@@edge0a988 Not directly. Palleting/ multi part fixturing feeds directly into speed. Same with LO machining, if you know your shit, you can setup some nice tool breakage macros, and autoprobe/offset macros and families of tools so you can get more reliable parts without a body at the machine (assuming more complicated/ high volume orders). But that in and of itself isn't the selling point. It's the part you actually make, and is the customer happy with it? I should note, lathe work is a bit of a different beast, especially swiss turns. You get a good contract for a swiss, that machine will literally drown you in cash.
In house coating - anodizing, plating, powder coat, etc. Being able to offer a finished product, with control of quality and lead times, is very attractive to customers and helps you stand out.
Big box warehouses around me are paying wages well above manufacturing. At the same time customers want to pay less with longer payment terms and you literally cant find an employee of any skill level. Rents are rising, material costs are up, shipping up, etc. We are paying more for tools, material, machines, etc and barely keeping any profit. My friend bought a commercial mower. He has $10K invested. Charges 50% more per hour then I do.
Well said! This seems to fit in most markets these days. We are a bike shop that specializes in custom wheels and found ourselves getting a ton of specialty work others couldn't take on which helped us stand out from other shops in our area that had 100x our budget. We started to lean into that even more and after having a good response with 3d printing, just bough our own CNC mill/lathe to start making more niche parts for our industry. Thanks for all your tips in machining, its definitely been very helpful while we learn this trade!
I am fortunate that I am a small one man porotype shop that is part of a large corporation. Internal capability is what keeps me employed. We outsource work all the time. even proto type work. But when something need done in days or even hours. Having the ability to stop what I am doing and completely shift my priorities to full fill the specific deadline. Now if my company would get more organized and never need last minute parts made. Then I might be out of a job.
As always spot on. I still try to find my spot. I Can se we start getting more and more work from 10 to 100 parts more and less complicated. But i do se most of out work is stainless and 30CrNi in dimensions that needs Saw cutting. 80 to 250 mm.
The biggest thing that we do at our shop is quick turn around so wether it’s 1 part or 100 parts we try to offer a 2 week turn around! That’s on new customers. The other thing we do with that is once we have developed a relationship we offer time and material. In most cases this saves our customers money because the tricks that we do to save time on quoted parts well they end up seeing the savings on that! That being said it is extremely hard to get to that point with a customer and we had taken big hit for them maybe doing parts at cost or not putting the typical mark up on the parts to get to that point that they trust us enough now. But also what goes with that kind of relationship is often we have to strip a machine to get them a part in a day or two. Anyways that’s just what I’ve seen in the last 10 years at the shop I am at now. Also we are considered a prototype job shop. But we do have contracts were we run 500 parts. Anyways I’m gunna leave it at that because I could go on and on. As per usual great video and congrats on the 50th shop talk video!!!
global supply chains are reconfiguring ! much manufacturing is being reshored or nearshored. the world is realigning faster than it will be possible actually. most chip fab companies are building new fabs in US in nxt 5 to 10 years. that is mostly automated machinery which is mostly tool n die work. i dont think there are enough machinists n tool n die guys for just this work. not in US anyway.
Nice video and good thoughts! As the guy who posted that original question in the forum, I sincerely appreciate the fountain of advice that's been coming from the community. Thank you Ian!
I really appreciate this channel. It has helped me become a better machinist. You’ve helped me find a happy medium between speed, running efficiently, and maximizing my tooling
Another thought-provoking video, Ian. I liked it. I come at it quite differently from, well, literally all machinists. As in, I'm not one...but you probably figured that out from my previous comments. As you described it, Ian, the transition is from a "service" company who can do a range of operations to an item defined by others, to a "product" company. I'm talking about a company that changes it's approach to selling itself into one that finds unmet customer needs, creates innovative solutions to those needs, and protects their intellectual property and market. A "product company" finds ways to not only produce the product more effectively than others, but includes in the very foundational structure of that product clear proprietary differentiating features. Often called "Unique Selling Points" (USPs, also sometimes ...Propositions) And, because of copyright and trademark laws, they don't even have to get patents on everything, because they very nature of what makes the product work is clearly proprietary. As product designers, we don't care if someone copies the **function**...we care that they have to go through the work of creating their own design and not copying ours. That kind of company, in ways sometimes difficult for other "job shops" to even understand, it transforming themselves into a "market leader". They are in the enviable position of getting to analyze market trends, choose which markets to attack and which to avoid, and really find a set of niches for themselves, that fit what they WANT to produce, not merely what they're asked to produce. Imagine being the one company to identify--even predict--an emerging need and aggressively attacking that trend as a first-mover in a market category. That's something that a company can latch onto, and make a killing as the market emerges, then heads toward maturity and saturation. As others move into the market as competition, that company can then nimbly relinquish the market to the Johnny-come-lately's, because they actually want to carve out some of their production capacity for their NEXT big niche win. But, this requires the company transform from understanding "how" to make things, to "why" to make things. That takes a whole heapin' helpin' of learning about...ew..."Marketing". Not in the TV-drama style of advertising, but in identifying what the company's capabilities are, find a place those will sell, and preparing that place for that company's unique solution. A common way of looking at whether it makes sense to dive into a market is related to the "maturity" of that market. Rather than restate it, here's an article that talks about different states of market maturity: learn.marsdd.com/article/the-four-types-of-market-market-maturity-where-does-your-startups-product-belong/. One final note: being successful with a "product" requires a much broader set of activities than does making parts. It requires product research, product design, customer surveying, documentation and packaging, distribution logistics and partnerships, even regulatory compliance. These days, it even seems like everything has to have a "cloud app" and social-media presence in order to get any traction at all, which means electronics; and computers and software. It's a very different world from the one a machine shop usually thinks of itself living in, but as you say, with the old differentiation points getting flattened out-of-existence by cheaper tools and greater automation (darn those software people!), things shift. Those who adapt will succeed even as the trend accelerates. Cheers! Thom
I am retired now, but spent 40 years in management for a very high volume machine shop, primarily multi-spindle screw machines and then branching out to CNC lathes and machining centers. We were an operating arm for some very large firms and we did commercial and defense work nationwide. Being in the machining business is very competitive and it is difficult to keep the lights on sometimes with all of the competition. My advice to any shop that wants to become successful is to go the extra mile to service your customer. As was asked of Bill Gates one time..."What makes a great company?"...his answer..."Great customers.". For the most part, you help your customer, and he will help you. Go the extra mile. Work late to get critical parts machined. Hand deliver them if necessary and sit down with the buyer and ask what else you can do to help. If you get to know your customer and products better, you might take a job at a loss, just to get your foot in the door and hope things blossom down the road. We had one job in the early 1970s where we took a $75K loss just tooling up, anticipating that the job would increase in quantity. It did spectacularly....machining over 10,000lbs of aluminum per day for 6 years. Know your customer base. Some large firms can be an absolute pain to deal with. They'll have a big supplier meeting and in the morning they will spout off about quality, quality, quality. After lunch, the buyers go with the lowest bidder! As Ian has mentioned, technology has narrowed the knowledge gap. Exciting times for those that can push the technology to the limits.
With the opportunity to buy the shop I work at, I keep the future in mind or “how can I make this place better.” I’d love to increase our CNC workload and keep more of that work in house, making us more diverse for our current and future customers.
That's great, the business has equipment and personnel, the most important in my opinion is to work on the human side, your network, customers and supplier alike.
Everyone can do everything nowadays. So many factors can tip the market in your favor but truth is, there are so many consumers out there that someone will end up paying what your asking for what your selling, even if it’s not right. That being said, there’s limitless opportunity to get more of the market
As a young man starting a "shop" I can say that one off job shop , fabrication and repair has been bringing me the most business. I do enjoy small production run (10 at the most) and willing take on the challenge, but I'm finding more work being able to weld machine and repair than just being a strictly machining guy. You have to be versatile and have great people and communication skills to make it in today's market.
I started a shop 4 years ago. And i am almost excact opposite. I do 10 to a few hundreds produktion parts. Most of the have 20mins plus runtime. I dont do much prototype and one parts.
@@nikolaiownz how are you running them cnc or manual. I only have manual machines. I bet after four years you've got nice machines that can crank out a lot of parts.
That’s where I’m looking at trying to get my foot in the door with my shop I’d like to find a older 90s early 00s cnc mill but I can do about anything on my manuals and welder do need to buy a better welder my Chinese multi process has been extremely good to me mig stick lift tig 110/220 actually works and works good in 110 it’s the only 110 stick welder I’ve ever seen actually weld but still it’s time to get a better shop welder and keep my amico for a portable unit
Good advice in this video. I think I could type all day on this subject. I recently bought some equipment from a shop that closed in the 80s. Had a long talk with the owner and he was one of the busiest shops in Texas back in the 60s and 70s and made a fortune. Along came the 80s and cnc was starting to boom. He bought a few cnc machines and learned that he no longer liked machining. So he closed down before it went bad and he lost a bunch of money. Long story short, you need to love what you do and innovate. All shops that stay the same will eventually die. Also don't ever open or keep a shop for money. If you do it for the love of the job you'll be fine.
Being a good reputable person will help someone succeed in business. If you are honest, people will bring you work. I can agree that it might not guarantee work, but people like to work with honest people
Quite an interesting video for episode 50! From the couple jobs I've been at at that needed machining services, I know my bosses and managers mostly looked for full service shops or ones with the most flexible techniques/processes. Often times types welding was a required facet, or specialty in composites.
My grandson is going to (East valley Institute of technology ) in Gilbert AZ for machinist. His hope is to work for a company called Salt River Project, my retirement co. And his other grandpa retirement co. I’ll make sure he follows you guys and what advice for a machinist student?
Just got my company going with a little momentum and got my first full size cnc mill in my garage. A sharp sv-2412 I love this trade and this channel. Thank you Ian!
What are the potential customers in your area? Aerospace, automotive, semiconductor, oilfield, etc? Talk to the purchasing people and see what drives them crazy then solve that. Maybe a part needs specialty processes that screw up the workflow for the customer. Is there a product you can manufacture completely for a customer? Have a well thought out business plan and customer list before you start picking out machine tools.
Just going to give my 2 cents... Probably worth less than that! I have been focusing on finding companies with whom I enjoy working and for whom I can fill a need or solve a problem. I am finding that the intersection of a good working relationship and fulfilling needs is a great place to operate. I view and treat business as relationships. Building and maintaining trust is something I am always mindful of. Communication is critical!
I’ve got a machine shop manual only basically put it together to learn it I’ve done a few jobs with it here and there but with zero connections to the industry to go full time expecting my shop to support me would be insane I’m sure as time goes one more and more people will learn about what my shops capable of as I’ve got a 16”x10’ swing lathe a smaller jet radial arm drill and a wells index mill but as it is I’ll never be able to compete making parts with a machine shop but what I can do and do well is repairing expensive obsolete machines and tools which is what I would eventually like to be doing as my day job nothing quite like saving something that is expensive to replace or worse yet doesn’t even exist anymore
@@TheMadHatter626 so long as you’ve working doing this type of stuff shouldn’t be to bad my problem is most people I know is nobody knows how things are built anymore
I've just started in a machining shop and have to use manual mills for a while and I'm noticing how much CNC machines have changed things, CNC machines can do basically perfect curves and all you have to do is learn how to code, or even just use a CAD program to automatically generate CNC code.
It’s pretty crazy! My shop used to have 10 manual mills and a skilled machinist at every mill back in the 90’s pre-CNC - it’s nuts to see the kind of work they did with zero automation!
I've been following you on Instagram for quite a while now, and I figured it wouldn't hurt anything to check out the TH-cam channel as well. I appreciate all the knowledge you share with your followers. It's definitely helpful.
In SoCal, out of 20 RFQ's to machine shops, I received 17 "no bids". The ones that did, had 10 wk lead times and were extremely expensive. Chinese shop did it for 1 tenth! The price and had it to me in 9 days. Many machine shops are complacent
Maybe the no bids and high prices are a result of the cheap Asian competition driving it away? I’ve seen the same kind of thing as you when I was a manufacturing engineer. I have a engineering business / job shop now and do pretty well making super rushed parts for my customers-often in 2-5 days. Also I have long term automation projects, fixtures, design work, etc (machining is mostly used to balance my workload and make my own designs). In the race to the bottom, Asia has brought the bottom so low (esp for really low quantities) that many shops don’t want to participate. They may be working on defense related work, or other work that needs to be done in the US. If they see a part that they know they can’t compete on, why bid the job?
Ian, your common sense & knowledge is impressive for someone of your (young-ish) age. Love your LinkedIn posts, and will look forward to viewing more of your videos!
I saw these threads on the forum. The other issues was that the people wanting to start these small prototype shops generally had minimal machining experience and were people from other careers who wanted to get into machining. So not only did they want to do a really niche thing like prototyping but they didn’t have the experience.
Yeah this is extremely true - kind of the manufacturing version of a bunch of lawyers opening a restaurant - it sounds like fun, until you gotta make it work!
@@iansandusky417 exactly yet that seems to be so common on the practical machinist forum and other forums like it. Someone with minimal experience in the area decides they want to open a shop. But they never know who their target market will be, they don’t know what equipment they need, they don’t even know what to offer. It is a really really bad way to start a shop. I am slowly working towards opening a side business doing specialised welding. But my day job is in a tool and die shop. I found via my day job a skill I was good at and saw an area of the market that I felt was lacking and that is how I decided to work towards doing it as a business. By doing it that way I already know my target market, I already know what equipment is needed. Sadly I think entrepreneur has become a buzzword and it’s the cool thing to be it seems these days but you have to go into it with skills and knowledge in the machining trades it’s not just push a button and go, CNC or not.
@@iansandusky417 I found it very useful for prototype work. Definitely saves me a lot of time in the early stages trying to iron out all the details and fitment. Printing soft jaws have also helped me out in a few instances.
Well I did the thumbs up I didn’t know about the comment part so man I’d love to have a free pair of calibers enjoy the video very much by the way and I’ve been subscribed
I recently asked a few companies to laser cut 1m2 stainless steel (1mm thick) .. Quote 220 USD$ - 3000 USD$. Most quotes are between 1000 - 2000 USD$. I thought ... whoow I'm going to buy a low wattage fiber Laser myself if the default is like 1500 USD $ and start my own lasering company (the budget of 40k USD would be there for it... I just don't have the demand for it yet). It also got clear that in the SMT (semiconductor assembly market) stencils are relatively expensive while the material is so dirt cheap. 220 USD$ is from a shop in China; 400$ from Spain (we end up ordering from Spain). I have CNC'd the parts before on my DIY CNC but it just takes a lot time. If companies don't start to talk and make their quotation calculation more obvious they will also loose followup business. And our followup business won't be small parts anymore. It's pretty clear that 60$ Material cannot make 1500$ profit for 20-30 minutes of cutting -- without any serious engineering.
Ian, great video! I am in the process of starting a side business that I hope to grow to something that may go full time in the future and the advice you share in this video was exactly what I needed. I have a machine arriving this weekend and my plan was to start a prototype shop with a focus on supporting local production shops with their tooling needs. I realize now, I may need to narrow my focus or niche down to provide a service that stands out. Appreciate the video, keep up the great work!
@@iansandusky417 It is a hobby machine for now, the Shariff DMC2. That is until I can afford a true industrial machine and have a space for it besides my basement. But I have work that is fitting for it from two local companies I have worked with in the past, so I’m excited to get started.
I don't think it's ever been enough to be just good at what you do. It may carry you for a long time, but eventually someone or something will come along and out compete you. In my opinion, a positive overall experience will far outweigh a cheaper price, a quicker turnaround, a big flashy sign outside your shop, etc. I worked service for a heavy equipment dealer for many years, worked my way up to be #2 in the shop. They had been around 20+ years. Had customers coming 3 states over to buy from us. Had the fancy showroom's, sold products cheaper than the next guy, all that. For many years we had so much work, we couldn't keep up no matter how many guys they'd hire. But one thing the company always lacked was customer service. It was no secret they had one of the worst reputations in our state.. but because they were always cheaper, or had the part in stock, and had the reputation from the brands they were selling, they did quite well. But slowly over the years I watched the management put less and less into it. Too busy with a new location they opened in another part of the state, too occupied with other ventures I suppose. They started hiring people with no qualifications (the running joke was at the interview they would ask if you know the difference between a wrench and a screwdriver. If you did, you were hired) so the work we put out to customers suffered, machinery & equipment would break down and sit there for months before any attention was put to it (if at all). They slowly started taking less service work in and only focused on new sales. Eventually they lost the few long term guy's that made the work happen due to a number of reasons.. they figured because they're the only game in town it doesn't matter. Well one day a competitor moved into town and now their monopoly is slowly starting to crumble. I saw the writing on the wall, and after attempts to do what I could, I chose to move on. I didn't want to see a company I had invested many years in suffer, but some things are beyond our control. Innovation is another factor to consider. As the world turns we must adapt, and the wise ones will see it way before it becomes a necessity.. but that's a whole other conversation. I thoroughly enjoy your content. I've been following here for several months & leave almost every video with a lot of thought to process. I hope you keep these going!
Dont own a shop but have to say I prefer job shops over production runs anyway. In particular I like to work in shops that have there own products. Just feels safer from a layoff in my experience. Not always but more often than not. Appreciate the discussion.
I have used a 3-D printer for prototype work but have gone back to sheet metal for most of my parts. The plastic parts weren't lasting through the testing we would do.
I think the ability for AI to generate parts and metal 3d printers will be a huge step in the future of machining and the future of society. Has great advantages in the future of engineering and machining. Modern day if your shop has that ability to 3d print parts in titanium or such with very very complicated internal features, you have a great advantage over other machine shops.
Good stuff. I'm doing my best to keep my shop flexible for all work. No it's not as efficient as full "production" shop but I'm getting some production jobs but mostly quantities under 50
Great video Ian. I have been a tool and die maker for a little over 25 years now. Although I don’t have my own shop. This was an awesome video to look back at if I ever go down this path. Thank you for the info!
Turnkey manufacturing. Don't just make parts. Offer complete solutions. Networking and establishing cooperative relationships with other shops to expand manufacturing capacity is a good way to always be in the loop for work and make sure your shop is doing what it is best at doing. If your colleagues at another shop have a machine (Wire EDM for example) that you need to properly manufacture a part, you'll be able to outsource those operations to them for optimal manufacturing outcomes. Optimal manufacturing outcomes = happy customers = repeat customers. You can also mark-up any outsourced processes on your quotes just because you provide turnkey service..... but that starts going into the profit margin blood rituals of the quoting dark arts 😅.
I agree with this approach, having a unique set of skills or services provide shops with the ability to be profitable. We are a CNC shop that evolved from a manual shop background. A long time ago we did mostly repair work and had a team of very talented and dedicated machinist to do fast and consistent quality work. At the time ( 15 years or so) I could see this type of service slowly becoming less profitable, so we started adding CNC's (2006) to our shop. About 4 years ago, after loosing my last experienced manual machinist to retirement a tried to hire new manual machinists without success, so I turn our focus on CNC and was lucky to hire a young programmer machinist with outstanding talent, soon after making him partner and foreman in the company we started reviewing our options for the future based on our existing customer base and the direction we wanted to take. In the summer of 2020 with did a big shop clean up, we removed a dozen smaller manual machines and supporting equipment including 2 older CNC machines and replace them with a new live tool turning center and 2 larger CNC machining centers. We now offer from prototyping to production, we also review designs and offer cost reduction recommendations and work with a network of like-minded businesses. We are also the local shop that other shops go to when they run into hot water. My point is a new shop owner, you must have an open mind, enjoy the work and work hard on your network of customers and vendors alike. The goal of a business is not to be competitive, it is to make a profit. New shop owners must create a reason for customers to pay more for their services. Be a Wizard at something, or find one!
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What’s YOUR tip to help new shops stand out from the pack?
Quality parts and good service.
@@nikolaiownz If I wanted parts made, those two are top, followed by speed, and then cost.
Lights out machining/adding automation to your machines is a great way to stand out and be competitive in todays market imo
@@edge0a988 Race to the bottom, couldn't disagree more. Make good parts, on time. 70% of shops can't even meet this baseline.
@@edge0a988 Not directly. Palleting/ multi part fixturing feeds directly into speed. Same with LO machining, if you know your shit, you can setup some nice tool breakage macros, and autoprobe/offset macros and families of tools so you can get more reliable parts without a body at the machine (assuming more complicated/ high volume orders). But that in and of itself isn't the selling point. It's the part you actually make, and is the customer happy with it?
I should note, lathe work is a bit of a different beast, especially swiss turns. You get a good contract for a swiss, that machine will literally drown you in cash.
In house coating - anodizing, plating, powder coat, etc. Being able to offer a finished product, with control of quality and lead times, is very attractive to customers and helps you stand out.
This is killer if you can swing it - I’d give my left arm to be able to control my anodizing / powder coating schedules sometimes!
Big box warehouses around me are paying wages well above manufacturing. At the same time customers want to pay less with longer payment terms and you literally cant find an employee of any skill level. Rents are rising, material costs are up, shipping up, etc. We are paying more for tools, material, machines, etc and barely keeping any profit.
My friend bought a commercial mower. He has $10K invested. Charges 50% more per hour then I do.
Well said! This seems to fit in most markets these days. We are a bike shop that specializes in custom wheels and found ourselves getting a ton of specialty work others couldn't take on which helped us stand out from other shops in our area that had 100x our budget. We started to lean into that even more and after having a good response with 3d printing, just bough our own CNC mill/lathe to start making more niche parts for our industry.
Thanks for all your tips in machining, its definitely been very helpful while we learn this trade!
Finding and establishing the relationship effectively is also key.
CAD has absolutely changed the game for shops. It's so competitive in today's climate.
I tend to agree with you there!
I am fortunate that I am a small one man porotype shop that is part of a large corporation. Internal capability is what keeps me employed. We outsource work all the time. even proto type work. But when something need done in days or even hours. Having the ability to stop what I am doing and completely shift my priorities to full fill the specific deadline. Now if my company would get more organized and never need last minute parts made. Then I might be out of a job.
As always spot on.
I still try to find my spot. I Can se we start getting more and more work from 10 to 100 parts more and less complicated. But i do se most of out work is stainless and 30CrNi in dimensions that needs Saw cutting. 80 to 250 mm.
Thank you very much sir!
That’s definitely a niche as well - and one I would still consider my shop in as well!
@@iansandusky417 from what i see on LinkedIn from you out shops hits pretty much the same spots
The biggest thing that we do at our shop is quick turn around so wether it’s 1 part or 100 parts we try to offer a 2 week turn around! That’s on new customers. The other thing we do with that is once we have developed a relationship we offer time and material. In most cases this saves our customers money because the tricks that we do to save time on quoted parts well they end up seeing the savings on that! That being said it is extremely hard to get to that point with a customer and we had taken big hit for them maybe doing parts at cost or not putting the typical mark up on the parts to get to that point that they trust us enough now. But also what goes with that kind of relationship is often we have to strip a machine to get them a part in a day or two. Anyways that’s just what I’ve seen in the last 10 years at the shop I am at now. Also we are considered a prototype job shop. But we do have contracts were we run 500 parts. Anyways I’m gunna leave it at that because I could go on and on. As per usual great video and congrats on the 50th shop talk video!!!
Just subscribed. I have been in the manufacturing industry for 6 years now and would love a new set of calipers😉
Thank you for checking it out!
Thanks for a good video.
global supply chains
are reconfiguring !
much manufacturing
is being reshored or nearshored.
the world is realigning
faster than it will be possible
actually.
most chip fab companies are building
new fabs in US in nxt 5 to 10 years.
that is mostly automated machinery
which is mostly tool n die work.
i dont think there are enough
machinists n tool n die guys
for just this work.
not in US anyway.
Nice video and good thoughts! As the guy who posted that original question in the forum, I sincerely appreciate the fountain of advice that's been coming from the community. Thank you Ian!
Thank you very much for posting the question sir, it was a fun one to dig into!
Thank you for bringing your question forward to the Practical Machinist community!
I really appreciate this channel. It has helped me become a better machinist. You’ve helped me find a happy medium between speed, running efficiently, and maximizing my tooling
Thank you very much for always stopping by!
Diversification is the key. Over the years this has always kept us going.
Hello Ian as always you bring us very high important topics to rethink about it and help us in the machining business.
Another thought-provoking video, Ian. I liked it.
I come at it quite differently from, well, literally all machinists. As in, I'm not one...but you probably figured that out from my previous comments.
As you described it, Ian, the transition is from a "service" company who can do a range of operations to an item defined by others, to a "product" company. I'm talking about a company that changes it's approach to selling itself into one that finds unmet customer needs, creates innovative solutions to those needs, and protects their intellectual property and market.
A "product company" finds ways to not only produce the product more effectively than others, but includes in the very foundational structure of that product clear proprietary differentiating features. Often called "Unique Selling Points" (USPs, also sometimes ...Propositions) And, because of copyright and trademark laws, they don't even have to get patents on everything, because they very nature of what makes the product work is clearly proprietary. As product designers, we don't care if someone copies the **function**...we care that they have to go through the work of creating their own design and not copying ours.
That kind of company, in ways sometimes difficult for other "job shops" to even understand, it transforming themselves into a "market leader". They are in the enviable position of getting to analyze market trends, choose which markets to attack and which to avoid, and really find a set of niches for themselves, that fit what they WANT to produce, not merely what they're asked to produce.
Imagine being the one company to identify--even predict--an emerging need and aggressively attacking that trend as a first-mover in a market category. That's something that a company can latch onto, and make a killing as the market emerges, then heads toward maturity and saturation. As others move into the market as competition, that company can then nimbly relinquish the market to the Johnny-come-lately's, because they actually want to carve out some of their production capacity for their NEXT big niche win.
But, this requires the company transform from understanding "how" to make things, to "why" to make things. That takes a whole heapin' helpin' of learning about...ew..."Marketing". Not in the TV-drama style of advertising, but in identifying what the company's capabilities are, find a place those will sell, and preparing that place for that company's unique solution. A common way of looking at whether it makes sense to dive into a market is related to the "maturity" of that market. Rather than restate it, here's an article that talks about different states of market maturity: learn.marsdd.com/article/the-four-types-of-market-market-maturity-where-does-your-startups-product-belong/.
One final note: being successful with a "product" requires a much broader set of activities than does making parts. It requires product research, product design, customer surveying, documentation and packaging, distribution logistics and partnerships, even regulatory compliance. These days, it even seems like everything has to have a "cloud app" and social-media presence in order to get any traction at all, which means electronics; and computers and software.
It's a very different world from the one a machine shop usually thinks of itself living in, but as you say, with the old differentiation points getting flattened out-of-existence by cheaper tools and greater automation (darn those software people!), things shift. Those who adapt will succeed even as the trend accelerates.
Cheers!
Thom
I am retired now, but spent 40 years in management for a very high volume machine shop, primarily multi-spindle screw machines and then branching out to CNC lathes and machining centers. We were an operating arm for some very large firms and we did commercial and defense work nationwide.
Being in the machining business is very competitive and it is difficult to keep the lights on sometimes with all of the competition. My advice to any shop that wants to become successful is to go the extra mile to service your customer. As was asked of Bill Gates one time..."What makes a great company?"...his answer..."Great customers.". For the most part, you help your customer, and he will help you. Go the extra mile. Work late to get critical parts machined. Hand deliver them if necessary and sit down with the buyer and ask what else you can do to help. If you get to know your customer and products better, you might take a job at a loss, just to get your foot in the door and hope things blossom down the road. We had one job in the early 1970s where we took a $75K loss just tooling up, anticipating that the job would increase in quantity. It did spectacularly....machining over 10,000lbs of aluminum per day for 6 years.
Know your customer base. Some large firms can be an absolute pain to deal with. They'll have a big supplier meeting and in the morning they will spout off about quality, quality, quality. After lunch, the buyers go with the lowest bidder!
As Ian has mentioned, technology has narrowed the knowledge gap. Exciting times for those that can push the technology to the limits.
Fantastic advice! Thank you very much for checking it out!
I didn’t consider the impact of CNC and 3D printing in the prototyping industry. Thanks for posting.
You mean like sendcutsend for combat robots.
With the opportunity to buy the shop I work at, I keep the future in mind or “how can I make this place better.” I’d love to increase our CNC workload and keep more of that work in house, making us more diverse for our current and future customers.
That’s a very exciting prospect! Always nice when you have the opportunity to help build your future business while working at it now!
That's great, the business has equipment and personnel, the most important in my opinion is to work on the human side, your network, customers and supplier alike.
Everyone can do everything nowadays. So many factors can tip the market in your favor but truth is, there are so many consumers out there that someone will end up paying what your asking for what your selling, even if it’s not right. That being said, there’s limitless opportunity to get more of the market
As a young man starting a "shop" I can say that one off job shop , fabrication and repair has been bringing me the most business. I do enjoy small production run (10 at the most) and willing take on the challenge, but I'm finding more work being able to weld machine and repair than just being a strictly machining guy. You have to be versatile and have great people and communication skills to make it in today's market.
Excellent advice, thank you very much for checking it out!
I started a shop 4 years ago. And i am almost excact opposite. I do 10 to a few hundreds produktion parts. Most of the have 20mins plus runtime. I dont do much prototype and one parts.
@@nikolaiownz how are you running them cnc or manual. I only have manual machines. I bet after four years you've got nice machines that can crank out a lot of parts.
That’s where I’m looking at trying to get my foot in the door with my shop I’d like to find a older 90s early 00s cnc mill but I can do about anything on my manuals and welder do need to buy a better welder my Chinese multi process has been extremely good to me mig stick lift tig 110/220 actually works and works good in 110 it’s the only 110 stick welder I’ve ever seen actually weld but still it’s time to get a better shop welder and keep my amico for a portable unit
@@jeremycable51 yea I'm getting a Lincoln multi process myself next week. Always good to reinvest into the shop and grab new toys.
Hoping to make a go with a new small shop out west, doing heat treatment, jigs & fixtures, NC milling, maybe picking up overflow jobs from local shops
Subscribed and notifications on! My first video I've watched and glad I found this channel. Hope I get the calipers 👀😁
Good luck, thanks for checking it out!
Your honesty is refreshing
Good advice in this video. I think I could type all day on this subject. I recently bought some equipment from a shop that closed in the 80s. Had a long talk with the owner and he was one of the busiest shops in Texas back in the 60s and 70s and made a fortune. Along came the 80s and cnc was starting to boom. He bought a few cnc machines and learned that he no longer liked machining. So he closed down before it went bad and he lost a bunch of money.
Long story short, you need to love what you do and innovate. All shops that stay the same will eventually die. Also don't ever open or keep a shop for money. If you do it for the love of the job you'll be fine.
This is fantastic advice! Thank you for checking it out!
Being a good reputable person will help someone succeed in business. If you are honest, people will bring you work. I can agree that it might not guarantee work, but people like to work with honest people
This is very true!
🏆 The riches are in the niches! Lean into your passion and focus on what you do best… - We’ll take care of the apparel Ian! ⚙️🧢👕
Quite an interesting video for episode 50! From the couple jobs I've been at at that needed machining services, I know my bosses and managers mostly looked for full service shops or ones with the most flexible techniques/processes. Often times types welding was a required facet, or specialty in composites.
Love these tips, and lessons. I'm new to machining and can't get enough. Now with Practical Machinist, that's a reality I daily enjoy!!!!! Keep it up!
My grandson is going to (East valley Institute of technology ) in Gilbert AZ for machinist. His hope is to work for a company called Salt River Project, my retirement co. And his other grandpa retirement co. I’ll make sure he follows you guys and what advice for a machinist student?
Just got my company going with a little momentum and got my first full size cnc mill in my garage. A sharp sv-2412
I love this trade and this channel. Thank you Ian!
Thank you very much sir! How are you liking that Sharp? Is that a 40 taper?
@@iansandusky417 yes, cat40! Glad to get away from R8 tormach tts holders
Relationships with buyers and engineers seems like the best long term solution but obviously those relationships don't come easily.
You are absolutely correct there - in my experience, they’re some of the most difficult to build, but they pay dividends once you put in the time!
What are the potential customers in your area? Aerospace, automotive, semiconductor, oilfield, etc? Talk to the purchasing people and see what drives them crazy then solve that. Maybe a part needs specialty processes that screw up the workflow for the customer. Is there a product you can manufacture completely for a customer? Have a well thought out business plan and customer list before you start picking out machine tools.
Very informative video, I hope I win the giveaway!
Keep up the quality videos. They are very helpful for those starting their own shops.
Just going to give my 2 cents... Probably worth less than that!
I have been focusing on finding companies with whom I enjoy working and for whom I can fill a need or solve a problem.
I am finding that the intersection of a good working relationship and fulfilling needs is a great place to operate.
I view and treat business as relationships. Building and maintaining trust is something I am always mindful of.
Communication is critical!
This is fantastic advice! As time goes on I find myself mirroring that strategy as well.
Hard mill, hard turn, or finish work in general. That'll make you special.
Have to agree with you there! Hard machining is a great way to stand apart from the crowd.
I’ve got a machine shop manual only basically put it together to learn it I’ve done a few jobs with it here and there but with zero connections to the industry to go full time expecting my shop to support me would be insane I’m sure as time goes one more and more people will learn about what my shops capable of as I’ve got a 16”x10’ swing lathe a smaller jet radial arm drill and a wells index mill but as it is I’ll never be able to compete making parts with a machine shop but what I can do and do well is repairing expensive obsolete machines and tools which is what I would eventually like to be doing as my day job nothing quite like saving something that is expensive to replace or worse yet doesn’t even exist anymore
I hear you. I'm in the processes of figuring out how to combine welding machining and repair niche for my area.
@@TheMadHatter626 so long as you’ve working doing this type of stuff shouldn’t be to bad my problem is most people I know is nobody knows how things are built anymore
I've just started in a machining shop and have to use manual mills for a while and I'm noticing how much CNC machines have changed things, CNC machines can do basically perfect curves and all you have to do is learn how to code, or even just use a CAD program to automatically generate CNC code.
It’s pretty crazy! My shop used to have 10 manual mills and a skilled machinist at every mill back in the 90’s pre-CNC - it’s nuts to see the kind of work they did with zero automation!
I think it’s enough. Not everyone can do it.
I've been following you on Instagram for quite a while now, and I figured it wouldn't hurt anything to check out the TH-cam channel as well. I appreciate all the knowledge you share with your followers. It's definitely helpful.
Thank you very much for checking it out!
In SoCal, out of 20 RFQ's to machine shops, I received 17 "no bids". The ones that did, had 10 wk lead times and were extremely expensive. Chinese shop did it for 1 tenth! The price and had it to me in 9 days. Many machine shops are complacent
Maybe the no bids and high prices are a result of the cheap Asian competition driving it away? I’ve seen the same kind of thing as you when I was a manufacturing engineer. I have a engineering business / job shop now and do pretty well making super rushed parts for my customers-often in 2-5 days. Also I have long term automation projects, fixtures, design work, etc (machining is mostly used to balance my workload and make my own designs). In the race to the bottom, Asia has brought the bottom so low (esp for really low quantities) that many shops don’t want to participate. They may be working on defense related work, or other work that needs to be done in the US. If they see a part that they know they can’t compete on, why bid the job?
Ian, your common sense & knowledge is impressive for someone of your (young-ish) age. Love your LinkedIn posts, and will look forward to viewing more of your videos!
Thank you very much sir, I really appreciate the kind words!
I saw these threads on the forum. The other issues was that the people wanting to start these small prototype shops generally had minimal machining experience and were people from other careers who wanted to get into machining.
So not only did they want to do a really niche thing like prototyping but they didn’t have the experience.
Yeah this is extremely true - kind of the manufacturing version of a bunch of lawyers opening a restaurant - it sounds like fun, until you gotta make it work!
@@iansandusky417 exactly yet that seems to be so common on the practical machinist forum and other forums like it. Someone with minimal experience in the area decides they want to open a shop. But they never know who their target market will be, they don’t know what equipment they need, they don’t even know what to offer. It is a really really bad way to start a shop.
I am slowly working towards opening a side business doing specialised welding. But my day job is in a tool and die shop. I found via my day job a skill I was good at and saw an area of the market that I felt was lacking and that is how I decided to work towards doing it as a business. By doing it that way I already know my target market, I already know what equipment is needed.
Sadly I think entrepreneur has become a buzzword and it’s the cool thing to be it seems these days but you have to go into it with skills and knowledge in the machining trades it’s not just push a button and go, CNC or not.
3D printing has helped us quite a bit. Looking to expand further into the technology.
What kind of applications have you found it useful on?
@@iansandusky417 I found it very useful for prototype work. Definitely saves me a lot of time in the early stages trying to iron out all the details and fitment. Printing soft jaws have also helped me out in a few instances.
Well I did the thumbs up I didn’t know about the comment part so man I’d love to have a free pair of calibers enjoy the video very much by the way and I’ve been subscribed
I recently asked a few companies to laser cut 1m2 stainless steel (1mm thick) .. Quote 220 USD$ - 3000 USD$. Most quotes are between 1000 - 2000 USD$. I thought ... whoow I'm going to buy a low wattage fiber Laser myself if the default is like 1500 USD $ and start my own lasering company (the budget of 40k USD would be there for it... I just don't have the demand for it yet).
It also got clear that in the SMT (semiconductor assembly market) stencils are relatively expensive while the material is so dirt cheap.
220 USD$ is from a shop in China; 400$ from Spain (we end up ordering from Spain).
I have CNC'd the parts before on my DIY CNC but it just takes a lot time. If companies don't start to talk and make their quotation calculation more obvious they will also loose followup business. And our followup business won't be small parts anymore.
It's pretty clear that 60$ Material cannot make 1500$ profit for 20-30 minutes of cutting -- without any serious engineering.
Ian, great video! I am in the process of starting a side business that I hope to grow to something that may go full time in the future and the advice you share in this video was exactly what I needed. I have a machine arriving this weekend and my plan was to start a prototype shop with a focus on supporting local production shops with their tooling needs. I realize now, I may need to narrow my focus or niche down to provide a service that stands out. Appreciate the video, keep up the great work!
Thank you very much sir! That’s exciting, what machine did you pick up?
@@iansandusky417 It is a hobby machine for now, the Shariff DMC2. That is until I can afford a true industrial machine and have a space for it besides my basement. But I have work that is fitting for it from two local companies I have worked with in the past, so I’m excited to get started.
Another great reason to keep expanding the skills we have.
Very true!
I don't think it's ever been enough to be just good at what you do. It may carry you for a long time, but eventually someone or something will come along and out compete you. In my opinion, a positive overall experience will far outweigh a cheaper price, a quicker turnaround, a big flashy sign outside your shop, etc.
I worked service for a heavy equipment dealer for many years, worked my way up to be #2 in the shop. They had been around 20+ years. Had customers coming 3 states over to buy from us. Had the fancy showroom's, sold products cheaper than the next guy, all that. For many years we had so much work, we couldn't keep up no matter how many guys they'd hire. But one thing the company always lacked was customer service. It was no secret they had one of the worst reputations in our state.. but because they were always cheaper, or had the part in stock, and had the reputation from the brands they were selling, they did quite well.
But slowly over the years I watched the management put less and less into it. Too busy with a new location they opened in another part of the state, too occupied with other ventures I suppose. They started hiring people with no qualifications (the running joke was at the interview they would ask if you know the difference between a wrench and a screwdriver. If you did, you were hired) so the work we put out to customers suffered, machinery & equipment would break down and sit there for months before any attention was put to it (if at all). They slowly started taking less service work in and only focused on new sales. Eventually they lost the few long term guy's that made the work happen due to a number of reasons.. they figured because they're the only game in town it doesn't matter. Well one day a competitor moved into town and now their monopoly is slowly starting to crumble.
I saw the writing on the wall, and after attempts to do what I could, I chose to move on. I didn't want to see a company I had invested many years in suffer, but some things are beyond our control.
Innovation is another factor to consider. As the world turns we must adapt, and the wise ones will see it way before it becomes a necessity.. but that's a whole other conversation.
I thoroughly enjoy your content. I've been following here for several months & leave almost every video with a lot of thought to process. I hope you keep these going!
Indeed, customer service is very important. Providing rework/repair service is another extra point. Don't just focus on manufacturing new part.
I'll take the 10 to 5,000-piece jobs any day of the week. Can't stand doing one offs, that's why I started my own shop.
Dont own a shop but have to say I prefer job shops over production runs anyway. In particular I like to work in shops that have there own products. Just feels safer from a layoff in my experience. Not always but more often than not. Appreciate the discussion.
I have used a 3-D printer for prototype work but have gone back to sheet metal for most of my parts. The plastic parts weren't lasting through the testing we would do.
I think the ability for AI to generate parts and metal 3d printers will be a huge step in the future of machining and the future of society. Has great advantages in the future of engineering and machining. Modern day if your shop has that ability to 3d print parts in titanium or such with very very complicated internal features, you have a great advantage over other machine shops.
Good stuff. I'm doing my best to keep my shop flexible for all work. No it's not as efficient as full "production" shop but I'm getting some production jobs but mostly quantities under 50
Another great video
Avoid the race to the bottom
Came here from your insta page. I am a gunsmithing apprentice and plan on using my 3d printer to save as much on $$ as possible
A lot of what was said also applies to people that run their own 3d printing operations
This trade is advancing fast with technology. 3d printing is the future for sure
Always looking for tips and tricks of the trade and practical machinist has tons, keep it up! Thanks.
Great video Ian. I have been a tool and die maker for a little over 25 years now. Although I don’t have my own shop. This was an awesome video to look back at if I ever go down this path. Thank you for the info!
Turnkey manufacturing. Don't just make parts. Offer complete solutions. Networking and establishing cooperative relationships with other shops to expand manufacturing capacity is a good way to always be in the loop for work and make sure your shop is doing what it is best at doing. If your colleagues at another shop have a machine (Wire EDM for example) that you need to properly manufacture a part, you'll be able to outsource those operations to them for optimal manufacturing outcomes. Optimal manufacturing outcomes = happy customers = repeat customers. You can also mark-up any outsourced processes on your quotes just because you provide turnkey service..... but that starts going into the profit margin blood rituals of the quoting dark arts 😅.
idol...👍👍👍
Good info!
Congrats on the 50th episode. Keep them coming.
Great videos! Always useful!
I agree with this approach, having a unique set of skills or services provide shops with the ability to be profitable. We are a CNC shop that evolved from a manual shop background. A long time ago we did mostly repair work and had a team of very talented and dedicated machinist to do fast and consistent quality work. At the time ( 15 years or so) I could see this type of service slowly becoming less profitable, so we started adding CNC's (2006) to our shop.
About 4 years ago, after loosing my last experienced manual machinist to retirement a tried to hire new manual machinists without success, so I turn our focus on CNC and was lucky to hire a young programmer machinist with outstanding talent, soon after making him partner and foreman in the company we started reviewing our options for the future based on our existing customer base and the direction we wanted to take. In the summer of 2020 with did a big shop clean up, we removed a dozen smaller manual machines and supporting equipment including 2 older CNC machines and replace them with a new live tool turning center and 2 larger CNC machining centers.
We now offer from prototyping to production, we also review designs and offer cost reduction recommendations and work with a network of like-minded businesses. We are also the local shop that other shops go to when they run into hot water.
My point is a new shop owner, you must have an open mind, enjoy the work and work hard on your network of customers and vendors alike. The goal of a business is not to be competitive, it is to make a profit. New shop owners must create a reason for customers to pay more for their services.
Be a Wizard at something, or find one!
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Thanks!