Tube Mills

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ec|o´nom´ics n.pl 1. the study of the production, distribution, and consumption of wealth and capital, producingresults especially as it concerns maximizing efficiency 2. economic factors

Tube Mill Economics 101
Applying fundamental laws to a complex situation
and dynamic relationships among production schedules, inventory levels, and setup times. Times have changed, haven’t they?Just-in-time and lean manufacturing have put an end to long production runs and well-stocked warehouses. The production manager of the month is some guy who doesn’t know an ID from an OD. The industry is so competitive that the sales staff considers itself lucky to get small orders with skimpy margins from surly customers. The beancounters don’t allow any spare parts and think that maintenance is anavoidable cost. Well, you get the picture. The good old days are gone, but not forgotten. In fact, a close look at that era can be more than just a nostalgia trip; it can provide valuable lessons about changing business conditions and practices. It can give you a better understanding of the situation you currently face and guide you to strategies and tactics to help your organization fight its wayback to healthy profitability. Your task is to bring the capabilities and limitations of the tube mill and the staff to management’s attention. By using an intelligent, informed, and diplomatic approach, you can be an agent of change and keep your job.

Step 1: Educate and Lead
First, educate. Start with yourself. Learn everything you can about the capital equipment and facilities in your plantand the individual capital of each member of the staff. These are intimately related to the organization’s ability to manufacture products and earn a profit. • Capital equipment and facilities. These are the production equipment and facilities required to support the company’s operation. Your tube mill and the plant facilities fall into this category. • Individual capital. Individual capitalrefers to inalienable or personal traits of persons, tied to their bodies and available only through their own free will, such as skill, creativity, enterprise, courage, capacity for moral example, noncommunicable wisdom, invention or empathy, nontransferable personal trust, and leadership.1
September 2004 tpj
A TPA Publication

By W.B. “Bud” Graham, Contributing Writer

here you are, leaningagainst a roll stand, reminiscing about the good old days—a time when production runs were long, inventories were plentiful, and profits were decent; when the tube production manager was a guy who worked his way up through the ranks and understood how to make tube; when the sales staff developed business relationships with customers; when maintenance was scheduled and spare parts were kept ininventory; when the employee training budget exceeded management’s meals/entertainment budget; when personnel turnover wasn’t a problem; when the management team understood the interlocking

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producingresults
Cost Penalty per Ton Produced

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$0.00 ($50.00) ($100.00) ($150.00) ($200.00) ($250.00)

32,284 $0.00

12,000 ($38.03)

10,000 ($50.14)

7,000 ($81.27)

3,400 ($191.14)Production Run (Feet) Cost Penalty per Ton Produced

Figure 1
In a tube facility in which maintenance and training are infrequent and minimal, a mill changeover is a five-hour ordeal performed by a two-person crew; the mill must produce 32,284 feet of tube to recover setup and scrap cost. The tube is 2.5-in.-OD × 0.062-in. wall thickness; the raw material weighs 1.61 pounds per foot.

CostPenalty per Ton Produced

$10.00 $0.00 ($10.00) ($20.00) ($30.00) ($40.00) ($50.00) ($60.00) 11,085 $0.00 12,000 $1.72 10,000 ($2.44) 7,000 ($13.13) 3,400 ($50.86)

Production Run (Feet) Cost Penalty per Ton Produced

Figure 2
Increased training and preventive maintenance help to reduce setup time. A 1.5-hour setup time changes the break-even point substantially. The mill must produce 11,085...