THOUGHTS

4 Must-know Trends in the Metal Fabrication Industry

Nov 21, 2017

Advancements in technology and supply chain practices have brought drastic changes to the metal fabrication industry.

Traditionally, the metal fabrication industry was quite simple, including processes such as cutting, welding, machining, and assembly for creating the final product. Today, the industry is highly dynamic and cyclical with its growth depending on the end-use industries such as aerospace, automotive, energy, and construction. Such changes have compelled metal shops to strive for profitability by diversifying their customer base and accurately forecasting demand patterns. Here are some of the top trends gaining prominence in the metal fabrication industry.

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Nearshoring

Outsourcing has been the go-to-market strategy for any manufacturing industry. The availability of low-cost manufacturing locations such as China and India was seen as a lucrative option for manufacturers. However, that view is rapidly changing as metal fabricators need to respond to dynamic home demands, factor in rising logistics costs, drive innovation, and prepare against market volatility risks. More and more manufacturers are reshoring their manufacturing capacities back to the American market as the tangible benefits outweigh the labor cost difference. Nearshoring operations have also been helped by local tax incentives and the “Made in America” movement.

Adoption of ERP Systems

The majority of the metal fabrication companies operate across a wide geography, both local and global markets. Since they also carry out custom metal fabrication, it can be quite challenging to manage all their operations and their suppliers, sourcing materials, and other processes across the supply chain. As a result, metal fabrication companies are resorting to ERP software to streamline their operations and increase their productivity and efficiency. ERP software goes well beyond excel sheets and software like Tally to reliably manage all critical business functions such as operational performance planning, enterprise mobilization, demand forecasting, and resource planning. Oracle Netsuite, abas ERP, SYSPRO, Plex Manufacturing Cloud, and Epicor ERP are some of the most used ERP systems by metal fabrication companies.

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