What's the biggest order you've ever had ripped out from under you?

As I was walking out the door I got a call from GE that said our $185,000 wire EDM order had been cancelled, because of a miscommunication on their end. We've got $20,000 in material on the way. Yesterday he was begging us to order material to get the job started, today we're screwed. Anyone got any worse stories to cheer me up?

We had one along the same line as yours about ten years ago Street. SUCKS! Got pulled because of "politics", we were cheaper... but someone was better friends apparently. About a year later we got them to buy the 20K in material.... Good luck man.

I've been lucky $5400 is my biggest loss to date or this week in fact. Sorry i cant make you feel better.

Jason,

StreetSpeed said:

As I was walking out the door I got a call from GE that said our $185,000 wire EDM order had been cancelled, because of a miscommunication on their end. We've got $20,000 in material on the way. Yesterday he was begging us to order material to get the job started, today we're screwed. Anyone got any worse stories to cheer me up?

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Sorry.... No worse storied to cheer you, but if you had a written order, shouldn't they be obligated for the material?

A few times it was in the 1-5k range, thankfully material cost was minimal and could be used on other parts later on. Last few days I've been working for about $8/hr as I very badly misquoted a few parts. I've been distracted lately with too many things going on, misread 2 drawings, and so on, there's a few more days of it left, and in the fun of this action very nearly ruined my right hand today in the lathe, very lucky it only got a little crushed and took some skin off. Wrecked 2 parts in one shot and a pair of pliers. Unfortunately gonna be a bit sore for tig welding now

185K now that is pretty shitty, is the material good for anything else? they should at least eat that costs.

Not sure what your confirmed P/O states as far as cancelations, but "Iron Clad" confirmed P/O should put any material received/ordered on canceled orders back on customer- its money lost-period-

I learned the hard way unfortunately- still sitting the material, waiting for a job to suck it up.

And worst cancel thus far about 80k compliments of GKN.

That's a bitch Street Speed, been there done that, but on nothing like your scale.

If I've got a PO, they get a bill for cancellation costs, and I get right savage with my pen (as my old mentor used say ) ....... suffice to say you might be surprised how often I've had something for my trouble.

Recieved a P.O. 4 months after I had shipped the exact same P.O. Didn't check the P.O. number until I was writing up the packing list, and discovered I'd already shipped the same job. They said it was a computer error. I had to absorb the loss.

Another time, I did an emergency job for a good customer and was told "we'll have the p.o. by the end of the day". Took 9 months to get paid.

StreetSpeed said:

As I was walking out the door I got a call from GE that said our $185,000 wire EDM order had been cancelled, because of a miscommunication on their end. We've got $20,000 in material on the way. Yesterday he was begging us to order material to get the job started, today we're screwed. Anyone got any worse stories to cheer me up?

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Yeah about the same dollar wise, but I had a bit more in material, maybe another 5-10k on top of that. To make matters worse I had already cut everything up by the time the order was canceled.

I couldn't afford to eat that much in material, so it forced me to find something to do with that material in those sizes, I made some new parts, and found customers for those parts. Turned out to be the best thing that could have happened to me.

Life is funny like that.

I had gotten a PO for a new customer for some blocks with a female brake fitting machined into them. I did at that time, and still doo tyo this day run the same style port, but a diff size on another job. I knew how to run them! It would have been a big job as I remember, but I don't recall how big. Maybe 6 digits? Prolly more actually. ??? I recall that it would have been at least a ton truck full of complete parts/week anyway. I thought that it would justify a new truck that I needed at the time anyway....

One week after PO cut they cancelled it. Called it "Vender Consolidation" and turned around and gave it to a current supplier. I am sure they were higher priced than I was. I was going to run in a transfer machine. They liked my price for the one blind hole that they had in the block. But I asked them what else gits done to these. It's an awfully large block to be used as an end cap - there MUST be some intersecting hole in this somewhere, and likely some mount holes maybe?

Turns out that the part was to go to the next sister company where THEY put another hole or two in it... AND THEN delivered it to yet another sister company for assy.

"Tell yuh what... What say I put ALL the holes in it for you in one sh-bang on my transfer machine, and deliver it to the assy plant?"

And there's no way they could have done eny differently on the susequant holes for anywhere's near the additional costs since I was already in the machine. A cpl more spindles don't cost that much more...

"Well gee - that sounds like a swell deal!"

Then I fell victim to "Vendor Consolidation". I'm thinking there was more to the story than VC, but ....

They were willing to pay me for my tools that I already had ordered and cancelled. (Cancelation costs) But it was only a $100 cancelations, and it wasn't worth that to me to show my cards to them.


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FFWD about 4 yrs and we had a $250K job for 3 diff parts that needed to be all wrapped up in about 3 months. These were parts that we had already been running in smaller lots, so the learning curve was already done and we could jump ratt into production really.

We were about 1/2 way through and I had JUST gotten the second half of the material in, forty-leven skids of WIP all over the place... and I git the call to shut down the fire. The end customer cancelled the order...

They did take whatever WIP that we had done, and after about 2-3 more yrs they had taken delivery of enough parts to close that order, so it wasn't a huge loss in the long run, but it sure didn't feel none too good at the time!


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Think Snow Eh!
Ox

You wouldn't even want to know....it was a good contract... The cancellation cost bill was way north of half a million.

Flat out pulled, about $22k. Not huge, but still sucked, in that amount was 1 time $3500 tooling fee, and a $2500 set up, then a per piece cost.

The order needed to be filled pretty quick. So as soon as the PO came in, we ordered $3500ish in oddball holders, reamers, cutters, tooling plate.

A week later we were canceled. The casting house drop shipped them to the people that had been making them. The $3500 was paid with out a question.

A few months down the road, we did get to actually run the job and get paid, but we didn't get the $3500 again.

I know they didn't complain too much about the $3500 since it was going to take another lot of castings to finish out the contract, and they were getting a progress payment on it anyways.

I would have liked to run them twice, a few things I would have liked to change. I didn't scrap any and the assembly went together like butter, no grinders involved, no sledge hammers, no porta powers. I was proud of that one.

Now they want Qty of 1 and 4, 4... maybe, but one doesn't seem worth the effort.

Screwed by G E

I guess If I got hosed by G E or anyone else and got stuck with material, I would give it to them free! One piece at a time, through their window!

Street, not to worry yet!
My story, got an order from my customer who's a 1st tier Pratt supplier back in '01.
Contract's total value to me over 18 months is 270K, material is AMS5666, supplied by my customer, valued over 55K total.
80% of work is EDM, then some manual drill and grind, not much fuss.
Me, at the time not enough EDM capacity so purchased a brand new one on the fly just for this job. First shipment due in the 4th month, then predetermined monthly shipping schedule.

Received material, welded plates for stacked cutting and start burning. Wire, filter, electricity etc etc - 4 hour/stack, 10 min changeover 3 times a day, total 12 hours/day average over 6 days.
This went on for 2 1/2 months... You figure out my expenses.

Then, call comes in: PO put on hold!
Not canceled, Put on hold.
Some might think great right? It's still alive, will ship later ....
Not so fast Samurai!
A PO on hold means issuer is not obligated to pay any expenses, material or completed parts until the expiration date of PO. Moreover, it can be re-issued at any time, therefore effectively restart the schedule clock from scratch.

Maybe a year later they've reopened the PO with a 5 year delivery schedule, which got extended twice after that.
At the end tough, in 2009 I have finally completed the very last shipment and got my investment back 8 years later.
Nonetheless, it almost broke me at the time.

Rossco said:

Not sure what your confirmed P/O states as far as cancelations, but "Iron Clad" confirmed P/O should put any material received/ordered on canceled orders back on customer- its money lost-period-

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Street,

At the very least, use this as a learning experience and rewrite your P/O contracts for future orders to cover this scenario as Rossco stated. P/O on hold indefinitely? Gotta be a way to cover that scenario too.

I have seen this several times with other vendors. P/O for 1,000 parts. Vendor buys lots of material, makes a shitload of parts. P/O is canceled just before parts are due, and new P/O issued for 10 pcs at the 1,000 quantity price. This is what happens when the purchasing dept likes to play games and treat vendors like crap.

In today's economy, I am surprised shops are not requiring some form of down payment (at least to cover the material) to be paid before they start on a job. Way too many companies are receiving finished parts and then never pay for them.

I can see a definate CON to the "material up front" mindset tho.

I can see the customer thinking that "Well we pd for his material already, so ... well he can wait on the rest a little while longer...."

Is the material that you put into the job any different than the labor, rent, machine payments, tooling costs (perishables), and whatever other costs of dooing business?

Is your material costs better than 50% of these costs?

Otherwise it just seems like everything above material costs is all profit, and you can go to Jamaica NEXT month!


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Think Snow Eh!
Ox

I've started to do that, anything over 1k, I need tooling and mat'l to push a button.

Seems so far customers understand, havn't gotten any pants-burning emergency jobs, yet. If it's a new customer, I think i probably will stick to it...

Right well prolly half our business is spread out around various GE factions, so when they say "jump" we basically say "how high?" We've never been screwed by GE, at least no where near this scale. The details are that they ordered 24 dovetail joint pieces to repair turbines with no down time. Bout' 90 hours wire time each. We were gonna have 3 of out 5 machines running 24/7 for about 9 weeks on those. We're quite slow on wire work at the moment, so that woulda been awesome. Apparently, there was a miscommunication between the GE Turbine Service repair shop, and this other dude from GE we were dealing with. I THINK my dad said they ordered 200 of these things, and didn't need the other 24 or something. I can't imagine the lucky bastard that's cranking these things out by the hundreds. So, if there is ANY consolation, MAYBE we can get a contact at the actual service center, say "Hey, we've got the material, how about we make these things for ya' next time you need a few hundred of them?" I don't know. I won't keep my finger crossed.

Oh, and the material is 13 chunks of 14" round, 12" thick 410SS. Not exactly something we're gonna use a whole bunch of...

Well, I got one for you. We were about a year into a 2 year Military job worth a few million dollars and one General decided he didn't want a specific gun that was supposed to mount onto the turrets we were building...so the whole job was scrapped!

Funny thing is, they (by "they" I mean you and I) had to pay us for everything we had already purchased for the job and pay us basically half of the "time" quoted since we were half-way into it.

Probably missed out on 1.2 million that year because of it...

StreetSpeed said:

Right well prolly half our business is spread out around various GE factions, so when they say "jump" we basically say "how high?"

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If your performing this much work for them why not set yourselves up as a "Prime" supplier? Will require some legal who haa, and such. Done correctly; you be soul sourced to them, and if they do something like this again you can have them by the balls.