Monthly Archives: October 2016

Industries from biopharm to oil and gas are abuzz with praise for continuous processing technology and the advantages the model brings to their businesses. Traditionally, these advancements take less time, consume less energy and usually have a smaller operational footprint to batch production, depending on the industry and assets utilized. From there, many businesses have seen significant Opex cost reductions, productivity gains, and alternative value-add opportunities.

Hype surrounding continuous processing can be particularly difficult to examine objectively, especially for decision-makers lacking the technical expertise while trying to determine if certain batch processes under their purview are worthy or in need of an upgrade to continuous status.

Do your operations fit the criteria below? Then it may be time to switch. Or, perhaps given what you learn, you must develop other areas first before taking the dive into continuous processing to gain and sustain its benefits.

Continuous processes ‘heating up’ in biopharm and chemical processing
If the science matches up, your company could be a prime candidate for continuous processing. Researchers from the Agency for Science, Technology and Research in Singapore published a study demonstrating how exothermic and endothermic liquid-phase reactions occurring in pharmaceutical or chemical processes could prosper greatly from continuous production methods over batch.

A*STAR scientists noted biopharm companies and chemical producers utilizing the Reformatsky reaction, a “organozinc-catalyzed reaction that frequently overheats with batch processing,” could find value in continuous processing. Using continuous methods in this way, companies could save on labor and resource costs, retain high uptime rates, uphold product quality, and perhaps even leverage efficiency as a means of lowering prices for consumers.

Will continuous processing give you IT nightmares?
A recent Automation World survey conducted for its advertisers inadvertently revealed several crucial differences between business leaders operating continuous processes versus batch processes. In sharing the results, the publication has provided on-the-fence decision-makers with powerful insights into what process changes could mean for their business at large.

The survey found more readers working with continuous processing worried about “technology upgrades” and “cybersecurity” than those working with batch processes. While correlation does not imply causation, Automation World Director of Content and Editor-in-Chief David Greenfield who wrote the accompanying article for the survey raised important points on-the-fencers should not take lightly. With an increase in technological innovation, connectivity, and interoperability gained through the incorporation of cutting-edge continuous processing equipment, the companies capitalizing on it are more than likely to possess a naturally increased awareness for the possibility of system breaches. That said, if your organization already struggles with cybersecurity issues under a batch regime, perhaps it may be best to devote attention to those gaps first before pursuing continuous processing and the tech that makes it possible.

Continuous processing removes many inefficiencies batch producers have struggled with since the dawn of modern industry. However, implementing continuous processes without proper foresight could backfire. Be sure to research how continuous processing has made an impact in your specific industry before integration, if you wish to glean a competitive advantage.

Out of all other home goods manufacturers, the plumbing fixture sector has perhaps the strongest ties to the economy. What does the current U.S. economic status spell for plumbing, and how can businesses prepare for what’s to come?

Housing market pain points shared by home goods manufacturers
It should come as no surprise that the residential housing market has seen better days, even in recent years. Homeowners are still very reluctant to invest considerably in home improvement projects, let alone purchase actual real estate. According to the Joint Center for Housing Studies of Harvard University, data from 2014 shows remodeling is down more than 40 percent when compared to “pre-recession levels.”

In a $300 billion industry representing nearly 2 percent of the entire U.S. economic picture, that’s a substantial loss for many home goods manufacturers, especially those in plumbing. After all, while bathroom and kitchen renovations can add a great deal of value to a home, they typically represent extensive projects with high costs. And when the housing market is unstable, not even the financially savvy homeowners want to stretch their budget and take the risk.

plumbing fixture

Successes in the housing market and plumbing fixture industry go hand in hand.

Recovering housing market a boon to plumbing if manufacturers can keep up
That said, things are turning around. Not only are more people investing in home rebuilds in the last two years, but general recovery in the housing market has led to a doubling of single-family starter home purchases (when compared to 2008 recession lows) and a drop in interest rates for 30-year mortgages, as reported by The Wall Street Journal.

Both are good signs for plumping, so long as the industry can position itself for increased demand. With fewer families renting and more buying, the plumbing fixture industry should prepare itself for higher production levels. The need for operational readiness is further compounded by attractive financing options providing first-time homeowners with extra cashflow to invest in repiping their “fixer-uppers.” For these reasons and more, estimates from The Freedonia Group indicate 6.3 percent demand increases in the plumbing fixture and fitting industry annually between now and 2019.

Where should plumbing fixture manufacturers focus to plan effectively for the future?
How quickly can your fixture manufacturing facility respond to consume trends? How long is your average project lead time? Those are the kinds of questions that will keep this industry ahead of the curve.

For example, many homeowners and commercial property owners alike see great potential in low-flow fixtures, which conserve water and save on heating costs. No doubt wary homebuyers who finally took the plunge will still look for opportunities to cut costs long after much-needed renovations. If manufacturers can update their more popular goods to meet sustainability expectations created by consumers – and the government, don’t forget them – they’re liable to win out when the housing market returns to its former glory.

Broadly speaking, facilities should continually improve their abilities to predict consumer trends and develop actionable strategies, for profiting but also for planning and hopefully preempting future challenges. Tankless water heating systems, for instance, are gaining popularity. Differing from tanked water heaters, these units reside right at point of use and forgo traditional distributed hot water plumbing. As a result, many new homeowners looking to inject a little energy efficiency into their property may choose to go tankless rather than stick to conventional plumbing. Has your business targeted this consumer yet? Are your products compatible with tankless systems? Do you have a plan for the day when everyone has a tankless system?

So, where are the blockages in your pipeline? Take a look at the operations necessary to turn an idea into a salable plumbing product, focus on what slows things down and use data to streamline efficiency. Only then will your facility be ready to raise to new challenges in a post-recession economy.

In 2015, the U.S. cement industry alone produced more than 80 million tons of Portland cement and nearly 2.5 million tons of masonry cement from its 101 facilities according to research from the United States Geological Survey.

Quite an amount, but not surprising given the ubiquity and versatility of the material – cement and concrete support our roads, bridges, and waterways, as well as act as the DNA to urbanization stateside and abroad. In a sense, cement is the “god particle” of progress. As the U.S. looks to repair its crumbling infrastructure and cities continue to attract large swathes of the population, cement will always have a void to fill.

Or will it? Recent challenges to the industry have made the future of even this most universal resource uncertain. What are they and what are their implications?

Environmental concerns throughout production cycle
At the root of nearly all the industry’s troubles lies ecological woes over production. The cement industry faces grave environmental issues that increase its costs and divert attention to competitors in the construction and building materials sectors like wood and steel.

“Cement production releases carbon emissions equal to 75% its weight.”

First, cement production requires incredible energy to heat its kilns. Annually, this figure works out to approximately 0.25 percent of the total energy consumed in the U.S. across all sectors, residential included, according to the U.S. Energy Information Administration. Furthermore, the EIA report on the cement industry points out its “reliance on coal and petroleum coke,” a combustive material high in carbon necessary for mass production.

Problems with greenhouse gases far surpass those of energy efficiency. Research by Maclean’s revealed cement production releases carbon emissions equal to about 75 percent its weight. For scale, the 80 million tons of Portland cement manufactured in the U.S. over 2015 effectively created 60 million tons of carbon dioxide in the process.

Ecological consciences aside, high emissions rates from production aren’t cheap in the age of the carbon tax. Inevitably, keeping the course will only jeopardize finances and taint low units costs once the expenditures trickle down to the consumer. To the U.S. cement industry’s credit, strides have been taken to mitigate emissions. According to Green Biz, cement businesses averaged an annual 0.5 percent reduction in carbon in recent years. Unfortunately, these gains aren’t commensurate with production growth as urbanization soars nationally and internationally.

Oil stagnancy could lead to production losses
Cementing is a crucial step in the oil and natural gas extraction process. Among various other uses, drillers line wellbores with cement to protect the integrity of their equipment and fill wells to stem the flow of resources. In fact, the oil and gas sector consumed roughly 4 percent of all domestic cement in 2015, according to the USGS.

Of course, oil and natural gas prices aren’t what they used to be. Economic downturn in the recent past could easily dissuade companies from investing in exploration and the production of new wells. Drilling development in upstream oil operations has traditionally been a capital-intensive endeavor. Investment spending usually follows value growth – for example, between 2003 and 2014 total oil company investments rose by more than $100 billion as per-barrel prices increased by over $50, according to the EIA.

Simply put, if the money isn’t there, businesses cannot rest on their financial laurels for very long. Something must give, and new wells at a time when production has stagnated doesn’t make fiscal sense. With some of its biggest buyers out of the picture, the cement industry may too suffer from overproduction. It will need to expand its portfolio or push to new markets to stay the course.

USC Consulting Group understands the struggles facing cement companies today and is ready to help the industry turn things around one business at a time. Learn about how one cement producer reduced maintenance costs with the help of experts from USCCG.

 

Lighting fixture producers the world over have much to look forward to. Predictions from Transparency Market Research indicate a near 7 percent compound annual growth rate through 2021, when global revenues will reach an estimated $215.29 billion.

However, the same cannot be said for bulb manufacturers, who came out of the Great Recession hurting and continue to see sharp declines. Although IBISWorld economists estimate a slight leveling through 2021 when compared to 2011-2016 figures, where bulb makers saw an 8.7 annualized contraction, it doesn’t take a business analyst to understand the direction of this industry is declining. And the truth is, this dip could eventually impact the fixture market in many ways.

What drivers have turned the dimmer switch down on the lighting industry? Could lean manufacturing practices help businesses operating in this sector find their way in the coming economic darkness?

1. Energy efficiency: ‘Sustainable’ for whom?
Be it for financial or ecological reasons, everyone from homeowners to business owners have begun switching to solid-state lighting like LEDs and OLEDs. According to the U.S. Department of Energy, SSL technology today could potentially reduce lighting electricity consumption by 75 percent, a big deal for those with burdensome energy bills, but not ideal for the lighting industry.

Apart from their electrical efficiency, SSL bulbs also last longer than conventional filament bulbs by a long shot. LEDs, for instance, outlast incandescents 25 times over, so says the DOE. Lighting has, in essence, innovated itself out of a lucrative consumer cycle. People may pay considerably more for a single light bulb than they did a decade ago, but not 25 times more. Lean practices like quality assurance inspections and process standardization will be a boon to these industries as they attempt to reclaim their former glory with a more reliable, simpler-made product.

2. Obsolescence new engine for lighting consumers
As creators of SSL products continue to integrate smarter, interoperable technology into their goods, a dead bulb will no longer drive consumers to buy – technological advancement will. That goes for fixtures, too.

Steve Arriola, director of operations at Hubbell Lighting in Greenville, S.C., showed Architectural Lighting Magazine luminaire manufacturing and assembly have taken on the appearance of any other electronics plant. This major shift impacts everything from equipment on the lines to the training required to work on the floor, not to mention the accelerated integration rate of embedded components required to meet customer demands.

Therefore, leaning out operations today while the industry rests on the cusp of a revolution will allow lighting manufacturers to hire and retain top talent, train workers on new technology, and capitalize on innovation rather than succumb to it. Furthermore, lighting manufacturers pushing to vertically integrate will need to rein in waste and optimize processes as much as possible to achieve the kinds of production cost savings and lead time cuts necessary to claim pole position in their market.

3. Trending now: Over-sized lighting fixtures
Large, modern chandeliers and pendant fixtures have come into favor with both residential and commercial lighting investors. So, as luminaire producers combine the traditional elegance of colossal installations with connected, data-driven mechanisms for a new age of consumers, they are met with attractive value propositions.

Yet as with all products that can be sold at a higher price point, manufacturers will need to back up their cost increases with value adds for the buyer – greater quality assurance, maintenance packages, responsibly sourced materials, etc. – any of which could tip a business into the red if lean manufacturing practices aren’t already in place and functioning smoothly.

Who knows what tomorrow might bring for the lighting industry. Uncertainty is the only certainty. Adopting a culture of lean manufacturing, however, ensures these businesses will stay responsive to changing customer expectations and technological integration.