April Shipments, Despite Correction, Give Positive Outlook for Shipments

May 25, 2017

Precision machined products shipments for April, as captured in PMPA’s Business Trends April Report, declined 20 points or 14.5% from last month’s record high of 138 to 118.

This correction does not bother us at all…

So why are we not bemoaning a 20 point, almost 15% decline in shipments?

  • The latest number, after the drop, is still one point above last year’s full year average of 117.
  • April’s 118 is down 4.2 points from the average of the last five years’ April values which is 122.2. Well within expected range
  • The March – April decline matches directionally with that of the last three years.
  • The 3-month moving average remains well above the 12-month moving average.
  • The sentiment indicators that we track for Shipments, Lead Times, Employment, and Profitability are all strongly positive for the next three months.

Our market has changed.

Our year to date average indicates that 2017 will be a strongly positive year for precision machining.  See the special addition to our report on the very last page.

If you are still managing your business based on the hunker-down, avoid-all-risk- thinking that kept you in the game over the past 8 years, you are likely missing some serious opportunities. See our article Change to Thrive

PMPA members can get the full PMPA Business Trends Report HERE

Accredited media can contact mkirchenbauer@pmpa.org to receive a copy via email

PMPA provides our members with actionable data so that they can calibrate their performance to that of their peers.

Did your sales fall in April compared to March? I’m sure they did.

Are you worrying about that?

Our shops are not. We have data.

Data that helps us maintain our perspective. And sustain our businesses.

 


Employment Population Ratio- Good News

April 18, 2017

The BLS’s Employment Population Ratio was 60.1 in March 2017, its first time back over 60% since February 2009.

February 2009!

This indicator actually shows what it purports to, unlike the U-3 (headline) Unemployment rate.

Not since February 2009…

The U-3 Unemployment rate may actually fall if workers give up looking for work, as the labor market falters. As the labor market is recovering,  the U-3 unemployment rate can rise because more people are re- entering the labor force as they start to look for work again.

The Employment-Population ratio, because it is unaffected by voluntary changes in labor force participation, is a useful indicator of current labor market conditions. Lows in the employment-to- population ratio correspond with economic downturns. The employment-to-population ratio holds clear and discernible implications for the labor market, both among and between segments of the population.

The Employment-Population ratio is a useful indicator. And currently, a positive one.

BLS Employment Population Ratio


Thank You to My Readers

April 12, 2017

Actually, a million thank yous! Thanks to readers like you, SPEAKINGOFPRECISIONBLOG has over 1,000,000 views.

1,000,000 views!

Our first post  was from June 30, 2009 and remains as relevant to day as it did then: 5 Reasons to choose a Career in Precision Machining

We’ve come quite a way since that very first post!

What do you like? 

Our post on The Difference Between Accuracy and Precision Measurement in Your Machine Shop is our most popular with 44,445 views.

Hardness vs. Hardenability- There is a Difference is our second most popular post at 35,780 views.

5 Facts About Manganese in Steel, 7 Causes for Quench Cracking of Steel, and Why Manufacturing is the Right Career Choice- DATA! all came in between 21,000 and 30,000 views each.

Average number of times a post gets seen on PMPASPEAKINGOFPRECISIONBLOG: 1048 times.

1,000,000 is an aspirational number. How many of us get to measure anything that we do in quantities of millions?  (Actually, all of our shops do, they call it “normal production!”)

But as an individual, as someone sharing knowledge and experience- 1,000,000 views;  1,000,000 shares of information; 1,000,000 human to human connections- that is an unexpected and very satisfying validation.

Thank you for spending a small part of your day with me here at my blog.

Together, we’ll continue to make sense of the the issues that make a difference to all of us in North American Manufacturing.

Especially Precision Machining.

1,000,000 views!

Do I believe in the power of social media to help us connect and share?

You bet I do! 1,000,000 times YES!

Tooting Own Horn  photo credit.


Being Bullish on Our Business is No Bull!

March 21, 2017

 

Being bullish on precision manufacturing is a logical conclusion from the strength of these just released economic indicators.

 

The data gives strength to the bull for precision manufacturing.

The PMPA Business Trends Report has a sentiment indicator for Sales for three months ahead. In January 2017, that indicator exploded, up 40% from December’s already optimistic number. (see the blue line on the chart below.)

Sentiment for sales up 40% since last report!

But don’t take our word for it. Here are 7 economic indicators released last week that are at multi year highs:

  • Consumer Price Index (CPI) up 2.8% year over year in February, up from 0.9% in July and at a pace not seen since February 2012;
  • Producer Price Index (PPI) up 2.2% year over year, Highest year over year rate since May 2014;
  • Manufacturing Production up 0.5% in February. Manufacturing Output is up 1.2% over the last 12 months, fastest pace since April 2015;
  • Housing Market Index  hit a 12 year high, its highest level since June 2005;
  • Housing starts rose 3.0% in February. Single Family housing starts jumped from 819,000 to 872,000 a pace unseen since October 2007;
  • Index of Consumer Sentiment from University of Michigan was close to January’s reading which was the best reading for this indicator in 13 years;
  • Retail sales were reported at 5.7 % just below January’s 6.0% year over year pace, highest since 2012.

The weight of the evidence is clear.

The weight of the evidence makes it difficult to be anything but bullish on our business prospects.

What are YOU doing to take advantage of the opportunities that this strong economy is providing for YOUR precision machining shop?

Data courtesy Chad Moutray Ph.D., CBE, Chief Economist at National Association of Manufacturers Monday Economic Report

 


Decarburization and Your Precision Machine Shop

March 17, 2017

Decarburization on surface layers can affect heat treatment and hardness attained on parts. Decarburization also provides evidence of where in a process a defect or imperfection occurred.

Most defects  in steel workpieces encountered in our precision machine shops are longitudinal in nature. While their presence alone is enough to concern us, for the purposes of corrective action, it becomes important to identify where in the process the longitudinal imperfection first occurred. Visual examination alone is not enough to confirm the source. Did it occur prior to rolling? During rolling? After rolling? Understanding decarburization and how it presents in a sample can help us to identify where and when  in the process the imperfection first occurred.

The question that we want to answer as part of our investigation is usually “When in the process did the defect first occur?” Looking at decarburization and any subscale present can help us answer that question with authority.

What is Decarburization?

The light area (ferrite) surrounding the dark intrusion is decarburization. note the lack of pearlite in this decarburized (lighter) zone. There is no evidence of scale, indicating that this defect was created during, rather than prior to rolling.

“Decarburization is the loss of carbon from a surface layer of a carbon containing alloy  due to reaction with one or more chemical substances in a medium that contacts the surface.”Metals Handbook Desk Edition

The carbon and alloy steels that we machine contain carbon. In the photo above, the carbon is contained in the pearlite (darker) grains. The white grains are ferrite. In an etched sample, decarburization surrounding a defect is identified as a layer of ferrite with very little, or none of the darker  pearlitic structure typically seen in the balance of the material. The black intrusion in the photo above is the mount material that has filled in the crevice of the seam defect.

What is Subscale?

The grey material adjacent to defect within the white decarburized area is subscale. This subscale is evidence that the crack was present on the bloom prior to reheat for rolling

Subscale is a reaction product of Oxygen from the atmosphere with various alloying elements as a result of time at high temperatures. The presence or absence of the subscale is the indicator that helps us to pinpoint the origin of the defect. For a subscale to be present,  the time at temperature must be sufficient for oxygen to diffuse  and react with the material within the defect. According to Felice and Repp, 2250 degrees F and fifteen minutes  is necessary to develop an identifiable subscale. Lower temperatures would require longer times. Typically rolling mill reheat cycles offer plenty of time to develop a subscale in a prior existing defect. However, for defects that are created during rolling, the limited time at temperature and the decreasing temperatures on cooling make formation of subscales unlikely.

Reading Decarb and Subscale to Understand the Defect

Decarburization is time and temperature dependent. This means that its relative depth and severity are clues as to time at temperature, though interpretation requires experience and understanding of the differences in appearance from grade to grade based on Carbon content.

Symmetrical Decarburization

If the decarburization is symmetrical this is an indication that the defect was present in billet or bloom prior to reheat and rolling. oxygen in the high temperature atmosphere of the reheat furnace depletes the carbon equally from both sides of the pre-existing defect.

Asymmetrical Decarburization

Decarburization that is obviously asymmetrical indicates that the defect is mechanical in nature and was induced some time  during the hot rolling process.

Ferrite Fingers

Unetched specimen of seam (top). Etched specimen showing “ferrite finger.” (Bottom)

Ferrite fingers are a surface quality problem that is associated with longitudinal bar defects. During reheat, a defect in the bllom or billet is exposed to high temperature atmosphere, forming decarburization and subscale  around the defect. Rolling partially closes or “welds shut” the crack. However, a trail of of subscale is entrained in a  formation of almost pure ferrite which has been depleted of pearlite, carbon and alloy by the reaction at elevated temperature.   This trapped scale remains a potential oxygen source, driving further internal oxidation and decarburization if temperatures remain high.

Continuous improvement requires  taking root cause corrective action. Obviously identifying the root cause is critical. When we encounter longitudinal linear defects in our steel products, using a micro to characterize the nature of the decarburization and presence or absence of sub scale or ferrite fingers are important evidence as to when, where, and how in the process the defect originated.

 

 

 


Stress Cracks in Steel Bar Products.

March 14, 2017

“Stress cracks are defined as transverse or near transverse open crevices created when concentration of residual stresses exceed the local yield strength at the temperature of crack formation. These stresses can be mechanically induced or can be attributable to extreme temperature differences and /or phase transformations. They can originate at almost any point in the manufacture of the steel.”AISI Manual Detection, Classification, and Elimination of Rod and Bar Surface Defects

Stress cracks are often found visually  at locations that experience bending or straightening. They are also referred to as “Cross Cracks” or “Transverse Cracks.” Originally they were identified in mill billet and bloom products, prior to rolling.

Micro examination can help determine crack origin by noting:

  • Orientation
  • Intergranular nature
  • Presence of scale
  • Presence of subscale

Additional microstructural characteristics can reveal the thermal history of heating and cooling at the crack location.

This photo shows stress cracks on a conditioned billet.

Causes and Corrective Action

  • Excessive load during straightening can exceed the local yield strength of the material causing it to crack; reduce load applied by machine, or consider tempering or stress relieving material prior to straightening or further cold work.
  • Cooling too quickly can also induce stress cracks. Critical cooling rates are highly dependent on steel chemistry. Crack sensitive chemistries (Medium carbon and high carbon steels; also medium and high carbon steels with straight chromium or straight manganese additions.) These steels should be slowly cooled through transformation temperatures to minimize the occurrence.
  • Design faults such as
    • Heavy sections adjacent to light sections and sharp corners 
    • Failure to fillet sharp corners
    • Use of fillets rather than tapers
    • Undercuts
    • Overloading the material during fabrication, processing, or application.

Detection of stress cracks  is problematic as their transverse orientation makes them difficult to detect on equipment set up to detect longitudinal defects.

Final caveat: The term stress crack is arbitrarily defined based on industrial usage in the market. It does not necessarily imply anything about the specific metallurgical nature of the crack, I know that a number of people use the term “stress crack” to describe longitudinal cracks on steel bar products as well, which the AISI calls “Strain Cracks.”

 

 


Feels like January 2012-The January 2017 PMPA Business Trends Up 24% Over December 2016

February 23, 2017

The PMPA Business Trends Report for January 2017 provides a statistical basis for the optimism that is sweeping our shops in this new year. With 81 shops reporting, our index reached its prior record high for January at 128, and is up almost 4% over the five year average for January, and up over 24% compared to December 2016. Read the full report to get the other indicators that make the case that you need to be actively growing and building your business in 2017.

Any questions?

Any questions?

Do not succumb to the temptation to reduce non-essential training and other support activities just so you can get shipments out the door. Continuous Improvement needs to happen every day-especially when your shop is busy!

And by the way, only 3% of our respondents were NOT optimistic about employment in the coming months. 97% certainly were.

Get the rest of the details here: January 2017 PMPA BT Report