No spec, no quality. Know Spec, know quality.
Know the specification!
No spec, no quality. Know Spec, know quality.
Know the specification!
PMPA Business Trends Report reclaims all-time record high of 143 in August. March 2018 was the first time that our sales index recorded such strong sales.
Eighty percent (80%) of our respondents reported sales increases, 51 percent of shops reporting reported sales increases in the double digits.
Sentiment indicators remain strong.
Our markets and businesses have changed- have we as managers kept up?
How are you managing differently for success rather than survival?
The ISM PMI was reported at 61.3, the highest reading since January 2004, when it was 60.8.
Prior to that the ISM PMI has not been at this level since 1984, when it was 61.3 in February, in 1987 it made it to 61.0 in December.
Here is the ISM’s Announcement:
“The August PMI® registered 61.3 percent, an increase of 3.2 percentage points from the July reading of 58.1 percent. The New Orders Index registered 65.1 percent, an increase of 4.9 percentage points from the July reading of 60.2 percent. The Production Index registered 63.3 percent, a 4.8-percentage point increase compared to the July reading of 58.5 percent. The Employment Index registered 58.5 percent, an increase of 2 percentage points from the July reading of 56.5 percent. The Supplier Deliveries Index registered 64.5 percent, a 2.4-percentage point increase from the July reading of 62.1 percent. The Inventories Index registered 55.4 percent, an increase of 2.1 percentage points from the July reading of 53.3 percent. The Prices Index registered 72.1 percent in August, a 1.1-percentage point decrease from the July reading of 73.2 percent, indicating higher raw materials prices for the 30th consecutive month.” ISM Timothy R. Fiore Press Release
Thoughts to consider: while past performance is no assurance of future performance, we note that the current level of the PMI has been of prior high water marks, rather than sustainable levels. While “this time it’s different,” is a possible comment, our look at the graph above suggests that we may be nearing the top. Although the values for the 1964-1966 do provide another possible interpretation.
Bottom line: Manufacturing and the broad economy showed remarkable strength in August 2018. Prospects remain positive for sales and employment in manufacturing. The current strong level of performance convinces me that we must be thoughtfully reconsidering all aspects of our business at this time. This trend might have legs- it might also be nearing a top. PMPA’s Latest Business Trend Report was optimistic on Outlook for the next three months.
Graph courtesy Calculated Risk
I compile the annual wage survey for the precision machining industry, and my sample is a nice slice of industry shops.
We don’t have any labor jobs in our shop hourly wage survey.
On the other hand, the jobs that we do have are all jobs requiring high levels of process ownership and personal performance.
Think of all of the aspects of our jobs- the tools, the offsets, the relationships between datums, the materials, the gages, the chips and their control, the coolants, the controls, the software code- and suddenly being a machinist looks a lot like being a Performer:
So today, I’m going to cue up a Neil Peart video on Youtube as an appreciative salute to the music made on our production machines under the watchful practice of our skilled performers.
I’m not celebrating Labor Day.
But I am certainly going to use the time to appreciate the performers in our shops who make things that make a difference.
Happy Performers Day.
More info about the Human Performance System Approach to understanding our shops
Neil Peart photo
I am always pleased when I encounter a quote that neatly communicates an Idea that I firmly believe, but is expressed more clearly than I could.
Imagine my delight when I received a placard containing one of my favorite industry quotes today!
“Read the Card!”
“Read the card!”
“What’s it say?”
“NO CAR RUNS, NO AIRCRAFT FLIES AND NO HIP REPLACEMENT IS FITTED BY A DOCTOR WITHOUT PRECISION TOOLS HAVING PREVIOUSLY BEEN IN USE.”
As precision machinist’s, we’re the people that make things.
Things that make a difference in everyone’s quality of life.
And who is is it that makes the tools that help us make that difference?
Why, precision toolmakers, of course.
A big thank you to Horn USA for sharing the placard with my favorite quote.
See you all at IMTS!
On June 21, 2018, the ECHA added Lead to the Candidate List for Substances of Very High Concern under REACH.
While this regulation arguably covers only manufacturers and importers in the EU, the fact of the matter is that our shops here in North America are producing components (articles) which are incorporated into products in the EU.
Our customers, who specify the use of leaded materials because of the economics of product provision (Leaded materials machine at much higher efficiency rates, lower costs , and seldom need post fabrication operations) are now asking their suppliers for a statement of compliance for the materials that THEY specify us to make THEIR components from. Leaded Steels, Brasses and Aluminums.
Our shops find themselves placed right in the center of a paradox- how can they certify that the material that their customer told them to use is compliant with this new REACH development?
PMPA has analyzed this and provided our members with a guidance document that
The world of Precision Machining is characterized by Volatility (this regulation just Arrived), Uncertainty (does this apply to me, I’m an North American, not European manufacturer?) Complexity ( So I need to read the ECHA announcement, The ECHA Substance Support Document, the Annex that covers Lead, and then two more annexes that tell me what I need to do) before I can figure out what I need to do, and Ambiguity (Actually the annexes do not expressly state what the exact deliverable required is).
This VUCA world is made manageable by PMPA regulatory sensemaking to help our shops first recognize, then intelligently understand and manage their risk.
PMPA members know who.
First the good news:
The 2018 July index of 128 is 14.3% higher than July 2017’s 112 value. Our year to date average is 135, up 10 points or 8.0% over 2017’s year-end average of 125. We are at 107% year to date.
And the not so good news?
Well actually it is just that to get to that record high Sales for July, the Index actually dropped 10 points or about 7.3%. from 138 in May & June to 128 in July.
I’m calling it a breather from the feverish year we’ve had so far.
Hours of first shift scheduled dropped by half an hour, a welcome break for the folks in the shop.
Why we’re not concerned about the decline of Sales in July:
The forward looking sentiment for Sales for the next three months actually climbed in July. while all other indicators remained steady.
We’re just taking a bit of a breather.