Machine Shop Strategies for Emerging with Advantage

Sept. 30, 2009
Proactive measures that precision manufacturers can take to exit from recession stronger, wiser, and healthier than before.

According to the Manufacturers’ Alliance/MAPI Quarterly Economic Forecast released in August 2009, spending in the industrial equipment sector is predicted to decrease by a sharp 22.7 percent this year, preceding a 0.7 percent decline in 2010. While the outlook for the immediate future for machining continues to be challenging, MAPI economists do foresee a dramatic surge in growth of 20.5 percent in 2011. Additionally, machinists involved in building transportation equipment should brace themselves for a roller-coaster ride – though new projects plunged 42.8 percent this year, the subsector is expected to see a 52.1 percent increase in 2010 followed by 36.4 in 2011.

All of this taken into consideration, there are proactive measures industrial equipment manufacturers can take to prepare themselves for the impending financial turnaround that will enable them to emerge stronger, wiser, and healthier than before. Several of these are detailed below.

Use Funds Efficiently: Many companies feel that the only way to remain one step ahead of disaster is to purge any type of extraneous spending, but it’s important to take a step back and examine how your company is using funds – not just how much they’re using. While deploying initiatives like product lifecycle management (PLM), and supply chain management (SCM), might require an initial investment, the ROI from these investments will very likely cover the costs and much more within a few months. On the other hand, if your company is depleting millions of dollars on operational expenses, something’s definitely amiss.

Keep Risk in Check: That is, to say, reduce it. Risk is inherent in any manufacturing sector, especially industrial equipment, where reliance on multiple suppliers can cause a serious meltdown should one or more of them shut down or fall below standard. These are trying times for everyone, but we’re only as strong as our weakest link. If a supplier’s performance is seriously suffering and there’s nothing anyone can do to prevent the inevitable, it’s important to take swift action. Manufacturers, in order to survive, need to prevent the entire supply chain from getting bogged down, delaying product time-to-market, and ratcheting up extra shipping and delivery costs. And if anyone thinks they’re immune to production slowdowns, think again. According to the aforementioned MAPI study, manufacturing production will drop by 11.9 percent this year before increasing 3.2 percent in 2010 and 5.1 percent in 2011.

Use Technology as an Advantage: The irony of unexpected change is that its occurrence is predictable. No matter how detailed your plans, something can, and usually will, go wrong. This is only a problem if you let it be a problem – with the right technology in place companies can react and adapt to sudden developments quickly and successfully, while contributing to a better, more creative work environment. Companies with a strong PLM strategy for lean manufacturing processes can create design iterations and bring new products to market while the competition is still getting their morning coffee.

Collaborate: We’re living in a global society and working in a global industry. Suppliers hail from all over the world, as do partners, customers, branch offices, and thought leaders. Being able to communicate effectively with parties in various physical locations is essential to getting anything done on schedule. Having a group of design engineers in California discuss ideas in real time with parts suppliers in India is fine. However, industrial equipment design and development involves a substantial amount of intellectual property (IP), and companies need to make sure that every change is traced, every version is controlled, and every international regulation is addressed. Virtual environments with 3D simulation reduce the need to send out physical or digital collateral such as CDs, email attachments, etc. Letting your IP fall into the wrong hands is a dangerously effective means of self-sabotage. It’s amazing how much more productive global collaboration becomes when no one is afraid of data breaches.

Innovate and Strive for Progress: Keeping loyal to traditional manufacturing practices doesn’t mean living in the Stone Age of technology; it means serving the customer with the same type of authenticity, the same genuine desire to address their needs which has set apart the great manufacturers from the good. Sure, in the 1960s heyday of civil infrastructure planning, engineers had only slide-rules and room-sized mainframes, but that doesn’t mean they weren’t cutting-edge. The most successful companies were and are those that provided the most innovative solutions to their customers. The advent of 3D simulation technology and single-source operations platforms represent a brighter future – one where almost anything imaginable can happen with an Internet connection and a digital screen.

What we once marveled at is now taken for granted, and so it should be. We may not have seen a recession like this year’s since World War II, but just think about how far we’ve come since then in machine design and equipment development. Think of how many dangerous processes we’ve managed to automate, how many hulking devices we’ve rendered portable. Though we may be facing serious economic challenges, by simplifying manufacturing processes and embracing collaboration we will be well-positioned to take part in a 21st century industrial revolution. Imagine what we can achieve.

Patrick Michel is the vice president of DELMIA Industry Solutions & Marketing, Dassault Dassault Systémes. Contact him at [email protected].

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