Now that we’ve entered Q1 of 2019, many purchasing managers and procurement teams are in the throes of developing savings plans, finalizing cost reduction strategies, and negotiating prices with suppliers.
Supplier evaluation, diversification, and consolidation are also on the rise as American-based manufacturing firms consider looking to alternative domestic sources in light of the “tariff war” and its negative consequences.
If this sounds like you, and if you are in the process of looking for domestic precision machining suppliers of brass, copper, and/or aluminum alloys, why not consider a U.S.-based company like R.F. Mau Co.?
Here are the top four reasons to work with R.F. Mau in 2019:
1) A large domestic footprint with over 70,000 square feet of manufacturing space
The R.F. Mau footprint consists of three buildings located right next door to one another in Lincolnwood, Illinois. Consequently, we have production capacity for current and long-term expansion and growth. Our bank of New Britain, Euroturn and Tornos Multi-Spindle screw machines is complemented by Haas, Daewoo, and MSO secondary machines. This makes R.F. Mau both perfectly equipped to fulfill your manufacturing needs and ready to handle your most demanding parts, both now and in the future.
2) Proven stability and longevity
Since 1936, R.F. Mau Co. has continued to expand our service offerings, and remained a constant, stable enterprise with the ability to serve our customers’ requirements. Our ISO 9001:2015 certification reflects our commitment to quality and process improvement. You can count on R.F. Mau as being a reliable and steady American partner for a wide array of parts ranging from brass faucet aerators to brass male swivels and aluminum rod inserts.
3) Purchasing power through mill direct sourcing
R.F. Mau Co. is a bit different from other manufacturers in our industry in that we do not purchase our brass or aluminum from overseas mills. Since we work with domestic suppliers, our material prices aren’t negatively affected by the recent overseas tariff issues.
Equally important, since we purchase directly from domestic mills, Mau Co. enjoys some of the lowest raw material pricing in the industry. This translates to offering our customers far better pricing than our competitors. Further, as our competitors struggle to find floor space, our 70,000 sq. ft. facility gives us the ability to maintain an extensive inventory of raw materials and finished goods.
4) Access to labor
A major concern for many companies is the lack of skilled tradesmen in the workplace. This shortage is increasingly the single largest problem facing US manufacturers today, as machinists retire and companies struggle to fill these roles.
This labor shortage is very real; for example, in July 2018, Jeff Cox from CNBC reported how hard it was for employers to “fin[d] qualified employees to fill a record 6.7 million job openings.”
In many ways, R.F. Mau Co. is perfectly positioned as a sustainable solution for an aging workforce.
Here’s how…
Over twenty years ago, Mau Co. embarked on a comprehensive in-house training program, developing young talent through rigorous hands-on apprenticeships. This investment has resulted in a highly-skilled team of experienced craftsmen who understand the importance of passing along their own trade skills to the next generation. Make no mistake – not everyone makes the grade. We learned early on that it takes a good person to become a great machinist. We like to think our machining experts reflect that philosophy.
Conclusion
With a large domestic manufacturing footprint, proven longevity, purchasing power through mill-direct sourcing, and sustainable access to labor, R.F. Mau is here to fill your 2019 precision machined parts requirements.
For more information about how we can be a resource for you this year, we invite you to contact us directly or request a custom quote for your brass, aluminum, or specialty copper alloy precision parts.
As we reach the end of 2018, President Trump’s tariffs are still a major topic of concern for manufacturers and consumers alike.
The latest updates in what many call the “tariff war” came this past September, when Trump imposed 10% tariffs on $200 billion of Chinese imports, with threats to increase the duties to 25% in 2019.
Who the tariffs are affecting – and how – have been constant worries on many companies’ minds. Some industries are already feeling the effects of these tariffs (both positive and negative). Others aren’t – but could in the future.
Besides having a broader economic impact, Trump’s tariffs could potentially impact domestic and global supply chains in several ways. In fact, we’re seeing some of the results of the tariffs now – and can possibly expect to see new ones in 2019.
1) Chinese exports will most likely increase so U.S.-based companies can avoid the possible effects of Trump’s current and forthcoming tariffs.
According to a recent Supply Chain Brain article, Chinese export growth is anticipated to grow by 1.8% this quarter but decrease -5.6% in Q1 of 2019. This is because some U.S. importers have required that Chinese companies export their products now so that U.S.-based companies won’t be impacted by tariffs next year. In fact, Supply Chain Management Review reported that Chinese import volume amounts may set industry records this year.
The results of increased imports vary. As Patrick Burnson explained in another Supply Chain Management Review article about Trump’s tariffs, warehouses are quickly filling up (sometimes to overcapacity, causing delays or affecting warehouse efficiency); shipping lines have added more voyages; and U.S. ports have experienced increases in cargo volume.
2) Stockpiled inventory could lead to part shortages and could tie up working capital.
On the surface, it makes sense why U.S. companies are importing more and more Chinese goods. But how does this scramble for goods affect organizations? Often, inventory is stockpiled. This doesn’t help in the long run.
Rosemary Coates explained in an article about tariffs and trade wars that “The result [of our clients stockpiling inventory] has been shortages of all kinds of parts worldwide for companies that are not stockpiling. In addition, hoarding parts ties up working capital and may put a stranglehold on your company’s ability to operate.”
3) U.S. exports to China will slow down.
While Chinese imports to China will most likely increase this quarter, U.S. exports to China have slowed down and may continue this trajectory. Per a September Reuters article about the U.S.-to-China export numbers, “China’s September export growth likely slowed to 8.9 percent from a year earlier from August’s 9.8 percent gain….”
In fact, Daniel Shane from CNN explained that some economists expect the export growth to decline to single digits or negative percentages. The reason for this decline in U.S. exports to China is, unsurprisingly, tariffs, which correlate to a growing decline in orders.
4) Companies will need to adjust their supply chains for tariffs.
Obviously, the last thing a U.S.-based organization wants to do is to increase their prices and lose market share because of consumers who are unwilling to pay higher fees. But unless (and until) companies adjust their supply chains for tariffs, consumers will most likely have to pay higher fees on certain goods. Consequently, the need to adjust your supply chain for the tariffs is higher than ever.
5) Supply chain planning could become more challenging because of tariffs and the uncertainty they cause.
Though some tariffs are set in stone, others are still up in the air – especially those set to possibly start in 2019. With this lack of certainty, supply chain planning – defined by Gartner as “the forward-looking process of coordinating assets to optimize the delivery of goods, services and information from supplier to customer, balancing supply and demand” – will most likely be more difficult for companies who may be impacted by the tariffs.
6) Importers and U.S. manufacturers will look for alternative sources for goods and products outside of China.
Though switching suppliers is not without risks, some U.S. companies and importers have decided to look for alternative suppliers due to current tariffs and what the future ones could hold. This trend might continue in the future.
Some are switching to suppliers in other Asian countries; others are turning to domestic sources. A geographic diversification of suppliers may help companies to remain competitive and financially sound if the tariff woes continue, as well as actually avoid or prevent more risks than if they don’t look for suppliers outside of China.
Conclusion
The effects of Trump’s tariffs and the ensuing trade war between China and the U.S. have already come to fruition or remain theoretical – yet highly probable – in nature. We can expect to see some of the ripples of their repercussions throughout our domestic and global supply chains that we discussed in this article.
So, what does that mean for U.S. procurement departments, buyers, sourcing departments, and supply chains? In summary, warehouse space may (if it isn’t already) become less and less with the onslaught of increased Chinese exports to the U.S. Supply chain planning will be more complicated than in the past. Companies who export their products to China may avoid doing so and look for optional markets to export to.
Conversely, researching alternative suppliers and sources outside of China may prove beneficial both in the short-term and in the long-term. Developing more geographically diversified suppliers can help you to face current and potential ramifications from these tariffs – especially since working with domestic suppliers like R.F. Mau Co. will help you to avoid such risks.
In another sense, robots are not replacing manufacturing jobs.
But they are changing them and creating new ones in the process.
More Job Creation & Work Augmentation, Not Replacement
As we’ve mentioned, some companies are implementing robotics to run operations more efficiently with fewer people. From a wider perspective, though, the trend is a shift in workers’ duties (also known as workforce augmentation) – and in some cases, new job creation.
“In the context of technological enablement and automation, there is an ongoing need for essentially human and enduring skillsets that robots currently do not possess. One global manufacturer plans to replace nearly 30 percent of its current workforce capacity with robots-but to reallocate its human workers to more complex tasks rather than eliminating them.”
As repetitive and mundane tasks are taken over by robots, our jobs are evolving. Workers can now engage in “more advanced and engaging tasks,” which, as Deloitte explores in another article about robotics, could help organizations “see lower turnover, higher morale, and increased internal innovation.”
Manufacturing workers can actually reap the benefits of robotics. For one, robots help increase safety. Many American machine shops use CNC machines and industrial robots in tandem, and robots complete more dangerous tasks that were performed by humans.
And a new job opportunity arises with what are known as “collaborative robots,” or “cobots.” Robots do the dirty work, but you need humans to tell the robots what to do. So, companies can now use their employees to run the “cobots.”
Moreover, robots help workers increase their productivity (one whitepaper touted a statistic of 0.35% per year) – and in turn, have greater job satisfaction. Because workers can now spend time and energy on more fulfilling, mentally-stimulating tasks than mundane work, employees have more ownership over their work and feel more empowered.
And as productivity increases, so do profits, which benefits the workers with more jobs, higher salaries, and increased opportunities for advancement.
Crunching Some Numbers
History and statistics back this up. The fear of robots taking over human jobs is nothing new. In fact, it’s been around since the 1930s. Take ATMs, for example. Many people feared that ATMs would take jobs away from bank clerks before they were installed. Instead, banks hired more workers after ATMs were introduced.
And according to “Work in the Automation Age: Sustainable Careers Today and into the Future,” a recent whitepaper from Association for Advancing Automation, from 2010-2016, 136,748 robots were shipped to the U.S. Simultaneously, the manufacturing workforce increased by 894,000. Many manufacturers who add robots also add jobs in the process.
These jobs are more skilled or involve different skills than previous positions.
Not necessarily technical skills; while some new jobs which will be created will certainly require a different degree of training and technical aptitude to work with or run robots, interpersonal skills and emotional intelligence will also become more important – things that robots simply could never learn.
Conclusion
So, now that we’ve explored this topic in more depth, let’s return to the original question: Are robots taking over manufacturing jobs?
The fact is that yes, jobs are being eliminated and replaced by robots. Companies are looking for ways to reduce their labor costs, and robots are an ideal solution in some ways. After all, robots don’t need insurance or file worker’s comp claims.
We’re already seeing low skill trade jobs being taken over by robots, so we shouldn’t be surprised if that continues in the future.
But these eliminated positions offer opportunities for both the companies, their current workers, and their future employees.
For with each eliminated job, new jobs are being created that provide more meaningful work opportunities to workers and benefit their employers in the process. At the same time, jobs are being augmented, or changed. Your employees can learn new things and invest in new processes.
Robots aren’t just coming; they’re already here. It’s our job to learn to use them to our advantage.
Besides constant news stories about Trump’s new tariffs and how they’re affecting our economy, one of the biggest topics of conversation in manufacturing-related publications and news sites lately has been robots.
Whether discussing automation, artificial intelligence (AI), or robotics, the crux of the matter always seems to be that robots are coming, and they’re coming to take our jobs.
This is a controversial topic, especially in the world of manufacturing, but one worth not shying away from since, as we’ve found, robots bring far more benefits than you might think.
Benefits for companies and ultimately – and perhaps most surprisingly – for the modern manufacturing workforce.
So today, we’re going to roll up our sleeves and get down to business. Let’s look at whether or not robots are taking our jobs.
First things first. Are robots taking away manufacturing jobs?
Some sources say yes, and some say no. But it’s not that simple.
In truth, the answer is both yes and no. Here’s how.
Robots, U.S. Labor Costs & Labor Shortages
We won’t beat around the bush; it’s commonly known that U.S. labor costs are higher than other countries around the world. Other developing countries pay their workforce far less than we do. As a result, their goods and products can be cheaper than domestic sources. The result? Foreign competition continues to grow.
In the U.S., we’re also benefiting from one of the best economies in years. In June, the Wall Street Journal reported that the U.S. had more job openings in spring 2018 than unemployed job seekers. This is great for workers. It’s not so great for employers.
Our workforce situation has shifted from one where employers had the upper hand to one where job seekers have the upper hand. During the Recession and shortly afterwards, employers held the reigns. They had a huge pool of people to choose from and could afford to be picky.
But now, it’s the reverse. Job seekers can afford to be picky, and employers must cater to them.
Consequently, a major trend has hit the U.S., especially in manufacturing: employers are having a hard time filling jobs or even retaining the employees they have.
High workforce costs, coupled with a workforce shortage, is hitting manufacturers hard. And to stay profitable, employers are having to raise prices on their products and parts because they are either paying more for labor or because they don’t have the labor to support the work they have.
Obviously, this hurts a company’s bottom line. And to cut costs, industries are looking into ways to run their operations more efficiently with fewer people. They’re doing this with automation – with robots.
We see this now in different kinds of manufacturing. For example, structural metal product manufacturers (which manufacture products like bar joists, transmission tower sections, and reinforcing bars) are using automation to fight the growing threat of foreign import competition.
Per a recent industry report by IBISWorld, repetitive tasks that are usually performed by low-skill workers are being replaced by new manufacturing technologies like robots which load and unload parts.
And here’s the rub: this does help companies save money.
So how does Mau Co. fit into this new robotic world?
As stated above, we see an opportunity using robotics in highly-repetitive tasks that require no human element. We believe that the ‘staging’ of parts – that is, the loading and unloading of parts into production equipment – is a logical first step into the robotics realm. By automating this process, we improve productivity by increasing efficiency. And because improving efficiency is at the heart of all manufacturing processes, Mau Co. continues to re-set the bar in a globally-competitive environment.
So, in one sense, yes, robots are taking over manufacturing jobs.
But in another sense, they’re not.
Learn more in the next post in our series about this topic!
On March 8, 2018, the world watched, stunned, as President Donald Trump declared new tariffs on steel (25%) and aluminum (10%) in a controversial move that was met with dismay by many and support by some.
Analysts, economists, manufacturers, and trade enthusiasts wondered how this would affect industries domestically and abroad – especially since Canada and Mexico had, in recent years, become two of the largest importers and exporters of steel to and from the U.S.
This issue is still a contentious one whose impact is only beginning to be seen across our industry. China, Mexico, and Canada have since retaliated against Trump’s tariffs with tariffs of their own, including tariffs on steel products.
Some market research organizations have anticipated that a corresponding increase in input costs will lead to higher prices for consumers and businesses in the U.S. Though the total effect of the tariffs has yet to be seen, it is possible that companies who import or export steel will be impacted in the future and that the global price of steel will grow.
Consequently, there has been a renewed focus on the age-old debate of ferrous vs. non-ferrous metals – and in particular, steel vs. brass alloys as materials for precision machined parts.
In a world of steel and aluminum tariffs, it’s important to look at the case for using brass for your parts needs. Here are three reasons to consider using brass for your precision machined parts instead of steel:
1) Brass is resistant to many different types of corrosion.
Brass – an alloy consisting primarily of copper and zinc – resists various kinds of corrosive agents like galvanic corrosion, which is caused by salt water.
Environments brass is well-suited for because of its resistance to corrosion include: industrial and residential water systems, some marine environments (excluding those with high-velocity currents), cryogenic applications, petroleum solutions, and any environments where nonoxidizing acids are present such as hydrochloric acid and hydroiodic acid.
2) Brass conducts heat better than carbon steel and stainless steel.
Brass is known for having good thermal conductivity – more so, for example, than different kinds of steel.
This is important because heat can be transferred easily in parts made of brass alloys, making brass an ideal material for several industries including electronics, aerospace, and defense, where higher thermal conductivity is vital.
3) Brass alloys can be machined at higher rates, bringing both manufacturers and their customers an increase in productivity and cost savings.
In a study conducted in the Cincinnati, Ohio-based TechSolve, Inc. measuring the high-speed machining capabilities of brass vs. steel, several single-point turning and drilling tests were completed on five brass alloys (leaded and lead-free), 304L stainless steel, and 12L14 stainless steel to see which performed the best. Throughout all of the tests, the brass alloys consistently outperformed their steel counterparts.
For example, when comparing machine operating speeds for turning and tool life, the tested brass alloys had significantly better results than the 304L stainless steel and the 12L14 stainless steel.
As TechSolve and Copper Development Association Inc. write: “304L was limited to 800 SFM or 20% of the top speed for brass (4,000 SFM). 12L14 was limited to 1,200 SFM or 30% of the top speed for brass. Notably, tool life for brasses was at least 8X longer at more than triple the speed.”
But this wasn’t just limited to tool life and machine operating speeds during the turning process. The brass alloys showed greater production efficiency during the turning process as well. This trend carried over to the drilling process, where the brass alloys provided higher production speeds and increased production efficiency.
They state in their conclusion: “Compared to 12L14 steel and 304L stainless steel, brass alloys can be machined at significantly higher production rates with longer tool life and higher efficiency… The high speed machinability of brass enables significant productivity gains and cost savings for machined products.”
As a result, brass can often be an excellent – if not superior – material to use to make precision machined parts, with everyone involved benefiting from its properties and its tensile strength. Cost-efficacy is something to keep in mind since the cost of machining stainless steel is often more expensive than the cost of machining brass alloys.
Conclusion
We can only begin to predict how the Section 232 tariffs on aluminum and steel might impact domestic and international manufacturing operations in the future.
But the metals industries are historically volatile and subject to the trends in supply and demand, so seeing a rise in steel prices would not be unexpected.
Escalating steel prices and unpredictable foreign import issues make the switch to brass a smart alternative. You can take advantage of a non-ferrous metal alloy that is corrosion resistant, a good conductor of heat, and the perfect material for ensuring machining efficiency, speed, and cost savings.
