Since the start of the COVID pandemic, global markets on commodities have been experiencing numerous fluctuations that were unforeseen prior to 2020. For many industries, initial expectations of losses across various markets have in fact seen a huge increase in demand over the past year and a half. Initially as people stayed home global supply chains reacted by decreasing output, however once the vaccine was introduced many of these industries began to re-emerge and experienced unprecedented spikes that put a whole new level of stress on those same supply chains. In the metal fabrication industries, as with others, business looked for ways to circumvent steel shortages.
Commodities used in industries like housing, construction, and manufacturing were all affected, with the prices for wood, steel and other necessities skyrocketing as demand grew even scarcer. We’ve seen this with our own customers, as competition for available steel resources intensifies and prices continue to rise. According to a recent article in the Wall Street Journal, “Manufacturers are facing the highest steel and aluminum prices in years, another hurdle for U.S. companies already struggling to make enough cars, cans and other products.” It goes on to say that “Rapidly increasing metal costs are pushing manufacturers to take what steel they can get and hire more people to seek out available supplies”. Let’s take a look at some of the ways we can help you to better weather these current shortages both now and into the future.
As told in the “Our Story” portion of our website, “Integrated Manufacturing Solutions started in 2005 as the only precision metal fabricator with an automated information and production system in the upper Midwest.” Over the past decade and a half, we’ve worked to stay current with modern manufacturing technologies to ensure we’re maximizing our quality while reducing waste.
Aside from our abilities to better advise you on things like laser cutting vs. metal stamping or sheet metal assembly and kitting, we also use modern-day approaches to manufacturing that are especially poignant today. One such approach is the idea of nesting.
In manufacturing, nesting refers to the process of laying out cutting patterns to minimize the raw material waste that is leftover. By carefully positioning the placement of the pieces to be cut from the metal you can increase the number of pieces that can be created from each sheet, eliminating waste, helping to circumvent steel shortages, and saving money in the process.
The idea of nesting has been around for some time, but improvements in nesting software have allowed manufacturing businesses to nest pieces with greater precision than ever before. There are different types of nesting approaches available. One such approach is static nesting, where a single arrangement of parts, or nest layout, is run several times. These types of jobs are usually low in number and often contain all of the pieces needed to create a single product.
The more widely used approach to nesting is dynamic nesting, where the variables used to define which parts are created from a single nesting layout are defined by other priorities such as the dates the parts are needed, manufacturing requirements such as cut type or type of material used, and others. The flexibility of dynamic nesting means manufacturers can be more responsive to shifting needs or supplies within the market. This ability to be flexible around which types of parts are created reduces waste even more with those cost savings being passed directly on to our customers.
Getting Ahead of Demand
The effects of steep prices combined with an inability to source materials to create new parts, metal, and other commodity shortages can cause headaches in other areas of the business as well. For example, another major contributor to recent shortages is the server slow-down in the overall supply chain. Cargo ships sit fully loaded outside of ports of entry, trucks of goods remain side-lined without drivers, and many shelves in stores remain empty. For manufacturers and our customers, this type of slowdown means that parts can build up and need to be stored while remaining pieces need to be created. Delays in delivery along with all of these uncertainties can severely affect consumer confidence.
Over the past 15 years, we’ve developed a good relationship with our suppliers and our customers. When we know about orders in the future, we can plan ahead, allowing us to minimize negative effects on the supply chain, a win for everyone. Combining orders helps us more easily source materials while having more insight into future orders can maximize the benefits of our dynamic nesting strategy to circumvent steel shortages.
Our goal is to do everything we can to protect our customer’s bottom-line, and to that end, we make sure we have the space to hold whatever assets our customers need us to until they’re ready to deliver. Whether storing the raw material inventory until production is ready to start, pausing and holding a work In process to respond to changes in supply or the market or keeping hold of fully finished goods due to logistical complications, we’re always ready to be flexible to the needs of our clients.
Keeping Customers Informed
A final piece in navigating the recent shortages is communication: Regardless of tactics used to circumvent steel shortages, communication is still crucial. Whether it’s the communication between the fabricator and the suppliers, the fabricator and the production client, or the client and their customers, having an open chain of communication means that all parties are aware of any changes to the schedule. At IMS we’ve developed relationships that go beyond business that are critical to managing the current changes in the market.
We’ve recently worked with our current customers to up our safety stocks on all high moving materials, as well as making orders further out into the future in anticipation of changes we see happening in the upcoming months. By planning ahead and working together we feel confident that we’ll be able to weather this storm. As it states on our website, “We believe IMS is fabricating the only way a company can if it wants to be around for the long-term, high quality, quick turnaround, strategic labor, and smart operations”. This statement rings truer now than it ever has before, and it highlights our commitment to help our customers continue to build high-quality products at the best price possible.
Contact us today to find out more about how we can help you navigate these shortages and disruptions to the supply chain.