Minimizing shop overhead as a business strategy?

[JH-Q]

The 50€/hr on cnc shop is an average rate i usually made every month when i ran it. If there's 120 hours of billable machine work each month, it still leaves 40 hours of time to calculate quotes, order material and tooling, accounting etc, and it should still end up as 8 hour standard work days (but it in fact rarely did so!).
Of course i had some jobs where i squeezed the cycle times as crazy as possible and got the profit to up to 150€/hr. But if you are only running 50 easy parts of one kind at those profits and then have to setup another PITA stainless part which warps out of tolerance, have to fight with tool life and the communication betveen CAM postprocessor and Fanuc 0M understanding it for example. A job which you price at 60€/hr rate quickly turns into 25€/hr just get it out of the door-nightmare. But of course it does happen with manual machines too. There's some difference how you quote production parts and one-offs (quote per piece or per hour)
There's been some silly hiccups in the code, especially trying to run 3D profiles. The worst was with Okuma machining center, it had no drip feed option so i had to upload the program cut into eight parts on floppy discs and because i had ten parts to make, i had to run total of 80 programs. Changing floppies all the time and i hated it. At least old Fanucs can be fooled into thinking a computer is a tape reader with infinite tape running in it.

When making one-off or short run stuff, the hourly rate customer pays is more about the machinist solving problems and using his skill set to make a part, rather than the productivity of an automated machine running at full capacity. It doesn't matter if they pay for me for shortening some screws with a hacksaw or setup a fancy machine, if the result is solving their machine-related problems.

When i think of the local manufacturing business and my past contacts, i'm not convinced it would be realistic to get any kind of serial production work. I used to specialize in short run and tool machining (not very precise or complex most of the time) but the biggest part quantities i ever ran in my shop were 200-500pcs lots of really simple turned parts (face, drill, single point internal thread and part off). Mostly it was 1-10pcs runs, with some parts up to 50pcs per order. Most of the mass-manufacturing which would fit a screw machine or other automated process is going to the medium-large companies with paid employees working in them, and not likely to end up in shops like mine. How do you automate making parts, which involve a lot of setting up and when you get it running, the parts are already made in just a few hours, and then you never see the same part again?

I did think of the Youtuber-aspect, which would very likely to yield more money than actually making parts in the shop. The cabin in the woods style stuff & vintage skills do get a lot of views. However, the drawbacks are that massive, i'm not going to do that. I do value my privacy, it's not for sale. And i will not work for Google, which sets the terms instead of even discussing them with me. I rather have the small customers, which i can invite over coffee and discuss their parts, payment terms and pricing. Also the work would change into something i dislike and have no experience at, i prefer making actual metal chips. Youtuber job would be filming work in the workshop while telling all kinds of BS to attract subscribers to make profit. Not to judge youtubers, there are a lot of great machine-related people talking about real techniques and lots of skiled information in their videos. But that kind of career is not for me. It may be the youtube has reached it's peak, since the competition in there is so fierce and maybe the digipeople are already going to some different app..? Not the kind of world i live in, so i can't say for sure

 

[JH-Q]

Sort of a short conclusion about this kind of workshop strategy;
Will it earn a living?
-Sort of, enough to get food on the table, roof on top of my head and all the basic human needs.
Will it pay for a new car / iphone / travel to NYC?
-Absolutely not
Is it scaleable to hire employees and grow a bigger business?
-Absolutely not.
Does it pay for the machines and get you a cool shop at the same time?
-Hell yeah!
Is it a good business model for most shops?
-Nope. Might work out for a few craftsman supplying their local economy or a few youtubers. I can imagine seeing these kind of workshops in rural canada or alaska..?

Some ten years ago i was visiting Seoul, South korea. (got frustrated at the cnc shop long hours and basically living there, had some money so took a vacation) I wandered the streets and came across something fascinating. There was like a six-story shopping mall, filled with hundreds (or thousands, no idea?) tiny vendors with sample parts from subcontractors all around. Like electrical parts, injection moulded plastic/rubber parts, machined gears and pretty much every small-scale part you could imagine.
But it gets even more interesting! Next to the "subcontracting mall" was a district filled with really tiny machine shops specializing into some kind of niche each. These must have been in the 10-30m2 range with just a few workers in each. Some were hobbing gears, some had piles of lathe parts and there even were some plasma cut plate/material vendors in there. One had a half meter pile of heavy steel plate stacked in it and a bandsaw and a torch on top of it. Each morning they would lift the tools to the street to make space in the shop. There were some younger guys carrying chips and parts from shops to somewhere with wheelbarrows. Can't put the place in the map anymore, but it was not far away from Cheonggycheon, the famous city stream park.
It would be interesting to know the numbers behind these kind of shops. Are they tough sweatshops, or enough to pay for the city living in Seoul? Keep in mind, that is not a third world capital, but one that equals or surpasses EU and US manufacturing in precision electronics.

Sadly, many who run these kind of tiny machine shops in various countries, don't have an internet connection and english skills, or neither write on this forum.

 

[604Pook]

Sort of a short conclusion about this kind of workshop strategy;
Will it earn a living?
-Sort of, enough to get food on the table, roof on top of my head and all the basic human needs.
Will it pay for a new car / iphone / travel to NYC?
-Absolutely not
Is it scaleable to hire employees and grow a bigger business?
-Absolutely not.
Does it pay for the machines and get you a cool shop at the same time?
-Hell yeah!
Is it a good business model for most shops?
-Nope. Might work out for a few craftsman supplying their local economy or a few youtubers. I can imagine seeing these kind of workshops in rural canada or alaska..?

Some ten years ago i was visiting Seoul, South korea. (got frustrated at the cnc shop long hours and basically living there, had some money so took a vacation) I wandered the streets and came across something fascinating. There was like a six-story shopping mall, filled with hundreds (or thousands, no idea?) tiny vendors with sample parts from subcontractors all around. Like electrical parts, injection moulded plastic/rubber parts, machined gears and pretty much every small-scale part you could imagine.
But it gets even more interesting! Next to the "subcontracting mall" was a district filled with really tiny machine shops specializing into some kind of niche each. These must have been in the 10-30m2 range with just a few workers in each. Some were hobbing gears, some had piles of lathe parts and there even were some plasma cut plate/material vendors in there. One had a half meter pile of heavy steel plate stacked in it and a bandsaw and a torch on top of it. Each morning they would lift the tools to the street to make space in the shop. There were some younger guys carrying chips and parts from shops to somewhere with wheelbarrows. Can't put the place in the map anymore, but it was not far away from Cheonggycheon, the famous city stream park.
It would be interesting to know the numbers behind these kind of shops. Are they tough sweatshops, or enough to pay for the city living in Seoul? Keep in mind, that is not a third world capital, but one that equals or surpasses EU and US manufacturing in precision electronics.

Sadly, many who run these kind of tiny machine shops in various countries, don't have an internet connection and english skills, or neither write on this forum.

I think that whole spectrum of business is missing in the western world. Like China and the flea market like areas of machine automation parts and anything you would need to setup a factory. bazars of craftsmen making things. Mexico has some areas like that.

Seems we just all went we need a big space and lots of money coming in even if that costs us in stress and home life.

 

[john.k]

Old George Mitchell lived in a hangar full of old machines ,a couple were never used surplus from WW2. He had only one eye ,and lived in a single room that was originally the toilet for the hangar .........he charged $4 an hour ,was snowed under with work ,and used to take over a year to finish a job.......but his big claim to fame was the shed full of Allison engine parts at the side of the hanger...........when he died,the place was left to a nephew ,who was trying to get stupid prices for machines like rise and fall auto bed mills....The Allison stuff 'was all gone' ,the nephew claimed.

 

[couch]

You could also use the Mursk method.....fire half the workforce ,and make the rest work twice as hard ,for twice the hours ,save them money on their rent by chaining them to their desks ..........and if the are ungrateful ,replace them with computer brained monkeys ......ooops,thats supposed to be a secret for now.