South African Fabricators – Are we no longer productive and competitive?

Voortman recently invited and paid the travel costs for Spencer to visit their factory in Holland as well as a Dutch fabricator and a German fabricator. This is one of a series of three articles to share my findings with our members. My grateful thanks go out to the Voortman team and their SA representative First Cut for making this eye-opening trip possible.

At the SAISC board and council meetings a subject that is often raised is “are South African fabricators still world-class technically and at the same time cost effective (through productivity)?” The answer to the former is a most definite yes, if not better than world-class because of an overemphasis on quality, cleaning, and polishing. This will be explained in more detail below. The answer to the latter is – I am not sure. On the one hand, we are still exporting well over 100 000 tons per year. On the other hand, we are still losing business to Asian and European companies. But based on what I saw in Europe there is every chance we will not be cost effective for very long, despite the short windows of breathing space that the weakening Rand does present to us.

(Our exports should not be sold based on a weakening rand, we must have much more to offer than that!) Once again we will discuss this in more detail below. What makes European companies more productive than SA companies? It is common knowledge that there are certain issues that increase the cost of doing business in South Africa.

Examples include:

1. Security of our facilities a. We each have a mini Fort Knox (the USA facility that houses the countries gold stocks) where high electric fences or walls, electronic gates, and security guards are all the order of the day. b. The famous expression “there are no free lunches” applies. Someone has to pay for all these items that you do not see in Europe, nor for that matter in the USA.

2. BBEEE a.There is no doubt that this is another cost that our competitors do not have. This cost varies dramatically from fabricator to fabricator. Please don’t get me wrong, we do need to empower the previously disadvantaged. b. Somehow we seem to have lost sight of that one critical item that should be the cornerstone of genuine empowerment – that is education and training, more education and more training.

3. Job creation a. In SA one of our biggest issues, which clearly is fuelling crime, is the lack of employment opportunities. We should not be thinking of paying off workers but should rather be making every effort to up-skill our existing staff. b. During the recent recession in Germany, unlike in SA where as soon as there is a downturn we stop training completely (to save money?), the German government actually paid companies to retrain and up-skill workers who otherwise would have been discharged and been on the dole (at a cost to Government anyway). There has to be a lesson for us in that policy. c. Perhaps the most significant observable difference between an SA workshop and the European shops I visited is how few workers are to be seen and of course, this translates into (low) man-hours per ton. d. Nevertheless, despite the relatively low pay our semiskilled workers earn, because we have so many of them in our workshops, our rate per ton for labour ends up being relatively high.

4. Overkill when it comes to quality and safety (sorry about the bad pun) a. Companies in the construction world all report to us that the overemphasis on safety is not having the desired effect. The accident rate is not improving substantially but the productivity has dropped (by as much as 30% reports one company member). b. There are serious double standards being applied on major contracts. Steelwork being imported from other countries has not been ‘spit and polished’ anywhere near to the same standard that is being demanded of SA fabricators. Inspectors have not been adequately trained in what is ‘fit for purpose’. Can you imagine what motivates an inspector to use a torch and dentists mirror to look for spatter and sharp edges in an otherwise not visible part of a product that is not going to get painted? This is just one example.

5. Labour legislation and the power of the unions a. No one in our industry needs to be reminded of these issues. The July 2014 Numsa and other unions led strike in the industry, the platinum strike, truck drivers and, and, and… have had a serious impact on the ability of our fabricator members to survive. Money that was being set aside to be spent on productivity improvements has been used up just to stay alive.

6. Planning, layout, and cleanliness a. It just jumps out at you how clean with concreted floors and yellow walking lines and generally organised their shops are. Compare that with our typical steel stacked anywhere disorganised SA shop.

So what can we learn from our European colleagues? Accepting that the items mentioned above represent part of an overhead cost structure that is beyond our control, we never the less have to get cleverer and more productive. Apart from the few workers on shop floors, the next most noticeable difference between the SA workshop and their European colleagues is the emphasis on reducing handling activities. This leads directly to the smaller workforce. No longer is the emphasis just on numerically controlled equipment with faster drilling speed, movement speed within the machine but perhaps even more attention is now being paid to eliminating handling involving human hands.

So we find machines with mechanical feed tables and discharge tables handling the steel component to the next step in the process, which could be a choice of, for example, after hole drilling the steel may need to go to notching (coping) and or marking to show where attachments will be assembled. This would be achieved by a left or right movement once the component is out of the machine.

Another example would be after the sawing process. There is a choice of returning the off-cut (if long enough) back to the stockyard and if short enough directly to the open fronted scrap bin which is strategically placed close to the discharge end of the saw. But no this does not involve a crane action, a hand driven forklift with a magnet picks up (as in our case) three pieces of off-cut and deposits this in the bin. So what I hear you say, what makes this mind-bogglingly amazing is that there will be only one operator for two or three machine stations. Some strategically placed closed-circuit video cameras with a display at each of the machines enables the operator to know when one of the machines need human intervention. And with all that going on he still has time to blow off the milled shavings from the saw with a compressed air gun before the steel moves to the next station. In SA we have at least one operator for each machine and he may well have at least one assistant – none of whom would bother to remove the swarf.

Other ways to reduce handling time and associated delays Apart from the mechanical handling systems programmed by 15 programmers to suit the equipment and possible routes to and from them there are lots of other tricks I learned:

1. For years now I have been beating the drum for more jib cranes strategically mounted on columns to eliminate crane bottlenecks. So this, for example, could be at a drilling machine where the jib crane would take items off a bundle to load onto the machine. The Dutch have taken this one giant step further. A fixed jib (really a cantilevered crawl beam) is mounted on a special crane beam as well as the main crane beam both of which are designed to carry the horizontal thrusts of the cantilevered system. Apart from the way it is mounted, the crane operates just like any electric overhead travelling crane (EOT) 

2. It is quite common for fabricators to blast the steel before doing anything else to it. In the SA environment, a bundle of angles (say 100 x 100 x 10L) would be split open and the angles passed through the shot blast machines in batches to suit the width of the machine. After blasting the angles would be stacked neatly in a similar bundle and transferred by crane to the next step where the bundle would then be opened up one at a time again. Not so at Voortman where they come out of the shot blasting machine in batch widths; packed onto dunnage (same width); then transferred by side loader to the next station and stacked one layer on top of the next ready for immediate use one at a time (for in this instance the punch machine). This looked to me to be an amazing saving of time unbundling and rebundling. And no chainsaw damage is a bonus.

3. Some years ago we were lucky enough to visit UK shops including Severfield Rowen’s Dalton works where the steelwork was trundled through the works on mechanical trolleys and the artisans moved with the trolleys doing their work. The main trick for the success of their operation was sorting the steel items with their drawing in advance of the artisans doing their work. Their Mig Mag welding machines had support arms with very long hoses to reach the middle of the trolleys.

The Voortman take on this was the same emphasis on sorting the steel for the artisan. The steel was moved to a station (one of 64) each with its own welding machine (photo 1) (Mig Mag with short hoses – no stick welders to be seen). The assembly, checking, welding and fettling was all done at this station. The only movement was then to despatch, where trailers were waiting to be loaded. Mig wire was from the Jumbo rolls we first saw in the UK  Welding fume extraction is now obligatory.

4. Great attention to welding details is given even as far as different size welds for the web and flanges of this beam. In the SA situation we probably don’t even call up the weld sizes on our drawings let alone differentiating between web and flange sizes.

5. Magnet and suction lifting devices are extensively used