4 Reasons to be Optimistic about the Future of Manufacturing

 

Marlin Steel ManufacturingHere at the Marlin Steel facility in Baltimore, we’re always excited to see news about the manufacturing industry (after all, manufacturing is what we do). We’ve recently seen a lot of positive news that could indicate that the manufacturing industry in the USA is poised for a comeback.

“What are these pieces of positive news and why should I get excited for manufacturing,” you ask? Well, there are a great many reasons to be both optimistic and excited for the future of manufacturing, including:

Reason #1: Job Growth

For much of the last few decades, manufacturing was a declining business in America. After enjoying a boom in growth during the years following WWII, when America’s manufacturing infrastructure was one of the only undamaged sources of manufactured goods in the world, there was a major decline. During this time, there were innumerable factory lay-offs and closures.

Thankfully, this decline has leveled out during recent years. In fact, according to a recent Wall Street Journal article by James R. Hagerty, jobs in the manufacturing sector have risen “by about 600,000 over the past four years to more than 12 million.” In that same article, there was a bit of information from a survey that indicated that 21% of U.S.-based manufacturers “were moving production back to the U.S. or planning to do so.”

An increase in jobs in the manufacturing sector indicates that more business is coming to American manufacturers. More jobs also means more people paying taxes and contributing to the financial stability of the country.

Reason #2: Energy Costs are Going Down

As Marlin Steel’s owner discussed in a previous interview with WBAL radio’s John Patty, which can be found here, the discovery of new techniques to extract more natural gas from deposits in various areas of the country has made it cheaper and more economical to power the manufacturing industry.

In states such as Pennsylvania and Ohio, the natural gas industry has helped to boost tax revenues, providing more money for schools and other necessary civil services.

By making energy costs more affordable for manufacturers, it is more likely that manufacturing jobs will be brought to America than to other countries, further increasing job growth.

Reason #3: Overseas Labor Costs are on the Rise

One of the big issues behind the loss of manufacturing jobs in America was the costs attached to operating in the U.S. as opposed to basing manufacturing operations overseas. Not just the energy costs, which we discussed above, but the labor costs as well.

Overseas laborers often performed unskilled tasks for absolutely miniscule pay. For many manufacturing companies, the sheer cost savings that came with switching to using labor from underdeveloped countries was too tempting to pass up. In order to guarantee competitive prices, it was necessary to cut costs in every aspect of the production process, especially labor.

However, in recent years, the average labor costs for unskilled labor in other countries has been on the rise, negating many of the cost advantages of using overseas labor. Not only that, but some manufacturing tasks require specialized skill sets and education, which necessitates the hiring of more expensive skilled laborers anyways.

Reason #4: Robotics

The labor cost advantage for U.S. manufacturing is further compounded by the increase in workplace automation in factories. Robots can do many tasks much faster and with greater consistency than human labor, but still require the support of a trained and experienced engineer in order to function at peak capacity.

For example, a robotic wire bending machine being monitored by a single engineer can make hundreds of bends in a quarter-inch thick length of wire per minute. With this speed, the robotic arm can make hundreds of complete wire forms per hour, where a single worker who is very skilled and experienced might be lucky to finish more than ten or twelve pieces of thick wire in that same time frame. Even with this engineer earning far more money than a traditional worker, he or she can get far more work done in the same amount of time.

Not only that, but the precision with which automated manufacturing equipment can produce items means that they’re more well-suited for use in products that require miniscule error tolerances. This opens up the potential client list of a manufacturer, such as what Marlin Steel was able to do after adopting our own automated manufacturing systems.

Think Positive

Right now, the future of manufacturing in the U.S. is looking bright. Naturally, we cannot know what’s in store for the future, but we think that there’s more than enough cause to be optimistic.

To learn more about manufacturing, and how workplace automation can help bring about a renaissance of American manufacturing, check out our other blog posts, or contact us. Marlin Steel’s engineers are happy to help answer your questions.

2,000 Days of Safety and Counting at Marlin Steel

 

Marlin Steel Manufacturing SafetyRecently, we made a blog post about how workplace automation improved safety among manufacturers. In that post, we mentioned that thanks to the adoption of automated manufacturing techniques, we have gone more than 2,000 days without a safety incident on our factory floor.

Well, we’re proud to state that we’re still more than 2,030 days without an accident (and counting)!

We would like to take this opportunity to congratulate all of the people on our team who have diligently removed chances for accidents. Our team has an exceptional safety committee headed up by our Production Manager (Andy Croniser) and several key employees in maintenance and leaders in our sheet metal fabrication department and our custom wire basket department.

People ask how did you get such a long streak? Here are five approaches that have helped our safety success at Marlin:

  1. Empowered Safety Committee – they meet monthly and get what they want
  2. Creative Safety Committee – come up with outside of the box ideas to improve safety
  3. Inquisitive Safety Committee – They took tours to other phenomenal safe facilities (Acadia Doors and Windows in Baltimore County, MD) to cross pollinate and model some of their ideas.
  4. 80/20 – follow up with solutions the most likely problems that will cause future accidents.
  5. Embrace Suggestions – Marlin invited in OSHA (Thank You Allen Stump) and our worker’s compensation insurance company (Thank you CNA) for suggestions. They gave great ideas. We followed each idea and they made us better.

This safety committee has for years met monthly, grappled with near misses, promoted clever ideas to make a safe environment for their colleagues. They have shown tremendous tenacity – never giving up making a better and safer work environment.

Everyone at Marlin Steel is proud to be a part of the resurgence of American manufacturing. Through the use of innovative technologies combined with training and experience, our engineers are able to craft custom wire forms for all of your materials and parts handling needs.

To learn more about how automated manufacturing techniques have enabled more than half a decade of accident-free work, check out our blog post on the subject.

How Workplace Automation Brings Safety

 

Marlin Steel SafetyIn the manufacturing industry, worker safety has long been one of the biggest concerns of employers. Manufacturers have worked long and hard to overcome the public perception of manufacturing as a dangerous field of work.

Of course, the notion that manufacturing jobs can be hazardous is not completely unfounded. In the past, on the job injuries were common among manufacturing industry workers. A century ago, it was common for workers to toil away for hours doing hard, repetitive tasks that were dull and exhausting. Exhausted, tired laborers became prone to making mistakes, causing accidents, many of which caused permanent injury.

Even as recently as the 1990s, injuries among the employees at Marlin Steel were fairly commonplace. Workers were making bends, cuts and welds in wire forms by hand. The labor was repetitive and physically demanding, lowering alertness and the ability to respond quickly when necessary.

Fatigued workers combined with a plentiful supply of power tools and sharp, small pieces of metal proved to be a ready-made recipe for disaster. Injuries plagued the manufacturing floor, some of them severe. In fact, at one point, there was a major safety incident as often as four times per year. Workman’s comp costs were through the roof, and production slowed every time there was an incident.

Clearly, something had to be done to improve the safety of the manufacturing process. The real question was: “how?”

At the same time, Marlin Steel’s owners were faced with another challenge: maintaining market share when foreign competitors were selling the same commodity baskets for less than the cost of the steel.

Improving Safety

As luck would have it, there was a way to meet both goals at the same time: by investing in manufacturing automation.

By making the switch to automated manufacturing processes, Marlin Steel’s workers were able to craft parts with a margin of error much smaller than was previously possible. This improved level of precision opened up new markets beyond the simple bagel baskets that Marlin Steel was once known for.

With the machines doing most of the heavy lifting, Marlin’s workers quickly found that they were not suffering from fatigue the way that they once did. In addition, workers didn’t have to handle sharp parts and potentially dangerous equipment by hand, limiting their exposure to injury.

Now, if a weld sends off an unexpected spark, the worker overseeing the welding machine’s operation is well away from it, largely eliminating the possibility of injury. With human workers being able to stand back and monitor the assembly of intricate parts rather than having to be up close to the process, safety is greatly improved.

“How improved,” you ask?

Thanks to the adoption of automation, the Marlin Steel production floor has gone more than 2,000 days without incident. That’s almost five and a half years without any kind of injury. Previously, the accident rate was once one incident every 91 days. This means that since the adoption of automated manufacturing techniques, the accident rate is 4.5 percent of what it used to be (and shrinking).

By combining manufacturing automation with a dedicated safety effort, manufacturing jobs can be made safer than ever before throughout the entire industry.

Vice President Joe Biden Meets with Marlin Steel and Discusses Manufacturing

 

Joe Biden and Marlin SteelVice President Joe Biden spoke with me and a roomful of US manufacturing leaders last week regarding his optimism about US Manufacturing. He stressed that the USA is the best place to build things because we have several attributes that differentiate us from the rest of the world:

1. Rule of Law
2. Respect Intellectual Property
3. Vast Energy reserves
4. Innovative Universities and Research colleges

He believes by embracing immigration reform we can help manufacturing because we will have a broader pool of labor we can hire that is legitimate.

When shaking my hand, he shared with me that his grandfather was in the steel fabrication business in Baltimore (like Marlin Steel) but they later moved to Pennsylvania. He thanked Marlin for growing jobs in the USA.

The president is right about some of the USA’s strong suits that make our nation great, however we can be better and faster growing. While visiting my Maryland Senator’s last week, Marlin Steel stressed that US Manufacturing has a 20% cost obstacle compared to our biggest economic competitors (like Germany and Canada). US factories are burdened with:

1. Higher taxes (40+% vs 15% in Canada)
2. More regulations
3. An out of control legal system

These costs make our manufacturers less likely to win jobs so we will not hire people and end the recession fast. The natural gas revolution is helping US Manufacturing, but it is being constrained. Approving the Keystone pipeline will help grow jobs in our nation.

Vice President Biden is right that we have strong suits, but let’s rollback these obstacles so we can hire more people.

How Marlin Steel Creates Your Perfect Parts Cleaning Basket

 

Marlin Steel Parts Washing BasketsAs a company, Marlin Steel is famous for its material handling and washing baskets for sensitive parts. Back in the day, Marlin Steel was most well-known for the manufacture of commodity bagel baskets for bakeries to use in the display of their bagels. Much has changed in the intervening years, to say the least.

Now, thanks to heavy investments in advanced robotics and employee improvement, Marlin Steel has the equipment and the expertise needed to craft custom wire forms for innumerable applications.

Traditionally, the biggest challenge in building a parts washing basket is getting a complete grasp of the application for which the basket will be used. It is very important to ask the right questions before attempting to manufacture the basket. By asking the right questions, it is possible to minimize costs, number of design iterations and the time it takes to go from initial design bid to finished product.

Learning to ask the right questions is more than a matter of training, it is a matter of real-world experience and knowledge. Marlin Steel’s engineers have successfully designed countless wire forms for use with a large variety of products, including:

  • Air foils.
  • Pump housings.
  • Valves.
  • Nuts & bolts.
  • Automotive parts.
  • Dental implants.
  • Firearms.

The above are just a few examples of the types of parts that Marlin Steel engineers have designed baskets for over the years. Thanks to their years of experience in designing baskets for all sorts of uses, Marlin’s engineers know just what questions to ask before they start building a basket.

Design Considerations: the Frame

Once the engineer has a complete picture of what the basket will be used for and the types of chemicals and temperatures it will be exposed to, he or she will set to work designing the frame of the basket. While there are innumerable different factors that will affect the design of the basket, such as the dimensions of the object to be held and the nature of the parts washing process, there are a few things which are fairly constant in a well-designed basket.

For example, most Marlin Steel baskets use a diamond-shaped base to reinforce the bottom of the wire mesh basket. This diamond pattern not only helps the wire mesh retain its proper shape when fully loaded, it also helps to prevent the basket from becoming stuck on conveyor belt systems. A square shaped bottom can snag very easily on a flat, wide transitioning surface. The diamond shape minimizes the point of contact between the edge of the conveyor belt and the basket, greatly reducing the chances that it will be caught on the edge of the conveyor.

The specific grade of stainless steel used for the frame, and any coatings that will be applied to it, will be determined largely by the needs of the part and the cleaning process. In washing operations that employ water, alcohol or detergent-based cleaning solutions, grade 304 stainless steel is usually the best material. However, for corrosive chemical bath processes that would eat 304 stainless, grade 316 stainless steel is better. Without knowing the washing process before designing the basket, something as basic as choosing the right alloy for the basket is impossible.

The Lid

The design of the lid for the basket should receive the same consideration and care that the design of the basket’s frame receives. For many parts washing processes, the lid is what keeps the small, delicate parts being washed from becoming lost or even damaged in the parts washing machine.

When a basket is being designed with a lid, it is vital that the lid is sturdy enough to not open accidentally during the wash cycle, but can be opened without difficulty when not in use. Once again, knowing the specific details of the washing process and of the parts being washed is invaluable to creating the perfect lid. In some processes, a simple shoebox-type lid that wraps the edges will work fine, while other processes might require a more secure latch to prevent the lid from coming open while the basket is being rotated or submerged.

The Wire Mesh

A parts washing basket would be fairy useless if the cleaning solution couldn’t reach the part to be washed inside the basket. Because of this, the open area of the mesh (the space between the wires) is definitely something that needs to be taken into consideration.

The open area of a wire form basket can vary by quite a bit, anywhere from 20 to 80 percent of the total area of the mesh surface. At 20 percent open space, the openings between wires are usually narrower than the wires themselves. At 80 percent open space, the openings are very large, allowing for most cleaning solutions to flow freely through the mesh: however, the thinner wires won’t be as durable and long-lasting.

To achieve the optimum balance of durability and flow, Marlin Steel’s engineers aim for an open area of around 50 percent in their wire form designs. At 50 percent open area, the wires themselves are thick enough to withstand repeated wash cycles, while being open enough to allow most fluid and aerosol cleaning solutions to reach parts easily.

One important caveat for designing a wire mesh basket is that the frame, as well as any other additional parts such as latches and hinges, take up some of the open area on a basket. As a result, the open area of a wire mesh basket that was designed to be 50 percent might actually be 40 percent if you take these space-consuming structural elements into account.

By taking into account the dimensions of the part to be washed and the nature of the washing process, Marlin’s engineers can design the right basket for the job quickly and easily.

The Skilled Labor Shortage in the Manufacturing Industry

 

Marling Steel on Manufacturing IndustryOver the last decade and a half, the manufacturing industry has been subjected to a great many changes and outright upheavals. From riding high through an economic bubble to struggling through the economic challenges brought on by the popping of said bubble, the manufacturing industry as a whole has struggled to adapt to the ever-changing market.

However, a new challenge is looming on the horizon for manufacturing companies all over the country: a significant shortage of skilled labor to perform manufacturing jobs. According to a survey cited by the McKinsey Global Institute, of more than 2,000 U.S. companies surveyed, 43 percent of manufacturing companies had critical positions go unfilled for more than six months at a time.

The trend of having positions that are critical to a manufacturing company’s very survival going unfilled is expected to get much worse before it gets better. Why? Because, of the current pool of skilled manufacturing industry workers, many are close to retirement age. Every time a company loses a skilled worker to retirement, they lose all of that workers accumulated knowledge and experience as well.

While the old workforce is leaving the industry, there just aren’t enough new recruits coming in to cover these losses. Part of the problem is with the perception that younger workers have of the manufacturing industry. According to an FMA (Fabricators & Manufacturers Association) study, 52 percent of teenagers indicated little to no interest in a manufacturing career. When asked why they weren’t interested in manufacturing, the majority said that it was because they were seeking “a professional career.” For these young people, manufacturing doesn’t even count as a career option.

Working to Encourage America’s Youth to Manufacture

Now that this problem of a skilled labor shortage has been identified, how can the manufacturing industry as a whole work to overcome this issue?

The most obvious way of dealing with this challenge is to step up recruitment efforts, to draw the best talents that are graduating from school to your company and deny these invaluable resources to competitors by getting them first. However, this solution is short-sighted at best, as there aren’t enough qualified people entering the workforce to go around, period. Relying on getting to a potential recruit before anyone else can is problematic.

Instead of trying to snap up what few potential recruits there are, it may be better to promote a more thorough understanding of how the manufacturing industry works in a developed industry. Much of the current perception of manufacturing jobs is taken from tales of overseas sweat shops and horror stories from the start of the industrial era.

The best weapon against ignorance of the viability and importance of manufacturing is knowledge. When young minds think of what it’s like to work in a big factory, they need to have real-world knowledge and experience from a real, on-site tour of a modern manufacturing plant, not just pictures from a book about a 1920’s textile factory.

The misconception that all manufacturing-related jobs involve back-breaking or repetitive work needs to be addressed. Potential recruits need to know what kind of skilled jobs are needed by the manufacturing industry and what each job really entails. For example, many manufacturing jobs require a working knowledge of how to program and repair robotics. Such work is highly skilled and may require certifications in software programming and mechanical engineering.

Manufacturing is no longer the work of an unskilled labor force that just bends wire around a post over and over for hours on end. It is the foundation of a strong economy and a rewarding career path for those with the drive to continually master exciting new skills and technology.

How Marlin Steel Filled Skilled Jobs

Another way to fill needed skilled jobs is to create incentives for your existing workers to learn new job skills to increase operational redundancy and build up your company from within.

Not long ago, Marlin Steel was featured in the pages of FABRICATOR Magazine for the way in which employees were encouraged to take additional training and certifications. By doing this, Marlin Steel was able to fill many critical roles using existing employees.

Taking the time and effort to nurture existing workers can prove to be a great way to not only fill skill gaps, but to demonstrate that any manufacturing job is not the “dead end” job many people who are considering their careers may think.

With some effort and education, we can show the youth of this country that manufacturing jobs are a viable career path, and maybe even stave off the shortage of skilled labor that is being projected by many.

A Manufacturers’ Perspective: What Marlin Steel suggested to Federal Reserve Chairwoman Janet Yellen On Monetary Policy

 

I had the honor to meet Federal Reserve Chairwoman Janet Yellen and several manufacturing leaders to discuss manufacturers’ perspective on the state of the economy. Several manufacturers stressed there was an improved degree of optimism and some new-found confidence because Washington seemed less dysfunctional (no Government shut downs looming, etc), however everyone was concerned with  the negative GDP growth in the first quarter.

Marlin Steel and Janet Yellen

Was this decline indicative of a loss of momentum or was it a nasty winter that depressed activity, activity that will bounce back in the second quarter?

The general theme was that housing is a concern and the world is becoming increasingly globally competitive.

One consistent theme was that stronger USA factories were exporting, but Europe remained a weak market (this is the same week that Europe announced Negative Interest Rates as a way to jump-start their economies!)

Marlin Steel’s Suggestions on Monetary Policy

I shared with the Chairwoman that Marlin Steel makes wire baskets for industry (Automotive, Aerospace, Pharmaceutical, Medical and Industrial powerhouses) and our material handling baskets are used to clean parts for clients like Toyota and Caterpillar, so we are exposed to a broad cross section of the US economy.  I suggested two ways to get the economy firing on all cylinders:

First, cut taxes because most factories were at competitive disadvantage with formidable economic rivals (Germany and Canada, especially) because our companies pay more taxes. As a result, we are losing jobs that Germans are winning and this means fewer jobs in the US. These are crucial jobs we need now to reduce unemployment.

Secondly, I said we should RAISE interest rates because this will be a psychological boost for the economy. Our country is on such sound footing now that we do not need the economic crutch coming from the Federal Reserve any more. In addition, our county is seeing some bubbles form (junk bond market) and that is an ominous sign. Lastly, raising interest rates will get consumers and business people off the sidelines and start borrowing money now to buy things that will improve their business and grow the economy. In our case, we bought the biggest robot in company history this week to capture the historically low rates (we received a financing deal for 10-year money @4.97%!) That is too good to stay valid; low interest rates mean a low hurdle for new investments, so poorly-thought-out ventures get funded.

I insisted to the Chairwoman that she should provide the  profound psychological mind shift we need – it’s time to get moving. The economy is rolling again and it is time to get off the sidelines. Raising interest rates will embolden business people to act – which is what our job seekers desperately need. It will provide the needed confidence we have turned the corner. Gentlemen and ladies, start your engines.

Response to Marlin Steel’s Manufacturer Perspective

The Chairwoman listened intensely but challenged me when she said that when we revised rates recently, it hurt the housing market. She believes that interest rate increases are off the table if unemployment is equal to 6.5%.

It was refreshing to see Federal Reserve leadership engaging with manufacturing leadership to understand the trends in the market and pulsing people in the trenches to get a feeling of the future growth trends from job creators.