Quality Quote

October 10, 2018

No spec, no quality. Know Spec, know quality.

Quality means compliance with all terms of the specification.

Know the specification!

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August ISM PMI- Highest Reading Since January 2004

September 5, 2018

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.

It has been a long time since the ISM PMI was at today’s levels!

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

Positive Takeaways:

  1. Manufacturing continues to expand. the 3.2 point jump from July to August was a substantial increase.
  2. The overall economy continues to expand- 112 consecutive months of economic expansion.
  3. The increases from July to August were especially robust for New Orders (up 4.9%); and Production (up 4.8%).
  4. Other indicators for employment, inventories, supplier deliveries  increased on the order of 2% or more.
  5. The Prices Index fell 1.1 percent in August from July, but still showed increasing costs for raw materials, for the 30th consecutive month.

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.

ISM August 2018

Graph courtesy Calculated Risk


New REACH Status for Lead- PMPA Members Know How to Respond

August 29, 2018

 

On June 21, 2018, the ECHA added Lead to the Candidate List for Substances of Very High Concern under REACH.

Not banned in every application…

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

  • Recites the applicable facts and regulatory obligations
  • Describes where and where not the REACH and other EU regulations apply / might not aply;
  • Analyzes the duties to our customers
  • Describes ways to meet our obligations
  • Provides references for understanding this new development

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.

  • Who is helping you and your team recognize new regulatory risks?
  • Who is helping you to understand those risks?
  • Who is providing answers so that you can concentrate on making those critical parts that the world needs, instead of spending three or four man-Days trying to figure it out? (Presuming that you know the issue even exists!)

PMPA members know who.

PMPA!

PMPA Members Only Guidance Document


A New Era Began Today

February 6, 2018

Autonomy in our technology is real! (Photo courtesy Joshua Andrade- Heinlein Forum on Facebook)

I was privileged to be able to witness the live cast of the Falcon Heavy Lift vehicle today. The photo above shows two booster engine modules simultaneously and autonomously landing. This was just a small part of the technology displayed today by the Falcon Heavy launch.

But here is why I say that a new era starts today:

  1. This is proof that Autonomy in our technology is real. It’s no longer about listening to a reporter somewhere talking about autonomous cars on test tracks. We got to see it ourselves today. It works. Now, it’s just a matter of scaling and networking the technology. We’ll be seeing this in our customers products sooner than we expected.
  2. Private enterprise for the win. NASA’s Bill Gerstenmaier, Associate Administrator for Human Exploration and Operations said that “the NASA SLS (Space Launch System) heavy rocket would cost about $1 billion per launch.” The Falcon Heavy cost is about $90 million per Launch. That’s about $910,000,000 in unneeded taxes per launch.
  3. Today’s launch has proven that the existential joy of engineering is alive and well and making cost effective technology in private enterprise. Space is no longer limited to staid, bureaucratic, rationalizations that it is for research for the common good missions. Today, it is about the human spirit and what we can achieve.
  4. This was not cobbled together by the lowest bidder with a bunch of imported parts. Although the label on a circuit board proudly proclaims “*Made on Earth by humans” this is validation of the capability of US private enterprise, engineering, and the entrepreneurial equivalent of  the gold record on Voyager.
  5. This is the defining event of the new renaissance of Engineering, Entrpreneurialism, and Manufacturing to further mankind’s material progress.  Through our own capable efforts.

Made on Earth by humans (Photo courtesy Joshua Andrade)

I am glad to be a witness to this milestone in the renaissance of manufacturing, engineering, and entrepreneurial accomplishment here in America today.  An electric car, is on its way to Mars. I watched two booster engines land themselves simultaneously. I watched the joy of the engineers as their work accomplished its demonstration of the power of our technology. This is the current generation’s SPUTNIK moment.

Baby boomers can just barely remember what Sputnik did  to transform for our culture, but many of us chose science and engineering and technology careers.  Today, we all had the chance to see a similar watershed for technology, manufacturing, and entrepreneurial spirit, and that it is cool again.

Existential Joy of Engineering- Why shouldn’t we love what we do?

The existential joy of engineering is alive and well, and it has just sent a red car hurtling towards a rendezvous with the red planet.

Red car to rendezvous with a red planet

 

…to be continued

Link to video Space X Falcon Heavy Launch– start at 4:14:24 to start with the launch

Photocredits: for Landing and Circuit board: Joshua Andrade (J Meauho Andrade on Facebook)


What Could be on Santa’s List for Your Shop?

December 13, 2017

We spoke with the Jolly Old Elf earlier this year to try to learn what he had in store for us…

While Santa didn’t give us any clues as to what he had in his bag for our shops, I have consulted with some of his  economists -uhh- favorite elves-  to try to get a sneak peek, as well as some sensemaking from our own Business Trends Report. Our Business Trends Report has been reporting an 8% or more higher level of sales and shipments for our industry all year- we and our favorite economists see that continuing in 2018 first half for sure…

Here’s what I think Santa has in his bag for you going into 2018:

New Technology – Yes, we know that you can’t find the additional people that you need to run new machines. THAT IS ALL THE REASON YOU NEED  to try to automate everything that you already have, so that you can free up the talent that you already have to move up to their highest and best use. That highest and best use will be on the newer equipment you will need to stay competitive in the strong markets ahead. Also, reconsider your approaches to tooling and accessories for what you have now. Cheapest cost per tool makes economic sense (maybe) in a slow market and hunker down economy. When your shop is so busy that you are routinely scheduling overtime and are at the limits of your capacity, tooling and accessories that reduce set up time, operate longer between adjustments, and provide additional benefits such as tighter tolerance capability are  an investment that leads to maximizing income from the capacity that you have available. Talk to PMPA’s Tech members to see how their tools, accessories, software, specialty materials and metalworking fluids can help you wring more production out of your current capacity in less time.

Training, Training, Training – The talent already on your team is your strongest asset. Training them to perform at their highest and best use creates a win win for them and for your shop. The best people that will be in your workforce in five years are probably the people that are already on your team today. Whatever you can do to improve their skills will pay dividends all the way around. PMPA has created an online training program called PMPA MFG to help you upgrade the knowledge and competencies of your new hires as well as existing performers. Check it out here: PMPA MFG Workforce Training or give Sterling Gill, III a call at PMPA HQ to get a personal demonstration.

Increa$ed Working Capital – If you really intend to take advantage of the strong demand for manufactured products in the next year, you will need to look at your working capital and adjust accordingly. The economists  – uhh- Santa’s Helpers-  that we follow have walked back their “recession in 2019” forecast and are now talking about a much more likely “soft landing.” Continuing strength for our shops through the first half for 2018 and a slight slowing in Q3 and Q4. The capital needs of a business  in a strong and growing market are much different than those needed when we were all in “hunker down mode”in a barely tepid economy. Our Business trends shows that the market for our products has shifted to a new higher level, and we see that strength continuing in our immediate and actionable future. Plan for success. Talk to your banker.

Fewer Regulatory Surprises – Regulatory surprises have been the basis for my personal economy and full employment  since the 2008 election. The current administration’s noticeably different approach has allowed me to focus my attentions to other areas of compliance, improvement, and member service. However, we are now on the lookout for  Trade and Tariff storms which could suddenly disrupt the markets and demand for our components (By forcing Santa’s sleigh to pull over until they pass.) On the regulatory side, as shop owners we need to continue to be diligent, train, document, and audit our systems for safety and compliance. If we do this we will both intelligently manage our risk, and also allay any fears of finding a stocking full of coal…

That’s what I caught a sneak peek of when I met with Santa. I hope that you consider these points and take appropriate action. It is up to us to respond appropriately to the strength in demand and markets. PMPA members looking for further details are welcome to contact me at PMPA.


Foaming- Why Base Oil Differences Matter In Your Shop.

November 6, 2017

You don’t need a degree in Organic Chemistry to understand the differences in your shops’ metalcutting fluid base oils and what they mean to you.

Synthetic base oils clearly are less prone to foaming than mineral oil base stocks.

A recent discussion on PMPA’s member’s only Technical Listserve centered around the issue of foaming in our machines and its relation to the type of cutting oil selected for use in our CNC and Swiss machines.

John Wiley, Business Development Manager for PMPA Technical Member Qualichem, Inc. contributed a nice piece of sensemaking regarding the role that the selection of base oil plays in the foaming we encounter on the machine.

“In this picture you can clearly see the differences in a base oil’s tendency to foam.  These are pure base oils, nothing added.  Poly Alpha Olefin (PAO) and Gas To Liquid (GTL) synthetics are  identical, while the two mineral oils foam considerably more than the synthetic stocks.  If you are a shop that has yet to experiment with new cutting oil technology, now is the time.  The benefits are firmly within your budgets. If you are doing medical work, the GTL oils are ideal.  If you are running lights out operations, the GTL are ideal.  If you want a cleaner shop, cleaner machines and cleaner parts, GTL is ideal.”

John went on to describe the scenarios where PAO’s and GTL’s would be expected to be the best choice for certain operations (like high pressure pumps) and applications, as well as compared the economics of  PAO’s and GTL’s. Our members got actionable insight as to the effects of the base oil in their metalcutting fluids in terms of both performance and economics.

You may not know a lot about Organic Chemistry, but the photo above is worth a semester in class (as well as a thousand words!) to show us why now is the time to consider Synthetic base oils in our CNC and High Pressure coolant metalcutting operations.

Qualichem,Inc.


7 Industry Trends to Think About- New Technology Isn’t One of Them

November 2, 2017

You may be surprised that Technology as a stand alone item is not one of them.

Our future is not about shinier flying saucers.

We will master  and implement whatever technologies are developed.

But our future is being impacted by these 7 items  today:

  1. Loss of experienced workers taking tribal and craftsman knowledge out of our shops.
  2. Lower average wages as experienced workers with seniority leave and younger workers start at trainee wages, making it difficult to attract talent with facts about “increasing wages”- even though they are.
  3. Training growing in percent of spend as many shops are unable to purchase new technology to quote new work because they do not have trained workforce.
  4. More and more jobs being quoted out of more challenging, non free machining materials;
  5. A bit of relief from new regulations, but more uncertainty as Washington turns to trade issues which can impact availability and cost of imported materials, and tooling,  as well as impact the exports of finished goods that contain our parts.
  6. Increasing demands for certification of production to a wide variety of customer demanded requirements regardless of legal obligations- Conflict Minerals, REACH, RoHS, Animal- Free; Ca. Prop 65. Etc.
  7. Possibility of an “Association Healthcare Insurance solution” in 2019 or beyond.

 

What do you see as the trends shaping our company and industry future?

Please don’t say technology- as Humans, we’ve been successfully implementing new technologies for quite some time.

Flying cars

Todd Rundgren Future

Fire