As we look ahead to where we would like to be in 2019, we should first reflect on what happened last year and how it affected business, then examine our preparation for the unexpected in 2019 and beyond. For manufacturers, 2018 was a year of growth tethered by tariffs that were more damaging in rhetoric than in actual application. The year began with threats of trade wars that instantly hit our pocketbooks, well before any tariffs were enacted. Creating an even playing field did help bring work back to the United States and helped to keep our products on par with other global providers, but the bottom line is still the bottom line and its degree of success in the long strategy of the tariff game can only be told by time. For now, upfront cost increases have been passed down to the end user and overall balance has been restored until the next batch – which means any future forecast based on current status is out of our hands and we must prepare for every possible scenario:
- Will tariffs cause more prices to increase or shift the advantage to another location?
- When will the next recession hit?
- How long will the next recession last?
- Where am I going to find labor for all the new work?
These questions are endless and make building a long-term strategy difficult, especially alongside an ever-moving forecast. That said, shops can prepare for many things in different ways to secure strength for the future. The economy is strong, the labor pool is depleted, pressrooms are busier today than yesterday, but talk still circles back to a looming recession. Even if economic experts are correct about a pending downturn, metal stampers should be in good shape for growth in 2019 – numbers are expected to be less than 2018, but still positive until a forecasted slowdown begins in 2020. In the meantime, a wave of new technology is coming before that recession unfolds, birthed by strong companies that embrace new challenges to create innovative solutions that meet manufacturing needs. In fact, much of the technology we can see happening in the coming years is already in front of us, just not yet mainstream in metal stamping.
For example, I recently purchased a new car with a lot of modern comfort features (or as I like to call them, reasons my car will be in the shop). I was not looking for all of these new technologies inside my car, nor did I believe they were needed. But after driving with them for a few weeks, I began to wonder how I ever lived without them. My car even tells me when my favorite artists are playing on a different station. Cars have used computers for years, but now technology inside the automobile cabin is rapidly evolving every day and the Internet of Things is becoming commonplace. Consider the smartphone, which began when IBM released the Simon in 1992. It could send emails, receive faxes, use calendars, and even had a touchscreen.1 Then Apple launched the iPhone 15 years later and disrupted the entire business world by opening a new era of convenience. Both the car and the smartphone you and I can’t live without show us how the impact of technology on business rapidly evolves from a starting point with early adopters to a wave of automation that is necessary for survival.
That wave is now seeping into the U.S. metal stamping industry with the digitization of the manufacturing plant and the early adopters of this new economy. For many companies, business is strong and somewhat stable at the moment, so taking the time to prepare for future needs is difficult to fit into their daily grind. But preparation is a necessary step for future survival – and 2019 is the year to get prepared. The tax cuts at the beginning of 2018 allowed those companies to spend a little more on capital needs in preparation for the next influx of business, so what better way to make the most of the extra business and tax-cut cash than to spend more time looking at value over cost. Implementing new ideas is not without risk, but waiting on the sidelines can keep a company out of the game. Creating the most of today, while planning for the future – when business is strong – will make surviving and succeeding tomorrow a lot easier. Finding the right mix of labor and technology is paramount to success in this new economy of metalworking.
I provide solutions that prolong tool life in metal stamping applications by utilizing a variety of manufacturing options, such as steel, coatings and surface finishes to remedy specific challenges. These improvements have helped stamping houses increase tool life dramatically and increase productivity in several different industries. One thing about improvements is that they come at an up-front financial cost, and often that initial investment is the very reason they are overlooked by those who do not think forward enough to understand where value exists. Creating a stable company comes from being financially responsible, yet forward thinking enough to understand where value exists. In this new economy of metalworking, evaluating productivity against upfront costs is a good starting point. As we move into transition years where anything can happen, it’s time to focus on value in all areas of business, not just upfront costs.
As the year progresses and we move closer to the next election, along with the predicted recession, competitors in the metal stamping business need to prioritize the development of practices that can be sustained throughout an economic slowdown.
1. “The world’s first smartphone, Simon, was created 15 years before the iPhone,” Steven Tweedie, Business Insider, June 14, 2015. Retrieved from https://www.businessinsider.com/worlds-first-smartphone-simon-launched-before-iphone-2015-6.
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