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Supply Chain Shortages

Assessing Supply Chain Shortages in 2022

China’s Battle with Decarbonization Poses Business Risks

In Assessing Supply Chain Shortages in 2022, Climate Change is a major factor in the equation.  In August UN Secretary-General Antonio Guterres called the report released by the UN’s Panel on Climate Change, “A code red for humanity.”  The report says that humans are unequivocally warming the planet and the results will be more heat waves, droughts, flooding, and hurricanes. The impact of all of that on global businesses is infinite and its ripples will impact business commerce across the globe.

In a much-anticipated announcement at the United Nations General Assembly in September, China President Xi Jinping stated that his country would peak carbon emissions by 2030 and aim to achieve carbon neutrality by 2060.

Regardless of ongoing trade tension between the two countries, meetings between the countries in the spring positively affirmed U.S. and Chinese cooperation in bolstering the implementation of the Paris Agreement and underscored the importance of ambitious climate action by the world’s largest greenhouse gas (GHG) emitters.

Supply Chain Challenges

For thousands of U.S. companies that have supply chains or operations in China, particularly companies that have not yet developed sufficiently rigorous greenhouse gas emission reduction goals, the Chinese national response to climate change represents complicated new opportunities and challenges.

Since Xi’s announcement was made, multiple industries and municipal and regional governments have begun increasing action related to decarbonization. These actions, along with past precedents in pollution control in China, provide guidance for how companies might consider preparing for business risks and disruption related to China’s quest for decarbonization.

As the number and scope of binding regulations for reducing carbon emissions increase in the coming months and years, it remains essential for companies with supply chains or operations in China to stay abreast of emerging business risks driven by the country’s timelines for emission reductions. 

According to an August article in GreenBiz, emerging business risks and opportunities will include:

  • Sourcing (through the need to qualify lower-carbon raw materials)
  • Process (upgrading production processes and equipment)
  • Emission controls (carbon emission reductions and capture)
  • Reporting requirements, both to regulators and to the finance sector
  • Access to capital, particularly domestic Chinese capital
  • Adverse reputational impact in China arising from ineffective or incomplete response to Chinese requirements
  • Industrial structure adjustments including replacing industrial processes and equipment and the elimination of outdated industries; and economic adjustments, such as a carbon tax

Shipping Problems

Just last week, Reuters posed the following question: What happens when the market of last resort, the London Metal Exchange (LME), runs out of metal? The 144-year-old exchange, which sets benchmark prices for the global industrial metal markets, has always prided itself on its role as ultimate buyer and ultimate seller of physical metal.

Total registered LME inventory has fallen by almost 600,000 metric tons since the start of the year. Stocks of all metals stand at 1.469 million metric tons, the lowest since 2008.  The strength of the post-COVID manufacturing recovery, first in China and now in the rest of the world, has impacted not just aluminium but all of the LME metals to varying extents.

Supply-chains, by contrast, are stressed by continued disruption in the global shipping sector, where container rates remain high and many ports, particularly U.S. ones, log-jammed.

How To Decarbonize?

The world needs more aluminum to go green.  But the smelters that produce aluminum use huge amounts of power and account for around 2% of all man-made emissions each year. Squaring that carbon circle is not going to be easy for China or the global market.

Welcome to aluminum’s decarbonization paradox.

Aluminum market rallies during the year were rooted in China’s own supply-chain tensions. Output curbs following energy restrictions are proliferating as provinces scramble to meet mandated energy efficiency targets.

The 10 aluminium producers participating in the CNIA (China Nonferrous Metals Industry Association) meeting committed to “continue to ensure supply and stabilize market expectations”. Only, however, if their power-hungry smelters have sufficient supplies of electricity. Aluminium is produced by electrolysis not by blasting it in a furnace. No power, no aluminium. And power in China is becoming a problem.

Aluminium curtailments earlier this year in Inner Mongolia were modest but a sign of things to come as the coal-dependent province tried to meet new quarterly dual-control targets for energy usage and efficiency. The province of Guangxi, another laggard in the energy league, last month ordered smelters to reduce run-rates to preserve power over peak demand periods.

Since China is by far the world’s largest producer of aluminum, both at a raw metal and semi-manufactured product level, this collective powering-down places a big question-mark over global supply. A market that has lived with Chinese over-supply for two decades is starting to price in a very different future. The country remains a large exporter of aluminum in the form of semi-manufactured products, which is starting to look anomalous as the huger for commodity-grade metal grows.

According to Reuters, stresses on China’s power system have turned the world’s largest supplier of aluminum into a regular net importer of primary metal. China’s problem today could be the rest of the world’s problem tomorrow. Estimates that the world will need another 25 million metric tons of primary metal production to meet an expected 80% rise in demand by 2050, fueled by the demands of decarbonization. Building that capacity while simultaneously “greening” existing capacity in a world that needs ever more renewable power is the conundrum facing the global aluminum industry.

Cass Acquires Micro-Fab Handshake

Cass Precision Machining Acquires Micro-Fab

 

Cass Precision Machining announced that it acquired Micro-Fab, a precision machining company based in Brooklyn Park, MN, on July 1, 2021. Micro-Fab will operate as a division of Cass Precision Machining. Serving the aerospace, defense, and medical industries, Micro-Fab has offered precision machining for over 30 years in Brooklyn Park, MN.   They also specialize in microparts for machining used in defense, aerospace, and medical, among other industries.

“It’s a great fit for us,” says Cass President Jim Garvin.  “Micro-Fab expands the market spaces we’re in and there are synergies with the machining and prototyping.  They provide very precise parts with high tolerances and adding such a strong group expands our capabilities at Cass. It also makes us a more diverse company.”

Micro-Fab Director Bob Past added, “At Micro-Fab we deal with more finite orders that are governed by documents,  which is more of a technical niche that we bring to the table for Cass.  It’s a win-win deal for both sides and we’re excited to be a part of such a great company like Cass”.

Micro-Fab works with nine milling centers, ten CNC turning centers, two fully equipped testing centers for quality assurance.  The new acquisition also has CAD/CAM equipment with the ability to download IGES, Parasolid, STEP, and autocad DXF/DWG files.  Their 15 employees will continue working on their site in Brooklyn Park as a division of Cass Precision Machining.

Founded in 1966 and in 2010 began focusing on manufacturing more precise parts and end-to-end solutions.  Mico-Fab specializes in aerospace, agriculture, defense, and medical industries.  They are also an ISO 9001 certified, AS9100 compliant, and NIST cybersecurity framework compliant division.

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Part 2: Should You Change Your Machine Supplier?

Change can be good for a company – be it small tweaks in the way you do things or big operational shifts. As we said in Part 1 of this blog series, taking an honest look at what’s working for your business and identifying opportunities for improvement is always a good idea. As you approach your annual planning process with an eye on identifying those key opportunities for improvement, one area to consider and assess is the performance of your machined parts suppliers. Switching machining suppliers can be a difficult decision to make, but choosing who supplies your incoming streams of materials, components or sub-assemblies can have a huge impact on your business.

Read more “Part 2: Should You Change Your Machine Supplier?”

Jim Garvin Named to Board of Directors for Diversified Plastics, Inc.

Cass Precision Machining is proud to announce that its President, Jim Garvin, has been named to the Board of Directors for Diversified Plastics, Inc. (DPI), a custom plastic-injection molder of high-precision thermoplastic components. As part of the board, Garvin will provide leadership and strategic guidance and serve as an adviser to DPI’s CEO and executive team.

“We welcome James to the board and look forward to his contributions as we grow the company,” says James Dow, Chairman of the Board at Diversified Plastics, Inc. “His well-rounded background in management, operations, business development and quality makes him ideally suited to help guide the company.”

As a member of DPI’s Board of Directors, Garvin will help represent the company’s shareholders. The board helps establish policies for corporate management and oversight and make decisions on major issues for DPI.

As President of Cass Precision Machining and former COO at Hutchinson Manufacturing, Inc., Garvin brings a long history of industry knowledge to DPI’s board. Garvin will provide thought leadership and add great perspective based on his depth of experience and network of influence. DPI is a full-service parts manufacturer that provides prototyping, manufacturing and assembly, so Garvin is a natural fit for their board of directors.

Before his roles at Cass Precision Machining and Hutchinson Manufacturing, Garvin held several leadership roles at Hutchinson Technology, Inc. Garvin started his career as a supplier and product quality engineer at Unisys, Midwest Operations Group in Roseville, Minn. He received a Bachelor of Engineering Technology degree from Southwest Minnesota State University in Marshall, MN.

5 Questions to Ask Your High-Volume Machined Parts Supplier

What is High-Volume Production?

The term “high-volume production” can mean many things to many people, from both a supplier and a customer perspective. What does “high-volume production” mean to us here at Cass? We’ve prepared an overview (View PDF) that illustrates the types of parts we run on a daily basis. Our hope is that this overview helps you start thinking about potential matches between your machined-parts requirements and our strengths here at Cass.

Our core-machining competencies include screw machining, CNC milling and turning, Swiss machining and precision grinding. When it comes to high-volume production, our capabilities match up best with parts up to 3.5 inches in diameter and under 12 inches long. Over the years we’ve migrated toward making more cylindrically shaped parts than anything else – at times up to 8 inches in diameter and up to 40 inches in length. The best way to leverage Cass’s machining and grinding capabilities is to release orders to us in the thousands of pieces and up. Through strategic investments in automation, we are running parts with EAUs in the millions without losing a beat.

Read more “5 Questions to Ask Your High-Volume Machined Parts Supplier”

How the Quality Management System (QMS) Works at Cass Precision Machining

At Cass Precision Machining we’ve been humbled and honored to receive our share of recognition and awards over the years. The recognition is always nice, and it makes us proud of our company and our team—but it’s the knowledge that our customers are happy and satisfied with the work we do that gives us the most gratification.

At Cass we take our responsibility to our customers very seriously as evidenced by our robust, proven Quality Management System (QMS) (download PDF). Everything we make passes several inspections, or it won’t go out the door. We also conduct cross-functional quality reviews every month at Cass to assess our QMS performance and results.

Cass QMS Highlights

  • Our Quality team develops a control plan that defines exactly how quality will be verified throughout the production process for every order we build.
  • Our processes require set-up compliance and verification before we run the first part, and we define specific part measurements and process checks throughout the build of each order. We also deploy roving inspection as an additional compliance support tool.
  • We apply Cass baseline quality control standards to every order. Examples of our baseline standards include: all machined surfaces to be 125 maximum finish, flatness to be .005” or less, perpendicularity to be .005” or less, all parts to be clean with no chips and coated with preservative as needed.
  • Our QMS requires that we customize our quality control plans to meet your business needs. We do this by seamlessly integrating your additional quality requirements with our baseline standards.

Read more “How the Quality Management System (QMS) Works at Cass Precision Machining”

Steve Brown Retires After 51 Years with Cass!

We recently celebrated Steve Brown’s 51-year tenure at Cass Precision Machining! Cass President Jim Garvin is seen here shaking hands with Steve (the guy with the big smile on the right) following a special presentation that Jim delivered at our year-end meeting on December 18th 2017.

Steve started at Cass Precision Machining as an inspector in 1966 while attending college at the University of Minnesota. He graduated from the U of M while working full time at Cass, and then served in the US Air Force Reserves. Steve moved from inspection to the machine shop, helping to serve our customers in a number of machinist roles. In the 80’s, Cass recognized his leadership skills by challenging him with a foreman’s position. Steve obviously left a positive mark with the shop team as witnessed by the hearty farewells he received at this retirement celebration. In 1995, Steve joined the Cass sales team as a Sales Engineer, and served in this capacity for the past 22 years. It’s pretty amazing to note that many of us think of 22 years as a career, while in Steve’s case, it was “just a step along the way”.

Read more “Steve Brown Retires After 51 Years with Cass!”

Change 2018 Machining Supplier

Part 1: Should You Change Your Machining Supplier in 2018?

Another holiday season is upon us, which, of course, brings us near the end of another calendar year. While 2017 can only be described as “tumultuous” from a news headlines perspective, we hope the past year has been productive and successful for your business.

It was a big year for us here at Cass Precision Machining as we rebranded with a new name, logo and website that gives our customers a better view of the many ways that we can serve them.

The end of one calendar year and the beginning of a new one is always a good time for any business to reflect on their operations – to take an honest look at what’s working for you and identify areas where you could be doing better. One area to assess could be an evaluation of your machining suppliers. Switching your machining supplier can be a difficult decision to make, but choosing who supplies your incoming streams of raw materials, components or sub-assemblies can have a huge impact on your business.

In the first part of this series, we will discuss two key areas to assess in your relationship with your machining suppliers. If you find that your suppliers aren’t meeting your expectations in these areas, a switch to a new supplier could become a part of your 2018 continuous improvement plan.

Read more “Part 1: Should You Change Your Machining Supplier in 2018?”

Cass Precision Machining Dream It. Do It. Minnesota Tour of Manufacturing Day

Cass Participates in Dream It. Do It. Minnesota Tour of Manufacturing Day

Dream It. Do It. Minnesota Tour of Manufacturing DayThursday, October 5th was a fun day for us at Cass Precision Machining. Our participation in Minnesota’s Dream it. Do it. Minnesota Tour of Manufacturing Day resulted in Cass hosting about 100 10th through 12th grade students and 10 faculty members from local schools. After welcoming students to the Cass campus, Cass President, Jim Garvin gave opening remarks about career opportunities in precision parts manufacturing. From there, we split into smaller groups for a four-stop tour of selected areas within our five-building campus. Upon completion, we rallied the students around an exhibit that featured a few of our customers’ more exciting vehicular products, along with displays of the parts that we manufacture for each vehicle.

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Cass Screw Machine Products Rebrands as Cass Precision Machining

Hello and welcome to Cass Precision Machining’s new website! After completing an extensive research study that gave us outstanding feedback on our name, brand, and all the ways that we can best support your machining needs, we are proud to announce that we have rebranded the company as Cass Precision Machining.

Read more “Cass Screw Machine Products Rebrands as Cass Precision Machining”

Jim Garvin | President Uncategorized