OP-ED

Fringe Friday: Foundry 4.0

Sometimes our editors find items that are not exactly "heat treat" but do deal with interesting developments in one of our key markets: aerospace, automotive, medical, energy, or general manufacturing. To celebrate getting to the "fringe" of the weekend, Heat Treat Today presents today’s Heat Treat Fringe Friday press article to prepare you for the global conversations you can expect at the international metallurgy trade fair quartet GIFA, METEC, THERMPROCESS, and NEWCAST. The theme? Foundry 4.0.

"From ArcelorMittal to Thyssenkrupp, digitization has arrived in the steel industry. Drivers are the desire to improve margins in existing business and increasingly the challenges of decarbonization. It is not disruptive new business models that are on the agenda of steel mills, but primarily improvements in earnings and an expansion of services. New digitalization solutions - from the transformation of the blast furnace to the vision of the autonomous steel mill, from digital melting operations to Foundry 4.0  - will be a focal theme at the upcoming metallurgy trade fairs GIFA, METEC, THERMPROCESS and NEWCAST, to be held from June 12 - 16, 2023 in Düsseldorf, Germany."

This guest column was provided by Gerd Krause, Mediakonzept in Düsseldorf, Germany. HTT is a media partner for the THERMPROCESS quadrant of the show. Give it a read and then email editor@heattreattoday.com if you have an op-ed or guest column that you would like to submit to Heat Treat Today!


In the highly automated steel industry data have long played a pivotal role. Take ThyssenKrupp Steel, for example: the hot strip mill in Duisburg alone not only processes about 16,500 tons of steel slabs but also the data of more than 1.2 billion measurements. Terms like Big Data, Digital Twin and Machine Learning are today just as familiar to metallurgists as tapping and slab casting. Artificial intelligence (AI) specialists and App programmers join traditional workers such as blast-furnace and hot rolling mill operators. Digital twins map production from start to finish and can be used for all steps in the value chain of products, plants and services alongside the real steel mill. One key objective is to analyze product and machine data across various process steps. With the help of Data Analytics material characteristics such as thickness fluctuations, roughness or stiffness can be forecast precisely and tolerances can be adhered to more closely. To this end, thousands and thousands of sensors capture the quality and production data across the entire flat steel process chain. This data base forms the basis for controlling and analyzing manufacturing processes in real time. In ThyssenKrupp Steel’s No. 8 hot-dip coating line in Dortmund the data analytics results are used to generate mathematical models for controlling the skin pass mill. The data model controls the line in such a way that the aspired roughness values of the steel strips are reached and the operation mode can be re-adjusted online if needed. This opens up new service options for steel producers. Commenting on this Lothar Patberg, Head of Innovation at Thyssenkrupp Steel said: “In future, customers would be able to not only track the current status of their orders. They could also obtain selected quality data from manufacturing with a view to adjusting their own processes before the coil is delivered.”

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The technological shift to CO2-free production with hydrogen and renewable energies has provided added momentum to the uses of digital technologies. According to consultancy Accenture, in industrial manufacturing up to 61 megatons of CO2 could be saved by 2030 through digitalization. Metallurgy plant builders such as SMS, Primetals and Danieli have long identified this potential: to strengthen their own companies but above all to open up new lines of business.

SMS digital: The big players develop the market

A pioneer in digitalization exhibiting at METEC 2023 is the Düsseldorf-based SMS group. Automation technology has formed part of this metallurgy plant builder’s DNA for many years. Technologies such as Virtual Reality (VR), Augmented Reality (AR) and Digital Twins were used by their engineers in steel mill development long before Industry 4.0 hit the headlines. While in the past individual divisions like the rolling mill were automated, digitalization today connects the entire production line from the blast furnace to the finished product on all levels. SMS was among the first in this industry to identify the potential digitalization holds for developing new business lines and established the start-up SMS digital in 2017. What started with 10 members of staff in a backyard, is now the leading software provider for metallurgy: SMS Digital GmbH with more than 350 specialists employed worldwide. As Chief Digital Officer on the board of SMS group Katja Windt, a former university professor with a PhD in engineering, has been responsible for the key areas of digital transformation – at her own company and with customers. The SMS Chief Digital Officer views the 150 years of process know-how in the metallurgical sector as a key advantage over competitors, or potential new entrants such as the digital champions Google or Amazon that have long had their sights on the industry. Digitalization for process optimization and energy management also forms an essential part of the new business lines of the SMS group. As a global player for the reduction of carbon dioxide emissions and the circular economy the plant builder has successfully invested in decarbonization and recycling technologies – ranging from climate-neutral steel production based on hydrogen, battery recycling and urban-mining solutions for reclaiming precious metals from electrical scrap to plants for producing green syn-gas and synthetic fuels.

Big River Steel: Learning steel mills are just the beginning

Digitalization focuses on the steel industry. At METEC 2019, the International Metallurgical Trade Fair with Congresses, the plant builder was able to present the world’s first “learning steel mill” together with Big River Steel. The mill built by SMS in the U.S. and digitalized and fitted with artificial intelligence (AI) in cooperation with partner Noodle.ai , is operated in the most resource- and energy-efficient way possible today. The AI by Noodle.ai analyses historical data and in part high-frequency signal series captured by more than 50,000 sensors. In addition to the steel mill’s data the AI platform also uses external data sources that capture and predict manufacturing processes, and even propose corrective measures. This means artificial intelligence helps to maximize the yield, improve product quality and eliminate safety risks. Huge data volumes from which AI generates knowledge allowing BRS to produce high-quality steel products at a lower cost and faster. The learning steel mill in the USA is just the beginning. For Digital Director Windt, the objective is self-controlling production: a steel or aluminum mill that runs autonomously with the help of learning algorithms. The key product for digitalization in the SM digital building block is the so-called Data Factory that collects and edits sensor data. Depending on custom requirements and desired performance increase, a wide variety of applications can be hooked up to this software platform. In conventional production, finished products are inspected for defects. If the goods are defective, the search for the cause begins and the source of the defect must be eliminated. In Industry 4.0 logic, continuous monitoring of production prevents errors before they occur. This saves time and money.

Customers do not to necessarily need to buy new plant technology for the service. As a new business model SMS also offers “Equipment-as-a-Service.” “Customers conclude a service contract with us for a component, such as part of a rolling mill or a continuous casting line,” explains Windt. So the plant builder does not sell the equipment but the customer pays for its operation and the digital applications used.

The power of digitalization has become evident during the Covid pandemic if not before. With the help of its AR SMS was able to commission steel mills remotely, i.e. without service engineers being on site as was the case before.

Smart Steel Technology: Start-up ready to attack

Smart Steel Technology (SST) promises to reduce energy consumption and the emission of climate gases such as carbon dioxide in steel production by means of artificial intelligence (AI) and machine learning (ML) Established in 2017 by mathematician Dr. Falk-Florian Henrich in Berlin, this start-up has set out to optimize processes on all levels. To this end the steel industry is set to change from control-based production to AI-based manufacturing.

Steel producers transform conventional manufacturing processes towards higher energy savings and CO2 reductions. With a gradual changeover from coal to hydrogen as a reducing agent, carbon dioxide emissions are already reduced at the blast furnace. Add to this new process pathways such as direct reduction using natural gas initially and later hydrogen as part of the decarbonization route for steel production. This is why steel producers need solutions to assess and control the CO2-efficiency of all production routes as well as their carbon and energy footprints broken down for each individual steel product. The pressure to do so emanates not least from customers. In the automotive industry the carbon footprint is increasingly becoming a sourcing criterion for steel products. “Precise energy and CO2 data allow steel producers to charge for their conversion efforts and complete audits successfully. Automated CO2 and energy analyses with AI-based models are the key to this,” says Henrich. With SST’s AI-based software packages, he explains, it is possible to precisely document and trace back the energy consumption and CO2 emission for every flat or strip product. AI considers numerous factors impacting energy efficiency such as raw material quality, product mix and maintenance.

In addition to companies such as Feralpi and Vallourec, SST CEO Henrich was able to convince the world's largest steel producer ArcelorMittal of the strength of his AI solutions. Example Eisenhüttenstadt:  here AI and ML methods managed to improve the surface quality of high-end steel grades for the automotive industry by more than 50%. The AI software is not only used to forecast the surface quality but also to prevent surface defects from forming. After the successful trial run in Eisenhüttenstadt ArcelorMittal has also installed software from the SST family at sites in Bremen, Hamburg and Duisburg.

Fero Labs: Changing raw material composition in real time

U.S. start-up Fero Labs also seeks to score points with decarbonization and green steel, as Head of Business Unit Europe Tim Eschert confirms. The AI software by Fero Labs makes it possible, he explains, to change the raw material batch composition in real time and thus significantly reduce the probability of rejects in the manufacturing process: “At the Brazilian steel producers Gerdau with a medium production volume we achieve some 9% savings a year.”

The international metallurgy trade fair quartet GIFA, METEC, THERMPROCESS and NEWCAST are part of the “The Bright World of Metals” portfolio and will be held in Düsseldorf, Germany from June 12 – 16, 2023. www.tbwom.com

About the Author: Gerd Krause is the Mediakonzept for Düsseldorf, Germany


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DUAL PERSPECTIVES: Is Green Hydrogen a Game Changer in the Heat Treat Industry?

op-edChanges are inevitable, but the world today is changing so rapidly that it’s constantly keeping us on our toes. Do two men from different parts of the world, both with significant experience within the heat treating community, have vastly different perspectives on the happenings in the heat treat industry?

We want to find out, so we asked a question that focuses on the world of heat treating to Thomas Schneidewind, the editor-in-chief of heat processing magazine, and Doug Glenn, the publisher and founder of Heat Treat TodayThe question: Is green hydrogen a game changer in the heat treat industry?

Thomas’s expertise lies in the European market while Doug’s resides in the North American market. We will feature their responses in each print magazine. Will their views align? Time will tell. Enjoy this third installment of an ongoing column. This column was first published in Heat Treat Today’s  August 2022 Automotive print edition.


Is Green Hydrogen a Game Changer in the
Heat Treat Industry?

Thomas Schneidewind, Editor-in-Chief, heat processing magazine

Green hydrogen is the oil of tomorrow

Thomas Schneidewind
Editor-in-Chief
heat processing Magazine

Last year, as moderator of our “Hydrogen in Practice” webinar, I had conversations with representatives of various industries about hydrogen. We always came to the same conclusion: technically, everything is already feasible today, only hydrogen is missing. Whether combustion processes, infrastructure or even the fuel cell, ultimately all the processes and technical challenges are not only known, but already solved. After all, hydrogen is an industrial gas that has long been used in many processes and is sometimes simply produced as a waste product. When hydrogen comes into contact with atmospheric oxygen and the necessary ignition energy is supplied, both burn together to form water. In the process, up to 90% of the energy that previously had to be applied to split the water is released again. During its combustion, apart from water in the form of water vapor, only a very small amount of nitrogen oxide is formed through reaction with atmospheric nitrogen. No hydrocarbons, no sulfur oxides, no carbon monoxide and, above all, no carbon dioxide are produced. This is why hydrogen is the great hope of the energy industry and a key building block in the decarbonization of the industry.

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In 2050, hydrogen will be the most important energy carrier for energy-intensive industry alongside electricity produced by renewable energies. We need hydrogen for the direct reduction of iron ore (DRI) in the steel industry as well as for burners in the heat treatment industry. Many metallurgical processes require the use of gas-fired burners. Electric heating in heat treatment is not an alternative in many cases. That is why the “all electric” concept pursued by some politicians has long since been abandoned, after many engineers from the industry have spoken out. That is why hydrogen will be the green gas of heat treaters in the next decades. But it’s still a long way to get there.

Alongside renewable electricity, green gases such as hydrogen are seen as a central element of the German and European energy transition. The German government and the European Union have long recognized this and are funding government projects worth billions of euros, as in the Important Projects of Common European Interest (IPCEI Hydrogen). Nevertheless, a large-scale hydrogen economy is still a long time coming.

The first step to be able to use hydrogen as an energy carrier on a broad scale in the future is to build up an infrastructure, both here and in the future exporting countries. At least in Germany, the starting position is very good; with the existing gas infrastructure, there is already the foundation for a successful hydrogen future. Nevertheless, investments are necessary here as well, but above all the necessary development of the international infrastructure is capital-intensive. For investors, however, it will only become attractive when development and market opportunities arise in the interim to long term.

The development is driven by climate protection legislation. On June 24, 2021, the German Bundestag (German federal parliament) passed a new Federal Climate Protection Act. The amended law raises Germany’s greenhouse gas reduction target for 2030 to minus 65% compared with 1990. Previously, a reduction target of minus 55% applied. By 2040, greenhouse gases must be reduced by 88%, and greenhouse gas neutrality must be achieved on a binding basis by 2045. That is why many companies are investing in the green market.

Electrolyzer manufacturers aren’t able to handle the fast-growing demand. Metallurgical plant manufacturers are also far from being able to process all the requests from customers in the steel industry in a timely manner. The problem is not only the lack of hydrogen, but also the limited resources of plant manufacturers. The steel industry and heat treaters cannot be transformed and decarbonized within a short time. Even though these problems are focused on today, the structural change will take time. It’s the classic ketchup effect that everyone knows: You hit the bottle, and nothing comes out the front – but eventually everything comes out at once. Everyone knows that hydrogen is coming, but no one can say exactly when and in what quantity. Only some politicians claim to know this. In my opinion it’s up to the industry to manage this. I’m convinced that hydrogen will be the oil of tomorrow. We will see in 2045 if I was wrong.

Doug Glenn, Publisher, Heat Treat Today

No. Nor do I see it being a significant player within the next decade. By significant, I mean more than 5% of all heat treat combustion being fueled by green (generated by renewable or low-carbon sources) OR gray (steam/methane reformed)
hydrogen.

Doug Glenn
Publisher and Founder
Heat Treat Today

That’s the short answer.

But it’s the “why” behind the answer that is important. And the “why” is predominantly economic. As some experts I’ve been talking to say, “The price of hydrogen at the burner nozzle.” The nozzle price is impacted by three significant factors:

  1. The cost to produce the hydrogen
  2. The cost to deliver the hydrogen
  3. The cost to store and/or use the hydrogen

None of these costs are anywhere near competitive given current technology or infrastructure, and it is going to take well over 10 years to get those technologies and infrastructures in place. And that assumes that there is adequate economic incentive – not political or environmental incentives, but economic incentives – in place TODAY. These economic incentives don’t exist today, especially here in North America. Some have argued that geopolitical disruptions have made hydrogen a bit more appealing. Possibly. Nonetheless, it is drastically more profitable to fire with natural gas than hydrogen, and there are no market-driven economic incentives to push us toward hydrogen at this point. There is no scarcity of natural gas and there is no scarcity of the technology to extract it from the earth. The only thing that is scarce is the political will to allow its extraction.

Here’s one more observation about the cost of producing hydrogen compared to producing natural gas. For all practical purposes, natural gas is ready to use once it comes out of the ground – after a few and relatively inexpensive purification processes. The major cost involved with the production of natural gas is drilling.

Hydrogen, on the other hand is abundant and readily accessible. Three-fourths of the earth’s surface is made of two hydrogen atoms combined to one oxygen atom. It’s everywhere and easy and inexpensive to “extract” from the earth unlike natural gas. However, even though it is easily extracted, the molecular bond between those two hydrogen atoms and one oxygen atom is VERY STRONG – one of the strongest bonds occurring in nature. The cost of breaking that bond is what makes the production of hydrogen so economically unviable, and there are no incipient technologies currently being developed that will change that within the next decade.

Water, water everywhere and not a drop to . . . burn.

Hydrogen combustion – green or gray – will not be a significant player in the heat treat industry for at least a decade. That’s not to say that some of our more forward-looking companies will not and should not start researching and developing technologies to help increase the economic incentive to produce, distribute, and use hydrogen. I know for a fact that there are a number of combustion companies already heavily investing in this way. More power to them. I’m looking forward to the day when I can fill up my vehicle with water and drive 500 miles, and I’m sure there are heat treaters who would love to fuel their furnaces and drinking fountains from the same source.


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When Is It Time for Recuperation?

op-ed

Last month, we discussed adjusting the fuel to air ratio of our burners – which is always the starting point. This month we will discuss the value of preheating combustion air using the waste energy in the furnace’s flue products to reduce our fuel consumption. This is commonly referred to as recuperation.

This column is a Combustion Corner feature written by John Clarke, technical director at Helios Electric Corporation, and appeared in Heat Treat Today's August 2022 Automotive print edition.

If you have suggestions for savings opportunities you’d like John to explore for future columns, please email Karen@heattreattoday.com.


John B. Clarke
Technical Director
Helios Electric Corporation
Source: Helios Electric Corporation

Natural gas prices continue to be a concern for our industry. We did see some short-term price relief in the U.S. because of the explosion at a Houston area LNG export facility that will reduce the U.S. ability to export natural gas for the balance of the year. Even so, there are LNG export expansion projects that will be completed in the coming year that will further expand the movement of North American natural gas to Europe and Asia. The result is that the U.S. price for natural gas will be more closely aligned with the price paid abroad. It appears the long-term factors influencing the price of natural gas in the U.S. remain unchanged — so, what should we do?

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We will continue to use the same typical furnace as last month — where after adjusting the fuel to air ratio, the furnace consumes $110,208 in natural gas per year. This furnace operates at 1600°F with an exhaust temperature of 1700°F. We have purchased and installed a recuperator that preheats the air supplied to the burner to 800°F. How much can we save?

If we locate our exhaust temperature in the left-hand column and find where it intersects with the preheated air column — the estimated savings is 32.3%.

Table 1. Savings from preheating combustion air

Recuperation requires a great deal more investment than simple fuel to air ratio adjustment. The projects are involved and generally require the burners be replaced or upgraded. There may also be the need to upgrade combustion air blowers and controls. Recuperation also alters the peak flame temperature the burner produces and can impact the temperature distribution within the furnace. Higher flame temperature may lead to increased NOx emissions as more nitrogen is oxidized. In most, if not all cases, these factors can be addressed with the selection of the right combustion equipment. So, assuming we wish to achieve a three-year payback — we can budget up to $106,000 for this project.

Recuperation is but one way to make use of the energy in the flue products that we would otherwise throw away. The exhaust from our burners can be directed over work to preheat it before introducing it into the furnace. The flue products can be used to generate steam so the energy can be used elsewhere in the facility.

The optimist may look at higher natural gas prices as an opportunity to gain an advantage over our competitors while the realist will see it as an imperative that we work to minimize the impact of rising costs. Either way, the path is the same: optimize the efficiency of what we have, then determine if further capital investments make sense. Next month we will discuss these steps in greater detail.

About the Author:

John Clarke, with over 30 years in the heat processing area, is currently the technical director of Helios Corporation. John’s work includes system efficiency analysis, burner design as well as burner management systems. John was a former president of the Industrial Heating Equipment Association and vice president at Maxon Corporation.


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Cybersecurity Desk: Why and How To Become a Compliant Heat Treater

op-edCybersecurity: it's important for more than just keeping checking accounts safe. Banks, government agencies, and online data bases all require strict cybersecurity. But what about heat treaters? What are cybersecurity requirements for heat treaters, and how can they become compliant?

Today's Technical Tuesday is a Cybersecurity Desk feature written by Joe Coleman, cybersecurity officer at Bluestreak Consulting™. This column series will have its debut in Heat Treat Today's September 2022 Trade Show print edition.


 Do You Need To Be Compliant?

If you are a heat treater who provides services to a Department of Defense (DoD) contractor or downstream DoD requests, you are affected by this topic and need to read on to get more details. In some cases, you may have already been asked about compliance by some of your customers. In this article and in future articles, we will provide the answers to the most

frequent questions regarding how heat treaters can become and stay in compliance to cybersecurity specs and even improve compliance in cybersecurity health.

Discussions around DFARS compliance, NIST 800-171 implementation, and cybersecurity within federal defense contracting are becoming increasingly prevalent by the day. Although it seems like the conversation is only recently gaining steam, the DFARS mandate has been around longer than people realize.

The DoD is requiring all contractors, subcontractors, and suppliers to be DFARS 252.204-7012 and NIST 800-171 compliant. Don’t take a chance on losing current DoD contracts and losing future business because of noncompliance. Compliance is non-negotiable for heat treaters within the DoD supply chain.

Heat treaters implementing effective cybersecurity practices are facing particularly challenging circumstances because there are more devices (including mobile devices) than people, and attackers are becoming more innovative. Cybersecurity is the practice of protecting systems, data, networks, and programs from digital attacks (web/cloud based). These cyberattacks usually seek to access, change, or destroy sensitive information; extort money from users; or interrupt normal business processes. Therefore, the government is pushing cybersecurity more than ever before. All of us need to be sure critical data and systems are protected and secured.

Here are several eye-opening statistics of how cybercrime affected SMBs (small to mid-sized businesses) from 2021:

  • Cyberattacks increased by nearly 300% since the beginning of the pandemic
  • 58% of cyberattack victims are small and mid-sized businesses
  • 60% of small companies go out of business within 6 months after a major security breach
  • 55% of ransomware attacks involve companies with fewer than 100 employees
  • 95% of cybersecurity breaches are a result of human error

What Is DFARS 252.204-7012?

DFARS  252.204-7012 is a DoD regulation that has become increasingly important for defense contractors and suppliers.

Originally implemented in 2016, DFARS 252.204-7012 requires safeguarding and “adequate security” of Covered Defense — which also includes CUI (Controlled Unclassified Information) — by implementing the guidelines found in NIST SP 800-171.

DFARS 252.204-7012 further requires contractors to follow certain procedures in the event of a cyber incident, report the incident to the government, and provide access to systems.

What Is NIST SP 800-171?

NIST SP 800-171 is a NIST (National Institute of Standards and Technology) Special Publication that provides recommended requirements for protecting the confidentiality of CUI in non-federal organizations or businesses. Defense contractors must implement the recommended 110 control requirements contained in NIST 800-171 to demonstrate their provision of adequate security to protect the Covered Defense Information (CDI) included in their defense contracts, as required by DFARS 252.204-7012. If a manufacturer is part of a DoD, General Services Administration (GSA), NASA, or other federal or state agencies’ supply chain, the implementation of the security requirements included in NIST SP 800-171 is a must.

The deadline to be fully compliant with NIST 800-171 was December 31, 2017. But it’s not too late.

Photo Source: Bluestreak Consulting™

Even if a heat treater is not a DoD contractor or in the DoD supply chain, NIST 800-171 is a great "best practice" standard for any organization to improve overall cybersecurity health. This will help in obtaining future orders because customers will know critical data is secure. Explaining NIST 800-171 in depth, and each of the specific control areas, is beyond the scope of this article, so, be on the lookout for a future article on this specific topic later in this series of articles.

Consequences of Failing To Comply With DFARS 7012 and NIST 800-171

Heat treaters willing to move forward with these cybersecurity initiatives by the DoD will have an overwhelming impact on the DoD supply chain and your business. If many heat treaters in the U.S. choose to not embrace the mandatory requirements, the DoD and DoD contractors will award contracts solely to the few heat treaters who do choose to become compliant. Poor cybersecurity practices can result in hacking, loss of company data and critical customer data, and attacks by malware, viruses, and ransomware. All of this can result in major damage to the business and loss of customers, not to mention being liable for all losses and paying significant fines.

Complying with DFARS 7012 and NIST 800-171 is a requirement for all DoD contractors, subcontractors, vendors, and suppliers. The DoD has now begun confirming that contractors and subcontractors are compliant before awarding additional contracts. Navigating NIST 800-171 and DFARS is a complex and challenging — but necessary — step in this process.

Watch for Future Articles in Heat Treat Today Covering the Following Topics:

  • DFARS 252.204-7012 and NIST SP 800-171 Explained for Heat Treaters
  • DFARS Interim Rule Explained (DFARS 252-204-7019, 7020, and 7021)
  • General Cybersecurity Best Practices and What You Should and Should Not Do
  • Performing Your Basic & Your Final NIST 800-171 Assessments
  • Submitting Your Assessment Score(s) to the SPRS (Supplier Performance Risk System)
  • CMMC 2.0: The New Changes and How To Become Certified
  • How To Safely and Securely Work From Home and Work Remotely
  • If You're Not Using 2FA or MFA, Your Data and Your Customer’s Data Is Not Secure
  • . . . and many more cybersecurity topics curated for heat treaters

Can You Afford Compliance? Funding and Cost Sharing for Heat Treaters

With the huge push for cybersecurity by the government, cost sharing and funding sources have been identified that may cover a substantial percentage of the costs associated with these critical cybersecurity projects.

About the Author:

Joe Coleman is the cybersecurity officer at Bluestreak Consulting™, which is a division of Bluestreak | Bright AM™. Joe has over 35 years of diverse manufacturing and engineering experience. His background includes extensive training in cybersecurity, a career as a machinist, machining manager, and an early additive manufacturing (AM) pioneer. Joe will be speaking at the Furnaces North America (FNA 2022) convention, presenting on DFARS, NIST 800-171, and CMMC 2.0. Contact Joe at joe.coleman@go-throughput.com.


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What Are the Real Threats to the Economy?

op-edIs the sky falling? Are we all doomed? Are we on the cusp of stagflation or hyper-inflation? Is this the beginning of the worst recession since the 1930s? The short answer is no.

Chris Kuehl, PhD, managing director of Armada and economic analyst at Industrial Heating Equipment Association, explains why the future may not be all doom and gloom. Read on to discover a positive outlook on the economy in this original content piece, originally published in the June 2022 Heat Treat Buyers Guide print edition.


Chris Kuehl
Managing Director, Armada, Economic Analyst, IHEA

The frothy coverage of the economy has been an exercise in extremes and one has to wonder why. Especially when we look at the actual data. The signals that are being sent are not all that dire. This is not to say that there are no problems to be aware of and there are most definitely some impending threats, but the near hysteria that shows up almost hourly is not justified by the facts — at least not as they are emerging right now. Why do some economists present these extremely pessimistic assessments and assert that a major catastrophe lies ahead?

The truth is that economists are not all that good at forecasting and predicting despite the fact this is supposed to be our job. The reality is that we have predicted 13 of the last three recessions. The comparisons between an economist and a meteorologist are not flattering but both professions have the same challenge. The data changes and it changes fast. The real purpose of the dire economic forecast is to warn. It is essentially pointing out that the economy is headed for a brick wall unless something changes. The prediction of a major recession in 2030 or 2035 or 2050 is nothing more than a call to action. If the issues that are affecting the economy are not dealt with, the likely outcome will indeed be the recession or other economic calamity that has been forecasted.

The predictions of doom and gloom are designed to call attention to major issues that demand attention sooner rather than later. All are driving the negative performance of the current economy. None of these will be easy to deal with and failure to either prepare for the impact or find a way to avert the disaster will indeed mean the economy could be headed for strains that will significantly hamper growth.

At the top of the list is the supply chain. It is safe to assume that the old system will never return. The breakdown in globalization has been due to everything from geopolitical tension to the desire on the part of companies to have better control of their processes. It is estimated that there will be a trillion dollars of reshoring in the U.S. this year alone. Nearly 70% of those doing business in China want to shift significant production to the U.S. or at least to North America. Robotics and technology allow companies in the U.S. and Europe to compete with those low production cost platforms in other countries. Despite these moves, China and other nations provide trillions of dollars of goods to the U.S. and the rest of the world which means that the reshoring effort will not eliminate the importation of material from China and elsewhere, but the dependence that has developed on the Chinese export sector will diminish. Along with the effort to bring production back to the U.S., there will be diversification when it comes to these overseas sources. There will be expansion to other Asian states such as Vietnam, Thailand, and Malaysia and there will be efforts to expand to more Latin markets such as Colombia and Brazil. Even states in Africa such as Nigeria, South Africa, Ghana, and Kenya will see efforts to expand. It is important to note that all these nations provide opportunities but also challenges.

The next challenge is connected to both the labor issue and the supply chain. Companies that struggle to find the people they want to hire will turn increasingly to automation and robotics. This has already occurred in the manufacturing sector as machines have largely replaced the people who once worked on the line in the factories. Now the automation revolution has reached the service sector with developments such as online buying, self-serve retail, and complete conversion to consumer driven interactions. The need for the labor that once dominated the service sector has largely diminished. The technology demands a higher-level worker, and those people are in even shorter supply than other skilled workers. The future is one of cobots — people interacting with and working alongside machines that have the ability to do their own problem solving. It is the robot and technology revolution that has spurred so much of the reshoring effort as the machines allow U.S. companies to compete with the low wage and low production cost operations overseas.

About the Author: Chris Kuehl is the managing director of Armada and an economic analyst for IHEA. Over the last 21 years, Chris has worked with many private clients and professional associates. He writes a bi-weekly publication for Fabrinomics on the impact of economic trends for manufacturers. Among other advanced degrees, Chris has a doctorate in Political Economics and is a well-known keynote speaker, giving nearly 100 presentations a year.


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DUAL PERSPECTIVES: The Heat Treat Shop of 2050

op-ed

Changes are inevitable, but the world today is changing so rapidly that it’s constantly keeping us on our toes. Do two men from different parts of the world, both with significant experience within the heat treating community, have vastly different perspectives on the happenings in the heat treat industry?

We want to find out, so we asked a question that focuses on the world of heat treating to Thomas Schneidewind, the editor-in-chief of heat processing magazine, and Doug Glenn, the publisher and founder of Heat Treat TodayThe question: What does the heat treat shop of 2050 look like?

Thomas’s expertise lies in the European market while Doug’s resides in the North American market. We will feature their responses in each print magazine. Will their views align? Time will tell. Enjoy this second installment of an ongoing column. This column was first published in the June 2022 Heat Treat Buyers Guide print edition.


What Does the Heat Treat Shop of 2050 Look Like?

Thomas Schneidewind, Editor-in-Chief, heat processing magazine

The Limits of Digitalization

Thomas Schneidewind
Editor-in-Chief
heat processing Magazine

Do you still remember the New Economy? The predictions of some economists at the beginning of the internet economy heralded the end of the classic business cycle when it vanished into thin air in March 2000 – just like the internet bubble on the stock market.

However, a look back at the turn of the millennium shows that many ideas were formulated back then that are only now – more than 20 years later – changing our lives. At this point, I would like to recall The Cluetrain Manifesto, the internet bible of the first hour. This document sets out 95 theses for the new corporate culture in the digital age. Thesis 1 states, “Markets are conversations.” Thesis 19 says, “Companies can now communicate directly with their markets. If they don’t seize this opportunity, it could be their last.”

Today, real-time communication is commonplace. Many companies are designing their workflows to be flexible and able to respond quickly to the needs of their customers and employees. One example: LOI Thermprocess GmbH relies on networked working at its new location in Duisburg, Germany. The central component of the concept is a digital room. From here, employees around the world can take virtual tours with customers. They walk through the plant with a terminal device and employees of the plant manufacturer interact with them remotely.

The SMS group will also implement even closer cooperation along the entire value chain at its new site in Mönchengladbach. The Technology, Service, and Digitalization Campus currently under construction will enable agile working in a 5G infrastructure and offer generous social and communication areas.

In heat treatment, digitization is making an important contribution to implementing the changeover in automated drive technology production. Significantly higher speeds of electrified drives and the resulting change in stress on components require heat treatment that meets these requirements. The high number of variants in drive technology also leads to smaller production sizes – the plants have to be designed more flexibly. In this context, digitization plays an important role.

Another aspect is the work in plant engineering with digital twins. Digital models can be used to increase efficiency in production. It is also about speed in the development of plants and the optimization of processes. The result of any digitization strategy is an increase in competitiveness.

Since almost anything is technically feasible today – at least in theory – the question is rather about the limits of digitization. These are manifold in nature: starting with heterogeneous IT landscapes in companies. These make cross-process integration difficult in regard to data security, (which apparently cannot be guaranteed), to dystopian fears of the replacement of humans by machines, (which stands in the way of the acceptance of digital solutions). In other words, digitization must always remain only a tool, not an end in itself. We recognize this most when the digital space prevents genuine personal communication.

Doug Glenn, Publisher, Heat Treat Today

Doug Glenn
Publisher and Founder
Heat Treat Today

Roughly 30 years ago, I asked this same question to the publishing staff of Industrial Heating magazine. I was their publisher at that time and the answers were intriguing. One person predicted that we would not have phones on our desks and that we would do most of our communication over our computers. Smart phones were not a thing at that time, so that prediction seemed far-fetched, but the “no phones on our desks” prediction has proven to be pretty much true.

What a 2050 heat treat shop/department will look like will be largely dependent on the type of work being processed. For captive shops, we should fully expect that these shops will be nearly 100% automated and self-governing. This includes incoming material analysis, load configuration optimization, multi-furnace utilization schedules, and part-by-part processing analysis – all will be done without human intervention. We will undoubtedly see more artificial intelligence including the resolution of unexpected problem situations that arise during the heat treating process.

More importantly, the idea of a distinct heat treat department will be less and less prevalent. By 2050, the vast majority of captive heat treatments will be done in-line with the manufacturing process with little or no interventions from humans. Washing, fixturing/loading, temperature measuring and control (most of which will be done continuously with full-part, non-contact infrared scanning), and inspection will all be done autonomously.

Most parts will be heat treated individually with single-part traceability/accountability.

The need for heat treat will be minimized with advances in the development of nanomaterials and the ability to designer-build alloys with specific metallurgical/mechanical properties.

Equipment controls and process control will be remote and cloud-based. These are some of the characteristics for captive shops where product variability is low and volumes are high.

For commercial heat treat shops where variability is high and volumes are relatively low, much of the same will be true with less and less human interaction needed. Nonetheless, these job shops will still have a higher need for human interaction than the captive shops. Commercial shops, however, will be much more highly automated than they are today, especially when it comes to part recognition and the recipes associated with those parts.

Finally, I don’t see heat treating as a carbon-free activity in 30 years. In fact, as the need for energy grows, I see the heat treat industry continuing to use carbon-based fuels. The only thing that will change in the next 30 years is the opinion that carbon is the devil. Although much slower moving, I think the world’s opinion about the evils of carbon will change much like the anti-cancer diet du jour in today’s world. In 2050, carbon will no longer be a dirty word.


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How To Make $17,792.00 in a Couple of Hours

op-edWe will explore the ever-popular subject of how to make money the easy way. Well, better stated: How to save some money, but at the end of the year the result is the same.

This column is a Combustion Corner feature written by John Clarke, technical director at Helios Electric Corporation, and appeared in June 2022 Heat Treat Buyers Guide print edition.

If you have suggestions for savings opportunities you’d like John to explore for future columns, please email Karen@heattreattoday.com.


John B. Clarke
Technical Director
Helios Electric Corporation
Source: Helios Electric Corporation

For our discussions, we will assume that we are operating a continuous heat treat furnace that processes work at 1600°F. The furnace currently consumes 2,000 SCFH of 1000 BTU/SCF natural gas and operates 8,000 hours per year. With today’s natural gas at 8.00 USD per 1 mmBTU (1 mmBTU = 1,000 SCF of natural gas), our furnace’s annual operating cost is:

Using our trusty combustion analyzer that provides a readout of the oxygen present in the flue products, we quickly determine the fuel contains 6% O2 (measured by volume, dry basis). The “volume/dry basis” is the most common value measured by handheld combustion analyzers. We measure the temperature of the flue products at 1700°F. Our burner and/or furnace specifications say the system should be operated at 3% O2. How much can we save by adjusting the burner(s) on this furnace?

Table 1 below provides savings numbers that result when non-recuperated burners are returned to 3% O2.

If we read where the exhaust temperature row intersects with our column for our starting O2 volume in the flue products, we see the resultant savings will be 13.9%:

 

 

We chose 3% O2 in the flue products (around 15% excess air) because radiant tubes and direct fired systems can commonly operate at this level with little CO or soot generation. A simple combustion analyzer can be purchased for a few thousand dollars and the labor required to make these adjustments is generally under a day. The payback period for this maintenance investment is measured in weeks, even if it requires the purchase of new tools.

There may be an added benefit we receive when adjusting the furnace. We may have an opportunity to increase the throughput, so perhaps production can be increased while fuel costs are reduced.

Table 1 can be used for other specific conditions, so keep it handy. Next month, we will explore the savings resulting from recuperation or pre-heating the air.

Recuperation projects are more complicated and require greater investments, but they are becoming increasingly critical for heat treaters working to stay competitive in our new reality of dramatically higher natural gas prices.

About the Author:

John Clarke, with over 30 years in the heat processing area, is currently the technical director of Helios Corporation. John’s work includes system efficiency analysis, burner design as well as burner management systems. John was a former president of the Industrial Heating Equipment Association and vice president at Maxon Corporation.


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Remembering Those Who Served

Heat Treat Today would like to wish everyone a Happy Memorial Day. As you (hopefully) take some time off from work, pause to reflect on the sacrifices men and women gave, and are currently giving, to protect and serve this nation.

Heat Treat Today will be back with you on Tuesday, May 31st, and we hope you too are able to rest and remember this weekend.

Have a blessed and safe holiday!

- The team at Heat Treat Today


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DUAL PERSPECTIVES: Europe vs. North America

op-ed

Changes are inevitable, but the world today is changing so rapidly that it’s constantly keeping us on our toes. Do two men from different parts of the world and lots of experience within the heat treating community have vastly different perspectives on the happenings in the heat treat industry?

We want to find out, so we asked a question that focuses on the world of heat treating to Thomas Schneidewind, the editor-in-chief of heat processing magazine, and Doug Glenn, the publisher and founder of Heat Treat TodayThe question: Will the war in Ukraine impact the heat treat industry?

Thomas’s expertise lies in the European market while Doug’s resides in the North American market. We will feature their responses in each print magazine. Will their views align? Time will tell. Enjoy this first installment of an ongoing column. This column was first published in Heat Treat Today’s May 2022 Induction Heating print edition.


Will the War in Ukraine Impact the Heat Treat Industry?

Will, or how will, the war between Russia and Ukraine directly or indirectly impact the industry? What immediately comes to mind?

Thomas Schneidewind, Editor-in-Chief, heat processing magazine

Thomas Schneidewind
Editor-in-Chief
heat processing Magazine

First of all, the war in Ukraine is a humanitarian catastrophe. And the first war in Europe since 1945 marks a turning point in history. It has a strong impact on the global economy and hits the thermprocess industry in particular. The exploding energy prices lead to shutdowns of sites in the steel industry. That means that some investments will be frozen.

Europe’s Turning Point

Due to the economic downturn more and more companies are facing another difficult year. Machine and plant builders are affected by the imposed sanctions. Most of the companies are engaged in Russia and in Ukraine as well. One example: Against the background of the war in Ukraine and the human suffering associated with it, SMS group has ceased its main business activities in Russia and Belarus, with the exception of safety-critical maintenance work. New orders will not be accepted. All companies who have strong relationships with clients in Russia and Ukraine are taking care of refugees. SMS will be taking in one hundred families from Ukraine at its German locations in Hilchenbach and Mönchengladbach.

In Europe we see a completely new set up of the political agenda. Specifically, the German so called Energiewende (the country’s planned transition to a low-carbon, nuclear-free economy) will be pushed by the decision makers. The German economy has a long way to go to be independent from Russian gas and oil. The war will affect people and businesses all over the world – we see a historical turning point. For Europe and for the whole world.

Doug Glenn, Publisher, Heat Treat Today

Doug Glenn
Publisher and Founder
Heat Treat Today

The first thing that needs to be clearly communicated is that our thoughts and prayers are with all of those being adversely affected by this war. The loss of human life, personal freedom, and property are the most important impacts of this crisis. Everything else – including what follows in this short column – is somewhat insignificant.

Energy Shortages

Higher energy prices caused by supply shortages are and will continue to happen. More so today than any time in history, markets are global and what happens halfway around the world will have an impact everywhere. The U.S. has imported nearly 20% of its energy from Russia, and with that supply being cut off, we are and will continue to see rising gas, natural gas, and oil prices.

The U.S. could do more to help ourselves and the world through this crisis, however. Mark Mills from the Manhattan Institute asserts that today, with oil prices at $120 per barrel, the U.S. is producing 1.5 million FEWER barrels of oil than we were last year when oil prices were only $60 per barrel. The energy problem in the U.S. is not fundamentally a lack of energy and it is not a market problem. It is a political problem caused by those who have pushed for “green” at all costs.

Supply Chain

Supply chains are and will continue to be disrupted. Being the largest economy in the world and geographically removed from the crisis, I anticipate that U.S. supply chains may not be as badly hurt as those in Europe, but the disruptions will continue. As we all know, if a manufacturer is missing just ONE PART, the entire end-product is on hold. It is completely unpredictable how and when this will impact the North American heat treat industry, but it is safe to say that it is and will continue taking a toll.

Increased National Debt

Probably the most significant long-term impact of the crisis is the continued irresponsible growth in national debt. Now exceeding $30 trillion, our country does not need a war to incur more debt. But as we all know, there is nothing like war to drive national debt through the roof.


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Natural Gas Revisited

OCNatural gas is the dominant energy source used by heat treaters and its price and availability is critical to all U.S. industry, so let’s look at the data and nail down some simple quantitative facts and maybe answer this pressing question: How will the war in Ukraine impact natural gas production and consumption?

This column is a Combustion Corner feature written by John Clarke, technical director at Helios Electric Corporation, and appeared in Heat Treat Today’s May 2022 Induction Heating print edition.

If you have suggestions for savings opportunities you’d like John to explore for future columns, please email Karen@heattreattoday.com.


John B. Clarke
Technical Director
Helios Electric Corporation
Source: Helios Electrical Corporation

As political pundits seek to explain the cause and impact of the war in Ukraine, I am struck by the lack of quantitative information they use to support their opinions and analyses. Given the complexity of the U.S. energy market, with a myriad of imports and exports between countries (especially Canada and Mexico), it is no wonder that people can support any preconception they have by simply omitting this import or that export. As always, we will focus exclusively on natural gas.

Let’s start with some basic facts. FACT: 40% of our electricity in the U.S. in 2021 was generated using natural gas1 and 20% of electricity generated in Europe is from natural gas2 — so even a vacuum furnace runs on a substantial quantity of this fuel.

One of the challenges when discussing energy markets is the many different units of measure people use to describe production, consumption, and costs. Our preferred unit of measure for natural gas production and consumption will be trillion cubic feet or 1 quadrillion British Thermal Units (BTU)* per year (one cubic foot of natural gas contains 1000 BTU (HHV)). To put this in perspective, if we pay $4.70 per mmBTU** — one trillion cubic feet is valued at 4.7 billion dollars. In 2021, the United States produced 34.1 trillion cubic feet or roughly 161 billion dollars of dry natural gas.

 

FACT: U.S. production of natural gas was at an all-time high in 2021 and is rising.3, 4 The U.S. is the largest producer of natural gas in the world by a significant margin. U.S. consumption has fallen over the last two years because of our COVID recession — but it is projected to rise in 2022.

 

Liquified Natural Gas (LNG) Exports

Natural gas can be exported via ship in its liquified state. The following graph shows the U.S. exports of LNG in recent years.5 Our ability to export LNG is limited by facilities that compress and cool the gas to its liquid state and the availability of tankers to move the gas across the ocean. Both ports and ships require significant capital investments and take time to construct — so there is a limit to the rate we can expand exports. Even as we export LNG, we continue to import some natural gas from Canada — but we are obviously a net exporter of natural gas by a considerable margin.

FACT: In 2021, the U.S. exported roughly 10% of the natural gas it produced as LNG. The U.S. is currently the largest exporter of LNG6 while Russia is the largest exporter of gaseous natural gas. Australia and Qatar are also major players in the LNG export market, and we may see these three countries vying for the top spot in the coming decade. The big advantage enjoyed by LNG is once liquified, it is a fungible source of energy — it can be exported to anywhere with a suitable port. Gaseous natural gas must travel through a pipe.

In 2021, the European countries in the Organization for Economic Co-operation and Development (OECD) together imported about 80% of the natural gas they use. Of this number, roughly 6.6 trillion cubic feet per year is imported from Russia, the largest importers of Russian gas include Germany — 1.70, Turkey — 0.95, Italy — 0.92, and France — 0.62 trillion cubic feet per year.

The U.S. has significantly expanded its LNG supplies to Europe in 2019—20217 to an annual rate of 1.86 trillion cubic feet in January of 2022,8 but LNG import capacity is still limited — with additional import facilities coming online in the next few years. Prior to 2019, Europe had little volume of LNG imports, so all the movement of natural gas was by pipeline.

While our price for natural gas in the U.S. has gone up considerably in the last year (approaching a mean of about $5.00 per mmBTU on the spot market), the price in Europe is running about six times as much — $30.00, with recent spikes as high as $60.00 per mmBTU. So, we load a typical LNG tanker with $15 million in natural gas in the U.S., and in 20 days, we lose 4% of the load to vapor, which we burn to power the ship, and offload $86 million at a port in Germany. Of course — this is an oversimplification, but the point is obvious. This price differential will continue to drive the market to invest in new production, LNG ports and ships — and apply upward pressure to our domestic price.

With or without the instability caused by the Russian invasion of Ukraine, we can expect a reliable supply of natural gas to fuel our furnaces and generate our electricity in the United States, but we can also expect higher prices to remain with us for the foreseeable future. Can the U.S. supplant Russia’s natural gas imports? The data indicates the answer is yes — but it will take time and investment. No matter what the outcome of the current war, the West will question the reliability of Russia as an energy supplier and explore all options to lessen their dependency on Russia’s oil and natural gas exports.

 

*1 BTU is the energy required to heat 1 pound of water, 1 degree Fahrenheit.

**Rough Henry Hub Price per mmBTU of natural gas at time of publication

References

[1] “Electricity explained: Electricity in the United States,” EIA.gov, March 18, 2021, https://www.eia.gov/energyexplained/electricity/electricity-in-the-us.php#:~:text=Natural%20gas%20was%20the%20largest,power%20plants%20use%20steam%20turbines.

[2] Statistical Review of World Energy — 2021. PDF File, 2021, https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2021-eu-insights.pdf.

[3] Kirby Lawrence and Troy Cook, “EIA forecasts U.S. natural gas production will establish a new monthly record high in 2022,” EIA.gov, December 16, 2021, https://www.eia.gov/todayinenergy/detail.php?id=50678.

[4] “Natural Gas Summary,” EIA.gov, February 28, 2022, https://www.eia.gov/dnav/ng/ng_sum_lsum_a_EPG0_FPD_mmcf_a.htm.

[5] “Liquefied U.S. Natural Gas Exports,” EIA.gov, February 28, 2022, https://www.eia.gov/dnav/ng/hist/n9133us2A.htm.

[6] Mundahl, Erin. “We’re #1! U.S. Ends 2021 as World’s Largest LNG Exporter,” energyindepth.org, January 5, 2022, https://www.energyindepth.org/were-1-u-s-ends-2021-as-worlds-largest-lng-exporter/.

[7] Victoria Zaretskaya and Warren Wilczewski, “Europe relies primarily on imports to meet its natural gas needs,” EIA.gov, February 11, 2022. https://www.eia.gov/todayinenergy/detail.php?id=51258.

[8] EU-US LNG Trade: US liquefied natural gas (LNG) has the potential to help match EU gas needs, PDF File, March 2022, https://energy.ec.europa.eu/system/fi les/2022-02/EU-US_LNG_2022_2.pdf.

About the Author:

John Clarke, with over 30 years in the heat processing area, is currently the technical director of Helios Corporation. John’s work includes system efficiency analysis, burner design as well as burner management systems. John was a former president of the Industrial Heating Equipment Association and vice president at Maxon Corporation.


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Natural Gas Revisited Read More »