A Change in Perspective

My father once told me, when looking for a new employee, hire someone who fixes and rides their own motorcycle. This kind of person, he said, tends to have the perfect mindset for our shop. They tend to be mechanically inclined, to appreciate care and precision over speed, and to be engaged in the world around them. This advice is on my mind because I’ve been rereading Robert Pirsig’s Zen and the Art of Motorcycle Maintenance, a book that, more than anything, reminds me to let go of fear and anxiety, and to be open to seeing the world from a newer, broader perspective. All of this is refreshing, since, like most of us, I have felt trapped indoors and at the mercy of a rapidly changing economy for the last 18 months or so.

The book takes a calm and meditative approach to describing a journey a father and son take by motorcycle from Minnesota to California. The book merges the author’s own philosophy with the journey itself and with the practical, hands-on practice of running and maintaining a well-built machine. As a business owner, I do the same. I balance the welfare of our business, the economic world in which we live, and my own passion for the hands-on work of our shop. At a time when the road ahead has seemed uncertain, Pirsig’s book reminds me not to let my perspective get too narrow.  

The author describes a host of ways that once motivated and energetic people can become trapped and stagnated by external things. He also discusses how to be or to become aware of these traps and how to escape them. Right now, there are several things that could tend to make us feel less than optimistic about the near future of our industry in the United States, about the road ahead. Specifically, many of the domestic markets that have been core consumers of our products and services are operating well below historic averages. Some of these are likely facing permanent decline as changes in technology make their activity increasingly less useful. And then there are the challenges of developing, sustaining, and motivating a workforce that can appear to be fading as activity on the shop floor slows, experienced staff chooses earlier retirement, and skilled and energetic new blood seems to be in short supply. Pirsig would call these attitudes “motivation traps” because they can seem like barriers, insurmountable challenges that would make staying in business difficult or impossible. In reality, the end of one road may be the beginning of another, and it is only my own resistance to considering new opportunities that makes me feel trapped.

Aviation

The aviation industry is a heavy consumer of coatings in both new components and repair and refurbishment. An early adopter of thermal spraying, a spectrum of coatings has been incorporated into parts throughout every large commercial aircraft, and the steady beat of commercial aviation’s heart has meant reliable business for our industry for decades. Today, almost two years into a pandemic that virtually decimated much commercial air travel, Bain & Company reports that near-term forecasts for global air travel will continue to decline, due to both consumer hesitancy to travel and continued travel restrictions between the US and EU, to the tune of a 36% reduction in revenues since 2019 [1]. Though this is certainly temporary and should ease as the pandemic fades into history, the lasting impacts for the industry are still uncertain. In the longer term, environmental, social, and governance, so called “ESG” factors, are gaining traction as key metrics of the health and sustainability of publicly traded firms like commercial airlines, and this change is causing major carriers to reconsider their fleets and routes. For example, Qatar Airways and others have accepted substantial losses in permanently grounding very large and expensive relatively new aircraft because the costs of owning and operating long-haul fleets with large carbon footprints become increasingly tough to justify [2]. Of course, flying will continue, air travel will not stay in its current slump, but where will it go, when, and what will it look like for those of us whose businesses depend upon it?

Auto Industry

Speaking of carbon, automobiles are another thermal spray sector that has been impacted recently. Here, two challenges are working simultaneously, with a near-term drought in semiconductors that has paused auto manufacturing due to a parts supply shortage, and a longer-term change in how cars are made as the industry begins a conversion to plug-in hybrid and full electric vehicles. Much of the thermal spray capacity in this sector is captive, that is, the spraying is owned and operated by the vehicle OEM, but there is a good deal that is outsourced to subcontractors, as well. Much of that spraying, too, is tied to internal combustion engines, which trends suggest are on their way out as electric powertrains continue to grow. Shops in this sector have seen a downturn in volume. Pent-up demand is anticipated to lead to an increase over 2020, if still lower than pre-pandemic numbers [3]. What remains unknown for the time being is how the migration to electric and plug-in hybrid vehicles will impact the application and diversity of coating technology in the market.

Green Technology

Also, along the path to green, power generation is a key component of the thermal spray landscape, and this, too, has been experiencing transformation. Vast reductions in the cost and lead times for solar photovoltaic production have seen tremendous expansion in this arena, with on-line solar capacity in the United States growing from 0.34 GW in 2008 to 97.2 GW in 2021. Since 2014, the cost of panels has dropped by a whopping 70% [4]. Utilities are motivated to embrace capacity that requires no fuel (and thus no volatile fuel costs, or emissions, for that matter), and so a significantly increasing percentage of our energy supply is coming from non-combusting, non-rotating equipment. However, it is this last point that means thermal spray’s participation in this sector is also scaling back, as coatings for turbine components were a major portion of the domestic industry’s volume, and many of us are feeling it.

Unpredictable Times

All of these factors have left many of us dazed and wondering about the future of spraying here in the US. Our shop, which has weathered all kinds of ups and downs over its 100-plus years was weirdly quiet last year. With far less work on the floor than usual, we resorted to reducing working hours temporarily, shifting from a five-day work week to four. Though many shops were able to work the first few months of the pandemic with little change in volume, as the summer of 2020 hit, work began to slow and government support, in the form of first- and second-round PPP stimulus, became more and more attractive. Workers in some regions had concerns about continuing to come to work. Others no doubt found that unemployment compensation and stimulus benefits were preferable to a paycheck and a risk of contracting COVID. As a result, workforces shrank, and some firms found it ultimately safer to close than to continue in an unpredictable economic climate.

A Change of Perspective

Pirsig might suggest that this is a good time for a ride, a change of perspective. In times like these, opportunities arise in two ways. ere is space during the lull to attend to things that languish when the shop is busier. These are often things that won’t take long to accomplish, maybe weeks or months, but should pay dividends for years to come. Short timelines are ideal because a pandemic can’t last forever (no matter how much it may seem otherwise). The book on motorcycle maintenance might liken this kind of work to the care of the machine. Taking time to ensure that bolts are tight, components are well lubricated and running smoothly, and necessary spares are on hand places us on a better footing when the inevitable problems do arise. The work itself becomes calming and reassuring because we know it is time well spent. Then, there are opportunities that may take some considerable time to flesh out but that we may never have started if it weren’t for a little downtime.

Maximizing Downtime

There are business improvement and expansion projects with short timelines to make the most of excess capacity while it is available. Here are some examples:

Parameter Development. How many of our day-to-day coatings and processes are refined to the point of verifiable optimization? That is, how certain am I that I am getting the best possible deposition efficiency and coating performance out of the coatings that are running consistently on our shop floor? In truth, when the parameter was developed, we probably did some optimization and experimentation, but the parameter we run today may well be one that we last really explored years ago. If business is slow and material prices are high (tungsten carbide, for instance, is experiencing a rapid rise in cost), efficient use of the material we are spraying is more important than ever. The less material falling to the floor and going up the stack, the better our efficiency and profitability. Parameter development is a time and material intensive exercise, and so it is one that many of us put off when spray booths are better utilized for production. But the investment in careful parameter optimization can make good use of available booth time when things are slow by ensuring that our methods are more efficient going forward. The same holds true for the development of new materials, new hardware, and new processes that we may not have had time to explore when the shop was running at capacity. 

Data Analysis: Like parameter development, there are front office tasks, too, that we can back burner indefinitely when things are busy. Inside our mountains of sales and order data, however, are veins of gold to be mined in the form of efficiency information. Which work centers are more profitable and which could be phased out? Which customers and products produce the most consistent margin? Are they underutilized? Is arc wire or combustion spraying a sleeper product that, though it is seldom requested, reliably offers a better-than-average margin? Where do we lack cross training, and who should we be considering for outside classes in robot programming or SolidWorks? Who are the motorcycle mechanics, after all, the ones who have a passion for engaged, hands-on work? All of these are questions that can be answered with a scan of shop floor or order profitability records. And of course, learning to make good use of shop data by developing SQL skills or migrating from a legacy ERP system to a more flexible cloud-based solution can be easier when business is slow.

Automation: It’s a touchy subject because it literally means the replacement of human labor with machinery, but greater automation of processes is key to improving efficiency. It can also improve employees’ job engagement by reducing or eliminating tedious, repetitive, or difficult work. Automation can also be daunting to implement; if it is not done well, it can cost a good deal and provide little return. Data can provide the key to knowing what to automate and how to do it effectively. Operations that are labor intensive but with little value added tend to be good candidates. Tasks that are difficult or unpleasant but repetitive are also excellent targets. Many of us already use robotics in spray cells to address the latter, but robotics are not the only tools for automation. Scheduling a report to run before the start of a shift that lists the materials and quantities for the stock room to allocate for the day’s production is also a form of automation, moving the workload from a high demand time of day to a lower demand time. Again, identifying the jobs that might best benefit from greater use of automation can often be as simple as looking at labor as a percentage of job cost and sorting from highest to lowest.

5S: Sort, set in order, shine, standardize, and sustain. Yes, I said it, it’s time to clean up and paint the shop. I admit it, my building is full of equipment, parts, supplies, tooling and all kinds of other things that I’ve held onto because I believed that someday they would come in handy. Most of it has done nothing more than occupy floorspace and collect dust… for decades. The Japanese practice of clearing out the unnecessary and perfecting what remains pays dividends in workplace morale and job efficiency, but it can also feel like the adult version of being told to clean our room. There is certainly little time or patience for an exercise like this in most shops when production is humming, but downtime can be a prime opportunity to get needed organization, maintenance, and painting done, putting available labor to effective use. Returning to the concept of efficiency once more, it is also true that shop floor space should be efficient as well; space costs, and, if square footage can be better employed to generate revenue, it should be.

We’ve covered some of the items that can be handled relatively quickly and using the time and resources that a slowdown has made available. In the language of the book, we have gotten our motorcycle running smoothly, have packed efficiently for the trip, and have a sure route planned. Now, we look outward for the longer-term goals that this change in the business environment will bring; it’s time to get on the road, look outward, and enjoy the scenery.

The same principles that have moved aviation, automotive, and energy to change are also pushing a parallel initiative to make our existing infrastructure more efficient and durable. Congress has acted and is acting to allocate quite literally trillions of dollars toward rebuilding roads, bridges, and railways. If you’re like me, you can’t help but picture all of this work involving heavy equipment, steel manufacturing, and excavation… all of which depend upon the protection offered by thermal spray coatings. Globally, the mining and construction machinery market is expected to see 21.5% growth in 2021, as economies restart and manufacturing attempts to make up for supply chain shortfalls brought on by the pandemic and related shipping issues [5]. The American Jobs Plan, its allied programs in the states, and similar efforts to refresh and renew United States infrastructure represent a massive amount of allocated spending that will directly impact utilities and manufacturing across the country. This should translate into real economic activity for US manufacturers in the heavy equipment and construction materials markets and their suppliers in the coming years. For us, this potentially means activity in carbide and other wear control surfacing, hard chrome replacement, and corrosion control coatings for steel structures.

A Boost in Domestic Manufacturing

The pandemic and its effects have also highlighted the problems of depending upon global suppliers to meet domestic needs. The term “re-shoring” and its synonyms that have been heard throughout the past 20 years or more have taken on new meaning as supply chain issues choked a good portion of the country’s purchases over the last 18 months. While the realities of manufacturing consumer goods at the kinds of prices consumers are willing to pay may mean that we never fully separate from overseas production, certain items like semiconductors and steel have seen increased interest in domestic production. Steel manufacturing is up 21.6% over the same time last year, and will likely remain strong as infrastructure improvement efforts increase the demand. Likewise, government and industry participants have agreed that US manufacturing cannot be hobbled again by a shortage of semiconductors. The drive to increase domestic chip manufacturing is seen as both economically strategic and a matter of national security. Both steelmaking and chip manufacturing rely upon critical process components coated by thermal spraying, and so the rapid increase in production in both sectors is likely to lead to increased demand for coating services and materials ranging from nickel chrome boron to yttria to copper.

Conclusion

These are just a few examples of opportunities that our current business climate has enabled, a few of the wide-open spaces I tended to ignore as I focused on what I perceived to be approaching dead ends. Pirsig makes no claims that his perspectives are inherently right and others are wrong. I, too, make no claim that my view on the thermal spray marketplace is correct. My intent is to share my perspective, and in doing so hopefully to illuminate some of the challenges we’ve faced and how we got past them. Hindsight is 20-20, of course, and much of this information might have been more helpful nine or twelve months ago as the ratchet strap of a tightening economy really began to squeeze. I hope, though, that the broader value of a change in perspective might help us to better weather the next storm that comes our way. To be able to step back when things seem dire and realize that the universe of opportunity is much larger than I might have imagined is a skill that will take time to develop. The truth of our industry is that we are a relatively small and talented community of technicians, engineers, and businesspeople who have the ability to restore the machinery that makes modern life possible and make those machines run longer and more efficiently. With that appreciation, it is perhaps harder to feel pessimistic about the future of our business.

References

1. Weston, G., Schulte, A., Venkataraman, K., and Kurganov, Y. 2021. Air Travel Forecast: When Will Airlines Recover from Covid-19? Retrieved on November 9, 2021, from bain.com/insights/air-travelforecast-when-will-airlines-recover-from-covid-19-interactive.
2. Boon, T. 2021. Qatar Airways Confirms Impairment On All 10 Airbus A380s. Retrieved on November 9, 2021, from simpleflying.com/qatar-airways-a380-impairment.
3. Fitch Ratings. 2020. US Auto Industry Outlook Improving in 2021 but Secular Risks Remain. Retrieved on November 9, 2021, from fitchratings.com/research/corporate-finance/us-auto-industry-outlookimproving-in-2021-secular-risks-remain-02-12-2020.
4. United States Department of Energy. Solar Energy in the United States. Retrieved on November 9, 2021, from energy.gov/eere/solar/ solar-energy-united-states.
5. Association of Equipment Manufacturers. 2021. Construction Equipment Economic Outlook: Stability Is on the Horizon. Retrieved November 9, 2021, from aem.org/news/construction-equipment-economic-outlook-stability-is-on-the-horizon

Permission

Article running with permission from the American Welding Society and the International Thermal Spray Association.