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Metal Needs to Rock to Rule

Driving top- and bottom-line growth is a tough nut to crack for almost anyone. The metalworking industry, for one, which looks to generate revenue of less than $1 billion by 2013, is, well, let’s just say it’s hanging in there for now. But tools and processes are available to help such small companies and manufactuers, so embrace ‘em to become more competitive.



Unless you’re in the price gouging, er, oil business, driving top- and bottom-line growth is a tough nut to crack. And there’s typically a myriad of reasons why it’s becoming harder and harder to make your company a hot commodity. Rising energy costs, meeting compliance — does it really matter what it is? At the end of the day, there are forces beyond your company’s control coming down on you harder than Judge Judy’s gavel.

And the industries that are really down on their luck, well, they face an even bumpier road, as you can imagine. The metalworking industry, for one, which looks to generate revenue of less than $1 billion by 2013, according to new Frost & Sullivan research, is, let’s just say they are hanging in there for now:

As the market for metalworking fluids in the U.S. becomes more competitive, the fluid suppliers are struggling to maintain production capacities while facing increased raw material costs and tighter regulations, said Frost & Sullivan Research Analyst Sreeram Raghuraman. Other factors are influencing the market including the decline in consumption of metalworking fluids in the U.S. as end-user industries, such as the automotive manufacturers, move away; and large end-user industries, such as the aerospace industry, who are using non-ferrous metal solutions that provide similar characteristics as iron and steel, along with low weight.

Not exactly an ideal situation, or industry, to be in right now. What’s more troubling is the typical advice Frost & Sullivan offers to get back on track, which is the same pat answer we’ve been hearing for an eternity: product innovation. “High-speed machining will help metalworking fluid suppliers to remain ahead of competitors, and the increased growth in niche markets is also offering growth prospects for high performance fluid products,” the report noted.

So the metalworking industry didn’t know this already? That is a little hard to believe. Especially when across our desks comes a news brief from Canadian Industrial Equipment News about Blaser Swisslube, a supplier of Swiss-quality metalworking fluids. The company just celebrated its 25th anniversary in North America with an advanced training seminar for more than 200 guests, including employees from Blaser’s operations in Europe, Asia and South America. According to the news brief, Blaser has all sort of clever tools and processes at its disposal, and it’s a global company to boot. This metalworking-fluids provider seems to be making things work, so why can’t others?

In addition, there’s a new service available to metalworking “duty of care” obligations from a U.K. company called Oel-Held, as this story points out. In essence, Oel-Held has launched its new service to help companies find their way through regulations relating to metalworking fluids and to identify action to resolve any existing or impending problems. Best of all:

The service is offered free of charge, with no obligations, and generally involves nothing more than a short visit to site from one of the Oel-Held advisors. The company also offers training for operators and/or managers in the effective management of metalworking fluids.

Sounds like a useful service, no? Sounds like it can perhaps make smaller companies more efficient, companies like the Metalworking Group, highlighted in Cincinnati’s The Enquirer. Metalworking Group used to deal primarily with local companies but has since found itself in the enviable position of dealing with mega-companies like Berkshire Hathaway, Tyco and Newell Rubbermaid. As such, the little-company-that-could has seen its revenue jump 30 percent each year for the past three years. Here’s one reason why:

To stay competitive, the Metalworking Group has invested more than $1 million over the past year in new metal-cutting equipment, including more than $600,000 in a laser-cutting machine. It has also embraced a new approach to working with customers.

“Fifteen years ago, we made parts,” said Michael Schmitt, owner of Metalworking Group. “Now we want to be an integral part of the customer’s operation to help them drive cost out of their business,” Schmitt said.

Instead of just taking a customer’s specifications and producing the item to meet the price quote, for instance, Schmitt’s company is helping their customers design their parts to reduce cost without affecting their performance, a process known as “value engineering.”

If a small contract manufacturer like Metalworking can use a simple concept to rock the industry, why can’t others?

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Comments:
  • ryan
    November 10, 2006

    i enjoyed the artical but i would like to see the same kind of reserch invested in the metal service center part of metal. If we could get a stable price from the mills we could effectively help out our end users and give them a quality product at a good price that they can pass on to there customers.


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