Can you expand capacity to the point where you can keep up with OEM customers? If not, you better start pulling together a formal plan. OEM customers aren't going to wait around.
"It's getting to the point where we can't work with companies that don't have long-term capacity plans," said Warren Long, senior principal supplier development engineer, Oshkosh Corp., during the Strategic Sourcing session at The FABRICATOR's Leadership Summit (FLS) in Innisbrook, Fla., in late February.
It's not enough for a metal fabricator to keep up with more jobs coming through the door; a shop needs to be planning how it can address the need for additional capacity in an intelligent and organized manner.
The thing is that many metal fabricators simply assume additional capacity is related to equipment capacity. That's not necessarily true in some instances.
General Sheet Metal Works, South Bend, Ind., is trying to reshape itself so that it can grow profitably with its customers. Until recently the metal fabricator was like many of its peers: When capacity appeared constrained, it added equipment.
General Sheet Metal Works finally asked a third party to come in and take a fresh look at the company's operations, Art Harrison, vice president, operations, told a group at an FLS break-out session called "Strategies for Adding Capacity." Early investigations revealed that the company simply didn't have the systems and management talent in place to accommodate rapid growth.
For instance, as management began charting their processes one day, everyone noticed the tangled mess of communication lines that represented the quoting process. Further investigation revealed that delays and redundancies were normal during job quoting because people didn't have the needed experience to work efficiently or to issue a quote without having a more experienced co-worker check the work. General Sheet Metal Works didn't have success in replicating quoting expertise as the company added people after the Great Recession.
"What we learned was we had a limited knowledge of what could be defined as capacity," Harrison said.
Now that management has upgraded the knowledge level of those preparing quotes and reassigned some job responsibilities, Harrison said, the company is in a better position to grow in a more controlled manner.
Capacity issues also can be related to a fabricator's physical facility. At the same FLS break-out session, Gregg Simpson, president, Ohio Laser, Plain City, Ohio, told the crowd that he tracks sales metrics and availability of shop floor space to determine when it makes sense to add on to plan a facility expansion. It sounds like common sense, especially considering that Ohio Laser was an early resident in its industrial park and has room to expand. But town leaders change over time, and so too might attitudes about manufacturing in a community. Simpson said that is one of the challenges that he has to confront when expansion is required.
Metal fabricators need to plan so that they can grow with their customers. They also need to be intelligent in deciding the best way to take on the additional responsibilities.