Hot-Rush Jobs: THREE THINGS You Need to Know | Machine Shop Talk Ep.115
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- เผยแพร่เมื่อ 6 ก.ย. 2024
- What do you do when you solve a very difficult problem for a customer in a hurry, only to be met with the cold shoulder when it comes time to pay their bill?
On this episode of Practical Machinist’s MACHINE SHOP TALK, Ian Sandusky from Lakewood Machine & Tool is back to dive into the wild world of dealing with hot-rush work, and how to best navigate these situations when they inevitably arise.
How have YOU handled these situations in the past? Have any tips or tricks to share? Let us know in the comments below!
Read the post from the forum thread here:
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I was a consulting engineer. I learned to charge a 50% retainer to start a project and the other 50% before I turned over the signed plans. The people that are in a hurry, usually are the slowest to pay because they are cutting corners and don't plan ahead. Good Luck, Rick
That’s the way to do it!
I will go one step past that. Any company that has an emergency for a mission critical part is being run by dolts or is in financial straits. Imagine a racing team not having a spare set of tires. AND, not having a good enough relationship with their "normal" suppliers that they need a new shop to do a rush job is'nt a good sign. Things happen. But if their normal vendors wont help, it's likely becuase they're a bad customer or have burned bridges by always demanding emergency service. Seller beware sometimes.
No work starts without a PO, if the fire is that hot that a line is down, they can get you a PO in 30 min. If they can’t sounds like their problem not yours.
I'm the same way these days in reality - no paper trail? No chips flying.
It’s a shame the world’s come to that, but your viewers’ replies are right on. Money up front.
Engineer here and that is EXACTLY the point.
I used to do a lot of work in manufacturing doing PLCs & Automation and I'd get phone calls at all hours of the day. It was amazing how other people in the companies I worked for would hand out my phone number and tell people to call this number whenever they needed something. I used to get dragged down to factories under threat of losing my job all the time.
The amazing amount of SHIT behavior that goes on is staggering.
In the end I simply walked away from manufacturing and went into mining.
Similar SHlT but better money.
This is a good gauge to meassure those clients!! Im using it!
That is zen way of dealing with shysters
“Not My Problem”
People in need can be the most ungrateful bastards ever.
Shame it often seems to be that way!
not only people in need, also corporations in need, Siemens is no better than that. I wouldn't believe it if I wouldn't have seen it myself.
Rush job. OEM $1,000 in 6 to 8 weeks. This shop should have called when the part was ready and said "Bring $2,000 cash and you can take it away". The willingness to pay is proportional to the amount of pain of the moment. Once they had the part in hand and the factory running again, no more pain for the client, so screw the little machine shop. Rush job, rush pay BEFORE delivery.
It never ceases to amaze me that how quickly someone needs something is often inversely proportional to how quickly they can pay for it. If I can fabricate your part in hours, you can certainly find the money to pay for it in a similar timeframe.
Hear hear!
Years ago our great electric rewind shop did a rush emergency repair on a obsolete 4,160 volt motor that was needed to prevent subway tunnel from flooding. Shop kept a crew working over 16 hours to make repairs. City keep giving him the run around for the reapairs.A year later another identical motor burnt out day before heavy rain. Rather then do the usual delivery he told them they must come pick it up with a check for previous work. They gave him the check which he had somebody run out & deposit it and told them when he receives a check for that job he would release it. City had thier lawyers call him up and he told them to sue him. They sent a big shoot from the city trying to bully him and he said no check no motor and he would be closing the shop at 5 PM and being its a holiday weekend they could take the next week. After they hand delivered him a second check told him that his shop will never do work for them again. Told them he wouldn't perform work for them no matter what.
Rush jobs get paid for when the part gets picked up. Otherwise it does not leave until payment is received.
Customer comes in....
I need this welded ASAP!
I stop what I'm doing, weld it in 20 minutes
He says great.......what do I owe you.
I say.......forget it.
He says .......thanks
I say.......now I'm your buddy
He says.........ya, for the next 15 minutes
True story
Having done work for these larger companies I can tell you the bigger the company the harder it is and the longer it takes to get paid. Make sure you charge late fees and interest at the maximum allowed in your state! They have 30 days to pay and then you start charging them late fees and interest. I just finally got paid after 9 months of chasing down one large company for my money. Nothing but lies and excuses! The check was mailed yesterday, and we need you to send us this or that, and let’s not forget my favorite line “this is not how we do business”.
I'm not in the machine shop trade. However it's all the same. I call these folks "bouncers" because they bounce between shops looking for cheaper and cheaper prices. Usually bad mouthing the last shop. So what do you think they will do to you. Yup, I will do a job for them, but, I'll charge twice the price and request cash up front. They will pay, but you never see them again. But you got your money. Never offer a discount to get work. You'll get screwed.
Rush jobs, especially from a new customer. No work starts without a PO. If it's a rush I ask for 50% down. Got hosed doing a favor for another machine shop. It was only $400. The customer didn't pay, then the shop stepped up and paid me. It was 120 days later. But he made good, and I get work from him for last 4 years. He doesn't own a cnc lathe & doesn't want to own one.
The first rule of business: The value of your service diminishes after the work is done. If he told them $1200 up front they would have paid it with a smile.
It's always a good idea to ask what the purchasing process is and what role do they play. Having these types of conversations up front is way better than finding out after the fact.
I am a fiberglass repair shop. Rush work I do for business, and remembered advice given to me years ago. Rush or Hot Rush creates two rush jobs. Because the work you had been doing, but stopped to accommodate the "new" rush job, impact the timeline of the job that was temporary put on hold. Of course, not every time, but it happens, my pricing considers this. Kudos on bring up this nasty corporate tactic of freezing you out once the work is back in their hands.
The problem is that everyone wants everything yesterday. They think we have magic xerox copier machines that you simply upload the model into and it spits out a perfect part in spec of the crazy toleranced drawing some unaware engineer designed. They think HMMMMMM I paid $15000 for this, they must be able to just press a button to shit out $15,000 worth of work in 50 minutes..... Oh... That's not how it works? This isn't amazon prime????
Hahaha I hate how accurate this is
that is the problem! every one thinks is amazon!
ya mean ya cant just hit that there green button and bam...all done, lolllllll
I’ve learned this the hard way. Send a quote, get a Purchase Order or Proof of Payment and then carry on with the job. Don’t break down your pricing as they might run with your quote down the road to the next guy. If their factory is really standing still and they’re losing big time, then they can issue a “breakdown PO” or “emergency PO”. Also don’t add your hourly rate and quantity of hours spent. Calculate your estimate hours plus an hour or two for delays etc and add the labour price. If they can’t accept your quotes or pricing on your terms, doesn’t matter what the size of the company or price of the project, if it costs you your peace then it’s too expensive. They don’t care if your employees and rent is paid up to date, only concerned about their own production.
Number one negotiate before you work and get a credit card number before you work. If they don’t like the terms let them go somewhere else because they wouldn’t be coming to you as a machinist to make the part if they had another option. Number make a ticket to start out get a signature. You know as well as I do if you act you’re more important than everyone else and want to jump to the front of the line you have to pay that’s just the way it works. I worked in auto repair field for 25 years and I can’t tell you how many times someone wanted their truck fixed now today in front of everyone and when completed you end up storing it for weeks. Finally no work leaves shop until you get a check or it’s paid for. A million dollar companies have to have petty cash or emergency funds. Your time isn’t free
you are so right. I'm a former machinist and have been working in a big company as an engineer who sometimes buy things from a machine shop or electronic factories. It's so embarrassing when payment is "renegotiated" by a professional buyer and all bridges are burned down because of ignorance and stupidity from that professionnel buyer, who want to show management how effective they are even though that Business lawyer have to spend time to resolve things.
Young buyers who plan to hop around jobs don’t have any long term incentive to play nice with suppliers. It’s crazy how rude and entitled I’ve found certain purchasing agents to be.
@@poetac15 one of our buyers where so rude that even his colleague could not work together with him. He, at least managed to get fired when the company had to reduce its cost but it took several years having him to make disruptions.
Been many who try. And i got stung twice. I restore cars.. last payment often fails to come.. but i always retain the unrplacable things like grills and indicators.. dash components.. chrome.. amazing how fast the money comes through.. have only put a lien on 2 cars in 15 years. 80 dollars a day storage.... moral is. We shouldnt have to.. have one problem which is current.. but great video.. thanks
After 12 years doing the trade, of course I've seen this situation several times in all places. And I have a strong opinion on this:
I always do the job and take the risk of not getting paid because, if the problem gets solved, you get leverage with the people you helped.
You never know who is going to get promoted, or change companies, or change industries even, and they are going to remember you as the go to shop to solve serious problems.
I always make the asumption that they never want to screw me over and, if they do, more often than not was not the people but the corporation burocracy.
One time I made a part for a technician and the company didn't paid me, 7 years later that technician was a supervisor in the same company and gave us so many work that he became like the 70% of the company income.
I do understand that way of doing it, building a network and good reputation. Hopefully one have set a treshold so one do not get hit harder economically than one can take, in case a job should go wrong
rare, 99% don't out that way.
Lack of preventative maintenance and willful ignorance driven by greed are the main reasons that cause situations like this. Companies don't want to invest in PM, they just want to push people harder for nothing.
A lot of times for Facility Managers the only thing they can really control are repairs and maintenance and labor. Hence those are the areas they clamp down on to keep their costs down.
Never do anything for a new customer without a signed PO or money up front.
Nothing personal, it's strictly business.
Get payment first or decline the work. It's that simple. You are in control before the repair is made, they are in control when the repair is completed.
I personally don't do walk-ins, if a walk-in gets past security I usually just point to running machines and say if I have to turn them off to do your job it'll be at a cost of £250/hr + what it costs to do your job, that normally works to get shut of them...
I worked for a major food company in the USA and a certain pump was 30k USD with a 12 week lead time.
They normally kept one new spare in the warehouse until the "Lean" team decided to "save" 30k by eliminating that spare.
Needless to say that "savings" bit them on the ass several times until they wised up.
I was lead mechanic for a manufacturing plant Downtime was extremely expensive. I would requisition spares, and those requisitions would be denied. Then when it bit us on the ass, it's "Why don't we have a spare on the shelf?"
Right up front doubling that $1,000 number for "dropping everything" ($2,000 COD) when they first come would be my (written) response. When I deliver in a few hours AND get paid - everybody's happy and no one get f'd. They will be back.
Customers often state, "I need it in a hurry" and "I dont care how much it costs".
Only the first one is true.
No terms for unknown clients. Cash on delivery or certified check. You are not a bank for anybody, unless you want to be cause you know them. No money, no part.
This is the way.
Way many industries go you are hero to zero as soon as the customer gets what they want. I finally told a builer I worked for that was slow pay but wanted you done yesterday that I would come as fast as he paid. He did not like that at all but customers will abuse you as much as you allow
Never break down your quote. Never justify your pricing.
That's just because usually the customer doesn't appreciate the line item "knowing my shit" that comprises most of the bill.
Ian, good advice! I absolutely agree!
At Mercedes, one hour of downtime in Germany costs around 1,000,000 euros. You can pay this if you are a supplier who does not deliver parts on time.
Wow! That’s insane, but I suppose I shouldn’t be surprised!
@@iansandusky417 Mercedes is extreme in every respect.
Some companies don't look at the metrics the way you or I (shop owner) would. YES - you have the better price. YES - you have phenomenal turn around. YES - you have a non-existent NCR rate with them. But for all that there is no reciprocation. I have a customer like this. So when they send work it gets low priority. If they drop of the list, it's OK. However, if they aren't paying ON TIME, then we move on.
This is why I could never be in business for myself! I would tell them it is $800 and I won't be doing any future work with them as they don't value my time.
We charge a decent amount for what we do but it's also extremely proprietary and nieche. We have 50 years of knowledge and data. I always give the quote before the owner/sales commits. Typically it's always a rush rush rush then you give them a price, it is no longer a rush then 9 weeks later they will pay the price you originally quoted because they did their own shopping or couldn't find anyone to do exactly what they need. I do not release approval drawings or part numbers until we have a purchase order submitted from the customer. I know a purchase order isn't payment but it is a big enough commitment to cover our tail incase a customer doesn't want to pay with NET30 terms.
Price accordingly as a rush job, definitely not just material cost plus time. A signed Purchase Order, including a 10% discount if paid within 30 days of invoice. The people who refuse to pay (promptly) are normally the bean counters and not the person who turns up with a worried look. Without an approved purchase order the cost may not be "in budget" back at the customer's office.
The problem with a charge under a few thousand dollars is that it may not be worth your time to collect BUT if you a responsible member of the business community you are going to collect because if you don’t they will go down the road and do it to someone else.
Always hold the parts, never let more than what is paid for go out the door
Always have lawful documents signed and dated and agreed upon
I've been told many times to only accept COD for new customers. Maybe even 50% down, and balance upon completion. Also that Canadians are notorious for dragging their feet to pay or ghosting you once they get the part.
Another thing is never tie up all your machines for one customer. Frank Stronach of Magna would flood small machine shops, pull all of his jobs and buy them up when they couldn't find enough work to stay afloat.
My shop machine a forging for a local manufacturer. At first they supplied the forging. But as time went on, some how it change so we had to supply the forging. Ok fine. Some years go by and it was towards the end of the life cycle for that part, the customer asked for 2,000 more. We were out of forging an and said the minimum order quantity was 15,000. The customer replied Don’t worry, the orders will come. So we had more forgings made. They did submit a few more orders, but after a while nothing. Still sitting on 10,000 forgings after 6 months. I walked in the tool crib and boss man was screaming in the phone ‘I’m tired of playing banker for you’. Not sure what happen after that but a two months later, the machine that machine those forgings went out the door and no one complained.
Signed contract. 50% up front.
Hot rush is always double time, double materials, AND pay BEFORE the part leaves
People always help the wealthy people or companies and they take the advantage of the small guy
Services rendered services paid! Do not provide the part until you get paid. Emergency situations call for expedited payment.
Fortunately for me this is a rare occurence, but I put them in the tight leash list. Am lucky and there isn't much competition in my area, so its a case of, 'well you didn't pay last time I dug you out of a hole'. If they offer resistance and won't pay, ' oh that wasn't me etc.... dont matter, if you want it done..... If they pay up, then lay down the law & stick to it. Usually can solve it with a bit of persistance. Some over time have turned into long term customers.
Only resorted to ringing guys I know in the same game and saying, 'suggest you don't deal with so & so' a couple of times in most extreme cases.
Yeah COD is worth considering. But as was said in the vid, tell em that up front.
If your company is nimble enough to have calculated the downtime cost within minutes and have dispatched an employee to hunt for an immediately available problem solver, surely they are nimble enough to have some bean counter override the purchasing protocol and print a cheque or hell even send an E-transfer.
Why is it that every single person inside and now OUTSIDE of an organization has the ability to stop and turn on a DIME to get something done yet the one employee who literally need not get off their arse to contribute is allowed to have that invoice sit for up to 90 days? No.
Signed PO or no part PERIOD If the part is under 1k pay for it in cash BEFORE receipt(they can use petty cash)
As a rule i won't brake down a running machine or setup. So if there is no machine available they will have to wait. If it's a very difficult job and takes a lot of planning i won't rush it as well.. So the only real rush jobs are usually low risk. But i alway try to quote them in some form... Just recently i accepted a job to face off a glued stack of "magnets" thinking it would be quick and easy.. the whole stack came appart and i spend the rest of the day saving the parts and trying to fix what i could. Things like that i regard as a bigger risk than not getting payed.
It's nice to know that things in America, the land of business are the same as Canada and I suspect pretty much anywhere in the world.
The credit card option is a blessing for small vendors.
But you have to stick to it.
Make it a policy, cash or card, and 99% of arguments vanish because the customer then has to argue with the credit card company why they shouldn't pay.
It was pointed out to me a long time ago, if someone or some company doesn't have a credit card, that tells you about their credibility.
One local supplier, medium to large business, refuses sales of less than $500 and then without an established account it's cash or card.
The number of small businesses broken by extending credit is monumental.
Problem is letting the work get ahead of the money. No incentive to pay.
Same problem when you pay in full up front. No incentive to work.
Happens all the time in home remodeling and contracting. Restaurants call it dine and dash.
My boss repairing pressure washers got himself in payment problems not waiting for purchase orders. Couldn’t seem to learn it wasn’t good for his health.
No good deed goes unpunished!
Hear hear!
It is my number one rule; when rush ins come to the shop, I tell them numerous examples why working with rush ins has been bad for me in the past in terms of getting my mneys worth and that I frown upon this kind of work!
This makes them want to promise this and that and gives me a chance to set their expectation on the price and even force them to prepay or cash and carry or otherwise they will never get their hands on the part and leave with it! I tell them; I will make the part while you return with the cash
This is a great strategy - anything that helps actually getting paid is a win in my books!
@@iansandusky417 Glad to hear, here is the second part; when they come back with the money, return some of it saying your estimate was exagerated because it was simpler than it seemed before you made it or you tweaked something to save them money! This will counter your initial behaviour and will establish your ability to be honest and straightforward without being pushed by your customer to be honest and straightforward!
Have a deposit twice what you estimate the job will cost. Then you can give them the part and some money back if the piece didn't take longer than expected
Fair enough.
COD no exception
When its questioned
I question do you really need the part ?
Ill make you part with your money before i make the part
If they dont want to pay i don't play
As a former millwright in a saw mill we had tons of hot rush breakdown jobs that we had our machine shop down the road do. No matter what time of day. We had the authority to call and get it done. Payment was never an issue. We expected rush work to cost 1 1/2 times. The mill being down cost a ton of $$. No we didn’t have our own machine shop. Cheap fucks wouldn’t build one in the new mill.
Pay up front before you start😮
hot rush first time customers are deposits to start and paid before it goes out the door. Many companies comp control their bill paying and that might mean you will get paid much later or not at all.
If you don't get paid, do the following...find out who does errant jobs close to your shop. Tell them to visit the non paying company *everyday* at the *same hour*! and pay this errant job person a few bucks. You'll be amazed how people get scared and their mind play games on them...they'll piss their pants off!! .... and you'll get paid. I read this in an old 1930's book of "how to manage a work shop"
My 45 yrs as an owner truck driver I have only been jibbed two times. I worked for the going low rates and never really knew how to quote a job properly. One day I read that if you dont wince when you give a quote you have underquoted. It was difficult at first but from then on I was happy to shine on the lowballers. Genuine people pay what it's worth.
Also that BS about giving a low price will get you heaps more work from them is just that.BS
If management need to approve it, they are the one that will end up without earning if productions stops. Maintenance guy will get his salary no matter what
Quite true!
In such cases just demand to see an instant bank transfer of the funds for the job before releasing the part.
COD! COD! COD! Never let a company dictate terms to you about your services. Tell them to pound sand if they don’t like it.
Great advice!
Thank you very much!
It all has to do with burn rate. People are willing to pay $1000 for something that takes 1 week but they don't want to pay $100 that takes 15 min.
The issue is you got it done so quickly, so the company knows your time invested, and doesn't feel the product warrants the price based off that assumption.
In my business i have a minimum, and I don't do work while they wait or same day. That way nobody can be pissed because I solved their problem in 10min for $200.
I hear ya man - I do the same in a lot of these cases. I won’t even tell them it’s done - I’ll just say come by with a cheque and we’ll release it when we can - and if it happens to be done right when they walk in with the money? Well… good timing.
I've seen it too. It's lame-o attitude thinking that my shop is better than your shop and I'm using you as a crutch. Double your price cuz you're late with my payment.... My owner would give prices before. If it was a rust job he charged double or a one-piece setup
It doesn't matter how urgent it is, or how much it will cost them if the line's down ... not your problem. If it's urgent cash up front ...
Good advice
Thank you very much!
I usually tell them it will be c.o.d. and I take credit cards. If they have a problem with that, it is their problem, not mine.
Walk in and take the part back. The merchandise is the property of the seller until paid. You are operating a business not a charity...
Sure you may lose some customers, but they're usually bad customers anyway but tried and true solution: "F**k you, pay me. Then you get your stuff." Use their panic to your advantage. Get electronic payment setup so they can bring you a card to swipe. No corporate bean counter is going to make a big stink over a few grand to get a down line up and running again.
So , the factory doesn't keep a spare doom's day part.?
You’d be surprised how many don’t!
5S means not having any dooms day parts
COD Cash on delivery
The magic words!
How is this an issue today?
Leave me the part and specs, I’ll call you in an hour or so with the price. If that works for you, come back with a check or credit card plus 5% and I’ll get to work on it and have it done by… Problem Solved.
Anything less makes you look weak, which gives them the green light to jerk you around.
Rush jobs not picked up immediately on completion should get a $1,000 a day surcharge.
never do favors never let a product out the door without being paid
COD
i cant buy anything in life on net 30 or 90 terms why should these companies be given the same privilege's ? net 30 oh i add interest for that sir...
Cash and carry on these “important for them” rush jobs. COD $$$$ I’ve seen some of the largest companies in the world scam, cheat or simply not pay.
E- transfers and credit cards. Or go else where.
Up front, if it was $1000 from the OEM, I would just ballpark it at $2k off the bat.
Zero trust with all hot rush work until proved otherwise, if their production is stopped because of a breakdown, its their problem, not being paid makes it your problem. Remember, money talks, bullshit walks... learn to say NO, without getting caught up in someone else's dilemma....a day in court to get back $800 is worse than not doing the job, especially if you have to drag men off another job with deadlines looming....these are hard learned lessons from 22 years in business.....
no ticky no laundry
If you trust, you go bust, once the customer receives the goods Ther is no incentive to pay
Well it cost that guy $800 to figure out what kind of a company they were. And since they routinely go through those parts and you know there's going to be another delay in ordering, when they come back in, you charge them triple. And when they ask for the reason why, you say it's an a****** fee and you need payment up front
Perhaps the part needs repo'd
LOL. aaaaaaand.. their down.
Next time wait the 6 weeks for the oem part, i wont be going out of my way to help you again, there are other businesses who will appreciate and reward my efforts to solve their time sensitive problems.
Get paid in advance for rush work or don't do it.
Rush jobs should always be an additional 25 - 30 percent plus an upfront P.O.
The job does not leave the workshop unless payment is made.
>> **THIS IS SIMPLE. *THEY NEED IT..!!!! > *SO,, YIOU TELL THEM,, YOU NEED THIS PART TODAY OR TOMORROW..*OK*,, WE CAN DO IT.!! >> *BUT,, THEY NEED TO KNOW,, IF THEY. NEED IT,, YOU NEED TO GET PAID..!!!! >*SO,, EASY FIX... YOU TELL THE CUSTOMER AND YOU GET THEM TO SIGN AND DATE ON A PIECE OF PAPER,, WHICH YOU GIVE THEM A COPY... THE ESTIMATED COST RANGE AND!!! THAT THE PART IS COD..!!!! WHEN THEY COME TO PICK IUP THE PART,, THEY PAY YOU OR THEY DO NOT GET THE PART...!!! **ALL DONE AND THEY KNEW ABOUT THE COD.. WHEN THEY ORDERED THE PART TO BE MADE AND THEY SIGNED AND DATED THAT PIECE OF PAPER,,, END OF PROBLEM...!!! **THEY DO NOT LIKE THOSE TERMS,, TOO BAD.. GO SOMEWRERE ELSE AND SCREW SOMEONE ELSE AND NOT **YOU**!!!!
COD for jobs like that. If I’m kicking a job off a machine to accommodate your needs ? COD if they need it that bad they can pay now. Trying the old quote quantity trick to get you to come down on price for the emergency part BS
I tell the customer, when the cash is in the bank, I will start your project, otherwise go elsewhere.
If I don't know you it's cash or card. You can make up a PO.
Too add if you don't know how to handle this situation you will not be in business long.
This is very simple I just do not do business with them any more. Problem solved.
No po we don’t go
Get all your money upfront....
Some one has a credit card