May 2023 Volume 5

OPERATIONS & MANAGEMENT

Consequently, the backlog is still growing, albeit at a slower pace than in the preceding two years. While this was true across all three major product categories, impression die experienced themost severe gap. This phenomenon was not isolated to the forging industry and is reflective of the widespread supply chain disruptions and excessive federal stimulus. However, this trend is now gradually dissipating due to the influence of higher interest rates and the Federal Reserve’s general tightening of the money supply, which is having its desired effect of cooling inflation, but at the expense of softening demand. Interestingly, this cooling effect has had more of an impact on Impression Die products than that of Rolled Ring and Open Die products. The survey results show that since the first quarter of 2022, the value per ton of Impression Die products has declined by 30 percent. In contrast, Rolled Ring and Open Die products have experienced an increase of 10 and 26 percent, respectively.

The survey results also indicate that while the total tonnage of Impression Die products shipped has grown by 24 percent, Rolled Ring and Open Die products have only seen lower readings of 10 percent and -6 percent, respectively, over the same period. The raw metal types and alloys predominantly used or increases in quality or complexity in the manufacture of the respective categories, heavily influence the value of the finished forging. It seems that the forger's ability to charge more per ton plays a significant role in the observed growth in Bookings and Shipments within the Rolled Ring and Open Die categories. Therefore, it is likely that a good portion of the growth observed in these categories is a result of their ability to command higher prices per ton compared to Impression Die.

Figure 2: Dollars per ton of Impression Die products have cooled more substantially than that of Rolled Ring and Open Die products. Source - FIA's O& S Survey

Ian Stringer VP – Data Strategy AMT-The Association for Manufacturing Technology Phone: 703-827-5209 Email: IStringer@amtonline.org

FIA MAGAZINE | MAY 2023 53