November 2008- In the third quarter of 2008, Modern Metals and Plataine Software conducted a survey of metal manufacturers. Of the 761 survey respondents, 40 percent identified themselves as metal distributors, 36 percent as metal fabricators and 7 percent represented companies that provide both distribution and fabrication services. The remaining 17 percent represented mills, machinery manufacturers and distributors, R&D organizations and consultants.

Forty-three percent of respondents represented companies with fewer than 50 employees, 18 percent reported 51 to 100 employees, 23 percent fell into the 101 to 500 employee range and 16 percent collectively represented companies with more than 500 employees.

The fabrication services most commonly provided by respondents are welding, bending and punching. And of the 306 respondents who identified themselves as distributors, 70 percent provided some type of fabricating service, with plasma cutting being the most popular value-added offering, boasting 33 percent of respondents.

All in moderation
Although the survey responses were received before the stock market tumbled, more than 70 percent of respondents forecasted moderate growth in the next 18 months. About 10 percent forecasted rapid growth, while 15 percent said business would remain flat. Only 2 percent forecasted a contraction in their business.

However, a larger part of companies that provide both distribution and fabrication services forecasted a rapid growth in business--82 percent forecasted a moderate growth, and 4 percent expected business to be flat. None of these companies expected business to significantly contract.

Strategic initiatives
Almost half (49 percent) of the respondents currently source their metal from mills, and 45 percent source from other service centers. And a significant portion of that metal is sourced domestically. More than half of the respondents stated that between 76 percent and 100 percent of their metal is sourced domestically, with another 25 percent saying that between 51 percent and 75 percent of their metal comes from domestic sources.

According to more than 40 percent of survey respondents, rising material costs is the greatest challenge the metals industry faces. Other challenges included inventory management, material supply and fixed cost issues.

Value-added, inventory management and customer service were the areas the respondents would most like to improve. And as a result, most of the respondents (72 percent) are either currently engaged in or are planning to start in the next 18 months initiatives toward production optimization. More than 50 percent are either currently engaged in or plan to start initiatives in real-time shop floor visibility and lean manufacturing. Forty-seven percent are either currently engaged in or plan to start shop floor automation in the next 18 months.

And job costing and estimating software, as well as process planning and scheduling software, are currently employed or planned to be deployed in the next 18 months by more than 50 percent of the respondents. In addition, 47 percent of the respondents either have deployed or plan to deploy shop floor tracking and flow-control software. MM