the fourth industrial revolution cover image

The Fourth Industrial Revolution

At Pentaflex, we consider it a top priority to be at the forefront of all industry shifts for the sake of our clients, our team, our community, and our industry. In this post, we will explain Industry 4.0, the influence on manufacturing, and what you can do to stay at the top of your game.

A Little History Lesson

Industry 4.0 is the Fourth (but not the last) Industrial Revolution. The first revolution was the introduction of steam and water into the manufacturing world. Next came electricity and assembly lines. These first two industrial revolutions did in fact change history as we know it. But both of these revolutions also took a considerable amount of time for everyone to grasp and implement fully into their processes. That is why you will see almost one hundred years between the 1st, 2nd, and 3rd revolutions.

Industry timeline

We saw Industry 3.0 hit center stage at the tail end of the 60’s. This is where computers start to impact machinery and processes in everyday manufacturing. Manufacturers saw the benefit and continued to improve the software. This resulted in speeding up assemblies, cutting back on overall costs, and creating a safer working environment for manufacturing teams.

One of the biggest positive consequences of the third revolution was speed. Everything could be done faster. This also meant we found problems faster, fixed them faster, and improved them faster. Because of this, we saw the fourth revolution hit almost half as fast as its predecessors.  

What is Industry 4.0?

As we move into 2019, we are now rapidly seeing the full adaptation of Industry 4.0 – only 50 years after the third industrial revolution. Essentially, this revolution is the more advanced & sophisticated version of 3.0. This revolution we are seeing computers have the ability to receive more data, interpret said data, implement their findings into their current processes, and then share that data with other computers. Regular terms for this time include cyber-physical systems, the Internet of Things (IoT), cloud computing, and cognitive computing1. We will discuss all these topics and more in later blog posts.

The modern world originally coined the term “Industry 4.0” back in 2015, but has been in regular use since early 2018. This is by far the most exciting adaptation to manufacturing for companies and consumers alike – and is also the fastest.

How ‘Smart’ Are You?

In the coming months and years, we will gradually see the demand for ‘smart’ facilities increase. Supply chains will continually search for the most advanced and fullproof systems.

What will really set apart manufacturing teams will be the ones that have learned to harvest the data, interpret, and improve their processes for the betterment of their teams, their customers, and the end-users.

What Can You Do?

The first step we recommend is learning more about Industry 4.0 and how it will directly influence your industry. Learn which components the team is already modifying in your processes and which ones are being overlooked. By staying up to date on where your industry is at, you ensure that you are always at the top of the conversation and ready to contribute to the next big shift.

We have linked a few sources at the bottom of this blog post to continue your education.

The second step is to ask the leadership in your company how they are embracing this new shift in manufacturing. How is the team preparing to update systems, streamline processes, and keep customers in the loop about these progressive changes?

Be sure to ask more than once as plans and processes will continually improve as the technology does. Ask if there are ways for you to get involved and to help further the implementations along.

The third step is to contact your current manufacturers in your supply chain. Ask them what they are doing to embrace the fourth Industrial Revolution. Every organization should be able to give you a straightforward, honest and excited answer.

Have You Called Pentaflex?

Our team is ready and excited to discuss these changes to our industry for our customers and our team. Give us a call at 937-325-5551, fill out our short contact form, or email us at sales@pentaflex.com to hear how we are staying at the cutting edge for you.

 

Sources

1http://info.microsoft.com/rs/157-GQE-382/images/EN-US-CNTNT-Report-2019-Manufacturing-Trends.pdf

https://www.weforum.org/agenda/2019/01/is-your-business-model-fit-for-the-fourth-industrial-revolution/

https://www.oliverwyman.com/our-expertise/insights/2018/feb/agriculture-4-0–the-future-of-farming-technology.html

tractor_farming_technology

Technology & the Agriculture Industry in 2019

Summary: Share the upcoming trends for technology in agriculture in the coming year and how it will influence the industry.

Agtech

In the past decade, we have seen a trend between various industries and their rejection or acceptance of technology. Where industries like marketing, supply chain, and retail were the first ones to jump on the train, we are now seeing the last passengers board for departure.

A prominent industry in this situation is agriculture. One of the oldest industries in our world, they have made leaps and bounds in the past few years to move up to speed. One of the main reasons for this are a new generational dominance over the industry. While others are the demands of the population, and the sustainability needs of the planet.

Here are three areas of Agtech (Agriculture Technology) that you should be aware of in 2019…

Self-Propelling Farm Machinery

The idea of self-propelling farm machinery completely taking over the agriculture industry is still a long way off. However, we are starting to see the trend move this way for various machinery such as sprayers and smaller mechanisms.

For a great overview of the agriculture machinery manufacturers, check out this article titled Manufacturer Consolation Reshaping the Farm Equipment Marketplace. This article gives an in-depth side-by-side comparison of the various industry leaders since the early 1900’s. If you study the trends of these manufacturers, you will see how they have reacted and implemented new products based off the needs of the farmers of that time period.

By understanding what the farming community of tomorrow will need to do their jobs in the most efficient and effective way possible, manufacturers must continually push the envelope when it comes to perfecting the technology behind self-propelled farm machinery.

Take Action: Assess your organization’s direction for the current and upcoming years. Are you in tune with the needs of your customers for them to be successful in the years to follow?

Farm Maintenance via Smart Devices

Along with smarter machinery, we are also seeing smart devices and applications make their way into the mainstream. These help the farming community better monitor and manage their crops.

For example, in 2018 there were multiple softwares unveiled to help farmers streamline their productivity and efficiency. On top of smarter and more efficient software, we are also seeing a large increase in mobile applications that allows the agriculture community to manage their entire operation with a few taps on their screen.

But why in 2019? Smart devices have been ruling our world for almost two decades now.

We are attributing this shift to the rise of the millennial decision making farmer. Millennials have been in the workforce for quite some time now (the age range is 23-38). But we are now starting to see some of the older GenYers move into prominent decision making roles.

With them comes updated thinking, efficiency, and ease of process for the sake of the organization and the population. This point leads us to the third and final most important trend to look for in agriculture in the coming years.

Take Action: Review your current processes and see where there are gaps that could be filled by a smart device or software.

The Industry is no longer Resisting

The agriculture industry has been around as long as humans have needed to eat food. But it still had a difficult time moving into the technology-filled world of today. Why?

Because without agriculture, the entire human ecosystem collapses. So, the practical thought was, “why fix something that isn’t broken?”

And this thinking worked for quite awhile. That is until the industry started to realize that their current way of doing things would no longer meet the demands of the planet in various ways.

Now, no matter the generation, the agriculture industry sees the need and is accepting technology with open arms. They are on a quest to streamline processes, utilize efficient machinery, and ensure our sustained future.

How does this Relate to Pentaflex?

You might be reading this and be thinking “What does any of this have to do with a metal stamping company?”

Here at Pentaflex, we believe in the power of investing time in listening to our clients and understanding the industry they are in. Only by grasping the full picture of the industry can we ensure that our processes, machinery, products, and service are meeting the needs of that industry.

Take Action: Call Pentaflex today to hear more about how we are staying up to date on the changes in the agtech world.

 

Learn More from our Sources:

AgTech Trends in 2019: Synthetic Biology, Precision Agriculture, and Millennial Farmers https://learn.g2crowd.com/2019-agtech-trends

Agriculture software: https://www.g2crowd.com/categories/agriculture

Average farm size by acreage: https://www.statista.com/statistics/196106/average-size-of-farms-in-the-us-since-2000/

Agriculture 4.0 https://www.oliverwyman.com/our-expertise/insights/2018/feb/agriculture-4-0–the-future-of-farming-technology.html

Farming Equipment Tools: https://agamerica.com/top-farming-equipment-tools-embrace-2019/

Agriculture software: https://www.g2crowd.com/categories/agriculture

2018 Farming Progress Show: https://www.farmprogressshow.com/en/home.html

Impacts of the New United States-Mexico-Canada Trade Agreement on Automotive Manufacturers

The North American Free Trade Agreement (NAFTA) between the United States, Mexico, and Canada was officially renegotiated at the end of September, and became what is now the United States-Mexico-Canada Agreement. With the ability for U.S. companies to operate in Canada and Mexico free of tariffs preserved for now, the new agreement updates 24-year-old terms to include a heavy focus on the automotive industry, as well as agriculture, the digital economy, and labor unions.

The updated trade agreement terms have the potential to highly impact the automotive industry. New stipulations require a higher percentage of an automobile’s content to be produced in NAFTA regions and a minimum of $16 per hour paid to workers. The deal’s sunset clause details that the agreement will be in place for 16 years and is to be reviewed every six years.

In this post, we will describe some of the agreement’s terms and what they will mean for automotive manufacturers if the measure receives Congressional approval and goes into effect.

What’s Included in the United States-Mexico-Canada Agreement?

The United States-Mexico-Canada Agreement includes new terms affecting how much of an automobile is to be produced in NAFTA regions. Original NAFTA terms required 62.5 percent of an automobile’s components to be produced in relevant regions for manufacturers to gain the zero-tariff benefit. New terms in the trade deal increase that requirement: 75 percent of an automobile’s composition is to be fabricated in NAFTA regions.

Canada’s participation in this trade deal was in question until September 30th, when the United States’ northern neighbor finally reached an agreement with the terms. There had been threats previously that Canada would be excluded from the new deal, which would have presented a negative impact for automotive manufacturers relying on Canadian-made components and materials.

What the Terms Mean for U.S. Automotive Manufacturers

With new terms requiring 75 percent of an automobile’s contents to be produced in the U.S., Mexico, or Canada, NAFTA regions will receive an influx of manufacturing work for automobile components. This increased production could bring new jobs to the automotive manufacturing industry.

Using local materials, including aluminum and steel, benefits labor unions and protects many high-paying jobs currently located in the U.S. Additionally, the United States would have the ability to impose tariffs if the 75 percent threshold is not reached.

It’s also good for the automotive sector that Canada has maintained its partnership within the agreement. Given that numerous automotive companies in the United States rely on Canadian materials and components for automobile production, higher prices would have been an undesirable consequence as foreign automakers may have benefited from American companies’ decreased competitive advantage.

Stay Tuned

While the terms of the United States-Mexico-Canada Agreement affect businesses in a variety of industries, the automotive sector will experience one of the largest impacts. As the deal moves closer to approval and implementation, Pentaflex is committed to providing the information you need to stay up-to-date.

We consider ourselves a direct stakeholder in this deal due to our close involvement with clients in the automotive supply base— many of those based in Mexico. As a leader in the U.S. metal forming industry, Pentaflex will continue to track trade deal deliberations surrounding the United States-Mexico-Canada Agreement.

To learn more about what the United States-Mexico-Canada Trade Agreement means for your business or to learn about our products and services, contact us today.

What the Steel Tariffs Mean for U.S. Metal Forming Businesses

In recent weeks, the United States implemented new tariffs on steel and aluminum to promote a policy of “America First.” The theory is that increasing import taxes on foreign steel and aluminum encourages U.S. companies to use U.S.-supplied steel and aluminum boosting production capacity toward a goal of 80% capacity utilization.   Increased usage of American steel should drive more jobs for US steel and aluminum manufacturers and less business for competing suppliers in other markets, such as Europe and China.

What the Tariffs Mean for U.S. Industry and Consumers

While these steel tariffs were put in place to put American suppliers at an advantage, many drawbacks are now occurring that are affecting manufacturers and consumers alike.  The Coalition of American Metal Manufacturers and Users has said that companies that make products using steel and aluminum employ more than 6.5 million workers across the country compared to 80,000 workers at steel plants.  Any company that uses the materials will be faced with higher production costs. A report published in June shows that US steel is at the highest point in 16 years at $982 per ton and the widest price differential compared to $644 in Western Europe and $566 in China.

When manufacturers face increased steel costs, they must offset the added expenses incurred in other ways, which has the following effects:

  1. U.S. consumers will pay an increased cost for products containing steel, such as cars and appliances.
  1. U.S. manufacturers cannot pass on the increased cost to their customers. Higher tariffs lead to smaller profits, unless manufacturers are able to obtain steel from domestic suppliers at pre-tariff costs.
  1. With domestic steel at a premium, American steel suppliers may continue to increase their prices, though they will likely keep it just below the combined cost of foreign steel and its tariffs.

In typical supply-and-demand fashion, the limited supply of steel within the U.S. has already caused the price to go up. Since April of 2018, the price of steel has increased almost 26%.

This makes U.S. manufacturers that rely on steel far less competitive, and leaves some worrying for the future of their businesses. Rather than face intense profit losses on U.S. soil due to the increased material costs, some manufacturers are already outsourcing some operations to China instead, where they can use cheap Chinese steel tariff-free.

Learn More

The effects of the new U.S. steel tariffs are widespread, touching aspects of the entire economy. But nothing has been more impacted by it than the manufacturing sector. Even if the results from the tariffs are good for domestic suppliers of steel, many other businesses that use the steel are feeling the pressure as they are negatively affected by the rising prices.

As a U.S.-based metal stamping company and a metal forming leader, Pentaflex continues to be on alert and up-to-date with information regarding this rapidly changing situation.

For more information about the recent tariffs, or to learn about our products and services, please contact us.

MEMA Comments on Proposed Changes to NAFTA

The new US administration has brought with it a number of proposed changes. One of these changes involves updating the North American Free Trade Agreement (NAFTA) between the United States, Mexico, and Canada.

As the Motor & Equipment Manufacturers Association (MEMA) represents 1,000 vehicle and component manufacturers and suppliers, the organization aims to educate policy makers on the current role of NAFTA in the supply chain.

According to MEMA, the vehicle manufacturing sector is the largest of the US industrial segment, employing more than 871,000 Americans directly. When factoring indirect and supporting jobs, the number rises to 4.26 million jobs supported by motor vehicle parts manufacturing.

This is a major factor to consider when reorganizing trade deals and strategies. For this reason, MEMA has submitted comments to the US trade representative highlighting the benefits NAFTA has had in the development and growth of North American motor vehicle supply chains.

Currently, suppliers in this segment depend on an international network of vendors and customers to maintain their competitive edge. Even within individual companies, there are often multiple plants located in each of the NAFTA countries. This freedom of trade and commerce has allowed US manufacturers to thrive, which has led to increased employment and productivity within the US.

This is an exciting time for the vehicle design and manufacturing sector, as researchers continue to innovate with new processes and technologies. Autonomous vehicles aren’t the only advancement – though strides are being made in this area – collision avoidance systems, vehicle-to-vehicle communications, fuel efficiency and alternative fuels are all important developments that rely on strong economic support. Keeping costs low by working with other nations allows US manufacturers to invest more heavily in these high-tech improvements.

The role of MEMA is to foster growth among vehicle manufacturers, and NAFTA has been an integral component of this mission. While the Association supports efforts to strengthen US manufacturing, they want to be sure that all sides are well considered before action is taken. This is a delicate proceeding that could potentially impact millions of workers. As Pentaflex is a manufacturer of heavy vehicle components, we are monitoring this topic to see how everything plays out.

Would changes to NAFTA impact your business? Feel free to discuss this topic with us on Twitter. We look forward to hearing your thoughts.

What Manufacturers Need to Know About Changing NOx Requirements

Reducing harmful emissions from engine exhaust has been a goal for years, with new designs and energy sources constantly being introduced to combat pollution. Recently, numerous government agencies petitioned the EPA for stricter regulations surrounding nitrogen dioxide (NOx) emissions.

Specifically, the EPA regulations would target heavy duty on-road trucks, buses, and other similar vehicles. The last such NOx standard revision was put in place in the year 2010, and limited NOx emissions  for truck engines  to 0.2 grams per brake horsepower-hour. The next set of revised regulations would be implemented in 2024. The California Air Rescue Board wants to see the NOx limits reduced to 0.02, which would be a 90% reduction.

But lowering certain emissions is easier said than done – especially since NOx is just one of the pollutants that regulators seek to decrease.  Current recommendations call for lowering CO2 emissions – to create an engine that meets both of these goals is very difficult for engineers. In addition, manufacturers are tasked with boosting fuel efficiency. Running engines at a higher temperature boosts efficiency but also increases the amount of NOx that’s released, so there are a number of challenges to work around in order to meet proposed regulations.

Notably, installing selective non-catalytic reduction or selective catalytic reduction systems can limit emissions. So it is possible to produce or retrofit cleaner engines on heavy equipment, it’s just a matter of updating current systems and finding the right options for each situation. With the proposed nation-wide regulations on the way, it will be interesting to see what other developments are considered to solve this problem.

Pentaflex President David Arndt Elected 2017 Chairman of PMA

Pentaflex is proud to announce that our President and CEO, David Arndt, was recently elected Chairman of the Precision Metalforming Association (PMA). The election was held on March 11 at PMA’s annual meeting in Dana Point, California. Big accomplishments like this don’t happen every day, and we are proud of this distinction.

What is the PMA?

The PMA is the metalforming industry’s primary association. The Precision Metalforming Association is highly regarded for its innovative tactics and has a history that is long and distinguished, dating back to 1913 in Cleveland.

The PMA comprises almost 900 member companies. The large association encourages excellence in competitiveness and cost-effectiveness amongst its innovative members via tools that include networking, statistics, advocacy, trade shows, and seminars.

What Does This News Mean?

Chairman of Precision Metalforming Association

President David Arndt Elected Chairman of PMA

At Ohio-based Pentaflex, we cheer one another on as metalformers. Thus, the official announcement of our President as the new chair of an association that our company so proudly belongs to is very exciting. David will lead the national association for the 2017-2018 term year.

As Chairman, David will have the opportunity to apply the strong skillset he uses to drive Pentaflex forward, now with an even larger influence as he presides over the Precision Metalforming Association. Being trusted in such an important role is impressive, and we commend our President for his fantastic achievement.

Continuing to Provide Quality

At Pentaflex, we will continue to deliver top-quality metal stamping services to customers, during David’s term as chair and beyond. For over 40 years we have been a provider of precise metal components for a range of metal stamping industries, such as agriculture, medical, energy, and automotive.

With an established reputation for providing value-laden products and the recent appointment of our President to the esteemed PMA, Pentaflex stands strong in 2017.

Slowdown Coming for the Trucking and Rail Industry

With low fuel costs, you would think the transportation industry would be seeing big gains. But, unfortunately the opposite is true as a slowing economy and lower freight volumes lead to more trucks and railcars being available.

The trucking industry is responding by reducing workers. ABF Freight Systems recently reduced its workforce by 4% because of the slow economic environment. The predictions for 2016 were optimistically cautious a few months ago but have turned to outright caution even though trucking executives generally expect a stronger second half of the year. But, their outlook for this year is described as uncertain.

The slowdown in freight volume leads to shippers having an easier time finding trucks to hire. This puts them in the driver’s seat to negotiate for better terms. It is still unclear at this time the exact factors that are causing the drop in freight volume. Possibly reasons include excessive inventories, a manufacturing slowdown, reduced demand from the energy sector, or lagging retail sales of winter clothing and equipment due to the warmest December on record.

Workforce reduction isn’t the only belt-tightening measure for the shipping and transportation industry. In response to the lagging economy, new truck builds are being reduced. Truck users may be replacing older models with newer ones but are not buying new trucks outright. Orders are down and layoffs might be coming for OEMs.

The impact of the economy on the trucking industry doesn’t hurt us as greatly as it would other OEMs. The commercial truck components we manufacturer are just one of the many components in our portfolio. Diversification across a wide range of industries and strong capabilities enable us to maintain a solid manufacturing base in uncertain times.

Manufacturing Voices Were Heard By U.S. Senators and Congressional Representatives In April

Manufacturing advocates met with legislative representatives at the eight-annual NTMA/PMA One Voice Legislative Conference in Washington, D.C. earlier this month. Unified as One Voice, the PMA (Precision Metalforming Association) and the NTMA (National Tooling and Machining Association) took advantage of this opportunity to be heard on Capitol Hill.

Pentaflex President and PMA Vice Chairman David Arndt was in attendance at the conference and helped to convey important messages about the major issues facing U.S. manufacturing interests right now to representatives from the U.S. Senate and Congress. Dave met with Senator Rob Portman and Congressional Representatives Jim Jordan, Brad Wenstrup and Marcy Kaptur. The three key messages that were promoted by the PMA representatives and other manufacturing advocates at the meeting were related to tax reform issues, training and recruitment for manufacturing jobs, and regulatory issues.

According to the One Voice newsletter published by the NTMA and the PMA, the specific message to Congress about regulatory issues was, Federal regulators must comply with small business review procedures and honestly analyze how their rules impact the economy. Congress should work to block or repeal unnecessary, ineffective, and harmful EPA, OSHA, and NLRB regulations while working to reform and make transparent the regulatory process. The detailed requests related to regulatory issues were designed to stimulate manufacturing in America, including a request for the EPA to withdraw ozone, power plant and water rules, plus a request that regulators should comply with the Small Business Regulatory Enforcement Fairness Act (SBREFA), Administrative Procedures Act, and Regulatory Flexibility Act.

The message to Congress about manufacturing jobs was a request to support manufacturing in America by supporting workforce development, job training, recruitment, and placement programs. Additionally, the manufacturing representatives and advocates asked Congress to support skills certifications and national industry-recognized employee credentialing, in addition to expanding the local involvement of small/medium sized manufacturing in the implementation of WIOA (Workforce Innovation and Opportunity Act).

Regarding tax reform, the main message was, Dont leave small businesses paying the bill! Tax reform is requested for all manufacturers both C-corporations and pass-through businesses. The One Voice newsletter reports, The only way to grow the economy is through a simplified code that encourages domestic investment with a globally competitive rate.

Please stay tuned to this blog in the upcoming months. Well continue to keep you posted about any progress made as a result of the One Voice Legislative Conference. As a contract manufacturer of metal stampings and assemblies, Pentaflex supplies the commercial truck, automotive, medical and off-road industries, in addition to other manufacturing industries, and were directly impacted by — and invested in — the future of manufacturing in America.

Slowdown Coming for the Trucking and Rail Industry

With low fuel costs, you would think the transportation industry would be seeing big gains. But, unfortunately, the opposite is true as a slowing economy and lower freight volumes lead to more trucks and railcars being available.

The trucking industry is responding by reducing workers. ABF Freight Systems recently reduced its workforce by 4% because of the slow economic environment. The predictions for 2016 were optimistically cautious a few months ago but have turned to outright caution even though trucking executives generally expect a stronger second half of the year. But, their outlook for this year is described as uncertain.

The slowdown in freight volume leads to shippers having an easier time finding trucks to hire. This puts them in the driver’s seat to negotiate for better terms. It is still unclear at this time the exact factors that are causing the drop in freight volume. Possibly reasons include excessive inventories, a manufacturing slowdown, reduced demand from the energy sector, or lagging retail sales of winter clothing and equipment due to the warmest December on record.

Workforce reduction isn’t the only belt-tightening measure for the shipping and transportation industry. In response to the lagging economy, new truck builds are being reduced. Truck users may be replacing older models with newer ones but are not buying new trucks outright. Orders are down and layoffs might be coming for OEMs.

The impact of the economy on the trucking industry doesn’t hurt us as greatly as it would other OEMs. The commercial truck components we manufacturer are just one of the many components in our portfolio. Diversification across a wide range of industries and strong capabilities enable us to maintain a solid manufacturing base in uncertain times.