Thursday, August 3, 2017

US factory expansion is up (good) and so are raw goods costs (bad)!

US Factory Gauge Continues to Signal Solid Expansion in July

...While the ISM index settled back from a June level that was the second-highest since 2011, it remains above the average over the past year, as are its three main gauges. The figures signal that optimism about the economy is enduring among American businesses even as prospects dissipate for swift changes on tax and infrastructure policy from Washington lawmakers.

 Goods producers are sustaining progress that’s been building since 2015. Steady U.S. consumer and business demand, along with a recovering global economy, are allowing manufacturing to hit its stride.

 A pickup in the ISM’s prices-paid index indicates more factories also reported paying higher prices for inputs and raw materials last month, also a reflection of improving world demand... 

- excerpt from recent IndustryWeek.com article  

(read full story here: http://www.industryweek.com/data-and-statistics/us-factory-gauge-continues-signal-solid-expansion-july?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+IWNews+%28IndustryWeek+Most+Recent+News%29&sfvc4enews=42&cl=article_1&NL=IW-07)

That's the recent news from IndustryWeek magazine. Overall, it's good news for manufacturing, but pay attention to the last Key Takeaway in the final paragraph. It specifies an increase in Prices Paid Index. This story indicates that production is strong, optimisim is strong, but your raw materials cost is going to take a bite into your profit margins. 

Unless you make some adjustments... As the world's economy growth and demand improves, your material costs will continue to swell. You may not have the leverage to force your supplier to keep raw goods prices down, but you can offset those costs with some manufacturing adjustments.

When your raw goods increase you have to counter that by decreasing your scrap waste and decreasing the cost to convert it to finished goods. That's achieved through improved efficiencies.

One way the new Gribetz Spectrum quilter does this is by reducing downtime required of changes to needle settings. Since the Spectrum's unique design uses 15 independent sewing heads, NO needle setting changes are necessary to switch from one pattern design to another! Each sewing head can be independently controlled and automatically turns off/on as needed.
New Gribetz Spectrum with 15 unique sewing heads

With the Spectrum, you can create the most unique product designs to be competitive in this increasingly competitive industry while still maintaining a profitable bottom line with better production efficiencies. Besides reducing downtime, you can also increase your daily yield sewing at 1400 RPM on the Spectrum!

GSG has equipment to improve your bottom line through improved productivity and efficiencies in every part of your mattress factory. Click here to learn more about all our New Products.

New Products from GSG