Version 28 of BobCAD-CAM’s flagship software is said to be compatible with all custom PVD Coated Insert and specialty milling and turning tool shapes for CNC simulations. The software’s verification update Shoulder Milling Inserts enables users to draw the half profile of a rotating milling tool and define multiple cutting surfaces on the tool, if applicable. Previous versions allowed users to program with their custom or specialty tooling but now V28 offers users the additional ability to accurately simulate jobs using these types of tools. Users can visually inspect and confirm their CNC programming within the simulation interface, which is also included. These capabilities are also supported on turn-mill/multi-tasking CNC machine simulations using the Mill Turn CAD/CAM module.
Allied Machine & Engineering (AME; Dover, Ohio), a manufacturer of holemaking and finishing tooling systems, has purchased Superion Inc. (Xenia, Ohio).
Superion has built its reputation as a manufacturer of special solid carbide and PCD-tipped rotary cutting tools such Carbide Drilling Inserts as end mills, reamers, drills and step tools.
“By acquiring Superion, Allied has added a wealth fast feed milling inserts of over 50 years of experience in special tool manufacturing,” says Bill Stokey, AME president and CEO. “Their highly-skilled associates operate CNC equipment and utilize sophisticated quality control systems to ensure the highest standards of quality.”
Customer sales and support will continue to be provided by both AME and Superion.
Shops often use a DNC slot milling cutters system simply to transfer part program files to machine tools. While this certainly has its advantages, few shops use DNC in more advanced ways, such as a means of integrating a qualified (preset) tooling system to monitor tool life and speed setups.
According to Dan Fritz, president of Suburban Machinery Software (Willoughby, Ohio), high cost and implementation difficulties are the primary reasons why shops don’t adopt a qualified tooling system. The new tooling control system (TCS) option on the company’s PC-DNC Plus software makes this as easy as scanning bar codes on inexpensive, disposable tags. TCS allows automatic loading of tool offsets into a machine’s CNC during setup, in addition to monitoring tool usage and sending e-mail alerts when a tool has broken or is nearing its expected lifespan. The only additional hardware fast feed milling inserts items required are bar code readers and pre-printed bar code tags and machine placards.
Here’s how the system works: After a new tool or new inserts are installed in a toolholder, the tool’s standard length and diameter are measured and entered into the system’s database (this can be done automatically if the measuring devices have an RS-232 serial output). The system also records the technician’s name, date and time the tool was qualified, as well as the expected tool life, if desired. Once a tool is qualified, a disposable bar-coded tag is attached to the toolholder, and that bar code is scanned to identify the tool in the database.
A placard attached to the machine contains bar codes representing the machine’s tool carousel positions. When loading a qualified tool, the operator first scans the bar code on the tool’s tag. Next, the tool position bar code on the machine’s placard is scanned so the system knows which tool is located in that particular carousel position. The toolholder tag is then discarded. After all tools are loaded into the machine, the operator scans a bar code on the placard that signifies this, and the system automatically sends the temporary tool offset files to the CNC.
The system’s database logs and displays the amount of time that each tool has been in use, in addition to showing all other data entered for the tool. When a tool approaches its expected cutting life, the system can be set up to automatically transmit pages or e-mail messages to alert shop personnel.
If a tool’s useful life has been reached, then a new tool or inserts can be mounted and the tool is re-qualified and assigned a new bar-coded tag. If a tool that has not reached its cutting limit is removed from the machine, then that tool’s accumulated cutting time can be carried over to the new tag that is assigned to the toolholder.
“It all changed when Pringles moved into town,” Jeff Cupples says as he pulls onto the highway and away from the group of metal buildings bearing his family name. Driving across West Tennessee from Cupples’ J&J Company’s headquarters in Jackson to a satellite facility in Dyersburg takes about an hour – enough time for introductions and some background, beginning with how opportunities to help make the machines that make the potato chips fueled greater ambitions for what was then a simple tool and die shop.
A walk through the 65,000-square-foot satellite plant reveals how far Cupples’ J&J has come. Equipment here ranges from mills, lathes and EDMs to press brakes, CNC rollers and robotic welders. All this, and we had yet to see a more expansive, more sophisticated mirror of the same capabilities at the nearly 40-acre, seven-building main campus, which also boasts a field service operation and some of the first Eagle and Bystronic fiber laser cutters of their kind on this side of the Atlantic. Suddenly, Jeff Cupples’ earlier use of the term “one-stop shop” no longer seems so cliché.
However, what truly sets this nearly 400-employee company apart cannot be found in the equipment itself, either in Dyersburg or in Jackson. The diversification and expansion of machining and fabricating capabilities have been driven in part by adhering to one central idea. As Cupples puts it, “Every part has its own identity” – that is, a way to shape the metal that, at a particular point in time with a particular set of resources and customer requirements, is more cost-effective than any other option.
Finding each part’s “identity” is a distinctive strength of Cupples’ business. How does a shop scale and diversify its capabilities without losing the full efficiency of each of those capabilities? How can capabilities as different as laser cutting and CNC milling be used effectively together within the same organization? For Cupples’ J&J, the answer begins with a job quoting system that recognizes and leverages the strengths of various manufacturing processes and equipment.
Away from the din of the equipment at the satellite plant, the drive back to Jackson provides a welcome opportunity to talk big-picture turning points. We discuss the 1989 move from manual machining to CNC, and, prior to that, the 1981 addition of welding and forming equipment for machinery components. However, Cupples quickly zeroes in on the 1997 purchase of the company’s first laser cutter.
At that time, the primary interest was in supporting the CNC machining and fabricating equipment with a faster means of drilling holes and cutting simpler geometry. This newfound speed (and quality, in many cases) drove expansion by deepening relationships within the region’s lawn and garden industry as well as with large customers like MTD Products, Caterpillar, Kubota and Kellogg’s (which purchased Pringles from Procter & Gamble in 2012). The laser also made the company a go-to source of emergency orders to help keep customers’ machinery running. “The next thing we knew, we were running it 24 hours a day, six days a week,” Cupples says.
Laser cutting also opened new opportunities to pursue production-volume fabricating contracts. No longer just an enabler of the mills and lathes, this capability has since become a particular point slot milling cutters of pride, to the point that the company has been known to repair, modify and even design laser cutting nozzles from scratch. It is a lynchpin in a strategy that depends on fabricating and machining capabilities to support one another, both through tooling for production-volume work and through complementary operations on the same parts. “We’ll laser-cut something, bend it, machine bosses and robotically weld it all together, then maybe machine after the fact,” Cupples says. “Is it laser and machining, or maybe machining then laser? What about waterjet? What is the best-cost scenario for the customer?”
By early 1998, just months after the first laser installation, Cupples was working on spreadsheet-based automation to help answer such questions more efficiently. Meanwhile, he says much of surface milling cutters the competition was simply “plugging in numbers,” charging overly standardized rates with no basis in shopfloor reality.
Zipping through the Jackson facilities on a golfcart, we pass by sunglass-clad laser operators hurriedly scooping up freshly cut parts from sheet-metal nests. Moments later, we pause to take in specialty machining operations on a massive boring mill. Each of these jobs requires vastly different priorities and skillsets to succeed, but both began the same way: carefully timing cycles to map out potential process chains and determine which of four individual teams — production fabricating, specialty fabricating, and production and specialty machining — would be best suited to handle the work. “It’s like a bunch of smaller companies working together,” Cupples explains. “Whoever does the most work is the master of the project, and they subcontract out to the other divisions.”
To determine the “master” division for new work, Cupples uses the same Microsoft Excel-based system that the estimators in each division employ for “subcontracting” to one another. During this process, the idea that “every part has its own identity” manifests in the following ways:
Estimating trumps guesstimating. Cupples says many estimators are trained to “divide everything by .8” when accounting for the fact that no process is 100-percent efficient. However, part of every part having its own identity is assuming that every part also has its own efficiency. A realistic number for any given job might be derived from timing cycles as well as experience. For example, a particularly heavy part might drive the efficiency estimate for a press brake lower than machine timing cycles might suggest.
No averaging. Averaging rates for different workcenters into a single price can be efficient, but problems can arise when the mix of work changes, Cupples says. “Average your three-quarter-of-a-million dollar HMCs with everything else,” as he puts it, and shops will likely find that “all those big machining centers will be loaded” because they will likely be underpriced. Meanwhile, less valuable equipment likely will be overpriced, and thus more difficult to fill. At Cupples’ J&J, rates differ widely from workstation to workstation and from job to job.
Pricing is granular. In fact, the same machines often command different rates for different work. For example, factoring setup time for the job into every quote might lead the same workstation to command a lower rate for production-quantity parts than for lower-quantity, specialty parts (which generally require more setup). “We pay for (a machine) in the hours that we run it,” Cupples says. “Accountants will say the machine has value 24-7, but in our experience, you can’t charge a 24-7 rate for setup. You can really only charge for when it’s working.”
“Overhead” can be job-specific. Like setup or programming (which also factors individually into workcenter rates), costs associated with quality control and shipping can vary from job to job. Similarly to averaging workcenter rates, Cupples says he learned long ago that wrapping such costs into overhead can be a mistake. Even with a generalized “higher rate to cover the unknowns,” he says the result is often a situation in which “the job report says you’re making money, but your financials say otherwise.”
Pricing is fluid. Quality control costs and other variables are all pulled in as individual workcenter rates from a tool that is aptly named “the Matrix.” This companion spreadsheet outputs a literal matrix: a section of spreadsheet outlining as many as 16 possible chargeout rates for a given workcenter or cell per payback period, which is typically set to between 3 and 5 years. Estimators can enter different shift scenarios and setup hours for workcenters as they experiment with meeting quoting targets.
Automation is essential. With workcenter rates set, estimators have only to entervariables associated with the job – material data, part volumes and routings, labor hours and so forth – and the quote updates accordingly. “We can change work center rates as needed for new work that may have much higher or lower efficiency, or for new cells,” Cupples says. “We can actually load hours run on the machine or cell during the previous year, and it will tell us if our rate still creates profit and payback.”
Although the company’s meticulous estimating process would never work if all of these calculations were manual, it still requires significant time and effort. In fact, Cupples has considered upgrading to multiple enterprise resource planning (ERP) software packages over the years. However, most of the systems trialed so far have the same problem: “You have to lie to it,” he says. “Running multiple customers’ parts in a cell at the same time is difficult for ERP systems to capture.”
During the walking tour of the Dyersburg satellite plant, we paused to take in the “broken” production cell pictured below. This is one of many examples of a single employee running a machine with a relatively high-chargeout rate (the laser) alongside a machine with a relatively low-charge-out rate (the press brake). This cell is “broken” in that the machines generally run completely different parts, often for multiple customers. “This is how we compete with China,” Cupples says.
However, broken cells tend to break any shop management software that ties the labor allocated to different workcenters directly to payroll, Cupples says. With the spreadsheet, in contrast, it is easy to simply “combine those costs and make a workcell rate.” Alternatively, he might “let the high-dollar workcenter cover the labor” to get more from the lower-value machine.
Beyond the payroll issue, “broken cells” have also stymied systems that expect operators to scan work in via barcodes. “How do you clock into two different parts on the same machine?” Cupples asks, although he had already answered his own question. Whatever the scenario, “lying” to a shop management system (in this case, perhaps by getting creative with the scanning process or manually overriding labor input later) can be cumbersome.
As an example, Cupples cites a capability that he has yet to see replicated in other software: easily and quickly determining whether additional efficiencies gained from running overtime would be worth the additional labor costs. With his own system, there is no need to enter 47.5 hours for an employee that really worked 45 hours, but earned overtime for 5 of those hours (so, 40 hours regular pay, 5 hours overtime). This is because the system automatically changes the work center rates according to the overtime actually worked. Nor is there any need to create additional workcenters manually within the system – say, “OT1,” “OT2” and so forth – to account for overtime costs. Estimators simply change a single spreadsheet field, and the quote updates accordingly.
Cupples says such flexibility seemed far-off when he first developed a one-page spreadsheet to streamline and homogenize quoting across what were then brand-new business divisions. The company’s growth since then is testament to the success of its approach. At the time of this writing, that approach seemed unlikely to change anytime soon. “What we do takes less people and less time, and it’s more accurate,” Cupples says.
In what will be a surprise to one, the coronavirus and resulting economic lockdowns in numerous countries around the world had a significant impact on the machine tool market. This comes through clearly in the findings of our latest World Machine Tool Survey, which Gardner Intelligence conducts annually to quantify country-by-country machine tool output and consumption. According to the latest survey, machine tool consumption last year was down one-fifth from what it was in 2019. The 2008-2009 financial crisis also significantly affected the global machine tool market and serves as an interesting comparison to what took place in 2020 (more about that in a bit).
Production was down, too, but there were slightly more (about 2%) machine tools produced than consumed in 2020. The good news is that machines should therefore be available as the world economy opens back up. The bad news is that access to these machines may be hindered by severe global supply chain disruptions. And inventoried machines may not be the type buyers want.
In 2020, China’s machine tool consumption also exceeded its production, but by the smallest amount since 1999, which was before the trend of offshoring American manufacturing really got going. What the changes in China mean is worth understanding.
Given the very cyclical nature of the machine tool industry, last year’s report mentioned that the strong market in 2018 was a sign that 2019 would suffer a significant downturn, which it did. Of course, 2020 continued that downturn.
Global machine tool consumption in 2020 was $66.8 billion, down $16.8 billion, or 20.1%, from 2019. This was the lowest level of consumption since 2009, when consumption was just $1.2 billion less than in 2020. However, it took two years for consumption to fall to its current level. In 2009, machine tool consumption contracted 34.8%, or $35 billion, which is more than twice the decline of 2020. From that perspective — and somewhat surprisingly — the effects of the economic lockdowns on the global machine tool market are not as severe as could have been expected.
However, these effects are consistent with a larger trend. Our survey has shown global machine tool consumption to have been in a downtrend since 2011, falling more than $46 billion since it’s all time high in 2011. This is the longest and largest contraction in the history of the machine tool industry.
Going deeper on the 2020 numbers, and what did and did not change:
The top seven consumers remained unchanged in their world ranking in 2020. All but two, China and South Korea, contracted more than 10%. The number of countries that consumed more than $1 billion decreased to 14 in 2020 from 16 in 2019. Forty six of the 62 countries in the report (we added Nigeria and Uzbekistan per our rule of including any country with a single year of more than $100 million in imports) were down double digits in 2020. Yet there were four countries that managed to increase machine tool consumption in 2020: Morocco (33%), Indonesia (26%), Finland (19%), and Turkey (18%). Turkey and Indonesia have fairly sizable machine tool markets.
In 2020, global machine tool production was $68.0 billion, down $16.9 billion from 2019. This was about $2 billion more than total production in 2009. Although, like consumption, it took production two years to fall to its current level when it only took one year during the financial crisis. In 2020, production exceeded consumption by 2%, which is a similar amount compared to the previous seven years. While production exceeded consumption every year since 2009, the trend in the increase in the production to consumption ratio began in 2005 after the ratio of production to consumption bottomed in 2004 at 0.93.
While the good news is that this high level of production should mean machines will be readily available as the world economy recovers, it also means that machine tool builders may not be able to increase prices as much as in a normal recovery. However, the severe global supply chain disruption in the shipping industry may limit the availability of machine tools and push prices higher.
The top eight producers of machine tools remained unchanged, although the U.S. switched places with Italy, moving up to number three from number four. All but one of the top 15 producers contracted. The exception was Russia, which increased production just 1%. Four other countries increased their production: Slovenia (28%), Philippines (23%), Finland (16%), and Bulgaria (7%), although these four countries account for a very small portion of global machine tool production.
The most surprising detail of global machine tool production was that China decreased production by just 1% to $19.4 billion from $19.6 billion. If China had decreased production by the average of the other top 15 producers (-19%), then its production would have been $15.9 billion. This would have sent global production down another $4.5 billion to its lowest level since 2004.
As mentioned above, China’s machine tool consumption exceeded its production by the smallest amount since 1999. The difference was just $2.0 billion in 2020. A major reason for this small difference is that China’s machine tool production was virtually unchanged from 2019. Meanwhile, China’s consumption and production was surprising because China had one of the smallest contractions in machine tool consumption in 2020. These two factors sum to a narrowing of the gap between consumption and production.
Seemingly, China is relying more on domestic machine tool production to feed its machine tool consumption. Yet China continued to increase its exports as well. China’s machine tool exports increased nearly $1.6 billion, or 34%. Only one other country in the top 25 exporters increased their exports. That country was the Netherlands, which essentially serves as a pass-through country as it imports machines to export them to other parts of Europe. Only three of the remaining 23 countries in the top 25 exporters saw their exports contract less than 10%.
China’s dramatic increase in exports while the rest of the world was contracting suggests China is pursuing a different strategy than the five next largest producers. (Not so incidentally, the top five top producers after China are Germany, Japan, U.S., Italy, and South Korea, in that order. This marks the first time that the U.S. has been a top-Carbide Drilling Insertsfour producer since 2015.) China’s largest export market is Vietnam, which accounts for 10.8% of China’s exports. By comparison, Italy’s largest market is the next smallest at 12.6%.
The other four countries’ top market represents at least 18.6% of each country’s exports, with Japan’s top market accounting for 30.9% of its exports. For three of the other top five producers, China is the country’s largest export market.
China has only one export market that accounts more than 10% of its overall exports. The other top producers have two countries that account more than 10% of exports, except for South Korea, which has three. Italy’s two export markets with more than 10% of its exports account for 23.7% of its total exports. The other countries all have at least 31%gravity turning inserts of their exports going to their top markets, while the U.S. and Japan top out at 51.3% of their exports going to their top two markets.
If we include the countries that account for at least 1% of a producer’s exports, China has 26 countries in this category. Italy and Germany have 23 and 24, respectively. The others have 15 or 16.
Alternately, we could count the number of countries that imported at least $5 million in machine tools from one of the major producers. China leads the way with 72 countries each importing this much of its machine tool output. Italy is next with 63. No other country has more than 60, and South Korea has just 30.
What is this telling us?
Germany, Japan, the U.S., Italy, and South Korea are primarily exporting to the other major industrialized countries or markets close to home. For example, 51.3% of U.S. machine tool exports go to Canada and Mexico. Roughly 50% of Germany’s exports go to other European countries. But for these top producing countries’ remaining exports, they are competing for and in the same markets.
However, China has a more diverse export market base. Its exports are not so heavily concentrated in a handful of countries. China is exporting smaller amounts to more countries. These additional countries are primarily in Asia or Africa. They are countries that China can use for low-cost manufacturing or may play a critical role for China as sources of raw materials or energy or export markets for other goods that China produces. As an example, for the two countries we added, Nigeria and Uzbekistan, China accounted for 20% and 45% of their machine tool imports, respectively.
One way to think of this is that in the 1960s and 1970s, the U.S. had a significant positive trade balance (meaning it exported more than it imported) in machine tools that helped cement its role as the global superpower. This trade balance also resulted in countries that were closely allied with U.S. foreign interests since these countries’ economic interests were aligned with the United States. Could China’s export strategy be viewed in a similar way? Many of these countries may seem small or insignificant to Westerners, but over the next 15 to 20 years as China’s status in the world continues to grow, the view of these countries may change. It is possible that China’s machine tool exports will help these countries industrialize, increasing their wealth and causing them to become allies with — or at least heavily reliant on — China.
The World Machine Tool Survey contains much more information, including not only consumption and production data, but also data related to imports and exports of the top 62 machine tool consuming countries. The report includes import and export data on high-level machine types. To purchase the report and the data supporting it, visit gardnerintelligence.com.
This is the 54th edition of an independent annual survey that collects statistics from machine tool consuming and producing countries and compares them in real U.S. dollars. It is conducted through the research department of Gardner Business Media Inc. (Cincinnati, Ohio) by Steven Kline, chief data officer. Data for this report come from research conducted by Gardner Intelligence.
Traditionally, Gardner collected actual or estimated data on production, exports and imports from 26 countries. However, beginning with the 2015 survey, actual import and export data were included for every country that imported at least $100 million of machine tools in at least one year since 2001. This change added 36 additional countries to the overall survey. Production was estimated for these recently added countries, although in a few instances the actual production data were found on government websites.
Consumption is calculated by adding imports to and subtracting exports from production figures. The data typically are reported in local currencies then converted to U.S. dollars. After this conversion, all data in this latest survey also were adjusted for inflation using the U.S. Bureau of Labor Statistics’ Producer Price Index for capital equipment. This adjustment promotes a more accurate historical comparison.
Sources of Data
Special assistance came from the 15-member CECIMO consortium (Brussels, Belgium) and AMT – The Association For Manufacturing Technology (McLean, Virginia). For countries that did not report, import and export data were gathered from the International Trade Centre.
Definitions
A machine tool is typically defined as a power-driven machine, not portable by hand and powered by an external source of energy. It is designed specifically for metalworking either by cutting, forming, physical-chemical processing or a combination of these techniques.
Machine tools traditionally are broken down into two categories: metalcutting and metal forming. Metalcutting machines typically cut away chips or swarf and include (but are not limited to) broaching machines, drilling machines, EDM units, lasers, gear-cutting machines, grinders, machining centers, milling machines, transfer machines and turning machines such as lathes. Metal-forming machines typically squeeze metal into shape and include (but are not limited to) bending machines, cold-heading machines, presses, shears, coil slitters and stamping machines.
Data presented in the World Machine Tool Survey are solicited for metalcutting machines (codes 8456-8461 under the Harmonized Tariff System) and for metal-forming machines (8462-8463), and are solicited for complete machines only, not including parts or rebuilt machines.
Exchange Rates
All data reported in domestic currencies are translated into U.S. dollars using the average daily exchange rate for the year (not the end-of-year rate) as reported by ofx.com. All analysis is done in real U.S. dollars.
Shipments Versus Orders
In addition to contributing statistics to this survey, many countries also track orders for new machine tools. These are, by their nature, different sets of numbers, and they may or may not be related. This survey is based on actual shipments of new machine tools from the factories in which they are produced. In contrast, the various order compilations in individual countries around the world are based on bookings for machines that will be shipped in the future. The time lag between these two events can vary greatly. An in-stock lathe might be shipped one day after the order is placed, whereas a complex engine-machining line might take a year to be delivered after the order has been received. On average in the United States, orders lead shipments by four to five months. That is likely a common lead time for other countries as well.
The World Machine Tool Survey contains much more information, including not only consumption and production data, but also data related to imports and exports of the top 60 machine consuming countries. The report includes import and export data on high-level machine types. To purchase the report and the data supporting it, click here.
