Our Sites

How an industrial fabricator embraces Industry 4.0

Digital transformation and other technology investments lead Wyoming fabricator’s growth strategy

material handling towers tube and sheet

EMIT invested not only in a flat cutting laser, a tube laser, and a punch/laser combo, but also in material handling towers for both flat sheet and tube. Image provided by EMIT Technologies

When you think of an industrial metal fabricator—a maker of piping skids, large platforms and structures, pressure vessels, and more—full-fledged material handling automation and dynamic scheduling usually don’t come to mind. A precision sheet metal operation might have an extensive automated storage and retrieval system connected to a collection of advanced laser cutting machines, but an industrial and structural fab shop?

Even if there were some sort of rule that such fabricators couldn’t operate lasers and similar “precision fab” equipment, EMIT Technologies probably wouldn’t follow it. Considering the markets the fabricator serves, including a volatile energy sector, going against the norm ended up being a very good thing.

Despite obvious challenges in 2020, the 75-employee company has big plans. Revenue is projected to dip in the short term, of course, but over the next two years it hopes for sales to rebound in a big way.

Rural Fabrication, Vertical Integration

The company’s plant in Sheridan, Wyo., sits within view of the foothills of the Rockies, where on a clear day you can see snowcapped mountains in the distance. It’s not a bad place to fabricate metal.

“There’s a big reason why we’re as vertically integrated as we are. We don’t have many neighbors to rely on. It’s a Wyoming reality in general.”

So said Casey D. Osborn, CEO. He added that being in Wyoming has meant that, at least as of this writing, the staff has been sheltered somewhat from the pandemic. (Everyone still has the proper protective equipment, of course.) But being rural has also meant that the company must train most of its new hires from scratch. “It’s nearly impossible to find anyone with experience,” he said, “especially on the equipment we have.”

This includes a TRUMPF flexible manufacturing system (FMS) with a 4-kW flat cutting laser, a punch/laser combo, and a 4-kW tube cutting laser. All raw stock inventory is live: the flat sheet in the material handling towers; the tube, which has towers and an automated loading system of its own; as well as plate and other heavy stock outside the material handling towers. The tube tower can accept tube lengths up to 27 ft., round tube diameters up to 10 in., square and rectangular tube up to 8 in. dia., as well as various structural shapes like C-channels and I-beams. Other recent investments include a DAVI plate roll and a TRUMPF automated bending cell.

All this complements a collection of equipment more common in industrial fabrication: plasma cutting tables; grinding, welding, and painting of pressure vessels and pressure piping; and assembly bays for piping skids.

“We’ve always thought technology was a key driver to our profitability,” Osborn said. “We’ve bought deeply into Industry 4.0 and other smart manufacturing concepts and have been on a digital push for the past four years.”

Embracing Digital Manufacturing

EMIT was aiming for more than just raw production power. In fact, the new equipment and surrounding automation were just pieces of the puzzle. The glue holding it all together is software—in EMIT’s case, TRUMPF’s TruTops Fab—and, more broadly speaking, a fully digitized process, with the production control software talking continually to enterprise resource planning (ERP). Everything is tracked from raw stock through each production step, including employee hours on specific jobs (tied directly to the ERP’s HR module), and everything is scheduled using a pull-system methodology.

Production control system

An employee at EMIT checks the status on the company’s production control system.

“Everything is connected to our centralized material storage system,” Osborn said. “That effectively puts all of our inventory into a digital footprint that’s tied with our ERP system. We have live consumption associated with our production control processes and the routings through the shop. All of our workstations, whether in cutting, bending, or welding, receive digital prints through the production control system. And at the same time, it’s tracking the start and stop time of every process, and captures the time and materials used in every step.”

Some cutting and bending steps in the process offer full integration; that is, once the program is pulled up on the control, the job information is routed to the production control software. At other stations like welding, powder coating, and assembly, operators use a PC to clock in and out of each job to track the time.

Completing a job triggers downstream processes into action. An operator at a welding cell completes a task and, through the PC at the workstation, informs the production control system a given task is complete. That triggers material to be pulled from rolling or braking, which pulls material from cutting. It boils down to a series of “if-then” dependencies based on the various job routings in play on the floor at a given time.

The pull system helps the shop avoid the common “feed the beast” mentality when operating highly productive lasers, even when downstream processes can’t handle the extra work. Cutting work that isn’t needed is wasting valuable—and in the case of EMIT’s local market, unique—cutting capacity that could be otherwise sold.

Renewed Focus on Custom Fab

In recent years EMIT wasn’t in the business of selling capacity, at least not primarily. It grew into what it is today by selling configurable and engineered-to-order products to the energy sector, such as fabrications needed for gas compression. These include control systems, skids and vessels, platforms and structures, and even associated software that helps monitor the performance of these systems remotely. It sold excess fabrication capacity when opportunity arose, though it didn’t actively market the service.

vEMIT is certainly marketing custom fab now, though. The company’s latest investments are a culmination of a customer diversification strategy that began with the downturn in the oil and gas sector in 2015. “Fundamentally, we cut steel, we bend it, we weld it, and we send it out the door,” Osborn said. “There are a lot of opportunities around those fundamentals.”

Those fundamentals go back to EMIT’s launch 20 years ago, when the company essentially was a custom fab shop. Early projects, such as building catalytic converters for stationary engines, focused on the oil and gas industry. Over the years the company grew essentially by asking what else the energy sector needed and developing configurable products around those needs.

vIt might seem that by ramping up its custom fabrication capabilities again, EMIT is returning to its roots—but it really isn’t. EMIT now is a $38 million company, not a small fabrication startup. It needs to manage its capacity to avoid robbing Peter to pay Paul. A big custom project shouldn’t rob capacity from its bread-and-butter product lines.

Moreover, EMIT is in a rural area. It trains new hires from scratch—something shops even in historically industrial regions do today—but it also lacks a network of other shops with similar fabricating capabilities. In an urban or more industrial region, a product line fabricator that dives into custom fab might rely on a network of fab shops as subcontractors. They might help ease capacity constraints or give the operation access to less common services, like laser tube cutting. Of course, north-central Wyoming isn’t a hotbed for laser tube cutting—or most other advanced fabrication technologies, for that matter—hence the need for EMIT to invest.

About Knowing the True Costs

The digital push gives EMIT several benefits that support the current growth strategy. The first involves knowing a job’s true cost at a detailed level. “We can quickly understand what our costs actually are, compare that with how long we thought it would take and how much we thought it would cost, and refine our processes,” Osborn said.

plate rolling

EMIT’s recent investments include a new plate roll and an automated bending cell.

The production control system went live in mid-2019, and since then the company has been working toward cost consistency. Although some cost variation is to be expected, problems arise when those variations become excessive. As Osborn explained, over the past year EMIT’s new production control system has helped minimize the cost variation.

Osborn described a hypothetical job that costs $7,000 on average, but the range is between $5,500 and $9,500, with a standard deviation of $600. The trick is to minimize that standard deviation to optimize cost consistency. A lower standard deviation makes the outliers easier to identify—and identifying the outliers is key to process improvement.

“Instead of just looking at the average cost, we now focus on the exceptions,” Osborn said, “then follow up with training, skill development, and process simplification.” Those exceptions now can be addressed quickly. “If we look back several years ago, we often sent material through different machines and secondary processes, and things happened. Perhaps some parts didn’t get cut, so we had to scramble and recut those parts. But now that we have full traceability, this doesn’t happen. We’re able to catch errors or omissions at the very next manufacturing step and correct them immediately.”

All this helps take process improvement to the next level. If costs vary widely, process improvement is likely to be pretty obvious. Some operators might spend far too long setting up a machine for a certain job. Simple observation might show that employees spend too much time looking for tools. Staging tools in a certain way might save significant time. Perhaps some additional operator training is in order.

Over time the cost variation diminishes, so the exceptions become less obvious. In fact, if time and costs weren’t tracked in software, the exceptions might remain hidden forever. Even more challenging, the problem might not be with the work center but elsewhere in the value chain, like a communication issue between purchasing and engineering. One decision in the office can snowball into a large problem in assembly and shipping. The causes can be subtle, but by using production control software, the shop can uncover and eliminate them. And so the process refinement continues.

Such granular costing data helps drive EMIT’s growth strategy, especially as it expands more into custom fabrication. As of this writing, about 80% of company revenue comes from products for the energy sector, while the remaining revenue is from custom fabrication work. On the product line side, company engineers have analyzed certain products and uncovered design tweaks that could make manufacturing easier. For instance, it’s used some tab-and-slot designs, made practical with the tube laser, to ease fixturing, welding, and assembly. With costs tracked constantly, the company measures the savings immediately. Moreover, such design-for-manufacturability strategies can be transferred to the custom side of the business.

With costs tracked, EMIT knows where it excels and can focus its custom fabrication marketing and sales efforts on those sweet spots. The company has expanded its reach into different areas of the energy sector as well as to new customers in the outdoors and fitness space, markets opened up largely by EMIT’s new tube fabrication capabilities.

The fabricator also is partnering with steel service centers. “We’re basically trying to be an extension to their world,” Osborn said. “We’re buying raw material from them, of course, but we’re also processing material for their other customers.”

He added that because EMIT’s entire raw stock inventory—sheet, plates, tubes, and structural shapes—is live and continuously tracked, it has opened new opportunities in materials purchasing. For instance, when processing jobs for a steel service center, EMIT sometimes acts as a toll processor; other times it buys material at cost and holds a certain amount of inventory to handle future demands.

Osborn added that many of these proposals are still in the early stages. That said, opportunities like these have emerged at a good time, right when the energy sector hit a slump with much of the rest of the economy.

The pandemic of 2020 is certainly a roadblock. Even so, Osborn said, he expects within several years the fabricator’s revenue to be several times the $38 million it made in 2019. He added that the company’s digital transformation—and knowing exactly what’s happening where within the entire process chain—will help the organization get there.

About the Author
The Fabricator

Tim Heston

Senior Editor

2135 Point Blvd

Elgin, IL 60123

815-381-1314

Tim Heston, The Fabricator's senior editor, has covered the metal fabrication industry since 1998, starting his career at the American Welding Society's Welding Journal. Since then he has covered the full range of metal fabrication processes, from stamping, bending, and cutting to grinding and polishing. He joined The Fabricator's staff in October 2007.