Manufacturing didn’t fare so well last month, falling just slightly into contraction territory, as measured by the Institute for Supply Management. The data support what a few shop owners have been telling me.
“Business is softening.”
That was Bruce Hupfer, director of technical sales at Qualtek Manufacturing. The 40 people at this manufacturer know how tumultuous U.S. manufacturing can be. At one point, much of its business came from stamping computer chassis. After that business left for Asia, the company made a push for diversification. Today the stamper serves the medical field, renewable energy, as well as general industrial customers.
The shop has technology that can form components like few competitors can. The company invested in several servo-presses with a ram stroke that’s fully controllable. The ram can change speed during forming, dwell at the bottom, and even rock back and forth to ensure the metal of the formed part has “settled” into its final shape. This technology can take on some seriously complex parts.
The company also offers finishing and heat treatment services, making it one-stop shop for many customers. The shop’s diverse capabilities and customer base will most likely protect the firm for what may be a bumpy road ahead.
This is a common theme these days for so many shops. Business may be softening, but if the shop’s made it this far, it probably has plenty of experience mitigating the risk of the roller coaster business cycle.
Broadly speaking, we may well be at the beginning of a long period of busy periods followed by a “softening,” followed by another busy period, then more softening, and so on. It may be a continual adjustment for changing consumer demand that’s felt frequently throughout the supply chain, perhaps because those supply chains aren’t full of the inventory buffers they once had.
These days, so many fabricators work with customers that don’t keep much parts inventory. It doesn’t take long for the parts they deliver to head right into assembly. Some of the inventory has been pushed down to the fabricator level. Fabricators like BTD, Jay Manufacturing, and plenty of others keep a buffer of finished-goods stock on hand. It’s a key selling point.
But because companies now order just what they need and no more, it probably takes less to trigger the soft slowdowns like the one we’re experiencing now. It may well just be a summer lull, or--thanks to troubles in Europe and uncertainties in Asia--the start of something much more. The truth is, of course, we don’t know. But most fabricators these days, the ones who have survived the economic tumults of the past, aren’t tied to one sector. They’re lean and can quickly respond to whatever may lie ahead.
Shops like Qualtek stand at the ready for whatever lies ahead, be it a weak economy or--more immediately--a looming wild fire. At this writing, the Colorado Springs, Colo., shop is only a few miles away from a blazing inferno. The shop is safe within the valley, but some employees spent the night in shelters last week.
The situation presents an apt metaphor for this business. Failure (or fire) never seems too far away, but shops always prevail by offering services that, in a global economy, must be better than anyone else in the world could provide. In short, fabricators are ready. So go ahead, economy. Bring it on. If anything, fabricators have proved to be some of this country’s most tenacious innovators. On this July 4, I can’t think of anything more patriotic.