ERW tube welding lines pt. III: higher volumes with shorter campaigns!

After analyzing the differences between revamping and purchasing a new production line, and between extraordinary maintenance and revamping in his previous articles, Engineer Jacopo Grassino returns to the topic of electro-welded tube manufacturing plants. This time, he focuses on a strategic choice for ERW tube mills: how to increase sales and production volumes through shorter, rather than longer, production campaigns.

The volume constraint in the ERW industry

ERW tube mills have long dealt with the so-called 'volume constraint.' What does this mean? It means that total sales and production volume are typically considered the main indicators of a company's health. This is because the ERW industry, like much of the steel sector, is highly capital-intensive, with largely fixed costs.

As market challenges loom, as many expect, the competition for securing volumes becomes even more intense. However, an unexpected truth emerges: volumes can be secured through operational flexibility, even if it means sacrificing some plant efficiency. In other words, ensuring high production volumes during market downturns requires greater versatility—sometimes at the expense of traditional efficiency metrics.

Paradoxically, a company that appears less efficient in terms of production KPIs might actually perform better overall due to its adaptability.

The importance of a diversified product mix

Achieving production volumes must also take into account the sales product mix. Defining a target volume alone is not enough to drive sales—it’s equally important to determine what to sell and to whom. Therefore, success is not just about increasing production volumes but also about adapting the product offering to meet specific market demands.

Increasing volumes with shorter campaigns

Typically, KPIs improve with longer production campaigns and when the product mix favors heavier tubes, as hourly productivity increases significantly.

Put simply, it’s often said that running machines to produce lighter tubes is a ‘waste,' because the hourly output is much lower compared to the plant’s potential. Production KPIs generally improve when producing simpler products. 

Range diversity

However, it’s not feasible for the sales department to focus solely on tubes that optimize production KPIs. Doing so would likely result in missing volume targets and devaluing the product, as pricing would drop under pressure to sell.

A broader product range allows the company to meet wider market demands. Paradoxically, the tube mill may increase overall output by being less productive in terms of efficiency. This approach supports the production of more complex tubes, which command higher margins.

Market response speed

Production timing is often overlooked by production managers, yet quick delivery or short-term availability—if not immediate—is critical for sales, especially in certain product categories. It’s not just about how much and what is produced, but also when. A tube mill's speed of response becomes a key competitive advantage, as immediate product availability is often crucial in securing new orders.

The primary way to reduce delivery times is by increasing the frequency of planned changeovers at the mill. However, more frequent changeovers, with all other factors remaining the same, can negatively impact some production KPIs.

Once again, this is only a seeming paradox: the tube mill may become more efficient overall by increasing the number of changeovers, not decreasing them.

Considerations on CAPEX

Maximizing the product range in an ERW tube mill can be achieved through several strategies:

➲ increasing the ratio between maximum and minimum diameters;
➲ expanding the ratio between maximum and minimum thicknesses;
➲ implementing or planning for internal bead removal;
➲ purchasing calibration rolls to produce a wider variety of products, especially for shaped tube production;
➲ broadening both shaped and round product offerings, where applicable;
➲ ensuring compliance with product certification requirements.

In conclusion: flexibility and product range breadth to overcome crises

During challenging market periods, tube mills face intense competition to secure volumes. These volumes cannot be achieved by focusing solely on the simplest or most productive products. Long production campaigns of simple or heavy products limit the ability of the sales team to meet volume targets. Flexibility is essential to ensure the required volumes are secured.

When planning the purchase of a new line or improving an existing one, the broadest possible product range should be prioritized. This approach will help both the production line and the company successfully navigate difficult market conditions.

About the author

With over twenty years of experience as a plant manager in the industrial and steel sectors, Engineer Jacopo Grassino provides specialized consulting services in cost optimization, production efficiency, new line commissioning, and business strategies.

For more information or personalized consultations, contact him at:

Engineer Jacopo Grassino
Phone: +39 3396821463
Email: [email protected]
LinkedIn: https://www.linkedin.com/in/jacopo-grassino/

You might be interested in reading:
ERW tube welding lines pt. II: extraordinary maintenance or revamping?
ERW tube welding lines: revamping or replacing?
ERW tube production: mill revamping strategies for coping with shorter campaigns

The alchemies of the weld zone. Guidelines for effective revamping of an ERW tube line