Brad Kuvin Brad Kuvin
Editorial Director

Don’t Let Waste Creep In

February 8, 2024

From the most recent automotive-sales check-in from S&P Global Mobility we learn that January U.S. auto sales were projected at 1.09 million units, translating to a sales pace of 15.2 million units (seasonally adjusted annual rate). While citing this as an improvement year over year, the firm’s experts predict month-to-month volatility for the market, while also projecting calendar-year 2024 volume of 15.94 million units, a 3% increase from the 2023 tally.

Such sporadic growth amidst a volatile market promises to keep metal formers on their toes for the foreseeable future. And as senior editor Kate Bachman notes in her auto-industry overview in this issue (beginning on page 18), “the most unpredictable lever remains the auto industry’s shift to electric vehicles (EVs), resulting in uneven forecasts and production volume uncertainty. … Several automakers are scaling back their production-volume plans and some are waiting to build production facilities. Other automakers that were planning to cut production volumes are resetting them.”

Bachman interviews executives at three auto-industry suppliers for her article, including Michael Haughey, vice president at North American Stamping Group. He tells Bachman:

“Our customers have a lot of capital tied up in EV production, one that has two lines dedicated to EVs and is using only half of one line. Programs are getting extended. Volumes are being cut, and no new engine programs are being launched either.”

And this, from Andy Melang, business development/program manager for Ultratech Tool & Design: “We’ll see a steady, constant, consistent flow, with probably a small increase in overall business revenue.” He indicates that 2025 and 2026 look to be higher-growth years. 

Such varying and potentially dynamic market forces should have metal formers, as we navigate through the first half of the year, “hunkering down,” industry analyst Laurie Harbour told a full house at the recently held Precision Metalforming Association (PMA) Metal Stamping Technology Conference, in Nashville, TN.  

“Hunkering down starts with cash, driving inventory turns and driving price increases,” Harbour says. “Metal formers must closely survey and understand profit by customer, profit by industry segment and profit by part, and know where they make their money—the sweet spot in the business.”

Surveying nearly 200 PMA member companies, Harbour finds that companies poised to successfully navigate uncertain waters have “sophisticated systems for pipeline management. They have a quote log with filters built in that leads them through to sales and requests for quotes. They have data to help decide what work to quote, and where to no-quote. These are the companies with sound sales plans.”

Then she stresses the importance of eliminating waste in the production process, noting that when business slows, “waste creeps in, whether in safety, in quality or in machine uptime. Look at how you’re doing changeovers, how you’re scheduling, and use data to create schedules that optimize throughput—different than output, as throughput means efficiently produced parts that meet quality specs.  

“Because even when building inventory, which finance people frown upon when inventory sits in a warehouse,” Harbour adds, “if you’re building inventory and gaining throughput, throughput trumps inventory-carrying costs all day long.”

Oh, and by the way: The survey data also show that companies that reduce machine downtime on a consistent basis, and remove unused machines, successfully drive throughput and profitability.

Industry-Related Terms: Lines
View Glossary of Metalforming Terms

Technologies: Management


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