Are you Under-Investing in your Shop?

Far and away, the biggest obstacle for fabricators is winning business and being sure that job will be profitable. In sales and profitability, the top shops deliver 45% better results than all others. This is all due to their ability to quote much quicker, win more contracts, set standards and decrease estimating to delivery time. 

Keeping your pipeline filled by decreasing estimating time is the biggest key to get parts to your machines. Too many continue to rely on manually-driven methods such as Excel, spreadsheets, or the experience of their most senior salesperson.  Automated quoting technology is available, affordable, and should be leveraged.

Developed especially for fabricators, SecturaSoft is the industry’s leading quoting software.

Go here to request a demo or learn more!

The Fabricator Quoting and Estimating Sheet Metal Job Shops

https://www.thefabricator.com/article/lasercutting/first-responders-look-to-pick-up-speed

“This speeds up the quoting process a lot,” said Almanza.

It also changes the requirements for the quoting role at the company. In the past NPL filled sales positions with employees with 10 to 15 years of shop floor experience. Today it can generate reliable quotes with less experienced employees.

“Filling sales positions isn’t a problem,” Almanza said. “We’re more concerned with finding operators and other skilled laborers than salespeople. Our quoting software makes sales quick and simple. We now have the flexibility to reallocate resources from the shop floor or front office to help sell when needed.”

SecturaSoft is a new company on the market.

“They customized the software for our needs,” Almanza said. “For instance, not every company wants a complete breakdown of every service included in a quote, but we want to make sure the customer understands precisely how their payment breaks out and how part order volume can affect that cost. They helped us sort through all of that.”

Hey Fabricators... What's limiting your profitability?

As seen in Shop Floor Lasers Magazine

You’re chugging along OK; keeping your head above the water… but if you’re like a lot of fabricators, manufacturers, or metal service centers you’re likely leaving money on the table… maybe a lot of it. No business is entirely leak-proof; a few extra hours of machine time here, some excessive scrap, a couple of lost bids – it all adds up. 

I spoke with industry veterans Scott Lindley (US National Sales Manager, Alpha Lazer) and Brad Stropes (COO, SecturaSOFT) to gain their perspective on where companies like yours may be able to plug the leaks and maximize profitability.  Here is part 1 of that interview...

What are the typical areas where you see the biggest room for improvement in a fabrication business? The low hanging fruit that bumps you in the head as you travel around from shop to shop?

Lindley: On the fab side it’s essentially old equipment, outdated processes, or outsourcing. I visit many shops where they’re using an old plasma table, punch turret or CO2 laser, believing it’s a more efficient or cost-effective process since it’s paid for. The reality is often that the old equipment is holding them back. Fiber laser technology for instance is now far more efficient than CO2 lasers. The previous notion that punch turrets are more efficient than lasers is no longer true. Routers used to be the best way to cut aluminum for boats, considering plasma tables and CO2 lasers couldn’t provide the cut quality. Fiber lasers are now an extremely good option for cutting aluminum, providing 3, 4, up to 7 times the cutting speed, with significantly tighter part spacing, and no hassle of tabbing parts in or worrying about the vacuum table. And the maintenance and energy cost of old machinery can easily eat any savings gained by having the machine paid for.

I often see companies that have purchased new equipment though and completely ignored the upstream and downstream processes. It doesn’t do much good to buy a more efficient machine that can cut parts 3 times as fast if you can’t keep up with the machine. Software plays a huge role in process improvement, allowing you to feed the machine more efficiently.  And then of course outsourcing is another big one. A shop outsourcing $400,000 a year for profile cutting is likely paying about $115,000 for someone else to cut their parts, and often having issues meeting production schedules, quality standards and paying extra to ship parts and materials.    

There are a number of fixed costs in running a fabrication business - labor, insurance, capital improvements, inventory, taxes, and more.  But when it comes to technology, would you say that the problem is generally under or over investing?

Stropes: From my perspective, the biggest obstacle for fabricators is winning business and being sure that job will be profitable. In sales and profitability, the top shops deliver 45% better results than all others. This is all due to their ability to quote much quicker, win more contracts, set standards and decrease estimating to delivery time.  Keeping your pipeline filled by decreasing estimating time is the biggest key to get parts to your machines. Too many continue to rely on manually-driven methods such as Excel, spreadsheets, or the experience of their most senior salesperson.  Automated quoting technology is available, affordable, and should be leveraged.

Scott, would you agree?

Lindley: Today’s modern fab shops, job shops and metal service centers incorporate a wide variety of machinery and software. But not every fabricator needs the most expensive and sophisticated systems. For some, less is more and careful consideration should be given before making a substantial equipment investment.  For example, today the gap has been closed between fiber lasers in terms of machine quality, cutting speed and part quality. What remains significant, however, is the cost and support. Unnecessarily overpaying for fabrication machinery adds years to recoup one’s investment. The most important thing though is to ensure that no matter what you do invest, you don’t get nailed after the fact by extraneous support costs, held hostage by the machine manufacture for replacement parts at a huge markup, or hit with long delays in getting support.

Scott, can you expand on what you mentioned about costs associated with machinery?

Lindley: Once you buy a machine, your costs are locked in. The machine will cut parts at a fixed speed, consume a given amount of electricity, need maintenance, and require set secondary processes. So, if you’re looking for ways to squeeze a bit more profitability from your company, look at these old machines. Imagine saving 50% on electricity or cutting your maintenance costs by two thirds. What if you no longer needed use micro joints to hold parts in place, and your operator didn’t need grind off the tabs? Imagine if you could cut twice as many parts in half the time, with less equipment running more efficiently? It sounds crazy, but it’s not unrealistic.

A growing number of fabricators are replacing multiple machines on the shop floor with a single fiber laser.  Because of their functionality and versatility, today’s fiber lasers are replacing CO2 lasers, plasma tables, routers, and punch machines. Consider the savings realized by consolidating the costs of running multiple machines and multiple shifts.  In a recent benchmark study I did for a local manufacturer running 5 punch turrets, two shifts, I looked at 3 days of production on 1 machine, cut from 77 sheets of anodized aluminum. I was able to nest all 2012 parts onto 62 sheets and cut the 48 hours of production parts in 5 hours. The fiber laser provided a 20% material savings and a 90% labor savings. Those numbers are hard to ignore.

 

Sheet Metal Estimating Quote- Section 179 Deduction

Section 179 at a Glance for 2018

2018 Deduction Limit = $1,000,000 (one million dollars)

2018 Spending Cap on equipment purchases = $2,500,000

Bonus Depreciation: 100% for 2018

The above is an overall, “birds-eye” view of the Section 179 Deduction for 2018. For more details on limits and qualifying equipment, as well as Section 179 Qualified Financing, please read this entire website carefully. We will also make sure to update this page if the limits change.

Here is an updated example of Section 179 at work during the 2018 tax year.

 

What is the Section 179 Deduction

Most people think the Section 179 deduction is some mysterious or complicated tax code. It really isn’t, as you will see below.

Essentially, Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income. It’s an incentive created by the U.S. government to encourage businesses to buy equipment and invest in themselves.

Several years ago, Section 179 was often referred to as the “SUV Tax Loophole” or the “Hummer Deduction” because many businesses have used this tax code to write-off the purchase of qualifying vehicles at the time (like SUV’s and Hummers). But that particular benefit of Section 179 has been severely reduced in recent years (see ‘Vehicles & Section 179‘ for current limits on business vehicles.)

However, despite the SUV deduction lessened, Section 179 is more beneficial to small businesses than ever. Today, Section 179 is one of the few government incentives available to small businesses, and has been included in many of the recent Stimulus Acts and Congressional Tax Bills. Although large businesses also benefit from Section 179 or Bonus Depreciation, the original target of this legislation was much needed tax relief for small businesses – and millions of small businesses are actually taking action and getting real benefits.

Here’s How Section 179 works:

In years past, when your business bought qualifying equipment, it typically wrote it off a little at a time through depreciation. In other words, if your company spends $50,000 on a machine, it gets to write off (say) $10,000 a year for five years (these numbers are only meant to give you an example).

Now, while it’s true that this is better than no write-off at all, most business owners would really prefer to write off the entire equipment purchase price for the year they buy it.

And that’s exactly what Section 179 does – it allows your business to write off the entire purchase price of qualifying equipment for the current tax year.

This has made a big difference for many companies (and the economy in general.) Businesses have used Section 179 to purchase needed equipment right now, instead of waiting. For most small businesses, the entire cost of qualifying equipment can be written-off on the 2018 tax return (up to $1,000,000).

Limits of Section 179

Section 179 does come with limits – there are caps to the total amount written off ($1,000,000 for 2018), and limits to the total amount of the equipment purchased ($2,500,000 in 2018). The deduction begins to phase out on a dollar-for-dollar basis after $2,500,000 is spent by a given business (thus, the entire deduction goes away once $3,500,000 in purchases is reached), so this makes it a true small and medium-sized business deduction.

Who Qualifies for Section 179?

All businesses that purchase, finance, and/or lease new or used business equipment during tax year 2018 should qualify for the Section 179 Deduction (assuming they spend less than $3,500,000).

Most tangible goods used by American businesses, including “off-the-shelf” software and business-use vehicles (restrictions apply) qualify for the Section 179 Deduction.

For basic guidelines on what property is covered under the Section 179 tax code, please refer to this list of qualifying equipment. Also, to qualify for the Section 179 Deduction, the equipment and/or software purchased or financed must be placed into service between January 1, 2018 and December 31, 2018.

What’s the difference between Section 179 and Bonus Depreciation?

Bonus depreciation is offered some years, and some years it isn’t. Right now in 2018, it’s being offered at 100%.

The most important difference is both new and used equipment qualify for the Section 179 Deduction (as long as the used equipment is “new to you”), while Bonus Depreciation has only covered new equipment only until the most recent tax law passed. In a switch from recent years, the bonus depreciation now includes used equipment.

Bonus Depreciation is useful to very large businesses spending more than the Section 179 Spending Cap (currently $2,500,000) on new capital equipment. Also, businesses with a net loss are still qualified to deduct some of the cost of new equipment and carry-forward the loss.

When applying these provisions, Section 179 is generally taken first, followed by Bonus Depreciation – unless the business had no taxable profit, because the unprofitable business is allowed to carry the loss forward to future years.

Section 179’s “More Than 50 Percent Business-Use” Requirement

The equipment, vehicle(s), and/or software must be used for business purposes more than 50% of the time to qualify for the Section 179 Deduction. Simply multiply the cost of the equipment, vehicle(s), and/or software by the percentage of business-use to arrive at the monetary amount eligible for Section 179.

Democratized Quoting

From the most recent material costs to machine run time, operator costs, secondary operations, shipping, and related expenses, there’s a wealth of information readily available to today’s fabricator. Intelligent quoting software turns that information into winning bids and maximum profits.

Such software automates and standardizes the process to allowing anyone to generate fast and accurate quotes; and the best thing is that these easy-to-use quoting tools are available at a price point that is within reach of any steel service center or fabricator.

Cloud-Based Quoting

In a relatively short time the Internet has evolved into a viable production tool.  Tapping into today’s web-based tools allows savvy fabricators to make business and manufacturing transactions part of a daily routine.  So why not leverage this technology to create winning quotes?

Internet or cloud-based quoting offers a number of advantages. 

  • Simplified:  The dashboard contains fields that, once populated, launch behind the scene calculations (rates, material costs, machine run-time, secondary operations needed and associated costs, etc.).  This eliminates the need to be a seasoned veteran in order to create a quote.
  • Accessible: Web-based quoting is accessible by virtually anyone at any place.  From laptops to tablets and cellphones, quotes can be generated on any device. 
  • Fast & Accurate:  By eliminating multiple manual touch points a paperless web-based quoting greatly simplifies and speeds the process.  In a world where the fastest quote often wins, bids that have traditionally taken an hour or more to produce can be generated in five minutes or less. 
  • Consistency: Your custom dashboard provides a common template for all who create quotes.  Tapping into actual costs uniformly ensures that all quotes, regardless of the experience of the salesman, are consistent and profitable.
  • Affordability:  Maintainability is a key advantage as updates are performed at a single location rather than multiple sources.  Cloud-based quoting is available as an affordable subscription service.

 

 

Tapping into Data

As Computer-Aided Design (CAD) models became more intelligent they allowed quoting to become more accurate. Quoting software taps into embedded data associated with the part and rolls that information into the quoting process.  This approach allowed fabricators and metal service centers to know exactly how the job should be nested to maximize material use. This in turn helped determine exactly how much of a given material is needed to complete the job. 

Today we’ve taken things a leap farther. Leveraging up-to-the-minute material costs, labor rates, machine run-time, post-cutting operations, and other information instantly plugs known variables into the equation.  As a result winning quotes can be generated in a matter of minutes. At the same time the integrated process examines inventory to determine is ample stock is available to complete the job. Accurate material pricing can be accessed to calculate costs for any additional material that will need to be purchased.  Furthermore, sophisticated quoting software even allows work orders to be combined to fully utilize material and production run-time and costs.

Go here to see a demonstration; or learn more about SecturaSOFT's fabrication solutions!

 

Excel, Spreadsheets and Tribal Knowledge

Timely and accurate quoting is without question vital to winning jobs and ensuring profitability.  Unfortunately for too many fabricators, be they steel service centers, fab shops or job shops the process remains more of an art than a science with quotes varying wildly from one salesperson to the next.  Let's examine why this is and how you can win more jobs in today's competitive landscape.

The way we Were

In the past, quoting often relied on the wisdom and best guesses of the most experienced salesperson. Part drawings or sometimes actual physical parts themselves were manually inspected and measured to determine weight and calculate the type and amount of material needed to run the job.  Steel prices were usually estimated and after some quick calculations that part of the quote was done. Next secondary or finishing operations such as grinding, bending, welding, shipping, and so on were estimated and rolled into the quote.  With a little luck, the job would be accepted – and with a lot of luck it would achieve maximum profitability.

For a surprisingly large number of fabricators the quoting process remains a black box known to a select few.  Quotes are seemingly concocted using a dash of intuition, a little “gut feel” and a bit of tribal knowledge handed down over the years.  As a result there are a small number of seasoned veterans entrusted to create quotes.  To compound the situation this knowledge isn’t easily transferred to the next crop of quoting specialists. Fortunately, today’s quoting software standardizes the process by capturing this knowledge allowing even the newest estimator to accurately quote jobs. 

The biggest obstacle your company faces is generating fast, accurate quotes.  Why is this? Until recently, the answer was automation – or more precisely, a lack thereof. Just as some service centers are leveraging automation to expand offerings and attract new customers, some are leveraging automated quoting software to increase sales.  The software utilizes intelligent machine calculators to understand what is required by the machine to develop a part.  For example, if a part is too heavy, a crane may be needed to move a part also increasing the cost.  Best of all, this intelligence is ingrained into the software meaning that you don’t have to be an expert to generate expert, profitable quotes.

Get more information or request a demonstration here

 

Part 3: Democratizing the Quoting Process

Make no mistake – it’s a war out there.  And the biggest obstacle your company faces is generating fast, accurate quotes.  Why is this? Until recently, the answer was automation – or more precisely, a lack thereof.  Take a look at virtually any shop floor and you’ll see automated pallet changing, storage and retrieval systems, even unattended lights-out production.  While the production side of the business has steadily evolved, sales and estimation tools have clearly not kept pace.  Instead most use antiquated sales tools such as spreadsheets, production ERP systems, or even good old fashion pen and paper.

New Paradigm Laser (Cambridge, Ontario) relies strictly on inside sales to keep machines cutting.  The company has a policy to provide quotes to prospective customers in 24 hours or less.  What’s most impressive perhaps is that Paradigm relies on inexperienced or even non-sales skilled laborers to generate the quotes. “In this business timing is everything,” said New Paradigm’s Plant Superintendent, Marlon Almanza. “The first quote in says a lot about your company’s responsiveness and commitment; and we find that it often leads to winning the job.”

Just as some fabricators are taking advantage of the full capabilities of machinery to attract business; New Paradigm is doing the same with its most valuable asset – people. In the past, the company filled sales positions with workers with10 to 15 years of shop floor experience under their belt.  Today, thanks to automated quoting, they are able to generate winning quotes with less experienced non-sales workers.  “Filling sales positions isn’t a problem,” explained Almanza.  “We’re more concerned with finding operators and other skilled laborers than sales people. Our quoting software makes sales quick and simple. We now have the flexibility to reallocate resources from the shop floor or front office to help sell when needed.” Automating the quoting process allows even inexperienced estimators to create winning bids; not just a select few experts.

Automated Estimation & Quoting Software

Today New Paradigm and many other fabricators are leveraging automated quoting software to increase sales.  A leading player in this industry is SecturaSoft. The company has teamed up with ERP/MRP solutions to develop the first true sales solution for the fabrication industry; and is the first truly mobile platform which can tie into your other software solutions.  “Today there is a clamoring from estimators for better, more robust, and more automated tools.  Most current tools rely on a lot of tribal knowledge, require a lot of manual input and duplication of work, and had no real intelligence,” explained   fabrication industry veteran and SecturaSoft Chief Operating Officer, Brad Stropes.  “SecturaSoft is an intelligent platform not only to enhance your ERP solution, but to replace that old, slow, tough to use spreadsheet.”

Through the development process, SecturaSoft has focused on making a powerful solution that can easily be used by any individual within an organization.  This was accomplished by focusing on the users’ experience and their interaction with the machines processes.  The program utilizes machine intelligence behind a streamlined interface to show the user only what they need to see to quote as efficient as possible.  This is much different than other platforms which require a highly trained fabricator to input all of the machine information one process at a time. 

The software utilizes intelligent machine calculators to understand what is required by the machine to develop a part.  One example of this is a simple press break operation which can actually become extremely complex.  A built-in intelligence understands the requirements of a bend.  If a part is a certain length, an additional individual may be needed to hold the part increasing the cost to bend.  In addition, if a part is too heavy, a crane may be needed to move a part also increasing the cost.  Because this intelligence is ingrained into the software, an estimator only needs to input a number of bends, while SecturaSoft automatically develops the cost per-bend. 

Now, Let’s go Sell!

It’s easy for shop owners to get caught up in the latest production tools. That’s understandable, these machines are important to expanding the shop’s capabilities and throughput. But the sales and estimating process is the fuel that keeps those machines running. So what does it take to win new sales in today’s competitive fabrication market? Boosting sales is a combination of relationships, people, machinery maximized to enable a wide variety of processing options, and equipping your staff with the best tools.

Part 2: Create an Opportunity for... Opportunity

So what’s different about your company?  Do you have a clear compelling advantage or do you just think you do?  After all, you have a fiber laser, they have a fiber laser.  You process sheet metal, plate, and aluminum - they process sheet metal, plate, and aluminum. You are “the best” - they are “the best”.  Instead of falling in to the hand-to-hand sales combat conundrum of screaming “Faster!”, “Cheaper!”, “Better!” why not expand the capabilities of your cutting machines to open the door to new markets? There are plenty of opportunities, with lucrative payback, for those willing to take on the challenge. The stumbling block for many is the willingness to venture outside of their current comfort zone.

Exotic Metals

Because few are willing to tackle these materials, there’s an opportunity for fabricators willing to tackle exotic metals such as: stainless steel, brass, copper, titanium, armor plate, tool steel, T-1 steel, nickel, super alloys, platinum and so on.  The best part is that no special equipment or expertise is required. 

For the most part fabricators who shy away from cutting exotic metals are concerned with damaging machines, ruining costly metals, and losing money.  This fear is rooted in a lack of experience and exposure to the process. While lasers generally include standard cutting conditions for steel, aluminum, mild steel, and often galvanized metal, few, if any, come with pre-loaded conditions for exotic metals. Consequently most fabricators have neither the experience nor the resources needed to cut exotic metals. 

“When it comes to cutting exotic metals most laser operators over-complicate the process. When cutting exotic metals the same variables familiar to most operators still apply,” explained Patrick Medlin, Executive General Manager for North Carolina’s ATS/Amada America, Inc.  “Focal position, nozzle centering, proper nozzle selection, nozzle gap, assist gas type and pressure, power, frequency, duty and feed rate all influence the piercing, cutting and cut quality of exotic metals just like they do their more common place counterparts.”

It’s always best to crawl before you walk or run so it’s recommended that first timers cut their teeth with the easier and least expensive exotic metals.  Once you have some successes under your belt move on to the more costly and more difficult materials like brass, copper, titanium, nickel and platinum. 

Coated Metals

“Similarly, some fabricators avoid coated materials. What poses a challenge is that, in order to reduce the likelihood of scratches or other damage, these finishes are intended to remain on the materials during processing and shipping,” said Medlin.  “It’s important to learn how to cut coated materials while keeping the protective surface intact. While these finishes certainly do a good job in protecting the material from scratching, they can pose some significant cutting challenges. The objective is to produce quality cuts without removing, scratching, melting or otherwise damaging the coating.”

The common theme when cutting any coated material or exotic metal is to invest the time to understand the materials you’re cutting and how to best set up your machine for success. It’s vital to take the time to run cutting tests in order to dial-in the machine and establish proper machine cutting conditions. Finally, remember to utilize the applications department where you purchased your machine.  They should be happy to answer your questions and help you to more fully optimize your machine’s capabilities and investment.

New Business AND Higher Margins

When you consider that there are fewer competitors vying for work outside of traditional sheet metal, plate, aluminum, and the fact that most customers will supply the materials, fabricators can attract new business and charge a cutting premium. So don’t be intimidated by venturing outside of your comfort zone.  If you’re processing only steel and aluminum with that laser you’re missing out on a real opportunity.  Use that machine that you invested in to its fullest capability. 

Next up: Democratized Quoting

Attention Fab Shops, Job Shops, Metal Processing Centers: Here are Three Steps to Generating More Sales

Sales are the lifeblood of any organization; and with hefty investments in people, machinery, facilities and technology, even modest size fabricators need a significant and steady influx of dollars to keep the lights burning. But it’s a competitive world out there; and bringing in new business doesn’t just happen. Let’s take a look at three key areas where you can increase your chances to generate more business.

Part 1. It Starts with the Right People (or Not)

According to Myers-Briggs the traits associated with those best suited for sales are: Extraversion, Sensing, Feeling, Judgment or what’s termed ESFJ. You know these people; they are outgoing, energetic, have a positive outlook and good at multi-tasking. They are likable and trustworthy.  But here are a couple of things to consider before you hire the next ESJF that walks in the door.

Independent Reps

Good sales people are hard to find. Moreover, they are expensive and take time to train before they begin producing. Consequently many shop owners choose to rely on relationships, referrals or on independent representatives rather than hiring a sales staff.  Some advantages are that reps have feet on the street; and have established long-term relationships with a number of potential customers.  They generally work strictly on commission and can match a prospect’s need to your metal processing strength.  On the flip-side, these companies generally represent multiple clients with a wide array of services and products – probably even a competitor or two of yours. Because of this the higher-commission or easiest sale generally garners their attention.

If you choose to rely on independent reps, be sure to take a proactive approach.  Keep them apprised of any new processing capabilities or incentives.  Stay at the top of their mind. In other words, help them help you.

Direct Sales

The fabrication industry is a relationship-based sales cycle.  Potential customers want to work with someone they are comfortable with and can trust.  Because of this, most estimators/sales in the fabrication world are industry veterans. They talk-the-talk, walk- the-walk and thoroughly understand the many processes and competitive advantages their shop may have. However, most of these people are Baby-Boomers preparing to leave the workforce and hard to find Generation X veterans; and let’s face it - millennials aren’t exactly knocking down the door to join the industry. 

Attracting Young Talent

To combat this, you need to attract new, aggressive, young, sales and estimators.  But first, one must understand the unique mindset of this new generation.  Millennials are hard-working, but they want to have the proper tools. This generation has grown up with technology, understands it, and applies it every day. Unfortunately, while most fabricators have no trouble investing in cutting technology, they don’t give that same attention to a lot of other areas. They have outdated servers, desktops running operating systems from 10 years ago and they don’t have the latest software to design with.  Because of this the best and the brightest shy away from our industry.

Attracting fresh talent starts with the tools you are willing to provide them. Focus on how difficult it is to ramp up a new estimator.  If you are stuck in the world of spreadsheets it could take years before someone is capable of quoting/selling off your platform. This industry has amazing technology, but it is often hidden behind a single individual within your shop. The new generation wants to leverage all tools within the fabrication environment, just like the many apps on their phone.  This means you must arm them and have them trained on 3D design tools and programming tools to quickly add to their knowledge of the industry.

Finally, when locating talent, focus on those who have an aggressive personality to grow.  Some in our industry look at the younger aggressive individuals as “entitled,” or that they haven’t put in their time. The difference is just how independent and resourceful this generation is.  Give them the tools, the training, and give them a goal to hit.  They might surprise you by just how much they can accomplish in a short period of time.

Up Next: Part 2: Creating an Opportunity for... Opportunity.

 

Steel Fabrication Estimating Software

Steel fabrication estimating software is on the rise for many fabricators.  Over the lat 5 years, the fabrication industry has grown by over 30%.  However, the fabrication shops themselves have not increased the profitability.  In any other industry this would be a monstrasity, but in the fabrication world "we know whats best."  I dont know how many times I have heard this in the past, that there is an art and not a science to what we do.  However, everything we do is based on science and engineering.  However, our stubborness to change makes our growth rate suffer and keeps us exactly where we were yesterday.

To change this steel fabrication estimating software is on the rise.  Steel fabrication estimating software companies are looking at ways to increase connectivity with customers and how business is done. Steel fabrication estimating software of the past, or what I like to call Excel, isnt a tool a future thinking organization should be using to create quotes.  When searching for steel fabrication estimating software, look for an all incompassing solution, that you never have to leave and can handle all of your processes.

Web-Based Quoting System Leverages the Cloud to Integrate the Process

Applying “intelligent algorithms” to part geometry and linking to appropriate sources of other required information makes the job-quoting process faster, more accurate and more likely to win you the job.  How is this?  By using known pricing, run time and other production variables applied to geometry-based intelligence, a shop can use web-based quoting to dictate profitability — not hope for it.  So if you're still quoting jobs manually what the heck are you waiting for?  Get in the game with SecturaSoft!

Modern Machine Shop Sr. Editor, Mark Albert blogs about the benefits of SecturaSoft.  Read it  here.

Steel Cost Increase

We have been receiving numerous questions on how to handle the recent cost increase to steel and other materials.  The issue many are running into, is that their estimators all run off of different spreadsheets and solutions throughout the globe.  This means that customers are receiving different prices from each estimator and you do not know the true cost. of your parts.

With this change in steel prices, you must centralize your cost database and pull one cost from a master user.  If you do not have control within a single location, you will have different prices going to your customers.  In addition, you will not be able to understand the true cost or profitability of your operation.

 

 

An Interview with Pierre Slabber

Pierre Slabber is a veteran of more than twenty-five years in the fabrication software industry. His professional background has included software development, managing product development and serving as Vice President of Engineering.  In these roles Pierre was responsible for the enhancement and ongoing development of next generation CAD/CAM nesting and related applications.   More recently Pierre was the chief architect behind one of the industry’s leading nesting programs. Today Pierre is Founder and President of SecturaSoft LLC. 

Can you give us a brief introduction to SecturaSoft? What’s the company all about; and why did you make the jump?

After twenty-five years in the nesting software business it was time for a change.  Over the past few years I recognized that there was a real need emerging in the industry – especially among smaller service centers, fab shops and job shops.  While CAD/CAM, nesting, CRM and other business applications were steadily advancing, the integration of these systems was lacking. The truth is that many of these tools, although robust in their own rite, don’t communicate with one another.  Not just on the shop floor… from the front office to the loading dock - these systems must be integrated across the board. Until that happens, those employing them will not realize the full return on their investments.

Companies today need open-ended solutions… that is the freedom to choose tools that meet unique needs and budget without being locked in to a specific vendor – solutions developed specifically for the metal fabrication industry. With this in mind we began working to create a web-based quoting and production management solution that could be easily integrated with a company’s existing CRM, CAD/CAM, nesting and financial programs. Perhaps more importantly we wanted to establish a genuine reputation for quality, integrity and trust throughout the fabrication industry.

Regarding the fabrication industry… What are some noteworthy advancements you’ve seen recently?

Intelligent CAD models have been around for quite some time; but in the past few years fabricators and job shops have begun to leverage the information stored in CAD files to create more accurate quotes. Geometry-based quoting brings with it a number of advantages and has had a measurable impact for those who are taking advantage of it.  At the same time, nesting applications pretty much across the board continue to get better and better.

Let’s begin with geometry-based quoting. Can you expand on this?

In the past, quoting processes were for the most part based on experience and best-guesses. The process was riddled with manual, calculation-intensive steps, inaccuracies and inconsistencies. Basing quotes on gut feel rather than on standard rules creates a number of problems as the quoting process, and final bid itself, often varied greatly from one salesperson to the next.  Furthermore most of these quotes were being generated using a simple Excel spreadsheet.  This often created a nightmare for locating and retrieving past data.  Again, a very manual, subjective, and time consuming process. Perhaps worst of all, one could never be certain that a quote will be profitable.

Geometry-based quoting replaces guesswork with known variables. It uses part geometry to determine the type and amount of material needed, machine run-time, secondary operations and all other costs associated with producing the parts.  This allows sales to create accurate quotes that convert to production instructions, and ultimately to an invoice.  In this way fabricators will know immediately how much profit a winning bid will bring them.

You mentioned nesting.  How important is a good piece of nesting software?

Nesting software is the key for anyone who cuts metal for a living. It drives fabrication machinery and maximizes yield.  Without this piece of software cutting, punching, bending machines are just costly equipment taking up space on the shop floor. 

What should one look for in a nesting system?

Fortunately the nesting software industry has evolved to the point where a number of good and affordable systems are readily available.  Today nearly all nesting program are easy to learn and use and more than capable of delivering good results. Because the basic functionality is pretty much the same across the board, fabricators can select a nesting program based on their budget along with current and expected requirements. Having said that, I would add that it is critical that the nesting application integrates with in-house business systems.  In this way the production staff can manage production routings and monitor the progress of orders that are being manufactured. The financial staff is notified when orders need to be invoiced and given the ability to create these invoices. At the same time the integrated process examines inventory to determine if enough stock is available to complete the job. Up-to-the minute material pricing is accessed to calculate costs for any additional material that might be needed. Furthermore, the process boosts efficiency and profitability by allowing work orders to be combined to fully utilize material and production run-time and costs.

What is the single biggest challenge facing fabricators today?

Fabricators have over the years learned to adapt to changing conditions.  During the economic downturn of 2008, the industry began to take a closer look at all areas of the business in order to become more lean and efficient.  For fabricators, the microscope was on the shop floor and its costly equipment and inventory. Anything that did not contribute to making the company more efficient was cut.  As a result manual and redundant tasks were automated and processes streamlined.

Today this presents an opportunity for these companies to gain real-time visibility in order to know the exact status of any and every order at any given time.  Those who get the orders out the fastest get the work.  Visibility is the single biggest challenge and opportunity for the fabrication industry today.

Don’t MRP systems provide this?

To a very limited extent. Fabricators should look for an MRP system that has been developed specifically for the industry.  This is the key.  An MRP system created for our industry should include capabilities for geometry-based quoting, have built-in nesting functionality, along with built-in material optimization capabilities. Most importantly, the system must seamlessly integrate with your nesting program of choice.  This allows all of the information pertaining to an order to be seamlessly linked to the entire company – from production, front office, to sales, and financial. 

What’s next? What do you see as the next frontier for fabricators?

I believe that sooner than later we’re going to achieve a reliable and affordable data highway delivering real-time visibility across the company and throughout its supply chain. With the Internet and Cloud we now have the foundation for that will allow us to access any information, from any place at any time.  Believe it or not, this isn’t so far away.

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Weight vs Geometry

We recently were at a customers office in Tennessee, where we had begun the conversation on cost based estimating.  They had several estimators all of whom quoted in a different manner.  One statement that stood out was when the customer said "if the estimator is still quoting based on weight, they need to be fired."  I was intrigued by this statement and wanted to know why.

The customer explained that in today's world if an individual is not utilizing value add and true geometry to base his quotations, then he is not accurate at all.  The old school mentality of taking the weight and adding margin is all guess work.  He explained the best way to estimate is based on machine run time, nesting, and labor costs in value add operations.  You will then add your markup based on the organization or number of parts.

Because we recognize that each method is still used, SecturaSOFT utilizes density.  This way an organization can quote based on weight or geometry.  In addition, we can purchase material in the same manner.  

Metal Cutting Challenges: Lasers

You didn’t invest in that laser not to use it; but there are instances when waterjet or plasma is a better option. Lasers can be limited by a number of factors including material thickness and quality, alloy type, heat conductivity, metallurgy, and even part geometry. The complexity of some parts, such as those with intricate detail, acute angles and tight radii, makes them better suited for waterjet cutting as waterjets simply do not emit the high temperatures associated with lasers. Conversely, plasma or oxy-fuel is a better choice for thick parts where edge quality and taper are less important.

Today many OEMs are introducing higher power lasers to help address thick cutting issues. For example, Mitsubishi now offers their fiber lasers in 4, 6 and 8,000 watt iterations with patented ZOOM head cutting technology.  During the due diligence phase of a new fiber laser purchase, devoting an equal amount of time to researching and understanding the differences and features of the cutting head when considering resonator wattage is of paramount importance.  

Choosing a machine that offers a cutting head that is capable of manipulating the BPP (beam product parameter), known as the Gaussian Mode pattern on CO2 lasers, can simplify and improve your results in thick plate cutting of mild steel.  This ZOOM head cutting technology is also capable of manipulating the focal lengths to 3.75”, 5.0”, 7.5” and 10.0” as well as manipulating spot size with no operator intervention and without changing optics.  All of these variables work together to create the optimal cutting tool for stainless steel, aluminum and carbon steel; thick and thin.

Winning more fabrication quotes

I am often faced with the idea that our solution may already be in place at most job shops.  I see certaing ERP and MRP systems being utilized by organizations as a spreadsheet for their quotations.  In addition, I see multiple organization use excel sheets to develop and deliver quotes to a company.  The issue I see with this is that these solutions are not purpose built to develop quotes or estimates for the fabrication industry.  This means that organizations take a longer time to develop each quote.

Time to quote and the win rate of an organization go hand in hand.  The organizations who win most jobs are usually the organizations who are first to quote.  This means that utilizing slower non-purpose built quoting solutions actually costs you money each time you bid.

When looking for a solution to this issue, I would recommend looking for something that is purpose built for your industry.  Search for a solution that can increase your turn rate by 200-300% thus increasing your win rate accordingly.  

Q&A: Laser Preventative Maintenance

Does preventive maintenance vary much from brand to brand? 

Preventive maintenance of fiber lasers varies very little from one brand to another.  This is attributed to the diminishment of items that require maintenance: specifically the elimination of nearly all optics.  The frequencies, procedures and costs of preventive maintenance on CO2 lasers can vary greatly between brands, however.  Most of these differences can be attributed to the resonator.  The differences between Cross-Flow and Fast Flow (RF and DC) are too numerous to discuss in depth in this in this interview.

Are Cross Flow and Fast Flow styles of resonators?

Yes, they are different styles of CO2 resonators.  RF and DC excited resonators employ high-speed turbines to move the laser gas through glass tubes and shoot an electrical charge through the tubes to stimulate the laser gas to produce the laser beam.  A cross-flow resonator has a large, sealed cavity with low speed fans to circulate the laser gas and electrodes to stimulate the laser gas to produce the laser beam.

Is preventive maintenance sometimes put off because it cuts into production schedules?

I would hope not.  Remember, all machinery requires preventive maintenance.  The better question for laser owners to ask themselves is “Do I want my machine’s down time to be planned or unplanned?”.  One of our customers is a world renowned heavy truck manufacturer that strictly follows preventive maintenance schedules of all their lasers.  Over the past twelve years I could count on one hand, the number of times, all of their lasers combined, have been down for unexpected, unscheduled repairs.  It’s also important to remember that most preventive maintenance can be performed during off hours. 

What’s the best advice you can offer a laser owner in order to maximize its use?

Lasers, be they fiber or CO2, are only making money when they are operating at peak performance. It’s, therefore, important to closely follow maintenance protocol. Follow optics cleaning procedures closely and regularly, track your productivity and machine downtime and ask to see the machine alarm history to help identify and address recurring problems. Understand and plan for secondary operation bottlenecks that may put a strain on schedules and machinery. Remember to keep machine programming software current, minimize part tip-ups and follow OEM recommended maintenance schedules. It’s true what they say about an ounce of prevention: Take the time to create and follow a daily and monthly maintenance checklist; and find laser operators who understand the importance of this and who are interested in taking ownership of the machines they run.

Guest BLOG post contributed by:

Patrick Medlin                                                                                                                                         

Advanced Technology Sales & Service                                                                                      

Greensboro,  NC  27409                                                                                                                                          

Tel: 336-393-0030                                                                 

pmedlin@atsservice.com

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