Over the past year I’ve talked to various metal fabricators, from low-volume job shops to specialized manufacturers, and I’ve noticed one thread common to all of them: They’re all high-mix, short-run environments. Volumes vary; some companies process a greater number of short-run jobs than others. But regardless of overall volume, they all seem to be producing short-run jobs.
Of these, I can identify two kinds that have well-endured the downturn. Both kinds have perfected shop floor operations to reduce lead-times, but each approach involves starkly different styles of customer interaction.
First is the shop that offers various services, from cutting and bending to welding and finishing, and concentrate on customer communication and value-added engineering. Companies like Litchfield, Mich.-based Nex Solutions and Baltimore-based Marlin Sheet Metal Fabrication come to mind. They often avoid the traditional RFQ route entirely. Instead, they may visit the customer many times, ask a lot of questions, and suggest design changes that can save the customer money.
It’s the “you-wanted-that-but-how-about-this” approach. They often go beyond traditional design for manufacturability. They make suggestions that not only make manufacturing a part easier, but also make the final component easier for the customer to use or assemble into a larger product.
These shops may even manage a bit of their customers’ supply chain. These metal fabricators realize they’re cutting and bending sheet metal that’s often the largest portion of the final product or subassembly, so why not manage the supply chain for the entire subassembly? That way, the OEM no longer needs to coordinate delivery from a laundry list of suppliers, but instead has one point of contact: the metal fabricator.
Another route to success seems to involve automation on the front end, where software allows customers to submit quotes, receive prices, and place orders quickly. Those quotes are immediately routed to the machines on the floor, which may start producing parts for that order within hours.
East Chicago, Ind.-based Robinson Laser comes to mind. The company, which has roots in the metal service center business, sold its steel assets to Cargill this year and became a company that specializes in the cutting of flat sheet. The company provides one principal service, laser cutting, a process perfectly suited for high-mix manufacturing.
Robinson basically has automated its quoting and order processing. Working anonymously, a potential customer's engineer can enter part information online into a service called PriceCheck, which gives an immediate estimate on the price of a part based on, among other things, current metal prices. If cost is an issue, the engineer can go back, tweak a design, then resubmit to get another quick estimate. Once he’s satisfied with the price, he can log on and start the RFQ process. The interface allows the customer to set the price based on the volume.
“It’s the classic price-to-volume relationship,” said Paul Labriola, Robinson’s chief executive. “The more volume, the lower the price. Twenty tons of a variety of parts has a better price than one piece of one part.”
Once the customer is happy, he clicks to submit the quote. Once the order is accepted, it is sent into the production queue. The company’s software nests and sends jobs out to the 40 laser cutting machines, and customers can log in online to check order status.
These two ways of going about quoting and sales sit at opposite extremes. They both have provided some much-needed differentiation during the toughest business climate in a generation, so they may work well as the economy ever-so-slowly recovers.