How to reduce costs on machined parts to offset rising material & services.

This is something I have mentioned before in previous newsletters and to people I talk to regularly. I will attempt to re communicate "old concepts" which in my opinion will help you all save money in the long run. Years ago it was not uncommon to receive large annual usage orders and also receive a single shipment or shipments complete within 3 months max. I realize to some extent these days are gone, but should not be forgotten. Employing concepts like holding more inventory instead of less means that less time is needed to accomplish the same task. There is additionally... better on time delivery with the customer and Increased supplier efficiencies such as less setups,  reduced email,  less phone calls, lessor packaging expenses, less material surcharges and less mistakes. In the end... the expenses of doing business get's passed on to the consumer. I know a little about this as it is something I do daily in deciding quantity's to run on my machine so we can build efficiency even though order quantities are substantially less.  I also see when I get orders and I have parts on the shelf that I can just pull down and ship. This is where efficiency is built and what allows us to have a better than average on time delivery report with our customers! This earns us additional business due to better performance while reducing our overall cost. Call me old school if you want,  but there are simple ideas which worked well years ago and I believe they can still work well today. It is my opinion that the alternative and current common day practices such as  Kanban etc...are over rated and one sided causing someone else (the supplier) higher operating cost as the result of pushing ineffective systems which are not truly a cost savings to the consumer.

It isn't possible or feasible to increase your inventories across the board on every part. It could be done on specific applications where cost is low. Consider holding extra inventory on inexpensive parts and common day parts where you know these parts will get consumed by the end user. Many of you have your own products and you can forecast better than someone who doesn't have their own product like Avanti. You can take advantage of this knowledge and save money by holding additional inventory and knowing you are able to buy competitively without the added markups necessary for suppliers to employ due to inefficient systems. I f you can consider when to hold inventory and when not to this will reduce workload for both companies and allow efficiency building to commence and automatically reduce cost. We both will have better customer service and on time delivery to all our customers as a result. There is a lot of wasted time created which cost's you money that I see as a result of to lean inventory systems.

NEW YORK/LONDON, Feb 11 (Reuters) - Copper bounced from a near two-week low to end a shade higher on Friday, as broader market sentiment gradually improved after news of the resignation of Egyptian President Hosni Mubarak. Mubarak handed power over to the army, ending three decades of autocratic rule, and bowing to escalating pressure from the military and protesters demanding he goes.  

Copper's turnaround tracked a similar reversal in world equity markets, as Mubarak's departure was seen partially reviving investors' appetite for risk. "Now that the risk of a violent transition in Egypt has abated,this gives room for the global economy to continue to expand," said Ralph Preston, futures analyst with HeritageWestFutures.com in San

Diego, California. "The markets are saying Egypt may not be as big a risk at this point." London Metal Exchange (LME) copper for three-month deliveryCMCU3 ended $10 higher at $9,961 a tonne, up from an earlier session low at $9,838, its lowest level since Feb. 1.

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Steel prices rise as demand to increase

Turned Parts

Reports of an expected 10 percent increase in steel demand in the United States this year sent some steel company stocks higher Thursday, the same day AK Steel announced a price increase.

West Chester, Ohio-based AK Steel (NYSE: AKS), which employs about 1,500 at its Butler Works plant north of Pittsburgh, said it is hiking current spot market base prices for all carbon flat-rolled steel products, effective immediately with new orders. The company said base prices for carbon flat-rolled products will increase by $50 per ton.

This week, Arcelor Mittal (NYSE: MT), the world's largest steelmaker, said it expected a 10 percent increase in the U.S. demand for steel this year, with demand in China and Europe climbing up to 7 percent.