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Manufacturing Looks Brighter in 2022, But Challenges Persist

Manufacturing Looks Brighter in 2022 But Challenges Persist. Volatile market conditions have created significant challenges for the manufacturing industry since the pandemic began. Manufacturers have been forced to reexamine nearly every step of their process and look for ways to improve efficiency with their data, resources, and workforce.

The last two years brought some unique challenges to manufacturers including rising costs, supply chain issues, and material shortages. Most manufacturers have been forced to implement changes in order to meet these challenges, including acquiring new talent, adding capabilities, and diversifying product portfolios to act as a foundation for growth.

Since the pandemic began, manufacturers have had to deal with the very real challenge of a lack of resources – both supplies and actual workforce. Cass Precision Machining has worked to remain agile and has taken action to be resilient in the short term to set up future success. Future success in manufacturing depends on deriving actionable insights from the last two years to improve decision making and to drive value.

Here is how Cass has responded to some of the questions brought on by the two-year pandemic.

What have been the biggest changes at Cass over the last year and a half, due to the pandemic and all of its ramifications?

Cass has always been known for its outstanding customer service.  For more than 75 years, serving our customers has been the fuel driving our company.  In the past 18 months, our customers have asked us to do even more on their behalf.  We have redoubled our efforts aimed at taking the best care possible of our entire customer base.  This has caused us to rethink old standards in how we do business.  We’ve implemented new tracking tools, become better at smaller lot sizes, and have enhanced how we work with our outside processing partners—all in the name of taking even better care of our customers.

As the country recovers from COVID-19, what new things will Cass implement to better support customers?

We are improving our internal systems to ensure responsiveness and drive the best possible value for our customers.  We are focused on reducing lead time, improving our quality management and execution systems, and ensuring we have the best-trained workforce in the industry.

There is a lot of talk of manufacturers needing to diversify their supply chain. What does that entail for Cass Precision Machining?

Cass’s broad range of capabilities and experience uniquely enables us to provide services nobody else can.  We can offer a variety of manufacturing solutions aimed at helping our customers reduce risk within their supply chains.  We can accommodate service or preproduction parts and can scale up volume better than anyone to provide the best total cost of ownership for our customers.  In terms of our own suppliers, we have expanded our supplier base and developed new partnerships aimed at reducing risk and opening more channels.

What changes have been implemented to ease disruptions to the supply chain? 

Cass has been working hard to procure material in advance of customer needs, enhance partnerships with leading suppliers, and partner with customers in long term agreements to ensure reliable supply.

Is localizing the supply chain a legitimate pursuit?

A localized supply chain has always been a good idea—there’s no better way to ensure timely delivery at the highest quality than dealing with local partners who truly care about your business.  The need for localization has only been emphasized in the past two years due to world events.

Is Cass continuing to digitize its supply chain? Will that make a big difference when further disruptions arise? 

Cass has fully implemented its ERP solution and is now looking forward to working with suppliers to fully integrate them into the system.  We will always strive for the human touch and meaningful relationships, and we believe a digital future supporting those values is key to success.

How long will it take for the supply chain to return to “normal”? Or will it ever?

We anticipate that shipping delays and supply shortages will begin to ease in late 2022 and into 2023, but underlying impacts mean the future will not look much like the past.  There will be more emphasis on transparency in the supply chain, reliable local supply, and long-term partnerships that will benefit everyone involved.

What’s next for Cass Precision Machining in 2022?

As we continue to grow and serve our customers better, we believe that we are in a unique position to attract more top-level talent.  We will also continue to make significant investment in automation and training to enable even more consistency and reliability.

The realities of the pandemic combined with existing trends in the manufacturing landscape means that companies must be more efficient and nimbler than ever in addressing the skills gap and labor shortages. With demand for manufactured goods always on the uptick, Cass continues a top-to-bottom evaluation of all processes, identifying ways to increase efficiency and to continue to support our customer base in any way we can.

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Supply Crunch Continues to Push Prices Suppliers are Charging Businesses

As we wrote last year, the global supply chain crunch will continue to impact pricing, lead times and deliverables well into 2022 and beyond. Prices paid to U.S. producers posted a record annual increase of almost 10% in November, a surge that will sustain a pipeline of inflationary pressures well into 2022.

The producer price index for final demand increased 9.6% from a year earlier and 0.8% from the prior month, Labor Department data showed in December. Both advances topped economists’ forecasts.

Materials costs have risen rapidly this year amid transportation bottlenecks, robust demand, and labor constraints. Many businesses have successfully passed those added costs on to customers through higher prices, and the latest report suggests additional consumer price increases in the coming months.

Manufacturing companies have all had to adjust to the realities brought on by the global supply crunch, and here at Cass Precision Machining we are collaborating with our partners as much as possible, doing the best we can to alleviate costs and concerns for our customers. This partner collaboration includes daily logistics, tracking materials via spreadsheets, and shuffling and prioritizing schedules etc. and communicating as often as possible with our customers.

According to the Wall Street Journal, the higher-than-expected producer-price numbers suggest that consumer inflation, which hit a nearly four-decade high of 6.8% in November, will stay elevated into 2022 as price pressures persist. The index, which generally reflects supply conditions in the economy, rose 0.8% from October, an acceleration from the 0.6% gain in each of the previous three months. Higher prices for energy, wholesale food, and transportation and warehousing contributed to the pickup in inflation.

“This is a testament to the fact that inflation continues to broaden out,” said Stephen Stanley, chief economist at Amherst Pierpont, in the WSJ article.

Persistently high prices in large part reflected clogged supply chains, as manufacturers scrambled to keep up with unusually strong consumer demand. The rise in prices of goods continued to outpace that for services, as consumer spending on goods remains elevated, while that on services is up just slightly from pre-pandemic levels.

Prices for good, excluding food and energy, climbed 0.8% in November from October, faster than the 0.6% increase the previous month. The service index advanced 0.7% on the month, up from 0.2% in October, driven in part by a pickup in hotel room rates and airfares.

According to Reuters, trillions of dollars in COVID-19 pandemic relief from governments across the globe fueled demand for goods, leaving supply chains overstretched. The normalization of economic activity has also juiced demand for services, with the delivery of some being hampered by worker shortages, driving up prices.

The easing of inflation for goods used to make other products, though still high, signaled that producer-price inflation is nearing its peak, said Gus Faucher, chief economist at PNC, in the Wall Street Journal. “PPI inflation will slow in 2022 as prices for energy and other raw materials decline thanks to greater production, weaker demand, and a gradual waning in supply chain problems,” said Faucher. “But PPI inflation will remain above its long-run levels due to continued strong demand for some goods and services and higher wages.”

At Cass Precision Machining we continue to partner closely with our customers to manage the challenges around material availability, material price, delivery needs and shipping.  We are committed to developing creative solutions to optimize customer success.

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Cass Can Produce Parts for Exercise Equipment

The Cass Precision Machining website contains a page entitled “Industries Served.”  On the page, we talk about our continued investment in new technology that leads to the best products at the greatest value.  Our history dates all the way back to 1945, and over the years, we’ve worked hard to build a reputation as a parts manufacturer with experience, dedication, and passion for getting our customers the highest quality parts at the best price.  Those attributes combined with our proven speed and accuracy in delivery, as well as why we’ve developed a client base that spans various industries, including agriculture, construction, recreational equipment, and exercise equipment, among many others.

With a list of over 20 industries served, Cass is very proud of our ability to perform and work with such a wide variety of industries and sectors that give us such a great roster of clients served over the years.

—Sean Sorteberg, Lead Commodity Manager, Arctic Cat

“At Arctic Cat, we refer to Cass as our ‘rock-star’ supplier. We’ve worked with them for over 20 years, and they’re always really fast and helpful with great quality. I love their shop, it’s immaculate, and they have the benefit of actual machinists on staff, emphasizing the quality of product they deliver. If we are ever in a pinch, our first call is to Cass, and they came through for us like they always do. Our rolling 12-month PPM is eight—just outstanding. Cass is always on the ball and ahead of the curve.”

 

It’s in that vein that Cass is looking to expand our work in producing parts for exercise equipment.

At Cass, we made a concerted effort in 2020 to increase our ability to produce prototype parts. The result is our Cass-Rapid Proto Machining business unit that significantly ramps up our ability to serve customers. With prototypes as well as build-to-print contract machined parts services with accelerated delivery responsiveness. This unit sets us up well to be an ideal partner to produce parts for exercise equipment.

Cass works with fitness equipment manufacturers to produce precision-designed, durable metal assemblies, weldments, and metal stampings. Additionally, Cass produces other exercise equipment parts and components needed to make parts for exercise equipment.

As a manufacturer of parts for exercise equipment, Cass is able to manufacture bearings, bushings, and most all needed assemblies on exercise equipment.  From strength and weightlifting machines, as well as cardio equipment and more.

Cass Precision Machining serves our customers from a five-building campus—including over 125,000 square feet of production space. We’re experts in Swiss Machining, CNC Machining, Screw Machining, and Finish Grinding.  In addition we’ve worked with many materials over the years, including steel, aluminum, brass, bronze, tubing, and a wide variety of machinable plastics.  Our production floor contains advanced metal stamping, fabrication, weldment, and metal assembly to help manufacturing partners improve their quality and reduce lead times.

Reach out to Cass Precision Machining if you are looking for a reliable partner in producing parts for exercise equipment.