Recent global and economic uncertainties have disrupted every manufacturing sector, including metal fabricators. Despite those challenges, the metal fabrication industry continues to grow in response to demands from consumers, OEMs, and governmental institutions. More than half (54%) of all manufacturers reported year-over-year growth.
With growth comes growing pains.
Because metal fabrication is such an integral part of most manufactured products — from the goods themselves to the equipment used to manufacture them — it’s weathered the storm of the pandemic a little better than most. Those companies that serve critical infrastructure and essential services like defense department initiatives have an even greater outlook.
That’s not to say that the metal fabrication industry has come through unscathed. Metal fabricators will need to address the following issues head on to meet the needs of various industries and help the nation’s recovery.
1. Labor Shortage
Prior to the pandemic, nearly four in ten (38%) manufacturers struggled to fill skilled labor positions. That number has jumped to nearly two in three (63%) in recent months, with higher than average turnover rates.
The metal fabrication industry faces similar challenges in finding and keeping qualified welders, finishers, and assemblers. The techniques for performing MIG and TIG welding to precise tolerances requires extensive training, and AWS and NAVSEA certifications add another layer of difficulty.
To address these issues, metal fabrication companies need to offer extensive in-house training, improve workplace culture, and provide attractive benefits. An important aspect is overcoming negative stereotypes about working in a manufacturing setting. Demonstrating the new face of manufacturing with high-tech equipment and state-of-the-art, climate-controlled facilities and amenities helps position manufacturing as a desirable career choice.
2. Supply Chain Disruption
The lead times to acquire raw materials improved slightly since the pandemic shut down that resulted in reduced production of steel and other raw materials. Still, nearly two in three metal fabrication companies report increased lead times compared to pre-pandemic levels. That’s according to the Precision Metalforming Association (PMA) as reported in Industry Week. Combine that with more than one in three (36%) fabricators that forecast an improvement in economic activity in the coming months, and the challenge mounts.
Metal fabricators that produce products for the U.S. Department of Defense may have an advantage over those who produce commodity goods. NAVSEA regulations have a “Buy America” provision, meaning that steel used on naval ships and other vessels needs to be produced domestically. Metal fabrication companies who produce commodity goods might rely on steel made overseas which experience far greater supply chain disruption.
3. Tariffs and Trade Wars
If supply chain shortages weren’t difficult enough, tariffs on steel imported from China and the European Union have fueled the flames. There are reports that the three-year dispute with the EU will be resolved, but U.S. steel producers hope that alternative protections will be put in place to keep their production — and their union workers — in demand.
No matter the outcome, the effects of the trade war will likely linger. Once again, metal fabrication companies that produce products regulated by NAVSEA compliance requirements have felt less of an impact from tariffs than those who rely on commodity steel and other raw materials from foreign producers.
4. Technology Integration
There are some fabrication shops that continue to operate using legacy systems and outdated equipment. In today’s fast-paced marketplace, such businesses may be left behind or never grow beyond their current capacity.
Connected devices, robotics, and other IoT technology have helped to speed up production through automation and reduced reworks. Sensors allow manufacturers to track and monitor equipment to ensure it operates at peak performance. In addition to equipment, manufacturers rely heavily on softwares to manage workflows, keep projects on time, and track productivity and individual performance.
Many complex parts and welds, however, still require a human touch and professional skills to produce ultra-precise tolerances.
5. Cybersecurity
The integration of technology comes with risks. Like all industries, data security is of critical importance. Not only do metal fabricators need to keep their own data and employee information confidential and secure, they also need to protect their customers’ trade secrets and data. When one of those customers is the U.S. government, the stakes are even higher.
Metal fabrication companies who perform work for the Department of Defense have strict cybersecurity compliance requirements, including:
- The Defense Federal Acquisition Regulation Supplement (DFARS) clause
- The National Institute of Standards and Technology (NIST) standards
- The Cybersecurity Maturity Model Certification (CMMC) requirements
Proactively addressing security issues means staying abreast of the evolving ways that cybercriminals try to access systems. However, the number one cyber risk in any company continues to be its own employees who don’t recognize phishing scams or other breach attempts. Continuous education among a metal fabrication company’s workforce is critical.
Part of choosing the best metal fabrication company involves vetting how well equipped they are to overcome these challenges. At Fox Valley Metal-Tech, we proactively address the issues facing the metal fabrication industry and continue to work closely with suppliers, compliance auditors, and security and technology experts to maintain an efficient, secure, and productive operation. And we’re proud to say that our dedicated workforce is strong and growing.
Contact our highly qualified team of metal fabrication experts to discuss your upcoming commercial or defense project, and access our RFQ Checklist below to help you scope out your project.
