What is metal and pipe fabrication, and where are we headed?
March 9, 2022
Written by Tyler Riddell
What is metal and pipe fabrication, and where are we headed?

Metal fabrication uses raw materials to build machines and structures. The process includes burning, pipe cutting, machining, welding, forming, and assembly to create the final product.

Metal fabrication projects range from hand railings to heavy equipment, pipe and machinery to beyond. Specific subsectors include:

  • Cutlery and hand tools.
  • Structural metals and architecture.
  • Hardware manufacturing.
  • Spring and wire manufacturing.
  • Screw, nut, and bolt manufacturing.
  • Pipe cutting
  • Forging and stamping.

A significant benefit of metal fabrication shops is centralizing processes that typically require multiple vendors to complete complicated projects. As a result, the one-stop metal fabrication shop helps save time and money and increases quality for contractors.

How is metal fabrication performed?

The metal fabrication industry has broad applications across many products and several sectors. Standard raw materials used include plate metal, casting, fittings, formed and expanded metal, sectional flat metal, pipe, and welding wire.

Fabrication Shops employ many different experts and specialties, including ironworkers, welders, boilermakers, blacksmiths, and other professionals that work with raw materials to make their final products.

According to the Bureau of Labor Statistics (BLS), approximately 1.5 million U.S. workers are employed in metal fabrication. They are punching, cutting, and press machine setters and operators; first-line supervisors; managers; machinists; team assemblers; cutters, welders, brazers, and solderers.

Metal fabrication sector characteristics

As with many market sectors, the economy drives demand and profits, and the metal fabrication industry is no different. Growth and thrive. For several years, metal fabrication has become a thriving sector that continues to recalibrate and grow. A few adjustments that have occurred include shifting from leaning on a few large projects to achieve annual profitability to agility and managing a steady flow of many projects and sales volume through diversification and repeating a successful template year over year. 

Most fabrication companies succeed at establishing their organization’s strategy to help best survive global economic changes. In the last few years, the local economy is thriving and has led to consumers spending at higher rates to purchase larger-ticket items such as houses, boats, and vehicles. In addition, population increases and demand for new residential and commercial construction has picked up, requiring additional commercial and agricultural machinery. 

The highly cyclical metal fabrication industry primarily depends on the construction, energy, auto, and aerospace industries. In addition, earnings for each sector vary based on market and economic factors affecting those markets. Therefore, investors must assess their specific customer base and economic influences annually.

Metal fabricators can gather the best predictions by looking at significant statistics for that business area, residential or commercial construction, defense, energy, or any other market. In addition, by diversifying customer bases from various market sectors, the industry’s cyclical nature can be better managed to keep net profits consistent.

Metal fabricators that quickly shift product lines can protect profits and focus on areas where demand is most prevalent. In addition, this type of diversification can create a sustainable revenue base, regardless of revolving economic conditions.

Metal pipe fabrication

Pipe Fabrication involves manufacturing straight lengths of metallic pipe and piping components, including forged flanges, forged or wrought elbows, reducer fittings, tee, and the pipe to provide complex or simple piping systems process or transport liquids, solids, and gasses safely.

Pipe fabrication plays a mission-critical part in society’s infrastructure, ensuring the institutional, residential, commercial, and industrial facilities are safely designed, mechanically correct, and thoroughly tested for the piping system’s service. Piping fabrication typically includes cutting, beveling, welding, and bending (or other pipe forming operations); and is performed by skilled tradespeople.

Pipe fabrication demands high precision among hundreds of components with equally challenging assembly and installation processes. Therefore, in any construction project involving a piping network, rpipe fabrication requires comprehensive designing, planning, scheduling, and execution according to the multi-level requirements (design, location, timing, and budget). 

For many years, projects called for a field construction solution. Still, fabrication shops are more efficient, effective, or appropriate to fabricate pipe for building today because of the overwhelming factors they mitigate for construction projects. A few include: 

  • Avoiding poor weather delays
  • Extreme dimensions and pipe material 
  • Limited accessibility and safety concerns
  • Availability of jobsite support staff
  • Required resources and welding facilities
  • Collaboration and scheduling with multiple trade contractors
  • Enhancing quality and environmental controls

Productive fabrication shops can handle various sizes of projects and can accelerate volume. In addition, a purpose-built shop offers workers a protective environment from the elements, efficient equipment, machinery, and a skilled craft workforce, making Shop Fabrication the ideal response for most piping projects.

A look at the future of metal fabrication 

The fabrication industry is learning to balance variability with capacity and finding new ways for managing the inherent variability of customer demands driven by an ever-changing economy. In addition, as machinery becomes more sophisticated, the ability to maintain constant capital and profit is improving.

Technology is rapidly improving every aspect of the fabrication shop and how it works with other teams and companies. 

Although forecasting can be a challenge for fabrication businesses depending on customer economic fortunes, the companies that can keep up with rapidly changing demands, leveraging technology to help maintain a high output capacity, will be in the best position of maximizing profits.

The need for capital investment

Capital investment is required for metal fabrication shops to quickly adjust output and meet the demands of a diverse customer base to achieve profits. Covering costs that may prove out an ROI down the road is necessary. However, when budgets are tightened, the industry must begin to cut corners and reduce variable costs, which naturally limits the customer base the fabrication shop can support. Companies need to invest in better hardware and technology to maintain a variable output, which are critical success factors for sustaining a diverse set of customers.

Critical elements of a capital protection strategy: 

  • Pairing output strategy to agility and diversifying customer bases
  • Economic vigilance and a competitive pricing strategy
  • Ensuring their entire manufacturing process is streamlined from top to bottom
  • Protecting investments from harmful environmental influences

The metal fabrication industry is an excellent investment built on customer demand. However, this lucrative moving target can be challenging to identify if fabrication shops redirect money toward market sectors yielding the highest profits at any given time.

Industry 4.0 Technologies are a must for improving output at metal fabrication shops.

Industry 4.0 Technologies are a must for improving output

Industry 4.0 continues to trend upwards, making substantial headway into the manufacturing and metal fabrication industries. Some aspects are now embedded and applied to automation. The two “trending” aspects directly Industry 4.0 pertain to “hard” automation and “soft” automation.

Hard automation relates to physical machines, like material-handling robots or welding, which have become common over the last ten years. However, soft automation is still less common in manufacturing environments which is the type that tracks data, even though most industry experts agree we’re reaching a tipping point in its use. 

Why? Sensors are becoming inexpensive and the basis of the Internet of Things (IoT), where almost everything will be integrated. Those sensors will allow manufacturers to track just about any aspect of their production, creating incredible opportunities for micro-customization of products and wirelessly monitoring productivity via RFID to optimize production and workflow without manual data inputting.

The market’s volatility has required the industry to streamline production practices and focus on the ability to produce high-capacity output for several varied customer requests.

Metal fabrication shops that can optimize their manufacturing process and operating machinery, paired with stakeholders who focus on competing costs and the economic trends affecting their customer base, will lead the industry.

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