IOWA LASER'S PURCHASING POWER  top

Talking Heads and Upticks in the Steel Industry

By Jim Mattson, Purchasing Manager

Whew! I don't know about you, but I'm sure glad the recession is finally over with. Wait, haven't you heard the recession is over?

The mainstream media and many of the economic talking heads are saying it's done and we're climbing back up the 'U.' Others declare we-might-be, but we-might-not-be, but-maybe-we're-moving-closer, possibly-towards-the-middle of a 'W.' Aside from the reality, it's quite comical to listen to today's prediction and then tomorrow's contradictions. 

A talking head's projections can be useful, I suppose, if you want to take advice from someone who reports the Department of Labor Statistics about upticks in "hiring increases," "new orders" and "productivity increases." The problem is they're piecemealing statistics from a complex set of variables that fits their talking points for the day.  There's no talk of the dynamics of incentives programs and whether "Clunkers" is selling today what might sell in the future.  There's no talk of the increasing amount of equipment auction emails I keep receiving.  There's no talk of the fact that I drive through road construction all the time now, yet still don't see new equipment being used to build roads (auction anyone?).  If profitability was based on projections, like it is for a talking head, I too would declare, "We're free!"  But it's not. 

Moving into the 4^th Quarter, we know the mills are raising their prices, regardless of the fact that many areas of manufacturing are still anemic, the order books are not where we want them and I've just given away my Vikings tickets (I can't bring myself to watch a guy that is my age get crushed.  Ouch.). 

The steel mills are still managing to push price increases through. A recent headline from a leading metal magazine sums this up pretty well "Absent demand gains fail to stifle flat-roll tags”. Many contacts in the steel service center industry believe the uptick in mill orders is a direct result of service centers having to finally start restocking their inventory - after they let it get to a level that had never been seen. As the mills start operating at higher capacity to meet service center needs, there has been one uptick - in scrap needs.  This in turn causes scrap value to go up, which causes the mills to charge more, etc. 

These are the Days of our Lives.

So where does this leave us? The general feeling is that the mills will probably be able to get another increase for September.  US Steel has just announced increases in October and November.  If there really is an increase in manufacturing then steel prices will continue to rise, but if this really is just the service centers restocking and the end users are still not buying, you will see steel pricing begin another nose dive. 

Iowa Laser can make advanced purchases in times like these.  We recently negotiated a multi-million pound steel purchase with deliveries over the next 12 months.  But our preference is to avoid uncertainty and keep real time pricing.  Why?  Because Favre gets paid to take the nose dive. 

(A personal note for you Vikings fans…rest assured that if Favre manages to bring the Super Bowl ring, company President (and Vikings fan) Sean Abbas has stated I will submit a written letter declaring Favre's superiority.)

AN ACTIVE SELLING POINT    top

By Joe Barber, Sales & Marketing Manager  

It was the best of times, it was the worst of times….

No, this article won’t read like A Tale of Two Cities.  But I honestly believe we are somewhere between the best and worst of times.  Like many of you, we are seeing constant ebbs and flows in the market today, but there are pleasant rumblings of things picking up in a lot of markets.  Also, like many of your staff, our sales people are out on the road paying visits to existing customers and doing what they can to drum up new opportunities for us.  One of the first things we ask our existing customers is if they understand all of Iowa Laser’s capabilities.  I am still amazed at how many long term customers don’t realize that Iowa Laser is not only a laser and bend shop, but offers welding and machining services as well. 

For a long time, the primary market for Iowa Laser was flat cut steel parts.  That market eventually evolved into laser cut parts requiring some level of secondary processing, typically bending.  For the past decade, we have also offered welding and machining services to allow our customers to purchase a more finished good.  These areas have grown over time, and Iowa Laser continues to make investments updating technology in these departments.  Looking forward, Iowa Laser has made a commitment to significantly grow these areas of our business over the next year.  A team has been assembled to fast-track this growth and illustrate our commitment to this goal.

If you were unaware that Iowa Laser offered these services, I hope you will consider us for any existing or upcoming needs.  We are often able to reduce costs and processing times by assisting in development.  If you are currently using these services, I would encourage you to contact us about how we can help you prepare for the inevitable market bounce.  And if you would like more information, or would like the opportunity to sit down with one of our sales people and our Weld Engineer, I would ask that you give us a call.  We always look forward to working and growing our relationship with each and every one of you.

CAPABILITY UPDATE   top

Prior to the economic downturn, controlling the manufacturing process at every potential intersection was the next move in metalworking.  Many of our competitors borrowed available capital to lure new markets, either with the latest and greatest methodology (VMI, FOB your facility), new processing equipment and/or powder coating facilities. 

Iowa Laser’s strategy for long term growth is a bit different.  Our core services are defined; they will not be changing.  What will change is our ability to supply to you more efficiently - quicker and cheaper with great quality – as we establish processes and continue to expand. 

Many of the companies mentioned above are standing at the base of a mountain now - stopped - sputtering the word “mountain” as they try trudging uphill.  We prefer to change the scenery.  Iowa Laser looks at the mountain, finds a better way and declares “hill.”  Whereas our competition focused on a bigger vehicle, we’ve focused on less wear and tear and much better gas mileage.  

We know laser cutting, forming, machining and welding.  We support those activities long term by making ourselves better every day.  When new equipment can make us more efficient, we purchase at the right time for the best price.  And we work hand-in-hand with experts in the heart of U.S. manufacturing to find solutions for other processes, from powder coating to delivered goods. 

Recently we updated (2) pieces of machining equipment to offer a more cost-effective secondary machining quote, along with quicker turnaround on the fixtures needed for each of our core processes.   Running the first job across the new equipment allowed us to turn an existing job from 14 hours to 4 hours.  We know that when we stop getting better every day, we lose. 

The Haas VF-6 VMC has a 64” x 32” x 30” travel footprint and offers a 2-speed gearbox for up to 250 ft-lb at 450 rpm.  In addition, we’ve found added benefits in machining aluminum for fixturing, running to 7500 rpm in 1.2 seconds.  With in-house fixturing, we’ve taken another potential delay – whether delivery or quality – out of the system.  Your prototypes are turned around that much faster. 

The Haas VF-3 with pallet changer has provided a whirl of speed and accuracy for productivity increases.  With part changeovers and fixture setups performed offline, downtime is limited to setup on new jobs.  For parts that utilize much of the 40” x 20” x 25” footprint, the machine supports unattended operation. 

Bottom line, Iowa Laser is focused on bringing stiff competition through smart decisions, greater efficiency and constant improvement.  As we work together to define the balance of outsourcing with Iowa Laser, know our goal is to help you avoid some of the necessary, yet painful steps you've endured.              

To discuss further, contact us at info@iowalaser.com .

THE ANALYTICS OF QUALITY     top

The Value of Maintaining ISO Accreditation

By John Lamos, Quality Manager

To maintain our ISO-accredited status, one of our duties is to actively record Quality metrics-to-performance for every part that runs through our shop.  Like you, becoming familiar with the necessary steps to ensure accuracy and accountability was a major task.  But the benefits of initiating this process have far outweighed the pains of this often misrepresented program.  While documenting company performance in macro form -- from the clouds -- is often considered a certain waste of time, we’ve found great benefits by analyzing the data beyond standard procedures.   

Now that we’re in our 6^th year since implementing ISO procedures with many of the ‘kinks’ worked out, we find the greatest contribution ISO brings is the ability to define repeat areas requiring improvement.  For instance, when a quality problem repeats itself, we have established criteria that warrants a ‘review’ process. 

Recently, using this data, we found an area of improvement on parts valued at over $100 each.  By utilizing ISO procedures and working with our customer, we defined critical processing steps for the future that has the potential to save thousands in processing costs.   In today’s world of magnifying glasses and cost savings, we place a very high value-to-cost ratio on our ISO process.

Click here for a excel file of our Quality metrics for FY2009 to date. 

UPDATE:  In late August, Iowa Laser was recommended for ISO 9001: 2008 accreditation.  Word on the street is we’re the first fabricator in the state to receive this level of quality analytics.

PRESIDENT'S STATE OF LASER   top

By Sean Abbas, President

I belong to a small group called Vistage 49 based here in Iowa, which is part of a larger organization called Vistage International.  My journey to Vistage started in 1999 when I was named President at Iowa Laser Technology.  I was 34 and confidently scared to death.  I thought I could handle the responsibility that came with the title, but I also knew there was a distinct difference between ‘management’ and ‘leadership.’  I felt that I clearly understood what and how this position would affect me.  I really had no idea.

Most people named to the position of company President are older and hence more experienced.  They have a network of associates their age (read: more experienced) to lean on.  At 34, I had no such network.  What I did have was a bunch of people who believed in and trusted me.  I knew Iowa Laser was a company with great people, founded on ideals that I was proud of. 

My limited experience carried me through the first, blurry 18 months.  A tremendous amount of tactical objectives needed to be accomplished.  Work Comp., health insurance, property casualty insurance, employee hand book, ISO 9000, wage scales, performance reviews, job descriptions, etc…  One-by-one, these objectives moved from the “to do” column to the “completed” column.  Very satisfying stuff… for a while. 

Then I started thinking: What next?  Where to?  Why?  How?  I thought I was scared when I first got the job, but these questions were really a hard swallow.  Did I actually have to lead now?  But wait a minute, wasn’t I already leading?  I had the title, right? 

The word leadership, as it relates to business, is commonly tossed around as a catch-all for anything an organization’s leader does.  Is it any wonder why people mistake leadership for completing the financial statements, settling on a health care provider, or making a capital equipment purchase?  These tasks are important to us because they affect our employees.  But do they include true ‘leadership’ or just ‘management’?  When we are unsure of answers, we typically place more value on managing day-to-day activities rather than moving towards our purpose as leaders. 

Facing these questions is what led me to Vistage.  I didn’t have all the answers.  I had some ideas, but what I really needed was a place, a group of people, who understood what I was going through.  I needed different vantage points, different experiences, learning opportunities and people who would speak their minds thoughtfully. 

Vistage 49 is that place.  We are 16 company presidents and CEO’s from Iowa.  We are diverse in terms of age, gender and nationality.  We are manufacturers of metal products, wood working tools, nutritional supplements, electrical switch gear, cord sets and wine.  We provide services like health and fitness, marketing, transportation, veterinary and dental supplies, web development and communication.  Our companies have revenues from $9M to more than $200M.  We have 27 employees to 450 employees.  We have locations in 7 countries and sell our products and services to 32 others.

Our mission is to enhance each other’s lives and businesses with our ideas, experience and sometimes, a little bit of tough love.  Every member is interviewed.  No customer/supplier relationships are allowed.  We meet monthly and average 15 members per meeting.  You must contribute both issues and ideas.  Sounds easy right? 

Not hardly.  Ever try bringing a new idea or problem to 15 of your peers?  Try admitting publicly that you don’t have all the answers - even though you are supposed to have them and it’s your job to have them.  Try having people question your intentions and motivations.  How about finding out that your “detailed” plan is missing dozens of details?  Or my favorite:  Try bringing a problem to the group (caused by others, of course) and finding out that you are the problem.  Your lack of action and direction is the real problem. (Take that, “type A” personality!)  This is the hardest part of Vistage, but it’s also the most rewarding and valuable.  It’s often a humbling experience.   

I’ve found in this group the ability to admit that I don’t have all the answers and that I may need help in crafting the best answers for Iowa Laser.  I’ve found it’s OK to be unsure and to question which path to take.  These feelings are natural and as good for you as they are for me.  What’s not OK is failing to act.  Failing to act is paralyzing to you, your organization and those you are trusted to lead. 

I’ve grown as a person and as a leader over the past several years I have been involved in Vistage.  I can attribute many improvements directly to my learning experiences at Vistage.  One of Iowa Laser’s values is learning.  We believe that learning is one our only sustainable competitive advantages.  The rate at which we learn and apply knowledge will give us advantage in the market place.  Vistage is one of the key ways I live this value.  If you are a president or CEO of a company and you have been looking for something more, Vistage may just be for you.  It’s made a difference in my career and I hope you have seen some of the positive results as our customer. 

Remember, not one of us is self-made.  We are by-products of the people and experiences that surround us.  What people and experiences are you surrounding yourself with?

Check out Vistage at www.vistage.com.

ON THE ROAD AGAIN  top

A Positive Company Memo

By Matt Miller, Outside Sales   

The unfortunate reality of the downturn in the economy is a loss of inter-company memos; this information is now communicated on the evening news.  As layoffs and aging equipment --- two variables of in-house manufacturing that will continue to affect long-term business growth --- keep many companies sliding down the mountainside, we’ve been asking tough questions of management about pre-downturn company goals and their effects.  Were they on target?  Are we in position?  Is developing more in-house manufacturing capabilities worth the downside risks all companies are facing today with the economy? 

The answers are yes and no, depending on too many factors to list here.  But a common theme that keeps coming up is this:  the speed at which you were able to respond to the economic downturn has directly determined the effect of devastation. 

Overall, we feel Iowa Laser was ready.  We took many steps in preparation to avoid what happened to us in 2001.  We prepared to react and it has made all the difference (no layoffs to date!)  That said, we were well aware that one department took the back seat with all our expansion, equipment and economy talk:  welding. 

Fortunately, about a year ago we began the process of designing a world-class welding department by hiring a new weld engineer.  After a nationwide search, the announcement was made in Sept 2008 that Jonathan Lowery was selected as our first Welding Engineer.  Jonathan brings 22 years of welding and fabrication experience to Iowa Laser.  (His family is native to Iowa so the only difficulty was convincing him to leave Louisiana cooking for Iowa’s sweet corn).  

Management tasked Jonathan with developing a world-class welding program for every industry Iowa Laser serves, including the military.  Working with our existing staff, we estimate he is well on the way.  For all who read The Cutting Edge, we’re happy to send a positive intra-company memo.  Jonathan recently announced Iowa Laser’s ANSI/AWS compliance to the following specifications: 

ANSI/AWS D1.1/D1.2M Structural Welding Code - Steel

ANSI/AWS D1.2/D1.2M Structural Welding Code -- Aluminum

ANSI/AWS D1.3 Structural Welding Code -- Sheet Steel

ANSI/AWS D1.6 Structural Welding Code – Stainless Steel

ANSI/AWS B2.1 Specification for Welding Procedure and Performance Qualification

ANSI/AWS D 14.3 Specification for Welding Earthmoving, Construction, and Agricultural Equipment

MIL STD 1261 Ground Combat Vehicle Welding Code – Steel

MIL STD 372 Ground Combat Vehicle Welding Code – Aluminum 

We would like to say he is finished, but the Cajun in him says he’s just getting started. 

Click here to find out more about what we're striving for.  

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