Modern Machine Shop

AUG 2017

Modern Machine Shop is focused on all aspects of metalworking technology - Providing the new product technologies; process solutions; supplier listings; business management; networking; and event information that companies need to be competitive.

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mmsonline.com August 2017 MMS 73 FEATURE HONORS PROGRAM WINNERS Another reason shops par ticipate in our sur vey is for the chance to be named an Honors Program winner. This program high- lights four shops selected from the top 20 percent benchmarking group that performed particularly well in one of the survey's four main categories. These shops were vetted by Modern Machine Shop Executive Editor Derek Korn and will be profiled in upcoming issues of the magazine and their representa- tives will be part of a panel discussion at the Top Shops Conference. Congratulations to this year's winners: 2017 AWARD WINNERS Machining Technology • X-L Machine—Three Rivers, Michigan Shopfloor Practices • Richards Industries—Cincinnati, Ohio Business Strategies •Land Sea Air Manufacturing—Westminster, Maryland Human Resources •MRS Machining—Augusta, Wisconsin said, a certificate to ISO 9001:2008 will no longer be valid after the end of September 2018, and its ISO 9001:2015 replacement requires that shops establish procedures for comprehensive risk management. This means shops registered only to ISO 2001:2008 will have to address risk man- agement as in their efforts to become certified to the new standard. BUSINESS STRATEGY The primary industries this year's Top Shops sup- port include aerospace (56 percent), equipment manufacturing (53 percent) and automotive (45 percent). In serving those and other industries, Top Shops consistently invest more in new equip- ment than other shops. In 2016, their median investment in capital equipment was $388,500 versus $150,000 for other shops. This investment in new technology is one reason why they achieved a higher growth rate of 9 percent than other shops at 1.5 percent. In addition, Top Shops were also able to achieve higher sales per machine last year, reporting a median value of $300,000 versus $160,000. Top Shops also get more value out of their shopfloor employees. Last year, their median sales per employee was $180,000 compared to $141,000 for other shops. Key Performance Indicator—In every survey, Top Shops have reported a higher profit margin, which is the most significant indicator of overall business health. Top Shops repor ted a profit margin of 15 percent compared to 8 percent for other shops. Top Practice—Adding engineering staf f is becoming more important for Top Shops as more OEMs outsource their machining work. Shops that can offer design for manufacturability (DFM) advice can suggest design changes to simplify machining work and reduce production costs. This year, 45 percent of Top Shops said they offer D F M s e r v i c e s t o c u s t o m e r s c o m p a r e d t o 34 percent of other shops. Trend—An increasing number of leading shops s a y s o c i a l m e d i a i s a n e f f e c t i v e s a l e s a n d marketing tool. This year, 37 percent of Top Shops affirm this compared to 24 percent of other shops. T h e m o s t c o m m o n p l a t f o r m s u s e d i n c l u d e Facebook, LinkedIn and Twitter, with growing interest being shown in Instagram. HUMAN RESOURCES Although the hourly pay of fered to shopfloor employees by Top Shops and other shops has historically been similar, this year's Top Shops pay a dollar more per hour for operators and setup personnel ($19) and $2 more per hour for CAM programmers ($28). That said, leading shops are more likely to offer other benefits to entice and retain good employees. One is a profit-sharing plan in which both the company and its employ- ees can benefit, because it spurs the workforce to look for ways to improve efficiencies, thereby improving production rates and profits. Forty-five percent of Top Shops of fer this compared to 33 percent of other shops. In addition, 56 percent of Top Shops have developed some style of formal, in-house training

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