The Growing Need For Value Added Services in Manufacturing

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The Growing Need For Value Added Services in
Manufacturing
Mike Verkamp Business Development Manager Sandvik
Coromant
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Mike Verkamp

• Married Father of 3 daughters
• Education
• BS Industrial Management/Industrial Engineering
  from Purdue University, West Lafayette, IN
• MBA from IU, Bloomington, IN
• Current Position
• Business Development Manager, Sandvik Coromant
  MAA
• Hobbies
• Triathlons, Home Improvement Projects, Leadership
  Training, Coaching

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Can we really predict the future?

• The horse is here to stay but the automobile is
  only a novelty, a fad.
• President of the Michigan Savings Bank advising
  Henry Ford's lawyer not to invest in the Ford
  Motor Co., 1903.
• The wireless music box has no imaginable
  commercial value. Who would pay for a message
  sent to no one in particular?
• Associates of David Sarnoff responding to the
  latter's call for investment in the radio in 1921
• Who the hell wants to hear actors talk?
• H. M. Warner, co-founder of Warner Brothers,
  1927.
• Dear Mr. President The canal system of this
  country is being threatened by a new form of
  transportation known as 'railroads'... As you may
  well know, Mr. President, 'railroad' carriages
  are pulled at the enormous speed of 15 miles per
  hour by 'engines' which, in addition to
  endangering life and limb of passengers, roar and
  snort their way through the countryside, setting
  fire to crops, scaring the livestock and
  frightening women and children. The Almighty
  certainly never intended that people should
  travel at such breakneck speed.
• Martin Van Buren, Governor of New York, 1830(?).
  

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Industrial megatrends 2012

• IT organizations will make foundational
  investments to deliver both IT productivity and
  business value.
• Manufacturers will focus on clock-speed alignment
  across the supply and demand sides of their
  supply chains.
• The requirement for speed and the ubiquity of
  information creates a new landscape for IT
  support of the supply chain.
• The factory of the future will be driven by
  capabilities to fulfill customer demand rather
  than pure production capacity.
• Manufacturers will shine the environmental
  sustainability spotlight on the factory as a
  means of getting to the product.

Source Association for Manufacturing
Excellence, www.ame.org
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What does it all mean?

• Were moving from a world of mass production to a
  world of mass production AND mass
  customizationagility based manufacturing.

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The Value Chain
Challenges
Capacity Capital purchase planning Competencies
Virtual Machining Programming
Asset Utilization Scrap rate Quality Competence
Inventory Administration Reconditioning Recyclin
g
Components Material Machinability Processes Mac
hines
Purchasing Systems Shipping Product
Marking Product Packing
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How to find a sustainable solution to communicate
tool data ?
1,000,000 Manufacturing units
50 CAM suppliers
200 Machine tool builders
100 Tool Suppliers
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ISO13399The Information Carrier

• Plug Play interface for cutting tool
  information
• Designed for system to system communication.
• High demand on information quality
• International standard. One language for
  communication. One translation is more reliable
  than multiple translations.
• Possibility to communicate also new cutting tool
  concepts
• Standardizing how to handle the information not
  the cutting tool itself.

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The Value Chain
Challenges
Components Material Machinability Processes Mac
hines
Capacity Capital purchase planning Competencies
Virtual Machining Programming
Purchasing Systems Shipping Product
Marking Product Packing
Asset Utilization Scrap rate Quality Competence
Inventory Administration Reconditioning Recyclin
g
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Metal removal Adding value
Cutting time 60 x 50 x 80 24
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Impact on cost per part
Value
Before Cost per part 80(2 805 1 275) / 51
100
80
Fixed costs2 805
12 Reduction in Cost/Part
25
Add.v costs 275
Variable costs1 275
Production quantity
51
62
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Impact on Gross Profit
Before Gross profit 1 020 Gross profit margin
201 020 / (51 x 100)
Value
100
Gross profit1 020
After Gross profit 1 845 Gross profit margin
30(1 020 825) / (62 x 100)
80
Fixed costs2 805
Gross profit825
50 Increase in GP margin 81 Increase in total GP
25
Add.v costs 275
Variable costs1 275
Production quantity
62
51
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Financial impact summary
Cost Per Part
Gross Profit
80
1 845
Reduction 12
Increase 81
75
70
1 020
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The Value Chain
Challenges
Components Material Machinability Processes Mac
hines
Capacity Capital purchase planning Competencies
Virtual Machining Programming
Asset Utilization Scrap rate Quality Competence
Purchasing Systems Shipping Product
Marking Product Packing
Inventory Administration Reconditioning Recyclin
g
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Source www.visualcapitalist.com/portfolio/tungste
n-an-industrial-metal-with-unstable-supply
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Source www.visualcapitalist.com/portfolio/tungste
n-an-industrial-metal-with-unstable-supply
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Financially, it makes sense

• Prices paid for used carbide have ranged from 12
  to 16 per pound recently
• Recycling programs are easier than ever to
  implement
• Modern recycling processes yield 90 usable
  carbide

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But, the best reason to implement a carbide
recycling program might be because it is just the
right thing to do
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Sandvik Coromant Carbide Recycling
Here's how it worksCall 1-800-SANDVIK
(1-800-726-3845) to order your free
carbide-recycling container.When full, return
your container with packing slip to    Sandvik
Coromant Recycling Program    C/O DHL    2151
South Park Drive, Suite 1    Hebron, KY
41048Sandvik Coromant pays you the current rate
per pound for your recycled carbide. Sandvik
Coromant sends all carbide inserts and round
tools to ISO 14001/OHSAS 18001-certified plants,
to ensure that all carbide is recycled using
approved, environmentally friendly methods.
Together, we can do our part to promote more
sustainable manufacturing processes.
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Q A
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