing and Developing a Supply Base: First and foremost, look for companies that have experience in your specific industry. Just because someone has extensive deep drawing experience with automotive inner door panels doesn’t mean they can build deep draw tooling for your double-basin stainless steel kitchen sink or your brass ammunition cartridges.

Reputation and references are very reliable ways find qualified sources, but you have to ask the right people the right questions. Ask for references. Find out what their customers say about their quality, integrity, past performance and workmanship. Ask how well they handle short delivery and crash programs. Do they have strong program managers? What type of products and tooling do they have exceptional strength in?

Visit their facility. Do they have the support services you require, such as: process modeling, surface strain analysis, CMM and inspection capability, laser scanning? What about reverse engineering capabilities? Do you need them? Are their tryout presses high quality and the appropriate size for your work? Do the presses have feed lines in order to tryout progressive dies?

How well staffed is their engineering department? Will you have a dedicated program manager? Is all of the engineering done onsite or do they outsource? If so, where to? Can they design in 3D solids? Do you need them to? How available are services and supplies such as foundries, tools steel suppliers, heat treating, plating and coating? Are these services readily available or is there typically five to seven days lead time?

Look for tooling suppliers that are cooperative and proactive in addressing problems. Insist they be part of a team - your team - that is dedicated to continuously improving design, manufacturing, assembly and serviceability of your process. Do they have resources to support these activities? Are they committed to building good relationships with your organization through continuous and cooperative communication?

 Once you have established your potential supply base, the first obligation to communicate clearly and effectively lies with you. Your suppliers will need clearly stated (written) die design and build specifications. Make sure your technical requirements and acceptance criteria are written in a way that is clearly understood and make sure they agreed upon by the supplier in advance of any quotation.

Outsourcing can be a worthy consideration, but it is not a fail-safe strategy and there are many variables to consider. Regardless of your reasons to outsource, proper planning, sound execution and resolute follow-up are required and all have costs associated with them.

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