Gerald Davis, The FABRICATOR’s Precision Matters columnist, writes an interesting capper to his yearlong series on estimating in the publication's December issue. In it, he discusses optimization of the quoting process so that it matches the true focus of the metal fabricating business. The estimates that are being sent out have to reflect the type of work that the shop is good at or wants to pursue. If a shop wants to win low-volume, high-margin work like prototyping services, it needs to include the correct pricing and delivery information that is likely to match the customer’s desires.
It reminded me of a question that gets bandied about sometimes when I visit metal fabricating companies: What is the company’s business?
It sounds stupid, but sometimes it’s easy to get caught up in other activities that take attention away from the focus on the customer. That’s not where a metal fabricator wants to be.
During the Fabricators & Manufacturers Association’s SoftwareFAB Workshop & Tours in late October, participants had the opportunity to visit Chirch Global Manufacturing, Cary, Ill. Chirch recently made the move to the Epicor Express cloud-based enterprise resource planning (ERP) software package. (The “cloud” means that the metal fabricator does not host the ERP software on its own servers, but rather accesses it through an Internet connection to Epicor servers.)
Anthony Chirchirillo, the company’s CEO, described the move as a smart one for his company. Using the software, Chirch doesn’t have to worry about attracting and retaining hard-to-find information technology (IT) talent. It doesn’t need to keep track of software releases, as Epicor updates the ERP program automatically as part of the contractual relationship. It doesn’t have to set aside as many funds for hardware investment and maintenance because it doesn’t have a room full of servers.
“We didn’t want to be in the IT business,” Chirchirillo said.
On a recent visit to nexAir, a Memphis, Tenn., welding gas supplier and equipment distributor, I was touring its newly renovated downtown facility, which now has a 4,500-square-foot equipment demonstration room, and the conversation turned to shipping of components, tools, and equipment from its warehouse. Patrick Galphin, the company’s director of marketing, pointed out shipments all with the appropriate labeling, lined up on the floor and ready for UPS pickup, and referenced a time when nexAir trucks used to drive around with less-than-full loads, wasting gas and time. Why spend the time and effort to figure out a more efficient delivery means when they could turn over responsibility to one of the world’s largest logistics specialists, which happened to have multiple vans and planes ready at the nearby airport?
“We weren’t interested in getting into the transportation business,” Galphin said.
Of course, metal fabricators can have a homegrown IT infrastructure and a fleet of its own delivery trucks and still run a successful business. But in today’s economic environment, where companies have to do more with less, it makes sense to take a new look at all aspects of a business operation. Even lean organizations have to satisfy customers’ demands or face lean times on the revenue side of things.
So let’s revisit the question: What is a metal fabricator’s business?
It’s the customer satisfaction business, and that occurs only when the customer is paying for the time and effort put into its fabricated metal parts. That customer is not that interested in supporting other aspects of the metal fabricator’s business.