Thoughts from a US manufacturer

[Jason H]

I have read many of the different posts here and I have a problem that I have yet to be seen addressed with the current situation. My machine shop is for MRO work in a textile product related factory, so this is coming with a different slant.

Several of my packaged products require outside components, some plastic and some metal. Some we get from US companies and some we get from China / India / Pakistan. Speaking from almost ten years of experience I have found that the factories in the foreign countries are far more willing to help out in times of need, such as a rush order or change to standard products.

My interactions with US companies are not the same. They are slow to respond if even at all. Their desire to help is extremely poor, I even have one vendor that won’t purchase a fax machine. ( small woodworking shop ) I have to mail my PO’s to him. On top of all of this their quality is on par with the import products at a higher price. Please keep in mind we pay our bills on time and are a reliable company.

You are in the minority from my experience so you will immediately disagree with me. The fact that we all show up to this web site show we have an interest in improving our skills and making the world a better place, so when you respond, think about some of your employees or coworkers. All of the MBA / upper mgt / CEOs that we love to hate, are they just responding to what is happening in their own factory?

We have some very intelligent people here ( whipin boy and reis are my favorite ) that give. But we have far more here that take, does this take all attitude translate out to total work ethic? I hear a lot of complaints and ridicule with little ideas of some solutions. Where do we being to put this egg back together?

 

[PeteM]

My own feeling is that one of the best things a customer can do is tell their supplier when they're unhappy. That way, they get a chance to fix things -- and it's all the loyalty we owe. More directly to your point -- some CEO's really focus on their customers and continuously try to improve. Others are looking for a fast buck and don't much care about the long term interests of either their customers or their own company.

If you can't get decent rush service from a supplier near you in LA -- and then get better turnaround from someone in China or India it's pretty clear the US supplier (and CEO) needs to lose the order.

I'd add one caution. Many companies have had the experience that a new supplier (e.g. in China) does exemplary work the first and second times around -- then quality starts to slip. It doesn't pay to make a commitment you can't back away from -- and it sounds like you figured out that long ago.

My own optimistic feeling is that there are plenty of US companies still left that care about their customers. The sooner we weed out the bad ones, the better.

 

[Dr Stan]

My own feeling is that one of the best things a customer can do is tell their supplier when they're unhappy. That way, they get a chance to fix things -- and it's all the loyalty we owe. More directly to your point -- some CEO's really focus on their customers and continuously try to improve. Others are looking for a fast buck and don't much care about the long term interests of either their customers or their own company.

Pete,

You just summed up one of the important points of quality control as taught by Deming and further developed by Toyota. The customer must work with their suppliers to help improve the entire supply chain. This is a much better approach than just finding a different supplier; however, sometimes that is the only recourse.

As to the fast buck CEO's we're probably seeing the Pareto Principle in action (the 80/20 rule). Most likely 80% or more of the CEO's/managers/etc are ethical/principled/moral people. However, it's the Jack Welches of the world who get all the attention.

Just my 2 cents.

Stan

 

[Jason H]

I forget where I read it, but there was a small hardware store that was being interviewed. A wal mart had just gone into the area and the owner of the small store responded to some lame question about the future for him. The subject of his response said that wal Mart only puts the poorly run stores out of business.

Pete, I do tell my suppliers where they are failing, and they expect my help to fix their problems. I have a fabric mill that is having financial difficulties and after 10 years of net 30 billing, they want me to prepay because they did not have enough cash to buy the raw materials needed. I canceled the order with them and placed it with a mill in China. Come to think of it, I very rarely get any sort of help from a customer, and would not expect it.

Shanghai to LA is a 13 hour flight. Taking into account the time difference, the suppliers there can get stuff to the airport within a few hours of my request. I get stuff from china faster then back east. Beat that with a stick!

Jason

 

[David Carlisi]

Shanghai to LA is a 13 hour flight. Taking into account the time difference, the suppliers there can get stuff to the airport within a few hours of my request. I get stuff from china faster then back east.
Jason

Back in Feb. of this year, I purchased a digital readout from Singapore. I even started a thread about it in General New asking if anyone had experience with the company.

http://www.practicalmachinist.com/vb/showthread.php?t=151991&highlight=singapore

I placed the P.O. on a Tuesday afternoon, and I received the readout on Thursday morning, less than 2 days delivery time. (It came in via Fed Ex.) I might add that it was half the price of any other comparable products. After 9 months, it is still working perfectly, in fact, I used it today. The owner even sent me a follow up email several weeks after the sale to make sure that I was satisfied.

I really want to buy American products, but does any American company even make digital readouts these days? If so, can they compete? Maybe tarriffs are the answer.

 

[SeymourDumore]

Jason

Here is a question. When looking for sources, do you contact factories directly in China, or is it a buying group with their own outside sources?
I aks this because here is a local ball manufacturer who imports quite a bit of raw and semi finished balls from China.
He has, for years tried to get products from China by directly communicating with the factories or their respective sales organizations.
Could not make a single purchase for just about every reason. No return call, misunderstanding, high minimum qty requirements, delivery late or not guarantied etc etc.
He then ran into a Chinese fellow, who's sole business is to take orders here and find sources in China. From that point on virtually all previous issues ( with the exception of delivery times) have been resolved.

I can tell you that sometimes I get calls from individuals or organizations who rarely purchase machined products but are in need of a one time something, and they tell me that I'm probably the 10th-20th place they are calling, and so far noone has bothered to even quote the part, let alone agreeing to make it. I usually take the job, sometimes simply out of sympathy, and make it OR!!! find someone from my connections to make it.

I guess what I'm saying is that you may not have the means to reach the right supplier for the part! I mean if you can order from China, then it likely would not make a damm bit of difference if you've ordered the parts from Connecticut, Maine, Georgia or wherever else in the US. Unfortunately, no matter how good of a business to business directory we implement, it is nearly impossible to decipher it and find the right supplier for the right job at the right time.
Maybe we need something like an MFGQuote type business, but with a different set of principles. Their idea I think is something similar, but tend to encourage whoring out jobs and shops.
What I'm thinking is more along the line of an organization with direct access to many shops and their capabilities, and have the ability to determine what jobs should go to what suppliers for quotes.
This actually is how 2 of my main customers work. They have a slection of suppliers, and are fully aware of their capability, efficiency, quality and workload. As order requests come up, they determine inhouse which supplier is best suited to do the work at the given time and that shop is the one which gets to make the part.
This is certainly beyond your proficiency, as it should be. You just want your parts quoted, made and delivered as requested.

Again, I think - at least initially - you're talking with a buying group in China rather than the factory itself. You may call the number from the advertisement, but the person on the phone is actually a representative of a sourcing agent.

 

[PeteM]

I have a fabric mill that is having financial difficulties and after 10 years of net 30 billing, they want me to prepay because they did not have enough cash to buy the raw materials needed. I canceled the order with them and placed it with a mill in China. Jason

You've raised a really interesting case, Jason. I'm wondering if the situation here is that your US supplier can't get any credit to pay for materials?? Any idea if they are caught up in this financial mess, where banks won't lend previously credit worthy companies operating cash? I suspect there's a lot more to it than that, but would be interested in your take.

 

[Wren]

At my last job at a freelance product designer/engineer, we also often found ourselves going to China for anything plastic and some other things.

My boss was not a fan of foreign imports and tried hard to buy American made in his everyday life, from clothes to cars. He would have preferred to use an American company, but every time he tried it he was burned.

He had a 15 year relationship with a molder in China who was always cheaper, quicker, and higher quality. Their customer service was amazing in my experiences with them. They gave prompt answers, did not lie, spoke excellent English, and were polite. This was basically the opposite of the American shops we dealt with. We were never interested in begging a shop to quote our work when we there was someone else there who could act like they wanted the business. We paid our bills on time and were IMO, very reasonable to work with.

We also stood up an internal machine shop b/c the incompetence in farming out work was astounding.

Before you get too upset, this company was still responsible for millions and millions of dollars in positive trade balance for the US. Lots of overseas companies, especially in the middle east, were looking for companies that could handle engineering and fabrication projects. Through this company, lots of US small shops were able to get good money to export their work.

 

[Jason H]

Seymore, For the production of textiles there are a few large mills here in the states and several small ones. I can recall one order where I cleaned the mill out of all of their stock and had them making a good size quantity to complete the order. Then the customer doubled the order with me, I doubled the raw material order and asked for a reasonably quick turnaround. The response I got was " Whats your hurry ". No joke, he was serious with the question. He did not want the second order!!!!

I have been to China to visit the factories that we purchase from. A lot of our customers are high profile public companies and they want to make sure there are no sweatshop issues. The factories I see are clean, safe, and well put together. All of the factories I use do have English speaking contacts and they are highly motivated to work. I purchase both textile and aluminum products.

I have a story that I tell all my salespeople. We once did a very small order for a church that probably netted us $0.25 profit. In the audience was the purchasing director of operational supplies for a bank chain that is nation wide and doing very well right now. Long story short is that we now supply every branch of this chain with logoed textile products in their lobbies.

You can't pass on the small orders, you never know where they will lead. I have several stories just like this one of taking a small order and the job turns out to be a big winner farther down the road. Instant gratification is for losers.

 

[Jason H]

Pete, in my opinion, as cold as it sounds, is that it is not my problem. Why should my company suffer because of their problems. If they cant deliver the raw materials, I can't make my product. Their problems become my problems. I am glad that I have an alternative that is happy to get my call. Maybe they had no money because the owner likes to blow it at the track.

This reminds me of a neighbor I had at my old location. He made soap on a rope style items for spas and what not. I always saw trucks delivering product, but outbound packages were small and low in quantity. This guy showed up in a new land rover all the time ( i think he went through 3 in a few years ) the wife always had the new bmw. They would take a few week long vacations during the year. You get the point and you know whats coming, out of business ( last year, before all of this mess ). I have to admit I was jealous of this guy until I saw the liquidators come to clear out his joint and I remembered what was important.

I take at most 4-8 days off a year and never at one time. The reason I have all this time today to write is that my brain is fried from working 17 hours yesterday.

 

[PeteM]

Hi Jason. I agree -- absolutely not your problem. But it is OUR problem if we're doing such a lousy job of freeing up credit to small businesses, that jobs are being sent overseas. I wasn't suggesting you do anything different at all -- just curious if you happened to know why the supplier couldn't afford the materials to deliver. Could be they're like that neighbor of yours -- a greedy idiot that deserved to lose his business and should have lost it earlier. Or, maybe, a decent company caught in today's economic squeeze?

 

[Jason H]

For the strong, there are solutions out there. We just did a ribbon cutting on our new facility that was purchased with bonds, all of the institutions were very supportive of us. ( Banks, City officials, etc.... )

http://www.lacity.org/cdd/pdfs/news/10-29-08_Draperies4Show.pdf

http://www.practicalmachinist.com/vb/showthread.php?t=152589

I think for the fabric supplier it was a combo of a union shop that was not sustainable and a grumpy owner.

Jason

 

[Dr Stan]

Pete, in my opinion, as cold as it sounds, is that it is not my problem. Why should my company suffer because of their problems. If they cant deliver the raw materials, I can't make my product. Their problems become my problems. I am glad that I have an alternative that is happy to get my call. Maybe they had no money because the owner likes to blow it at the track.

This is a good example of the difference between US and Japanese management philosophies. We (the collective we) like to talk about teamwork, but in practice it does not happen. The Japanese understand that their supplier’s condition will impact their business, for either good or ill. Consequently, they choose to include their suppliers in the team and help them improve and grow.

I highly recommend the book “Lean Thinking” by Womack and Jones. It’s available at Amazon, Barnes and Noble, and many other booksellers.

http://www.amazon.com/Lean-Thinking...=sr_1_1?ie=UTF8&s=books&qid=1226626430&sr=1-1

 

[PeteM]

We just did a ribbon cutting on our new facility . . .
Jason

Cool -- and congratulations. Thanks for filling in the details as well.

 

[SlicerMan]

My interactions with US companies are not the same. They are slow to respond if even at all. Their desire to help is extremely poor, I even have one vendor that won’t purchase a fax machine. ( small woodworking shop ) I have to mail my PO’s to him. On top of all of this their quality is on par with the import products at a higher price. Please keep in mind we pay our bills on time and are a reliable company.

Congratulations, you have found a low price whore who will give you what you want. Stick with her. When the American shops are gone she will own your ass.

I have been to China to visit the factories that we purchase from. A lot of our customers are high profile public companies and they want to make sure there are no sweatshop issues. The factories I see are clean, safe, and well put together. All of the factories I use do have English speaking contacts and they are highly motivated to work. I purchase both textile and aluminum products.

Yes, the factories YOU see are clean, safe, etc...
Do you actually see YOUR parts being made there ?
Or, are they being made down the alley at their fast turnaround subsidiary.
Do you think they would actually show you a sweat shop ?
Nobody is above putting on dog and pony show to impress a customer.

You can't pass on the small orders, you never know where they will lead. I have several stories just like this one of taking a small order and the job turns out to be a big winner farther down the road. Instant gratification is for losers.

Oh goodie! My ship is about to come in.... after 20 years.
If I take just one more loser job the next one will make up for it all.
I know where they will lead...Nowhere

Jason H, It sounds like you have work that no domestic shop wants... small quantities, low budget, demanding turnaround requirements.

Tell us otherwise.

I have lots of "potential" customers that would be reliable and pay on time, but they want cheap and my competitions quality and turnaround is adequate for them. Good riddance to them. I won't whore myself out. I would rather get half the business at twice the price.

Did they give you any fake Rolex watches when they gave you the factory tour.

SM

 

[Jason H]

Thanks Pete!
Thanks Doc for the reference. I will check this out. In regards to team work, do you think what really does keep us companies together is the thought of making a profit? The supplier did not care that I am unable to make my delivery

Slicer, just like anywhere, there is going to be good and bad. My choice where to place the work and I choose the factories that are good. A good size textile factory takes more then a year to set up, this was not done for show. I did see my goods being made and can return when a large size order demands close inspection.

How could a domestic shop not take work that makes a profit? I am upfront about what my capabilities are, I charge the amount that I need to make a profit, and i live up to my word. I do have a lot of work that no one wants and I charge appropriately for it. The other high volume work that is best sought after, I am able to develop the proper manufacturing setup to do it better then the other guy. Thank you to Practical Machinist for more help that you can imagine.

I don't know you, you are probably a great machinist, but a salesman I don't know about. Don't hate your potential customers because they are doing whats best for them. This isn't practicalsalesman.com so here ends that lesson.

You have relativity the same machines as the guy down the street and have to pay the same raw material costs. Something different has to be done.

 

[Dr Stan]

Thanks Pete!
Thanks Doc for the reference. I will check this out. In regards to team work, do you think what really does keep us companies together is the thought of making a profit? The supplier did not care that I am unable to make my delivery

Sounds like you had a supplier that needed to be cut loose. That said, there is quite a bit of difference between the way Japanese companies interact and the way US companies interact. It comes from their society where the needs of the group take preference over the needs of the individual, just the opposite of here.

 

[SlicerMan]

How could a domestic shop not take work that makes a profit?

I'm sure any domestic shop would love to do your parts if they could make a profit on it.
The reason you are having trouble finding one is that nobody here will work for the price/quality/delivery that you require.
You parts aren't profitable here.
Some things just aren't suited to be made here, for many reasons. Like lots of labor involved (like painting the eyeballs on kids toys, etc.).
It's not that American shops are "...not willing to help out in times of need, such as a rush order or change to standard products. "
or
" are slow to respond if even at all."
or
" Their desire to help is extremely poor ".

It's not an attitude or work ethic problem.
You just don't want to pay their rate.
That's cool, but don't lament the loss of American manufacturing because you are part of it. (I guess we all are)
SM

 

[stan 1944]

Manufacturing in America and Europe

Hello Gentlemen,
I can understand the points made by Jason H.
What goes around comes around,I mean the money.By purchasing local it might just give a local person the chance to buy from him I cannot see the (spring links) ! Buying his manufactured goods.


cheers stan




ps spring links=chinks=chinese

 

[Wren]

Sounds like you had a supplier that needed to be cut loose. That said, there is quite a bit of difference between the way Japanese companies interact and the way US companies interact. It comes from their society where the needs of the group take preference over the needs of the individual, just the opposite of here.

Japan is also in their 15th straight year of recession. I know that their attitudes are very different, but I don't know that they are something we should aspire to, as I think their results speak for themselves. We are freaking out about one year of recession.

Yes, it could potentially help our manufacturing base, but it would come almost squarely on the shoulders of American consumers.

I'm sure any domestic shop would love to do your parts if they could make a profit on it.
The reason you are having trouble finding one is that nobody here will work for the price/quality/delivery that you require.
You parts aren't profitable here.
Some things just aren't suited to be made here, for many reasons. Like lots of labor involved (like painting the eyeballs on kids toys, etc.).
It's not that American shops are "...not willing to help out in times of need, such as a rush order or change to standard products. "
or
" are slow to respond if even at all."
or
" Their desire to help is extremely poor ".

It's not an attitude or work ethic problem.
You just don't want to pay their rate.
That's cool, but don't lament the loss of American manufacturing because you are part of it. (I guess we all are)
SM

I think that you are reading way too much into his post, most of that is just not written there.

My experiences trying to get quality work quickly mirrors Jason's experiences. It gets old when a supplier tries to convince you that a holes location is not important, just b/c he doesn't want to buy another piece of material. Our schedules were tight, but we were willing to pay for it, and a lot of other people are as well.

Our customers were seeing the same thing from shops all over the country. We stood up a machine shop to supply parts to people we had done design for and we had no trouble making a profit on the parts. We were able to pay off a VF-4 in 3 months by doing one-offs and some modeling work on it for mock ups. Then they bought a VF-3 and paid it off quickly as well. The other shops were just lazy and belligerent. Just look through a lot of the confrontational posts here on this board and you can see that it would not be uncommon to get a shop owner that could be a real dick.