How to gain production work?

We are a small family owned job shop with less than 10 employees, several of which are part time. The majority of the work force will be retiring over the next 5 years. As the crew gets smaller I want to take that opportunity to add machine capabilities to make up for fewer bodies as opposed to hiring more on. We have more spindles than we can utilize at the moment. Only one vmc that stays busy and is by far the most profitable machine in the shop. The rest are all 3 axis machines without tool changers. With the fewer workers coming up I plan on replaicing some of the bed mills with more VMCs or, if the work is there, an HMC.

I know it might seem like the wrong approach given the 5 year forecast but I am trying to win some semi production jobs. Our large orders at the moment are generally in the 200-1000 piece quantities. We have a great customer base and have been blessed with opportunities to prove our quality.

What I am looking for is some advice on how to make the transition into production machining. I know it will take a different approach, starting with the quote.

Has anyone been in a similar position? Care to share how you won some production work?

Just do good work, and work with your customers.

I consider 200-1000 to BE production work....

Its really pretty simple, just keep dropping your prices until you get the big order.

You've got about six thousand steps of profitability in between one single VMC and some shit ass knee/bed mills ---all the way---> to production.

Tell you the truth, if I only had once capable machine, and 10 mouths to feed/pay/keep busy.. I wouldn't even be taking on jobs of 200, unless they
were quick and easy.

As always, be careful what you wish for as you may get it.

True production is not the panacea that those who haven't done it think it really is. Unless you luck into a job, its a cut throat, to the fraction of a percent business. Your shop processes, machines, people, support functions, and IT systems need to be dialed in.

If you want to get a start now, tune up your existing jobs. Do every one of your jobs come in the front door and out the shipping door without hiccups? Why not? Will they still run through the shop if your new ulcer puts you in the hospital for a week? Do perishable tooling and other supplies come in at the right rate?

I've worked both ends of scale. Production folks are jealous of the piece prices the short run shops get. Short run folks are jealous of production shops knowing the machines are busy for the next three months and no set-ups are required. Its a "grass is always greener on the other side of the fence" thing.

“We are a small family owned job shop…”

Include your family in the decision, and thinking process.

Start there.

John

Bobw said:

I consider 200-1000 to BE production work....

Its really pretty simple, just keep dropping your prices until you get the big order.

You've got about six thousand steps of profitability in between one single VMC and some shit ass knee/bed mills ---all the way---> to production.

Tell you the truth, if I only had once capable machine, and 10 mouths to feed/pay/keep busy.. I wouldn't even be taking on jobs of 200, unless they
were quick and easy.

Click to expand...

All good points. I should have mentioned that I'm more interested in the small lot production. We do prototype work for some of our customers and find out later that they moved forward with the design and had XX hundred or thousand units made. Depending on the material and design, a production house would have little to no benefit over our equipment. Way smaller margins? certainly.

Depriving ourselves of a capable VMC all those years has taught how to streamline the jobs we do have. However, when we brought in the new machine it was able to cut run times in half or more on certain jobs and certainly puts us in the playing field for some one off work we never could have won otherwise.

If I had to choose between the green grass on this side of the fence and the green grass on the other side of the fence I would certainly stay where I am. I love the one off work but feel like we are selling ourselves short by not winning some of this other higher quantity stuff.

At this moment you have just described about 1000 shops.

How are you different ?
1. Where in Pa ? It's a big state.
2. What envelope size do you work in ?
3. What do you specialize in ?
4. What materials do you work in ?
5. What is your machine list, capabilities, CAD/CAM systems ?

yoke said:

As the crew gets smaller I want to take that opportunity to add machine capabilities to make up for fewer bodies as opposed to hiring more on.

Click to expand...

We have not run into ANY problems with hiring morons.

You need to get closer to your customers, and sooner rather than later. And you need to find out where their parts are being made, and for how much. Easy, huh?

For the prototype to production problem, pick a customer to experiment on, and try this:
Meet with them up-front on the next project, and tell them flat out you want to do what it takes to become their production resource. Made in America, local jobs, etc... whatever it takes short of ethical missteps. To that end, engage them in a discussion on their next prototype job outlining the whole prodject -- proto and production -- and ask them what the number is to beat if the item goes into production. (They'll have an idea.) Push for a firm, legal agreement encompassing prototype and production. It may be you have to give away a lot on prototyping -- so be it. Your main goal is production for that part, and the future relationship. Maybe propose to fully and completely credit all the prototyping money over the first year or two of production work. (Not all up-front, however, and definitely based on actual, demonstrated volume.)

To make that viable, you will have to get your internal processes (like gbent sez) and personnel aligned with "production" machining, which may mean a second or third shift of entry-level production machinists, instead of the full-fledged, highly-capable team you have now. Know that it will represent a culture shift in your company, which may not please everyone. But it also may provide part-time work for some of your trusted, trained retirees who want to keep a hand in, socially and professionally, without the full-time gig.

Will it work? Don't really know, of course, but you should find out a lot about them, their processes, and how they perceive your shop int the process.

Or, lowball the production bid and job it out.

Chip

Similar boat here....

What I have tried to do with some degree of success...Develop my customers jobs so they could sell more, make more on them and place larger orders thru me...I on the other hand try to develop their product so that not every shop can duplicate the item easily. A simple part is just a part anybody can make and underbid...but add a few compound curves, a 4th axis op and it knocks out alot of your competition on small runs.

For one customer we were the shipping, R&D and tech department. My customer took in orders and handed over to us. We made, packed, shipped and gave tech support. I got a good price for the job, my customer didn't need brick and mortor, lowering his overhead to a cell phone and a shared rented suite known as "Corporate headquarters".

It was mentioned about bringing down your price...thats a tough call as you start working for less and less and very hard to get the prices back up and once you do they start looking at the cheaper venders again...unless you can add value to the part or overall process....which brings me back to my last comment.

Lot's of good advice here. I've worked on both ends of the spectrum, and I'll say this about production - It's boring, it comes with lots of headaches, and it seems to never let up, and it's cut-throat. I can't believe we make the parts we do for so little and still make money.

Unless you just want to capitilize on the work that you're missing out on, I'd let the production stuff go...

You say you all have only a handfull of pretty skilled workers. So, as a shop, what are you good at? What do you specialize in? Is there anyway to focus more/expand on that, and not worry about the high-volume stuff?

digger doug said:

At this moment you have just described about 1000 shops.

How are you different ?
1. Where in Pa ? It's a big state.
2. What envelope size do you work in ?
3. What do you specialize in ?
4. What materials do you work in ?
5. What is your machine list, capabilities, CAD/CAM systems ?

Click to expand...

1)South eastern
2)31x18.5x21. We do work on some much larger pieces in a pinch. Several jobs every year require 8-16 ft extrusions milled down to nothing.
3)Mostly prototype work for aerospace, Defense, Hydro, electronic, medical fields. We are the go to for a large snack food manufacturer in the area who has repairs and new pieces week.
4)Aluminum, Copper, Stainless in that order. We work with plastic on a pretty regular basis. Less tool steel than we used to do. Exotics from time to time.
5)Hand full of manual equipment, (4) 3-axis bed mills (2) cnc tool room lathes (1) VMC, surface grinder,band and horizontal cut off saws, Old Mits EDM. All the typical inspection equipment.
I program in Solidcam and have been pretty impressed. It makes a pretty efficient tool path and I have found it to be pretty intuitive.

I will make it a goal to discuss our customers production needs more in depth when they call about their prototype.

I would strongly urge you to read this thread which I started: http://www.practicalmachinist.com/vb/shop-management-owner-issues/any-job-shop-owners-managers-here-can-offer-input-iso-other-qms-286688/. We are in this position thanks to "seeking & acquiring large qty production work".

The point here is that with "larger jobs" comes usually "larger companies" which will soon translate into "larger headaches". If I could make money staying with other small companies doing small jobs and avoid doing PPAP's, filling out endless surveys, having customer on-site audits (i.e. your customer visiting your facility), then I would. I think someone mentioned it, be careful what you ask for, you might get it!

How it will go is you'll start quoting and things will look good and THEN all the other crap will come along; long after you have negotiated price. If you do not have a quality management system or ISO/equivalent certification then get ready for a long and bumpy ride that you won't enjoy. I'm not saying all large customers would be like this but many will. If you can supply to an industry that supplies/sells to someone who doesn't care about all the quality stuff (not saying that they don't want quality parts, they just may not need all the documentation/certification) that is your best bet.

Good luck,
The Dude

Larry Dickman said:

We have not run into ANY problems with hiring morons.

Click to expand...

If you'd like help with hiring morons, call my employer. They hired me, so obviously they've figured out how to do it.

To gain production work you need production equipment. Only having one vmc ain't gonna cut it.

Now's the time to start phasing out your 3-axis machines with no tool changers. You need full-blown, cnc vertical machining centers, and probably a cnc lathe or two as well. It's a whole lot easier convincing a prospective customer to give you production work, which requires full cnc machining centers and lathes at a minimum, if you ALREADY have the machines in place.

Horizontal machining centers are a whole different animal, costing significantly more than a vertical, and they require lots more fixture work, process and tooling development, and setup.

Sometimes you gotta go big or go home. Start now on a plan to finance and purchase new, or fairly new, cnc machines. If you haven't got a clue as to fixing them, then you're best to buy new, so you can have full distributor and factory support. For these reasons, it's hard to beat Haas. For ease of programming, speed, power, and resale, it's hard to beat Mazak.

Good luck!

Tool Cat Greg

The only one who will benefit from you doing production work with that equipment is going to be your customer. First things first...you need equipment suited to the job. Sounds like you have a lot of people working there for the amount of machines you have. I have 12 spindles and 4 guys (5 including me). Do anything from 1 pc to 1000 pieces. Normal is 50-100 size lots with the occasional 250-500 jobs thrown in.

Best way to win production is when you can take that 6 operation job and do it in 2 ops and charge occordingly to what everyone else with a vertical charges.

dstryr said:

The only one who will benefit from you doing production work with that equipment is going to be your customer. First things first...you need equipment suited to the job. Sounds like you have a lot of people working there for the amount of machines you have. I have 12 spindles and 4 guys (5 including me). Do anything from 1 pc to 1000 pieces. Normal is 50-100 size lots with the occasional 250-500 jobs thrown in.

Best way to win production is when you can take that 6 operation job and do it in 2 ops and charge occordingly to what everyone else with a vertical charges.

Click to expand...

When I say production I have in mind the 500-3000 pc orders. I'm not looking to dedicate a machine and employee to a year of making the same thing. Perhaps I should have been better at bring that up earlier. Most of the "production" jobs were losing out on are rarely over 500 pc quantities.

When I said less than 10 i meant it. We have a handful of good machinists who are decent on the 3 axis machines. It is pretty much myself and one other who can program/setup/churn through parts on the VMC. If I had an additional VMC or two I'm confident I could keep the spindles turning.

Over the years the machine capability steps the company took have, in my opinion, been to small. What we have now is several machines sitting idle most of the time because they don't have tool changers or we don't have the quantity to make it worth its own setup. Because every machine has been paid for in cash the incentive is less to replace it with more expensive machines. While Most of the work we win is smaller size/short run time work I can't very well keep multiple machines busy doing 5 or 10 parts.

I know it all works out better in my head and I'll never get that perfect pairing of jobs and quantities. Am I wrong in thinking that there is more money in what I just described?

So, assuming the prototyping process (CNC) results in a part with final production specs, you should be able to compete with production-level pricing because you have to do virtually nothing except make sure the program is time-optimized. Being aggressive on pricing shouldn't kill you, since you've got a head start on the competition. Still important to find out the competition's pricing and delivery details, though.

To preserve your investment, can you retrofit tool-changers from the "next level up" model? (May be a pipe dream, of course, depending on machine.)

Chip

Chip Chester said:

So, assuming the prototyping process (CNC) results in a part with final production specs, you should be able to compete with production-level pricing because you have to do virtually nothing except make sure the program is time-optimized. Being aggressive on pricing shouldn't kill you, since you've got a head start on the competition. Still important to find out the competition's pricing and delivery details, though.

To preserve your investment, can you retrofit tool-changers from the "next level up" model? (May be a pipe dream, of course, depending on machine.)

Chip

Click to expand...

We could retrofit a 4 tool changer on one of the lathes, other than that we're stuck with what we got. I could probably get a bit more creative with creating a cell. although then I lose the benefit of unattended run time.

yoke said:

When I say production I have in mind the 500-3000 pc orders. I'm not looking to dedicate a machine and employee to a year of making the same thing. Perhaps I should have been better at bring that up earlier. Most of the "production" jobs were losing out on are rarely over 500 pc quantities.

When I said less than 10 i meant it. We have a handful of good machinists who are decent on the 3 axis machines. It is pretty much myself and one other who can program/setup/churn through parts on the VMC. If I had an additional VMC or two I'm confident I could keep the spindles turning.

Over the years the machine capability steps the company took have, in my opinion, been to small. What we have now is several machines sitting idle most of the time because they don't have tool changers or we don't have the quantity to make it worth its own setup. Because every machine has been paid for in cash the incentive is less to replace it with more expensive machines. While Most of the work we win is smaller size/short run time work I can't very well keep multiple machines busy doing 5 or 10 parts.

I know it all works out better in my head and I'll never get that perfect pairing of jobs and quantities. Am I wrong in thinking that there is more money in what I just described?

Click to expand...

When I say Production I mean 500-3000 pc orders as well. No way you will win production orders of that quantity with your equipment. And if you do you are going to go broke.