what stampers can do to drive improvements & profitability ...€¦ · what stampers can do to...

What Stampers Can Do to Drive Improvements & Profitability to the

Bottom LineLaurie A. Harbour, President & CEO

Scott Walton, COO

Harbour Results, Inc.

Proprietary and Confidential

Established to help small- to medium-sized businesses transform operations and develop a roadmap to maintain financial and operational success.

Trusted Advisor to the Manufacturing Industry

OperationsImprovement

StrategicDevelopment

BusinessAssessments

Custom AnalysisBenchmarking

Sales Planning Due Diligence

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Proprietary and Confidential Copyright © 2019 Harbour Results, Inc

Key IndustriesHRI collaborates with clients to help identify and address pain points with

a goal to improve overall business performance

Tool and DieMolding

StampingDie Casting

Injection Molding / Plastics Processors

Metal FormingPrecision Machining

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Agenda

✓Manufacturing Industry Overview

✓ Stamping Benchmarking

✓Opportunities for Stampers

✓ Finding Hidden Sources of Profit

✓ The Next 18 to 24 Months

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MANUFACTURING

INDUSTRY OVERVIEW

2019 PMA Forming the Future

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▪ 312,000 jobs added▪ Interest rates rose▪ Unemployment below 4% ▪ Oil prices dropping

▪ Hourly wages plateau▪ GDP growth 3.4%, but declining▪ PMI was 53.8%, trending down▪ Housing prices plateau▪ Stock market improving but volatile

▪ Yield curves trend towards zero▪ New home sales decrease

The U.S. Economy is Strong, but Not Too Strong

Source: Federal Reserve

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Increased Material Costs

Whirlpool’s raw material inflation cost them $350M

in 2018

GM cut its forecast for profit after steel tariffs

were announced in June

Harley Davidson cited $48M in increased cost in

2018 due to tariffs

Nucor Steel nearly doubled their profit in the

second half of 2018

Tariffs have been imposed on multiple materials, resulting in increased material costs across the supply chain.

Source: Forbes, Bloomberg 7


Tariffs and Trade – Biggest Concerns

The implementation of a 25% tariff on imported cars and parts would be an extreme detriment to the North American manufacturing industry, not to mention retaliatory tariffs preventing North America from profitably exporting.

Section 232

China cannot afford to give up market share, their GDP decline is already proving this, they will continue to drop prices to stay competitive. Is North America efficient enough to compete?

Section 301

President Trump has the authority to withdraw from NAFTA without Congressional approval, but USMCA requires Congressional approval. The President can use this as a negotiation tactic.

NAFTA/USMCA

9


China’s Economic Growth Slows to 28-Year Low

Source: National Bureau of Statistics of China 10

Proprietary and ConfidentialSource: U.S. Federal Reserve

Is There a Recession Coming?

Key Intersecting point

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-4.3%

-1.9%

-0.7%

Slow Down Across North America or is it?

16.9M

Units

16.6M

Units

16.6M

Units

16.8M

Units

16.8M

Units

17.0M

Units

17.1M

Units

16.7M

Units

2017-2019 CAGR

Source: LMC, Oxford Economics

2019 will be ~17M units, less than last year, but still strong for the industry.

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OEM Restructuring

Ford Restructuring, Layoffs Could Dwarf GMs

GM Restructuring Plan; 2019 Profit Targets are Strong

Nissan Leaders in Legal Troubles

Lentz Wields the Ax as Toyota Aims to Cut Costs

Honda Struggles with Product

Suppliers Being Forced to RestructureFCA Still for Sale

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Changing Landscape – Disruptive Technology

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METAL PROCESSING

BENCHMARKING


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Stamping Saw Growth Going Into 2018

Source: IBISWorld 17


Revenue Saw a Marked Uptick in 2018

18Source: Harbour IQ


Capacity Utilization Forecasted to Increase

Production capacity utilization steady across shop type as of Q1 2019.

Stamping shops are projected to be at 72.5% utilization, having recovered from a slow Q4 2018.

Source: Harbour IQ

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More Investment Planned for 2019

Source: Harbour IQ

Stampers and other are expecting to invest more in 2019 than they did in 2018.

Stampers are projected to increase machine-related capital expenditure in 2019.

Molders are projected to decrease machine-related capital expenditure to focus on other areas.

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Stamping Throughput Exceeds Molders

Source: Plante Moran/MAPP, Harbour IQ, PMA22


Stamping Throughput Leads Other Industries

23Source: Plante Moran/MAPP, Harbour IQ, PMA


Profitability Varies for Stampers

Profitability between 10% and 11.5% across shop types. Stampers show

lowest SG&A costs.Source: Harbour IQ


Business Slow Down, Cost of Automation, Tariffs, Economic Uncertainty

Metal Processors Continue to be Compressed

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Transactional Waste, Growing Complexity, Specs and Tolerances, Price Pressures


OPPORTUNITIES FOR

STAMPERS


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Business Assessment Overview

• The Harbour Results business assessment walks through each of the key functions of the organization, to understand the effectiveness of each of them.

• Harbour conducts over 50 of these assessments per year, across various manufacturing industries.

• At the end of an assessment, HRI identifies which of these nine core areas represent the “chinks in the armor” to a company’s ability to grow and compress their business in reaction to market demand

Assessment Categories

Management

Sales and

Marketing

Human Resources

Finance &

Administration

Operations

Engineering

Materials

Quality

Program

Management

Business

Assessments

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Management

Human Resources

Finance & Administration

Sales

Engineering

Program Management

Operations

Materials

Quality

Gaps at any point in this hierarchy will drive issuesabove and below that function.

Assessment Hierarchy

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The Bottom Three is Where the Opportunity Lies

Assessment CategoryAvg. Ranking

(1-9)Finance and Administration 3.4

Human Resources 3.7

Quality 3.7

Materials 4.1

Engineering 4.4

Program Management 5.9

Operations 5.9

Management 6.3

Sales and Marketing 7.6

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Alignment of Sales and Operations is Lacking

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System

Process

Function

Task

Sub-

Task

Majority of Shops’ Functions Working ‘IN’ the Business

Working “IN” the business

Working “ON” the business

• Strategic Planning• Profitable Pricing• Demand Management• Throughput vs. Output• Capabilities Architecture• Next Generation Employees

• Reacting to Problems• Quality and Delivery • “Blocking & Tackling”• Product Costing• Scheduling

Management should balance between“IN” and “ON” the business

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Strong Strategy & Business Plan Will Drive Efficiency

No Fire Fighting

Continuous Improvement

Voice of Customer

Supplier Development

Capacity Planning

Operating Efficiency

Task-based Manufacturing

Understand and Evaluate

Opportunities

Challenge Status Quo

Standardization

Strategic Alignment

Sell into Capability

Use of Data and Market

Intelligence

Company Alignment

Strategic Planning and

Direction

Market Intelligence

Management Sales

Engineering

Program Management

Operations

Materials

Quality


FINDING HIDDEN

SOURCES OF PROFIT


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Consequences of a Lack of Strategy

Lack of Direction

The organization lacks a vision of what it wants to be; everyone does what they believe is best

Disconnected Leadership

Leadership has a vision and strategy but has not driven it to the rest of the organization

Competing Goals

Different communities within the organization disagree about vision and strategy

The Wrong Goal

The organization is united in a direction counter to true visions and strategy. Focused on the wrong goals and objectives

Management

Sales

PM/

Engineering

Operations

Support Functions

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Business Planning Process

Management

Sales

PM/

Engineering

Operations

Support Functions

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Market Intelligence

CUSTOMER INTELLIGENCE

MARKET FORCES

COMPETITOR INSIGHTS

ECONOMIC DATA

LEGISLATIVE IMPACT

PRODUCT FORECASTS

Management

Sales

PM/

Engineering

Operations

Support Functions

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Best-in-Class Sales Process

Market Intelligence begins the strategic sales process designed to help companies define and implement a plan to fill their pipelines, manage capacity and bring in additional revenue.

M

a

r

k

e

t

I

n

t

e

l

l

i

g

e

n

c

e

Management

Sales

PM/

Engineering

Operations

Support Functions

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Confront the Customer and Part Tails

• Total of 78 customers

• 10 of these customers account for 80% of total revenue

• 36 of these customers account for the bottom 1% of revenue

Management

Sales

PM/

Engineering

Operations

Support Functions

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Confront the Customer and Part Tails

• Total of 1005 parts

• 87 parts account for 80% of revenue

• 623 parts account for 1% of revenue

Management

Sales

PM/

Engineering

Operations

Support Functions

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Use Data to Quote More Effectively

Management

Sales

PM/

Engineering

Operations

Support Functions

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Identify Opportunities for Automation & Labor Reduction

Management

Sales

PM/

Engineering

Operations

Support Functions

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Capacity Plan Will Identify Constraints and Opportunities

By Part

By Press/TonnageTranslated to Sales/Run Rate

By Functional Area Management

Sales

PM/

Engineering

Operations

Support Functions

46


Identify Opportunities For Swim Lanes

• Total of 1145 SKU• 70 SKU represent 64% of total hours

• Each accounting for at least ¼ of a full press worth of hours

Management

Sales

PM/

Engineering

Operations

Support Functions

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Understand True Costs When Selling Open Capacity

Management

Sales

PM/

Engineering

Operations

Support Functions

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Machine Monitoring and Metrics Should Drive Behavior

Management

Sales

PM/

Engineering

Operations

Support Functions

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Support Functions Opportunities

• Shift from on-time delivery to schedule attainment• Purchasing groups need to become supply chain managers and cascade

their efficiency improvements to their supply base for mutually beneficial improvements

• Become the voice of the customer and drive purposeful continuous improvement

• Avoid inspecting quality in, and begin implementing more upstream quality prevention automation, especially as this tech becomes less cost prohibitive

• Calling on Industry 4.0 for automation and intelligence opportunities in support functions

• Understand industry inventory-turn benchmark, and identify opportunities to reduce on-hand inventory

Management

Sales

PM/

Engineering

Operations

Support Functions

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Function Task Inventory Time Critical Responsible

Minutes %

AM Administration 0 #DIV/0!

HM Handover Meeting 0 #DIV/0!

WA Work Assignment 0 #DIV/0!

CW Confirm Workstation 0 #DIV/0!

CR Confirm Work-Rate 0 #DIV/0!

TR Training 0 #DIV/0!

PL Print Labels 0 #DIV/0!

CQ Check Quality 0 #DIV/0!

GB Give Breaks 0 #DIV/0!

GL Give Lunch Breaks 0 #DIV/0!

WS Work Sub-Assembly 0 #DIV/0!

PM Pull Materials for Sub's 0 #DIV/0!

TD Training Documentation 0 #DIV/0!

CA Clean Area (5S) 0 #DIV/0!

PS Pre Start-up 0 #DIV/0!

Total Minutes 0 #DIV/0!

Minutes %

1 Must Do 0 #DIV/0!

2 Could Do 0 #DIV/0!

3 Could Be Done by others 0 #DIV/0!


Minutes %

MP My Position 0 #DIV/0!

QM Quality Manager 0 #DIV/0!

IN Inspecter 0 #DIV/0!

SP Supervisor 0 #DIV/0!

MA Maintenance 0 #DIV/0!

PT Process Tech 0 #DIV/0!

OP Operator 0 #DIV/0!

MA Materials 0 #DIV/0!

WH Warehouse 0 #DIV/0!

0 #DIV/0!


Total Minutes / Day 0

Total Hours / Day 0.0

Responsible

Critical

Function

Adopt a Task-based Manufacturing Philosophy

Management

Sales

PM/

Engineering

Operations

Support Functions

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THE NEXT 18 TO

24 MONTHS


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What To Watch

• Political Environment and Trade Implications

• Economic Factors and Potential Recession

• Automotive Industry Slow Down

• Industry 4.0 / 5.0

• 3D Printing New Technology/Laser Sintering

• Big Data – Use of Artificial Intelligence

• Merger and Acquisition Activity – Succession Planning

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Proprietary and ConfidentialBenchmarking Observations Recommendations

Discounted Rate for PMA Members

Health Check for Your Business

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Harbour Results Partners

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Thank you for the opportunity

Laurie Harbour (new email)

[email protected]

Scott Walton

[email protected]

www.harbourresults.com

248-552-8400@HarbourResults

Company Page: Harbour Results, Inc.

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mailto:[email protected]

mailto:[email protected]

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