Investing for the Future

“Just don’t do it” is probably the most prevalent “business strategy” in an economic downturn: wait it out; delay investments in new technology and equipment; make do with what you have until the economy turns around.

It seems to be a pretty sound, common-sense plan. Avoid a major capital outlay when things are slow; save big purchases for times when the money is rolling in.

But in fact, slow times may actually be the best time to replace equipment. In flush economic times, you’re typically running at or near full capacity. Replacing equipment while maintaining high production can be a major inconvenience, and can compromise your profitability. Slow times offer much greater flexibility for installing new equipment—as well as giving employees more time to become familiar with the new equipment.

Customer Satisfaction

In an economic downturn, customer loyalty is more crucial than ever to maintaining your profitability. But it’s hard to inspire loyalty when you miss customers’ deadlines, or deliver extrusions of poor or inconsistent quality to them. If your equipment is on its last leg, it will impact your ability to satisfy your customers…and ultimately, you may find that your long-time customers are taking their business elsewhere.

Beyond dissatisfied customers, there are other very real liabilities that come with delaying equipment purchases too long. Older systems mean expensive maintenance and repair bills. They’re often much less efficient, which means more waste and higher energy usage. In addition, they lack the automation of much of today’s equipment, which increases labor costs. If you wait and wait for the “perfect time” to replace your system, you lose out on benefits that could be realized now.

And if your percentage of downtime is high and steadily growing, watch out. Excessive downtime guarantees you’ll be slow—even if the economy has started to pick up. When business does turn around, you’re left trying to meet increased demand with outdated, inefficient equipment…and that doesn’t bode well for a long future in the business.

Replacement Benefits

Replacing the following components of your system can offer payoffs in areas such as efficiency, labor costs, and yield:

Furnace/Log Shear

If you’re currently using an old chain-style billet furnace, purchasing a new furnace could reduce your energy costs by two-thirds. A new furnace may also provide better temperature consistency and greater throughput.

Want to free up a few hundred thousand dollars? Add a furnace that has an integrated log shear: For example, say you run $15,000,000 worth of metal a year. At any given time, you might have a million pounds of metal, with a value of around $650,000, sitting in storage. Meanwhile, you’re paying interest to the bank on that $650,000, or that’s $650,000 you don’t have available for other purposes. An integrated log shear can significantly reduce the amount of money you have tied up in inventory, because you no longer need to stock billets in a variety of increments—the shear cuts logs to the precise length billet you need.

A furnace with an integrated log shear also offers savings in scrap. For example, billets are stacked in 2-inch increments. Say the average length of the billets you stock is 26 inches, and on average you’re cutting an inch off each billet to get the size you need. With a log shear, you could save four percent, because you’d always have the proper length billet.

Pullers

Looking for scrap savings? By adding a single puller to your system, you can cut by five percent the amount of scrap generated.

When profiles are manually moved through the extrusion process, often the result is twisted, uneven profiles and lots of scrap. A puller, on the other hand, applies just the right amount of tension until a billet is fully extruded. In addition to scrap reduction, a puller reduces manpower and improves the quality of your profiles.

A double puller boosts those benefits even more: it increases production and efficiency, and offers scrap savings of an additional two to three percent over single pullers.

Stretchers and Tables

If you’re searching for ways to improve yield, new tables and stretchers can help to accomplish this. Yield can be seriously compromised by damage to profiles as they move through the system. Replacing old graphite cooling tables, which can damage metal, with new belt tables, which are gentler on profiles, is one way to help ensure consistently high yield.

In addition, damage to profiles often occurs as the result of manual handling. New equipment that reduces the amount of manual handling offers two-fold benefits. If your system utilizes a puller, you can switch from a two-man stretcher to a one-man stretcher—which will both reduce labor costs and result in higher yields.

Saw and Gauge Systems

Manual handling and its associated costs can be cut with automated systems capable of receiving extrusions from the stretcher and batching and feeding them into the saw. In addition, modern saw infeed conveyors, which are more than double the width of older versions, can automatically move batched profiles through the saw and to the gauge table.

Stackers

You can reduce your head count by one or two people by adding a stacker to your system. Since profiles are stacked automatically, manual handling is eliminated, which helps to preserve the surface quality of cut profiles as well as lowering labor costs. In addition, stacking systems can automatically load profiles into age oven racks, supporting greater and more consistent throughput.

A Long-Term Investment

Purchasing extrusion equipment is a significant investment, but it’s an investment that provides a platform for long-term company growth. Equipment that runs smoothly ensures that you’ll be able to meet your customers’ requirements well into the future.