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Does it make sense to set up own CNC machines and produce parts compared to these Chinese prices?

I knew a deer blind company that farmed out parts and frames to China outfit and went out of business because of spending a lot of money to get poor-quality parts.
And witnessed another deer blind at a trade show (ATA show in St Louis) balling out the China manufacturer for crap quality parts. they are still in business but took some loss on the outsourced parts.
Yeah yeah yeah whoop dee effing doo, I bought a few things out of JC Whitney, too. BFD, cheap crap from the US. You ain't gonna get far with that one, Buck.

ps, the 160 mile per gallon carburetor did not work. Didn't come from China, either.

btw, did you ever have a 1970 Pontiac ? If it got any crappier than that it'd disappear into another dimension.
 
Our products use small precise parts, some quite complicated. If we had them made in the US we wouldn't have any customers because nobody could afford our products. We do have one or three parts that are so fussy that only one US shop can make them consistently, and we pay accordingly. There's no way setting up a full CNC shop would work for us. Not only do you need the machines and tooling and inspection facilities, you need the whole rest of the shop to support making fixtures and tooling. I used to work for a company that did make everything in-house, doing very similar work to what we do here. The business model that worked then, 1970-2000, doesn't work today.
 
Having been in the machining business, the only jobs I ALWAYS made money on were the ones I jobbed out to someone else. They may not have made money, but I did.
"When in doubt, farm it out."

You may want to find alternate sources for your parts as a backup plan, but tooling up from zero is not the way to do it unless you need some big write-offs.
 
Not only do you need the machines and tooling and inspection facilities, you need the whole rest of the shop to support making fixtures and tooling.
And the building to put them in, and the people to run them, and the people to manage the people running them, and the people to hire and fire them and the people to keep track of the payroll and state payments/requirements. And the people to manage the cash flow to support all that, and the people to figure out the taxes and pay that, and the people to figure out the insurance needs or else get reared by insurance agents, and probably another 500 things I forgot.

Making stuff is a long-term commitment. If this is about saving a few bucks, ha ha ha, won't work out quite that way.
 
If you ask for it :)


I totally agree with you. I agreed with you forty years before I even knew you. I bought absolutely nothing but US stuff for years and years.

And it didn't make a damn bit of difference.

Now it's too late to worry about, and also most of the people in the US do not agree with us, and also most of the people in the US are stupid shits who would rather piss away a trillion dollars a year on the army instead of housing, infrastructure, medical care, whatever would make life better for the people of the US.

You can only stand in the river trying to stop the water for so long before you figure it out, yes ? You go empty Lake Michigan with a tablespoon, I'm done with that.

At least in China people still make stuff instead of shuffling numbers around on a spreadsheet and calling it "creating wealth". So that's a little satisfaction.


Not so glad you brought that up .. why does no city in the US have public bathrooms ? You can't even walk two blocks in a village in china without finding a bathroom. Every brainless nitwit city in the US snivels and moans about people pissing on the street but put in bathrooms ? no way, "someone would shoot up drugs !"

What a loser place, may as well be India. US cities pretty much can't do anything without fucking it up.

When did this happen ? It wasn't this bad in 1970, for instance. It sure wasn't perfect but nowadays, the people running stuff would be lucky to get a grade of "moron" on an IQ test. Honestly, could they screw things up worse even if they tried ?
I guess you don't want to continue why you lust after a PINK sports car with a Rocking Horse?
 
I guess you don't want to continue why you lust after a PINK sports car with a Rocking Horse?
Haven't particularly liked Astons since .. DB7 maybe ? But if you'd seen the girls who were draped over that pink car, you might have been lusting also.

I didn't dare take a photo tho. In fact, I didn't dare look straight-on. Remember the little tool sharpeners ? That knife would go straight in, easy.

Even Hulk Hogan has to sleep sometime.
 
Haven't particularly liked Astons since .. DB7 maybe ? But if you'd seen the girls who were draped over that pink car, you might have been lusting also.

I didn't dare take a photo tho. In fact, I didn't dare look straight-on. Remember the little tool sharpeners ? That knife would go straight in, easy.

Even Hulk Hogan has to sleep sometime.
A Chinese Aston Martin knock off? Will have to check Alibaba for a price.
The sun has set on the British Empire.
 
Our business currently produces small handheld devices that have quite many metal parts. We buy them from China. With shipping,we spend every 2 months about $115,000 for those parts. Biggest costs are the aluminium end panels making up already $40,000 alone. The quantities are around 25,000 pcs. Of parts in total, 4000pcs per each separate part. Some are milled and some are lathed parts. I calculated the expected cost of raw material in comparison to the end prices we now pay, for example end panels aluminum costs around $0.15 and the milled panels from China $5. Sizes are quite small, biggest parts around 60x40x10mm, lathed parts 20x25mm and 12mmx10mm. Lathed parts stainless steel.

We would have around $300K to invest for machines. Is this going to get anything for serious production?



Sorry to reply to the OP's post, but you seriously are not giving us nearly enough info to give you a real answer, so what has been posted thus far is just generalizations.

Prints, qtys, etc would all be needed for any of us to have a clue.


--------------------

Think Snow Eh!
Ox
 
Our business currently produces small handheld devices that have quite many metal parts. We buy them from China. With shipping,we spend every 2 months about $115,000 for those parts. Biggest costs are the aluminium end panels making up already $40,000 alone. The quantities are around 25,000 pcs. Of parts in total, 4000pcs per each separate part. Some are milled and some are lathed parts. I calculated the expected cost of raw material in comparison to the end prices we now pay, for example end panels aluminum costs around $0.15 and the milled panels from China $5. Sizes are quite small, biggest parts around 60x40x10mm, lathed parts 20x25mm and 12mmx10mm. Lathed parts stainless steel.

We would have around $300K to invest for machines. Is this going to get anything for serious production?
What happens when it's no longer possible to get parts from China?
 
There’s similar opportunity here in the US. I’ve had lots of parts ruined by companies that say they’re anodizers. On the other hand find the rare good one and they never seem to ruin anything so it’s possible.

The reputation for good anodizers travels fast, so what happens is that they gain the reputation at one scale, and immediately get pushed to grow super fast. It isn't exactly a massive margin industry, so trying to scale like that on a bootstrap budget is extremely difficult, especially in a labor environment where McDonalds can't find people to flip burgers for $25/hr. Paying people to tend vats of bubbling acid is almost impossible.

So the scale starts to crush them, and the first thing that goes is the quality, because how can't it? Even with the best efforts.

Thus, the massive churn of quality anodizers goes on and on. The *really* good ones are smart enough to turn away work and never exceed capacity.
 
What happens when it's no longer possible to get parts from China?
What happens when the ocean explode, storms collide, the earth splits, the sun falls, clouds throw blood and the sky turns black?

Not a chance, Ox. Even asking the question indicates they don't have any idea.

What's this guy want to do, replicate the Bad Boys' escapade with the Haas 5, on a bigger scale ?
 
But yes China can make parts world-class when they want to.

The classic example used to cite that China can make good parts is Apple. Hard to argue "China can't make quality!" when you have a waterproof, face-scanning, satellite communicating, super computer in your pocket built with the same mechanical quality as a Rolex made in Shenzhen.

What those MBA's pitching China manufacturing don't tell you that it took 25 years and every hardware engineer at Apple spending a minimum of 2 weeks a year in China pestering them to up their quality and constantly riding them to maintain standards. My friends there call it their "2 Weeks in Mordor." They fly so many fucking people to China and back, they literally own their own international terminal at SFO where United does business-class only charter flights with nothing but Apple employees.
 
What happens when the ocean explode, storms collide, the earth splits, the sun falls, clouds throw blood and the sky turns black?

Not a chance, Ox. Even asking the question indicates they don't have any idea.

What's this guy want to do, replicate the Bad Boys' escapade with the Haas 5, on a bigger scale ?

"Why would we stop doing business with Germany?"
IBM Sales Executive, 1939
 
Hard to argue "China can't make quality!" when you have a waterproof, face-scanning, satellite communicating, super computer in your pocket built with the same mechanical quality as a Rolex made in Shenzhen.
I can see your friends' problem right off - apple/foxconn doesn't make anything in shenzhen. You only missed by like a thousand miles and five provinces.

Good thing you've got your facts straight, otherwise I'd have to doubt you.

Oh. Not to cast aspersions on your fantasies but at $200,000 in operating expenses for a round trip flight to china, not even considering profit or depreciation or maintenance, somehow I doubt that apple is sending charter flights every two weeks. That would be around six million dollars a year in airfare. Even apple is not that stupid.

Plus I've been thru SFO, a lot. Could you possibly point out this dedicated terminal? Cuz I pretty well know my way around that place. Been there more than once and I've never seen anything like that. (I do miss Willie Brown's welcome speech. They should have kept that, it sounded good).

Mosty, let me refer you to Tex Cobb. He's got his shit together.
 
Oh. Not to cast aspersions on your fantasies but at $200,000 in operating expenses for a round trip flight to china, not even considering profit or depreciation or maintenance, somehow I doubt that apple is sending charter flights every two weeks. That would be around six million dollars a year in airfare. Even apple is not that stupid.

You are correct. Apple doesn't pay $6 Million a year in airfare to China...

They pay $150 Million. To United alone:

On top of a somewhat substantial corporate jet fleet out of San Jose.
 
it is near impossible to beat China. China's government is behind China's manufacturing..Here our government is at odds with business.
And it seems if personal kickbacks can be had some government people will sell us out for side money.
It seems a stacked deck for our loss.
About the only answer is to go, Communist..then everybody will be poor and we will be even with China prices.
A darn shame for sure.
Some people views seem to be opposite to reality.
Government is not the reason manufacturing is outsourced to the lowest bidder(Although the reagan/thatcher administrations did get the ball rolling) the simple reasoning is money/profit/shareholder return.
Company bosses choose to outsource because their next quarter bonus will be bigger and shareholder returns will keep them in a job, it's that simple.
 
Our business currently produces small handheld devices that have quite many metal parts. We buy them from China. With shipping,we spend every 2 months about $115,000 for those parts. Biggest costs are the aluminium end panels making up already $40,000 alone. The quantities are around 25,000 pcs. Of parts in total, 4000pcs per each separate part. Some are milled and some are lathed parts. I calculated the expected cost of raw material in comparison to the end prices we now pay, for example end panels aluminum costs around $0.15 and the milled panels from China $5. Sizes are quite small, biggest parts around 60x40x10mm, lathed parts 20x25mm and 12mmx10mm. Lathed parts stainless steel.

We would have around $300K to invest for machines. Is this going to get anything for serious production?

Some of the reasons to move to in house production are lead time (both consistency and speed), quality control, ease of revisions, speed to market and SOMETIMES cost. If those aren't problems for you then I wouldn't go looking to bring it all in house. It won't be easy but that doesn't mean it's not worth the effort. I'm a decade into making specialty hand tools and we do fairly well making our own stuff but it's a niche business and the manufacturing side is what keeps me interested and helps make us unique. If your customers won't appreciate the increase in quality, then does it even matter?

I do genuinely appreciate you thinking about onshoring it though. So many people just want to hit the easy button and send manufacturing to Asia. Sometimes it is the best option though.
 
Our business currently produces small handheld devices that have quite many metal parts. We buy them from China. With shipping,we spend every 2 months about $115,000 for those parts. Biggest costs are the aluminium end panels making up already $40,000 alone. The quantities are around 25,000 pcs. Of parts in total, 4000pcs per each separate part. Some are milled and some are lathed parts. I calculated the expected cost of raw material in comparison to the end prices we now pay, for example end panels aluminum costs around $0.15 and the milled panels from China $5. Sizes are quite small, biggest parts around 60x40x10mm, lathed parts 20x25mm and 12mmx10mm. Lathed parts stainless steel.

We would have around $300K to invest for machines. Is this going to get anything for serious production?
Have you made a comparison to a USA quote for any of the parts?
 
Our business currently produces small handheld devices that have quite many metal parts. We buy them from China. With shipping,we spend every 2 months about $115,000 for those parts. Biggest costs are the aluminium end panels making up already $40,000 alone. The quantities are around 25,000 pcs. Of parts in total, 4000pcs per each separate part. Some are milled and some are lathed parts. I calculated the expected cost of raw material in comparison to the end prices we now pay, for example end panels aluminum costs around $0.15 and the milled panels from China $5. Sizes are quite small, biggest parts around 60x40x10mm, lathed parts 20x25mm and 12mmx10mm. Lathed parts stainless steel.

We would have around $300K to invest for machines. Is this going to get anything for serious production?
Another thing in the plus column for onshoring is the very real possibility of supply chain issues caused by world events such as covid. I've invested in the equipment to bring all my manufacturing in house over the last 5 yrs even though all my outsourcing was within Australia, the resulting improvement in workflow has been very noticeable.
 








 
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