When you’re looking for ways to raise efficiency, increase quality and cut costs it may not be a surprise to learn that we suggest outsourcing metal fabrication work.
Wiley Metal is a metal fabrication business, so we’re hardly unbiased, but hear us out (or take a few minutes to read what we have to say.) Another look at how and where you obtain the fabrications you need could trigger ideas for improvements and cost savings, and just think what you could do with the space you free up!
Outsourcing is Not Offshoring
The two terms are sometimes used interchangeably but they are far from the same thing. Outsourcing refers to having someone else do work for you, rather than doing it yourself. Offshoring is sending work to a manufacturer in a low-cost country
Some things are always outsourced, like cellphone service and your supply of drills and cutting tools. (You wouldn’t make your own, would you?) Other things you may choose to outsource, like janitorial services, or you may decide to provide them from within your organization.
When it comes to fabrications, often these are components of the products you’re making. Covers, brackets, struts, and housings are examples of components or subassemblies in your bill of materials that might be fabricated. You could make them yourself, or you could buy them from a specialist producer, like Wiley Metal Fabricating.
The Trouble With Offshoring
One of the lessons of the pandemic was that long supply chains – like when you import components from Asia – are a big risk. They reduce your flexibility, push you to carry more inventory, and with the limited oversight you can maintain, they may well reduce the quality of what you’re selling. However, if you outsource domestically these problems all go away.
Five Reasons to Outsource Metal Fabrication Work
If you need a dependable supply of fabricated components, we’d like to help. Alternatively, perhaps you need a one-off fabrication. It could be a grain hopper, a spiral staircase or something else entirely, and you’re thinking about making it yourself. Don’t!
Cutting, bending, and welding metal is skilled work that needs the right equipment. Whether it’s a one-off project or a dependable supply you’re looking for, we suggest outsourcing your project to us. Here are five reasons:
Let’s go through these one by one.
When you choose to manufacture components you’re also choosing to accept a level of risk. This arises from uncertainty in demand and the capacity you plan to put in place to handle it. If you want to always make every part yourself you’re going to need a lot of space, equipment, material, and people in order to handle peak demand.
Conversely, if you outsource, your supplier that takes on that risk. They can do that because they have a wide customer base that helps them balance demand and capacity. You however have only one customer, and that’s you. If you suddenly need to slow production you’ll be faced with people and machines standing idle. Outsource and let your supplier worry about that.
Modern fabrication shops invest in sophisticated machinery to cut, bend and weld, and they amortize this over orders from a large customer base. Do you have the equipment, and if not, are you willing to invest six or even seven-figure sums in turret punches, CNC press brakes, and laser cutting systems? And let’s not forget, it’s not just the hardware but you need people with the skills to operate and maintain these machines as well.
Yes, you can buy simpler and cheaper machinery, but then you don’t get the efficiencies and capabilities of the latest generation of fabrication equipment. That may constrain your designs, will probably impact quality, and certainly increases your piece costs.
Fabrication isn’t a “black art” that only a craftsman can master, but maintaining consistency does require a lot of experience and knowledge. Metal can vary from roll to roll and batch to batch, and spring back in bending is extraordinarily difficult to predict and deal with. Welding is another difficult process where experience is key to achieving good quality.
Experience is also important when it comes to looking at new designs or coming up with cost-saving ideas. An experienced fabricator can often look at part prints and suggest ways to improve appearance, cut costs or raise quality. This experience is developed by working on a large number of different jobs, for different customers and using different materials, something your in-house fabrication team won’t get to do.
If you decide to fabricate your own parts it’s going to be very hard to match the efficiency of a professional fabricator. That can be the efficiency with which metal is cut, bent, joined, and finished, or it can be the efficiency of the process, from design and purchasing to shipping.
First, a professional fabrication business will have equipment capable of high productivity. Laser cutters may have automated sheet feeders for example, and the business may use robotic welding cells. You could buy such equipment yourself of course, but unless you have the volume of work to keep them busy your cost per piece is going to be very high.
We can put quality under the “efficiency” heading too, (though it’s also a cost factor.) Skilled fabricators using advanced equipment will produce more consistent results than less experienced workers using older, less capable machinery. Poor quality is going to show up in higher waste and lower productivity, and it could also come back to bite you in the form of customer complaints.
Process efficiencies relate to things like economies of scale when purchasing – a fabricator might get through a ton of stainless sheets each week while you only need one a year – or to inventory management, space utilization, or design and inspection tools.
If you fabricate components in-house you’re inevitably dedicating a lot of space and money to that activity. Could those resources be put to a more profitable use? Rather than fill the floor with laser cutting machines, could you make more money using that space to assemble the products for which your business is known? Unless you’re blessed with abundant resources, the best strategy is probably to focus on satisfying your existing customers and winning new ones. Leave the fabrication work to other people.
When debating whether to make or buy, most business leaders think about cost first. We’re going to make the case that cost should come last. Here’s why.
Quite simply, unless you can invest in the latest generation machinery, and keep it fully utilized year-round, a dedicated fabrication business is going to make your parts at a lower cost than you can achieve. However, it may not look that way.
The problem is how costs are allocated. Every business and controller has their own way of doing things, and it can make activities look more or less expensive just by moving overheads around and making other adjustments.
So, when looking at whether to outsource fabricated metal parts, it’s a mistake to get bogged down in cost comparisons. Just ask yourself, what’s cheaper per minute or per part, a dedicated facility that you can’t keep busy all the time or one that works flat out every day?
Importance of Finding a Reliable Partner For Metal Fabrications
Once you’ve recognized the logic in outsourcing metal fabrication work, the next step is to find a dependable partner. We’d suggest you look for someone not too far away, preferably with modern machinery, a skilled workforce, and a commitment to putting customer needs first.
At the risk of seeming bold, we think that could be us. If you’d like to discuss what we could do for you, let’s talk.