Fabricated Metal Parts Manufacturing
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Industry Overview
The US fabricated metal products industry consists of about 50,000 companies that generate $200 billion of annual revenue. Large companies in specialty segments include Ball Corporation and Snap-On. Because of the special manufacturing processes involved, most companies make a limited range of products. The industry as a whole is fragmented: the largest 50 companies hold just 20 percent of the market, but concentration can be high in industry segments like cutlery, boilers, springs, and metal cans.
Competitive Landscape
Demand is driven largely by the needs of other industrial companies, and is therefore linked to economic growth. The profitability of individual companies depends on technical expertise and efficient manufacturing operations. The specialized nature and use of many products allows smaller companies to compete effectively. Despite large gains in labor productivity, the industry is still fairly labor-intensive: average annual revenue per worker is close to $150,000.
Products, Operations & Technology
The industry consists of several distinct segments, including structural metals ($55 billion); forging and stamping ($25 billion); metal containers ($25 billion); hardware and springs ($20 billion); metal valves ($20 billion); and fasteners ($10 billion). Many companies make products in even-smaller specialized segments.
Companies manufacture mainly simple metal parts used by industrial customers, such as those making autos, airplanes, machinery, appliances, and computers. Some companies make simple finished products like metal cans, tools, plumbing fixtures, and structural steel members.
Basic raw materials are ferrous and nonferrous metals, like carbon, alloy and stainless steels, aluminum, titanium, brass, copper, and various alloys. Raw materials are bought in semifinished form (slabs, billets, and blooms) or finished form (plates, coils, sheets, wire, bars, rails, beams), either directly from primary metal processors like US Steel; Phelps Dodge (copper); and Alcoa (aluminum) or, most often, from large metals distributors (metals service centers).
Three major metal processing operations are fabrication, preparation, and finishing. Fabrication includes processes like punching, cutting, bending, welding, coil processing, roll forming, laser cutting, and stamping. Machining, a fabrication method, uses a wide variety of machine tools to cut or form material to precise specifications. Preparation includes cleaning and surfacing metal with chemicals. Finishing includes plating, polishing, coloring, and coating.
Many companies have highly automated production lines. Typical equipment includes presses, screw machines, rotary transfer machines, computer controlled (CNC) single- and multiple-spindle lathes, and turning and machining centers. Some companies use CAD and computer-aided manufacturing (CAM) equipment. Engineering skills are needed to design products and production processes.