Orders of Magnitude – Key to Process Problemsolving

May 17, 2016

If you have an intermittent  or periodic problem, start counting frequency of occurrence, and then figure out what the order of magnitude is compared to your process.

 in our shops, order of magnitude reflects the relative scale of our processes and helps us see what is and is not applicable to the problem at hand.

In our shops, order of magnitude reflects the relative scale of our processes and helps us see what is and is not applicable to the problem at hand.

To solve periodic or intermittent problems in our shops, the first step after identifying the problem is collecting data about “When” and “How often” it occurs. Then, comparing it to the orders of magnitude that occur naturally in your shop can help you narrow down the likely causes.

Relative frequency can be a big help, when you figure out that the frequency has some relationship or equivalence to some aspect of your process. For example, if the frequency is about equal to two occurrences per bar, than it becomes relevant to look at bar ends first, With two ends per bar, or the fact that you might get just two parts out of the first bar end, this tying of frequency to an order of magnitude denominator saves a lot of thrashing about to try to identify root cause.

What are some orders of magnitude that occur in your shop that you should consider for your problemsolving efforts on intermittent or periodic problems?

Material Order of Magnitude

  • Per Piece
  • Per Bar
  • Per Bundle
  • Per Lot
  • Per Order
  • Per Heat
  • Per Supplier

Your shop processes have orders of magnitude too.

Per Machining Operation

  • Per Spindle
  • Per Stock Up
  • Per Machine
  • Per Shift
  • Per Release
  • Per Batch
  • Per Lot
  • Per Production Order

How does this work? In a prior life I had an intermittent customer complaint for a twisted square bar product. The customer was counting bad pieces cut from bars in bundles.The frequency was extremely low, it was not at one per bar or one per ten bars, nor one per twenty bars. It turned out to be approximately, slightly less than  “one piece per bundle.” Knowing that the frequency was that low, we were able to eliminate most of our upstream of bundle process steps. They would have generated much higher frequencies – more on the order of multiple occurrences per bar.

Based on our frequency being an  approximate order of magnitude of one per bundle, we focused our investigation on the product and process at and after the bundle stage.  Which was where our problem occurred-when a single bar  end was being twisted by the movement of the last strapping and clip installation as it was tightened for packaging. the balance of the bar was held securely by the prior installed starps, but the tensioning unit grabbed one corner of a bar as it secured the final band around the bars, creating a twist in the end of the bar held under the tension of the clip that locked in that last strap.

Without comparing frequency of occurrence to orders of magnitude in our process, we would probably still be trying to figure out where in our process we could twist  just one 14″ segment out of 3,260 feet of bars. We’d be in denial, and eventually lose the customer.

If you have an intermittent  or periodic problem with your products, start counting frequency of occurrence, and then figure out what the order of magnitude is compared to your process.

 

 

Image credit


Department of Labor or Department of Shaming?

May 13, 2016

Where is the oversight?

The contempt that the regulatory community has for the regulated is evidenced in the new regulatory tack- Online shaming.

The contempt that the regulatory community has for the regulated is evidenced in this new regulatory tool- online shaming.

We teach our children that online shaming and bullying are not acceptable. Sadly, our congress fails to require similar standards of decency from the executive branch regulatory agencies.

On May 11, 2016, Occupational Safety and Health Administration (OSHA) released the final Injury and Illness Recordkeeping and Reporting Rule.

We testified against several provisions of this rule  on January 10, 2014.

We are over 4 hours invested into our trying to get through the 273 pages of the federal register notice  regarding the change of rule. On page 239, OSHA handily dismisses  our time estimate of 4 hours of professional time to understand the rule as “inflated.”

Here is what NAM’s Vice President for Policy, Rosario Palmeri had to say about this rule:

“Today, this administration put a target on nearly every company and manufacturer in the United States. Manufacturers are supportive of regulations aimed at increasing transparency, and we pride ourselves on creating safe workplaces for the men and women who make things in America. However, this regulation will lead to the unfair and unnecessary public shaming of these businesses. This is a misguided attempt at transparency that sacrifices employee and employer privacy, allows for distribution of proprietary information and creates burdens for all manufacturers. We will look at all options to protect manufacturers from this certain threat to the modern shop floor.”

Imagine if we had a regulatory climate where good policy and collaboration,  rather than bullying and shaming of employers were the real work product.

Sadly, manufacturers continue to be the target for regulatory bullying and shaming, increasing the adversarial and punitive nature of workplace safety.

When the focus is strictly on compliance because of enforcement risk, the employer’s focus becomes defense, not on establishing best practices and innovatioon. Management of regulatory risk becomes paramount.  Resources are diverted to  documentation and duplicative efforts to assure inspections are passed, rather than nurturing a holistic culture of safety.

Shaming as public policy and regulatory protocol? How can these possibly improve safety outcomes?

What can employers expect next, stocks in the public square? When did shaming become acceptable government policy?

Ashamed dog photo Link

 

 


Manufacturing Percentage of Non Farm Payrolls- Any Questions?

May 3, 2016
Any Questions?

Any Questions?

March 2016 = 8.6 %

Link to FRED site for this chart


April ISM PMI Declines 1 Point But Stays Positive for Manufacturing

May 2, 2016

“Manufacturing registered growth in April for the second consecutive month, as 15 of our 18 industries reported an increase in new orders in April (up from 13 in March), and 15 of our 18 industries reported an increase in production in April (up from 12 in March). The April PMI® registered 50.8 percent, a decrease of 1 percentage point from the March reading of 51.8 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting. “- Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee.

 

50.8 reading was below expectations for April, indicating a slower pace of manufacturing expansion compared to March.

50.8 reading was below expectations for April, indicating a slower pace of manufacturing expansion compared to March.

The ISM report also highlighted that respondents in fabricated metal indicated growth in April, and reported increases in prices for steel, stainless steel, and aluminum.

Why we are optimistic for your business going forward: The ISM PMI report’s “Manufacturing at a Glance” table showed that New Orders and Production were growing; Supplier Deliveries were faster, Inventories were contracting and Customer Inventories were too low. These are all positive signs for our Precision Component making shops.

ISM PMI Chart courtesy Calculated Risk Blog

ISM PMI April 2016 News Release


Industry Sales Jump 12% in March- PMPA Business Trends Report

April 21, 2016

With 80 companies responding, the PMPA Business Trends Index in March 2016 climbed 14 points or twelve per cent to 131, only the third time the index has been above 130 in its history.

Up 12% over ptior two months; down 4% from March 2015

Up 12% over prior two months; down 4% from March 2015

This is surprising given that the FED’s Industrial Production (IP) index fell 0.6 percent in March. (The manufacturing component-ex mining and utilities-  dropped 0.3 percent).  The FED also reported manufacturing capacity utilization was lower, down from 75.4 percent to 75.1 percent, its lowest level in nearly two years.

PMPA members that participate in our monthly Business Trends Reporting also weigh in on 4 indicators of future sentiment- Outlook for the next three months for Sales, Lead Times, Employment, and Profitability.

Decline in Sales outlook not at all surprising given the March high. Sentiment for Profitability increase, while Lead Time and Employment remain the same.

Decline in Sales outlook not at all surprising given the March high. Sentiment for Profitability increase, while Lead Time and Employment remain the same.

Opinions for the next three months compared to today:

  • Net Sales: The outlook for sales of precision machined products has declined to seventy-six percent (76%) of respondents expecting the level of sales to remain the same or increase over the next three months.
  • Lead Times: Ninety-four percent (94%) of respondents expect Lead Times to remain the same or decrease.
  • Employment: Eighty-seven percent of respondents expect employment prospects to increase or remain the same for the next three months, a positive assessment. Sentiment is unchanged from last month.
  • Profitability: Prospects for profitability have moved to the positive, after a level three months.

 

The March 2016 PMPA Business Trends Report shows that our precision machining industry sales have turned positive. Lead Time sentiment shows we have the capacity to further grow sales which is supported by the fact that our hours of first shift scheduled are below last year’s calendar year average.  


Upset Testing- Steel in Compression

April 5, 2016

Mechanical properties of a given steel under compression compare closely with its tensile properties. An upset can be performed to determine how the steel will perform under compressive load.

Upset testing

Upset testing

A brittle steel under compression will ultimately fail by breaking along cleavage lines at an angle approximately 30 degrees from the axis of pressure being applied.

A more ductile steel flattens out, rather than cleaving, showing vertical cracks around the outer circumference. This ductile steel will not break, but will continue to flatten  as more stress (load or force) is applied.

This compression or upset test is helpful for assuring that a steel will successfully cold work.

It can also be used to determine the extent of seams, laps or other surface imperfections  on the surface of the bar. That’s what I used to do when we were producing drawn wire for cold heading applications.


Are Industry Sales Tracking Closer to Real Time Manufacturing Orders?

April 5, 2016

Lousy forecasting by OEM customers  beats Lean and JIT every time, leaving the OEM’s supply chain bloated with inventory and starving for releases.

Ryan Kutz of PMPA member company Aztalan Engineering asks “Since a better portion of our customers have adopted lean, JIT, or quick response manufacturing practices-where inventory is dock to stock and stock levels are managed daily, making inventory almost none existent-  is there any evidence of this in the year to year trend? Are sales figures becoming even closer to real time with manufacturing orders? “

Ryan asks  this in response to our post February Precision Machining Shipments Level With January  .

Ryan, we agree with your premise that most of our industry’s customers have adopted programs such as  Lean, JIT, Quick Response Manufacturing,  and other dock to production (as opposed to dock to stock) programs. These programs are designed to reduce cost of possession for the OEM. However, we see these as being essentially a blunt instrument used to beat the supplier rather than as a means to truly coordinate supply chain effectiveness. We feel that despite these programs, our OEM customers lack valid insight into market demand, causing inventories to rise and then their orders to our shops to plunge concurrently. Take a look at the following chart from Dr. Ken Mayland of Total Business Sales vs  Total Business Inventories:

These indicators tracked closely in 2014, not so much in 2015...

These indicators tracked closely in 2014, not so much in 2015…

This graph shows that in first three quarters of 2014, our customers had a great handle on their demand and their orders and invetories tracked quite closely.

From 4Q 2014 forward, however, the  % Change in Total Business Inventories continued to remain in the positive Year over Year, while the % Change in Total Sales year over year plummeted through end of Q1 2015, when they “leveled off” at around negative 2-3%.

I think that we err when we overestimate the power of Lean, Just in Time, and Quick Response Manufacturing in the hands of our customers.

These  tools seem to be a blunt instrument at best.

To your question “Are sales figures becoming even closer to real time with manufacturing orders?” the graph above does seem to show that the change in sales and in inventories are converging at end of 2015 and 2016 year to date.

My conclusion is that it doesn’t really matter how fine a resolution our customers have in their Lean, Just In Time, or Quick Response Manufacturing processes and procedures,  if their ability to forecast is so poor, especially during market declines.

Lousy forecasting by OEM customers  beats Lean and JIT every time, leaving the OEM’s supply chain bloated with inventory and starving for releases.

Thanks for the great query.

 

 


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