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shop wants to find a niche market

cncnewbie

Plastic
Joined
Sep 6, 2007
Location
New York
Hello,
I am a rookie business consultant and this is my first machine shop/job shop assignment. This particular shop wants to find a niche market concentrate on so they can get out of the 'job shop' business. My background is in plastic injection molding so naturally i suggested that market, but this shop doesn't have the equipment to do that.
Below I will describe the shop and their equipment:
Equipment
cnc milling
1-1997 fadal 40' by 20'
1-1992 tree vmc 40' by 20'
cnc lathe
1-1989 mazak 10a
grinding
5-ko lee surface grinders
1-moore jig grinder
1-Kikind Surface Grinder 12" X 40" table 12" height
1-Kent O.D. Grinder 9" I.D. 28" Ctr to Ctr
1-Shanniji I.D. Grinder 9" I.D. 20" Ctr to Ctr
edm
1-japax wire edm8" X 13" table 9" height
1-ARD M300 EDM RAM X: 12"Y: 6"Z: 6"
manual milling
1-1983 bridgeport track mill
2-bridgeports
1-Laguh Vertical Mill
manual lathes
1-Hercules Engine Lathe 10" swing 74" long
1-Clausing Engine Lathe 6" swing 30" long

Employees:
1-grinder in the grind room
1-cnc mill programmer/operater(also can operate cnc lathe)
1-cnc lathe programmer/operater
1-manual machinist(also can do basic cnc mill jobs if needed)
1-shop foreman(also operates edm's when needed)
1-secretary
1-part time engineer(retired)
1-full time inspecter(also does maintance on machinery when needed)

-Shop is a climate controlled 24,000sq/ft building with 6,000sq/ft being office space. The building will be paid off in six years.
-shop does not have pallet changers on the mills but they do set up production jobs to run at night-shop owner and foreman split duties coming in and changing parts-not the best system but they used to do the machinist playing on the internet during 3+hr cycle time thing....
-shop does a lot of fabrication(time and material) type work for a local factory
-other than that the shop is just a job shop for the industry
-shop utilizes E2 ShopTech system for routing/pricing
-shop uses virtual gibbs for cnc programming
-current shop rate is $65/hr.

If you guys have any ideas as to what type of market this shop can concentrate on with this type of equipment, please let me know. Also, if you want any more info please let me know and I will try and help you guys out.

Thanks guys,
Tiff*
 
Niche Market, aka " the rest of the stuff none of us want to take on " :D

Given that equipment list, I guess " a bit of this and that " is the market. If they're really looking for their own product to manufacture and sell. Then they have to come up with it and put the energy to make it work, unless they buy out someone else.
 
If you find a niche market a machine shop can get into and make lots of money and not have to do job shop work anymore, could you please post it here? I'm sure there are about 2,000 of us here that have been trying to figure out the exact same thing and could use some help.
 
I have an idea, but I am thinking that perhaps we should pursue it . . . with a little inginuity, lots of hard work, investment cash and a solid marketing campaign, it "might" be a real money maker. :rolleyes5:
 
This isn't a good idea at all. Niches haven't been at the forefront of architecture since about 1500. You rarely even see them in new churches. Now, every mosque will have one, called a mihrab, but I don't think they're CNC machined very often.
 
No, I am a lean/six sigma manufacturing consultant. I am just intrigued by this question they asked me, as I have only been around a tool shop as a project manager for plastic injection molding. We have a lot of work to do at this particular shop, so maybe we can make the job shop deal profitable and I will be more than happy to let you guys know!
Tiff*
 
-Shop is a climate controlled 24,000sq/ft building with 6,000sq/ft being office space. The building will be paid off in six years.....-shop does a lot of fabrication(time and material) type work for a local factory

So.....8 people in a 24 THOUSAND sq ft building and 6 THOUSAND sq ft of office space??

Jeesh......

Paid off in 6 years.....and 'lots' of T&M work from 'right here local'? Sounds like things are pretty dang good as-is!

Where in NY ....or is it an 'area 51' facility?

dk
 
A Lean/Six Sigma manufacturing consultant? Why didn't you say so?!?

Just tell your clients that the key to finding their niche lies in utilizing their value added paradigm shifts to achieve buy-in in mission-inclusive emerging markets while streamlining their business processes and valuing diversity. From there it's a matter of stamping your name on your bill.
 
Just tell your clients that the key to finding their niche lies in utilizing their value added paradigm shifts to achieve buy-in in mission-inclusive emerging markets while streamlining their business processes and valuing diversity. From there it's a matter of stamping your name on your bill.


I can see the bill, 46 buzz words @ $100 each, plus $175 in travel expenses.
 
there isn't a niche for them with that equipment list...in fact, they're just around the corner from bankruptcy. You need to get over there right away, no, scratch that, this instant and break it to them. I'll give you 10% of the scrap value of the machines for a commission if you secure the rights for the plant clean-out for me. I'll be there with trucks and a rigging crew directly.
 
there isn't a niche for them with that equipment list...in fact, they're just around the corner from bankruptcy. You need to get over there right away, no, scratch that, this instant and break it to them. I'll give you 10% of the scrap value of the machines for a commission if you secure the rights for the plant clean-out for me. I'll be there with trucks and a rigging crew directly.

Actually, that's not far from the truth. They would not be able to compete in today's market as far as production work goes with that machinery, and if they don't already have a base of regular customers for prototype, maintenance, one off style work, it would be a long shot. Let's put it this way, I'm not going to run out and buy their stock.
 
ok guys, don't worry about how much/how i'm getting paid for my work. And if you have nothing to contribute to the original question, please don't post. This particular shop is located in Middleport NY, not really a secret place, you should be able to find it on google maps :))
What are your guys' thoughts on the $65/hr shop rate?
thanks all,
Tiffany*
 
Sixty-five bucks an hour.....

In New York????

I live in rural bumfok Texas, and I bid at 70 bucks....per machine not per man....although, there is some overhead in that figure...debur soft seal, package, ship, steak dinner for shophands after a job well done;) Sometimes, one man can run three machines at once, if quantites can justify the setup time....that's two hudred and ten an hour for that man during those jobs. We are the lowest rate in town by five and ten bucks an hour.(2 other shops)
We aren't any busier because of it, and are considering an increase.
I always thought we had about the lowest cost of living in the country.
Maybe I'm mistaken, but I don't think that rate is high enough.
 
You have 16 posts now, and you're telling us to not worry about YOU getting paid on this job. Come on... Do you really expect us to bend over backwards to do your work for you here?

Try the XXXXXXXXXXX. I almost gave away the obvious solution to your problem with extracting info out of this group for free. Almost. ;) And no, it's not exposing yourself.
 
$65/hr is about what my shops average rate is and we do tool and die..... which is decently cheap for what we do. Around here the job shops charge between $45/hr to $85/hr. I'd say, using middle of nowhere PA as referance, that thats about in the middle average area.

I'd just like to add that instead of harrassing the original poster why not just post? I mean if there is such a problem with helping somebody with information because thats what they're getting paid for then why does PM having a shop management section with threads of what benefits and serverance and what should I pay people? I mean if you're the owner shouldnt' you have that already figured in to your overall bussiness plan? Why not free exchange of information regardless or just no exchange of information?
 
ok guys, don't worry about how much/how i'm getting paid for my work. And if you have nothing to contribute to the original question, please don't post. This particular shop is located in Middleport NY, not really a secret place, you should be able to find it on google maps :))
What are your guys' thoughts on the $65/hr shop rate?
thanks all,
Tiffany*


Well, first, $65 an hour is crap, 15 years ago when I was in college I could make up to $100 an hour in my parents driveway with under $1000 in tools wrenching on cars.

First, no amount of japanese buzzwords or shadowboards are going to make them more money, they don't need to get "lean", they need to get "smart".

They are running crap, and they can make a whole butt load of money on it. How do I know, because I run crap and am jealous of that list of crap, I could make a lot of money with that. Sure as hell wouldn't need 8 employees to do it though.

First mistake I see, they are running "production". They don't have the equipment to run production, and trying to do so is just beating their head against the wall. If I have to keep a machine running overnight, it sure as hell isn't pulling $65 an hour. Last over-nighter I pulled was at $310 an hour(that included fixture design, building it, setting it up and running it/time = average of) and it was a half hour run time(that op/last op), so I got some other stuff done too.

Second mistake, too many people. 3 GOOD people with a part timer or two to sweep up and run some machines, should be able to keep that equipment hummin'.

So with that equipment list, what is their niche? design a product, or job shop. The job shop can run from square blocks with a hole at $10 an hour or, depending on their people, take on the nasty stuff at big bucks, where the machines speed doesn't mean a damn thing, where competition is limited since most people will look at it and say "I'm NOT touching that!!". Add in some other value-added (oops buzzword) crap like heat treating, assembly, coatings, and consistent quality and fast turn around's when needed, and they should be rolling in the money. No buzzwords needed.
 
Well I was going to stay out of this one, but now you riled me up, too...

Quote: "And if you have nothing to contribute to the original question, please don't post."

This is a _forum_. So far I don't see where you have contributed anything to the forum yet to warrant special treatment. So, If you can't stand the random comments, don't post your questions here.

Quote: "I'd just like to add that instead of harrassing the original poster why not just post? I mean if there is such a problem with helping somebody with information because thats what they're getting paid for then why does PM having a shop management section with threads of what benefits and serverance and what should I pay people? I mean if you're the owner shouldnt' you have that already figured in to your overall bussiness plan? Why not free exchange of information regardless or just no exchange of information?"

Well at least the OP is up front about his credentials. But nevertheless, for a consultant, (s)he is asking a question that everyone would like to know the answer to. At some level it is sort of galling. If you posted, "so what is the meaning of life the universe and everything for a machine shop in upstate NY" (which is what (s)he really asked) you would expect a bunch of random brain firings & low level background heckling. Some might even be useful if you don't personalize them. The more responses generated, the more people begin to think and decide to add their 2 bits as well. Some who might have passed by will decide to add something useful either as a courtesy, or because they want to respond to all the non-productive comments.

And, this is in upstate NY. I'm personally in the woodwhacking biz, not machine shop, but this is one tight, closed/ cutthroat competitive area for machine shops.

Looks like someone once had an iterest in manuall grinding work. Where did that go?
There's certainly lots of aerospace around here. (Hillary bringing home the pork)

Do they have the ability to add value to Marcellus shale logging or extraction processes? That one is potentially huge, if they have the mind(s) for it.

smt
 








 
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