Category Archives: Manufacturing

Canada’s Growing Manufacturing Sector

Since our company was established over 25 years ago, we’ve been a well-known and reliable manufacturer of precision parts used in the aviation, defense, nuclear and a number of other industries. Headquartered in Ontario, Canada, we’re proud to play a significant and important role in Canada’s manufacturing industry.

The Canadian government is working hard to promote and advance manufacturing in the country by creating a variety of programs, funds and initiatives. For example, Canada’s Economic Action Plan includes programs that are meant to support manufacturing jobs, technology, and innovation to advance the automotive, aerospace, defense, and construction industries, among others.

According to the Canadian Manufacturing Purchasing Managers Index (PMI), the rate of growth for the manufacturing industry is holding steadily, with exports climbing to their highest level in more than a year. For example, the PMI was 55.3 in November, signaling a period of growth in the manufacturing sector. Additionally, the manufacturing sector is making a significant impact on Canada’s Gross Domestic Product (GDP), with overall growth of 0.3 percent in October. This manufacturing surge and GDP growth are setting up Canada for strong fourth quarter growth.

At Shimco, we’re focused on improving the efficiency of our operations  and working to promote and advance the manufacturing sector in  Canada.  We are automating more of our processes and using recently implemented state-of-the-art enterprise resource planning (ERP) software to increase output. Our automation and ERP programs allow us to run our advanced manufacturing and business areas even more effectively and efficiently, including scheduling, production control, inventory control, internal reporting, metrics and much more. Furthermore, we attend various industry trade shows and events to promote the aerospace and defense industry in Canada. We’re extremely proud to be part of Canada’s growing manufacturing and industrial business.

Responding to the Changing Economics of the Supply Chain

At the beginning of 2013, Supply Chain Digest ran a story in which supply chain “gurus” made predictions for the year ahead. Some came true, some didn’t.

One of the predictions came from analysts at IDC Manufacturing Insights. It dealt with manufacturer sourcing, and the overall prediction was for “changes in sourcing practices.” This seems to have happened in several ways.

One of the biggest is seen in the overall changing economics of the supply chain. Sub-OEM suppliers are now pushing their suppliers for lower prices, smaller quantities per shipment (moving more and more to Just-in-Time practices) and better payment terms—net 60 is now common, but some are asking for net 90. In essence, the financial risk is being pushed down the supply chain and suppliers are being forced to carry more working capital. As stated in this article, there is now a “relentless pursuit of greater operational efficiencies” which seems to be leading this shift.

What does this mean for suppliers? Like it or not, as this becomes the norm, suppliers will have to adjust and adapt accordingly. As OEMs demand cost reductions, suppliers will have to place greater emphasis on efficiency and lean manufacturing principles. This means satisfying customers needs and demands, while eliminating what isn’t essential. It means reductions in inventory, reviewing all operations, and reducing waste wherever possible.

Of course this is not easy, and as the risk continues to get pushed down the chain, it becomes more challenging for suppliers. However, by adopting leaner practices, unexpected benefits can often be seen, and a true commitment to what the customer wants is demonstrated.

Manufacturing on the Rise: Global Demand, Increased Costs Overseas, and the Attractiveness of Manufacturing in North America

During the past few weeks, we’ve been hearing and reading the news reports showing stronger-than-expected numbers related to the economy. These numbers all point toward a rise in manufacturing in the U.S. and North America. One recent report from The Week sums up why manufacturing here is on the rise, offering these three reasons:

  • Global demand is on the rise.
  • Overseas manufacturing isn’t as cheap as it once was.
  • More foreign companies are moving manufacturing operations to the U.S.

Meeting global demand

After declining for several years now, companies’ inventories have been depleted. Consequently, it will take a while to manufacture enough product supply to get inventory to sustainable levels again, and the push to do this is happening now. At the same time, global demand is rising and this puts even more pressure on companies to manufacture more products.

Saving money by staying close to home

The recent trend we’ve been seeing is more manufacturers are staying close to home and turning to suppliers in North America rather than going to China or other foreign destinations. After years of going overseas, manufacturers are “reshoring” and realizing the many advantages – including money saving and quality assurance – of manufacturing closer to home.

Moving manufacturing operations to – or back to – North America

More foreign companies are turning to North American suppliers, or they’re locating their manufacturing operations here. They’re “waking up” up to many manufacturing advantages: In May, a report in USA Today said, “Foreign manufacturers aren’t the only ones waking up to the benefits of making things in the U.S. Since 2010, more than 200 companies, mostly U.S.-based, have brought back production they had sent out of the country.”

In the days ahead, we look forward to more manufacturers around the world hearing the “wake-up call” and recognizing the many advantages offered by manufacturers and manufacturing operations in North America.

 

The Pressure to Increase Efficiencies in Manufacturing

machined_formed_bannerManufacturers at all ends of the spectrum continue to feel the squeeze to reduce costs and increase efficiencies.  Whether the push is from your customer or from their end customers, a small or medium sized manufacturer has the most to lose if they aren’t constantly adjusting and producing more with less.

Lean manufacturing is one of the methods that companies are using to consistently deliver quality products quickly and efficiently.  The lean manufacturing movement is focused on the reduction of inventory and lead times for production.  The push to implement lean manufacturing principles frequently comes from other suppliers or from the customer directly.

The core of lean manufacturing includes some of the following items:

Cost efficiency – this isn’t cost reduction, but looking at where costs can be more efficient.  Cost efficiency can be applied to labor time, production runs, equipment operations and so forth.  Variables, that if studied, more than likely can produce areas that costs can be more efficient.

Inventory reduction – This is about how much inventory is being carried by the company before it is either sold or shipped to the customer.  Smaller batch production is a way to control inventory carrying costs.  This leads to less overhead, more factory space and, hopefully, happier customers.

Shorter cycle times – if production times can be shortened, this opens up areas for flexibility in production, planning and space.

As you can see, these three separate and distinct elements are integral to one another.  If shorter cycle times are achieved, inventory levels will be reduced, providing greater cost efficiencies.  If inventory levels are reduced because of improved production processes, cycle times have likely been improved, which would also provide greater efficiencies in costs.

An example of this improvement in cost efficiencies is occurring at Shimco today. In response to our customers’ need to move towards just-in-time inventory and shorter lead-times, we are revamping our entire ERP program. Our objective is a system that will allow us to produce in smaller lots but with a significant improvement in cost control and data capture.  Our new ERP system will allow us to have an even tighter control over our process flow, as we will be able to make adjustments to resource utilization in real-time.  The end result will be a re-allocation of some of our costs into a system that will give us meaningful improvements in lead-times, inventory levels and customer satisfaction.

In today’s increasingly competitive market place, companies need to constantly strive for improvements in cost efficiencies.  What was great yesterday isn’t necessarily good enough today.  But with a dedication to always finding ways to be leaner, an organization will help tilt the odds for a successful future in their direction.