What if you don’t train them and they stay?
What If I Train Them And They Leave?
February 22, 2012Why Service Trumps Quality And Price
February 9, 2012In the precision machining business, nobody sets up their machines based on the quality or price of your barstock. They set up their machines based on your delivery (service).
Ability to provide your product on time and to specification is the true determinant in the real world of execution. Thats why there is a gap between the dream world of business plans (what we think we can get) and the real world of monthly operating statements (what we got).
The delta (difference) between the two is a failure of some supplier to service (provide what needed as needed as planned.)
- Quality: Either the quality of the product meets requirements, or else you will get claim/return and won’t get the order (again).
- Price: You will meet the market price for whatever comparables exist for the same requirements- or else the lowest priced comparable product will be selected.
- Service is the only differentiator in my experience;
Therefore it is only your ability to serve the customer with immediate delivery/ provision as needed that is a differentiator.
PS.: Consumers consider service to be part of the landed cost, and don’t want to pay extra for it. In the industrial sector, service is a given.
PPS.: Everything else is Marketing B.S.
USA Leads Global Recovery-Evidence
February 6, 2012Leadership is about action, not potential. Global Purchasing Managers Index (PMI) data shows that it is the USA, not China, that is leading the world out of the slowdown.
Here are 5 reasons that PMI data is relevant evidence for your analysis
- PMI is a reliable fact-based indicator as opposed to opinion or confidence-based indicators.
- PMI is produced monthly, faster than comparable official data series.
- PMI covers almost all private sector economic activity in many countries (including the all-important service sectors).
- PMI are not revised after publication.
- PMI are produced using the same methodology in all countries where they are produced- assuring comparability.
While we associate the PMI data with the Institute for Supply Management, the fact is that Markit Economics is the firm doing the actual surveys and reporting.
How do you read the above PMI Data?
World Steel Production 2011- 1.5 Billion Tonnes
February 1, 2012Crude steel production reported by the World Steel Association was 1,526.9 megatonnes in 2011, up 6.8% over 2010. This is a new record for global crude steel production. Imagine what the demand for steel would be if we had a robust recovery free of economic temblors!
United States production was 3rd world wide with 86.2 megatonnes after China at 695.5 megatonnes, and Japan at 107.6 megatonnes. The US figure was up 7.1% over 2010.
In 2011, crude steel production in North America was 118.9 Mt, an increase of 6.8% on 2010. The US produced 86.2 Mt of crude steel, 7.1% higher than 2010.
While prices have softened lately, we continue to be bullish for higher prices long term based on global demand due to improved living standards everywhere.
By our calculations this 1.5 billion tonnes of steel is approximately 0.22 of a tonne per person or about 486 pounds per person for each of the 6.9 billion folks on the planet.
1,526.9 MT= 1562900000 tonnes = 1.72280235 × 109 short tons = 3.4456047 × 1012 pounds
WTO- China Raw Material Exports Broke Trade Rules
January 30, 2012Today the WTO upheld its decision finding that Chinese restrictions on key raw material exports broke trade rules.
We have been following this particular issue since November 2009:
http://pmpaspeakingofprecision.com/2009/11/04/chinese-resource-hoarding-dispute-before-wto/
We followed up :
http://pmpaspeakingofprecision.com/2009/12/30/china-resource-hoarding-wto-panel-convened/
And today we are reporting that the WTO upheld its decision that Chinese restrictions on key raw material exports broke trade rules following the appeal by Beijing. As a result, China must bring its duty and export quota measures on elements including bauxite, coke, manganese and others in line with their WTO Obligations.
The WTO found in favor of the United States, European Union and Mexico in July following a complaint that China had failed to meet the promises it made when joining the body.
At issue were important raw materials for those of us involved in advanced manufacturing- bauxite (aluminum ore), coking coal (steel making), fluorspar (steelmaking) manganese (steelmaking), silicon metal (steel making), silicon carbide, yellow phosphorus and zinc (Brass).
Both the United States and the European Union claimed victory after the publication of the appeal body’s report. according to Industry Week online:
“Today’s report is a tremendous victory for the United States — particularly its manufacturers and workers,” U.S. trade ambassador Ron Kirk said. “Today’s decision ensures that core manufacturing industries in this country can get the materials they need to produce and compete on a level playing field.”
EU trade commissioner Karel De Gucht said the ruling represented a success in efforts to ensure fair access to “much needed” raw materials for EU industry.”
Congratulations to Ron Kirk and his team for winning one for U.S. Manufacturing.
PMPA Business Trends 2011 Review and Summary
January 26, 2012PMPA’s Index of Sales of Precision Machined Products rose to 114 for the year, up 15 percent from the 2010 average of 99.
The good news is that the Precision Machining Industry is back on track.
The decline in sales in December was due to seasonal factors. The standard deviation of sales for the year is 8.33, not far from last year’s 7.82, and a far cry from the shock and awe volatility of 2008 when the standard deviation was 13.8. What is most important to note is that in 2011, 11 of the 12 months were all above 100 (baseline) and that December’s 98 is the highest value we can recall (It was 99 in 2006, a virtual tie). December 2011 shipments were 108% of those in 2010.
The Q4 average for shipments of 109 is down five points from the yearly average, but due to seasonal factors in December.
It was interesting to note that the percent drop in sales in December from the average of October and November was on the low side of the range at 14.8% for December 2011; In 2008 it dropped 26.4 %; 18.2% in 2007. We believe that seasonality explains the 3 month vs. 12 month moving average indicator.
The average shipments index for 2011 was 114.
The average shipments index for our base year of 2000 was 100. According to our data, we show less than 2% per year growth since 2000; what has made for our greatest challenge has been that all of that growth has come in the past year. We do not expect 2012 to post such large increases.
What do you expect for shipments in 2012? Based on what?
2012 Top Shop Survey – Free Tool You Can Use
January 25, 2012Is there a swiss type machine in your future? How would you know?
Last year’s Top Shops Survey found that 24% of the top tier (top 10%) of shops reporting in the survey reported Swiss technology in their shops. This compared to just 11% for the balance of shops reporting. This is a trend that you probably ought to be following if you want to stay up to date on trends in precision machining.
Last year Modern Machine Shop launched its first annual Top Shops Survey. Almost 200 machining facilities took part in that benchmarking survey. The Top Shops Report of that survey’s results had a number of interesting shopfloor practices worth considering. The report also provided a number of operational and business metrics which can help a shop your shop stay competitive and become a better business.
The survey will be available until February 15th, so click the link to go to Modern Machine Shop’s description of the survey which includes a link to the online survey site. TOP SHOP ARTICLE
PMPA co-publishes Production Machining Magazine in partnership with Gardner Publications in Cincinnatti Ohio. Production Machining focuses on our high precision, high mix, production industry. Gardner’s flagship publication is Modern Machine Shop- which covers the broader contract machining industry.
The survey will only be posted for a short time, so now is the time to benchmark to your peers.

Posted by speakingofprecision 














