The 5 Shifts Toward a Smart Metalworking Factory

By now you have received 10 emails from me with various tips.

Now let’s go back to basics for a moment.

For metalworking companies to be successful in the fourth industrial revolution, they must do the following five things differently:

  • value
  • time
  • price
  • data
  • network

The 5 shifts

#1: VALUE: Choose an ideal client

If you choose your client, they can choose you.

That means you have to specialize, because it’s getting harder and harder to be a generalist. Of course, there are large companies that already have a decent scale and can get away with it, but if you don’t have it yet, it’s better to choose a specialization.

Do you want to move toward a low-cost, autonomous factory or do you want to offer customers more service and options? Want to help local handymen or companies like Siemens, Boeing or Caterpillar? Handle exotic materials or mainly plain steel?

You cannot continue to regard every customer as equally important.

So sometimes you have to let go of 20% of your less profitable customers to make room for better ones. Only then can you deliver maximum value and make the most of it.

#2: TIME: Focus on lead time

Efficiency is no longer the right measure. What matters now is output and lead time.

The reason for this is that you have to be able to deal with large variations. Quick Response Manufacturing (QRM) is the best process improvement method for this.

Sometimes this also means that the planner must agree that you only plan for 80% occupancy.

#3: PRICE: Dynamic pricing, always upfront.

Fixed item prices no longer fit our current era. Material prices, inflation, labor costs and production pressures change by the day. So it doesn’t work to put a fixed price on this.

What also no longer works is to set prices on after-the-fact basis. After all, how would you like it if you didn’t know in advance what something was going to cost? That’s a recipe for whining.

Consider each request unique and provide fully automatic upfront pricing.

Sales prices should be calculated automatically based on real-time plant data (plant occupancy, material price and operating costs).

The better you quote in advance, the more the customer is going to trust you.

#4: DATA: Industry 4.0 architecture

Make decisions based on data, not opinions. You link all systems together and use the data for analysis and prediction.

Then you and the team make decisions based on this data.

The team must know in real time what their impact is on the company’s performance, or they will not see the value of automation.

For this, you need a modern “digital factory” stack consisting of many separate apps.

#5: NETWORK: Use the chain

Stop e-mailing and go for standardized data exchange.

Use the chain to automatically place and receive requests. But also use the network to share capacity.

This includes digital order intake and giving the customer real-time access to order progress.

That’s it! 😊… It sounds simple, but not easy to figure out on your own.

What I can promise you is this: If you prioritize these things, you will be a market leader within 3-5 years.

Really, it’s a matter of just doing it!

At first I thought I would write a long blog post about this, but instead you will receive short emails from me explaining each topic a bit more.

Who knows, later I’ll probably make a nice article/presentation out of it.

Does that sound like something to you? 😉

Tomorrow we will go deeper into the topic of VALUE. See you then!

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