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My employee is too slow.

F35Machinist

Cast Iron
Joined
Nov 3, 2021
Location
California
My business is mostly low volume production and prototyping for aerospace and medical device. A while back I hired a machinist to help me at my shop. I pay him 40/hr which comes out to about $45/hr in cost to me. The job is to program, set up, and run the parts. I need him to average $120/hr in revenue in order for me to make any profit at all from his being here. My problem is that he is a little slow with programming and also programs the parts to run slow on the machines. By my calculation, he averages around $80/hr work output.

I like the guy overall. He is a good worker and we get along. He doesn't waste time and works pretty diligently, but not fast enough. For example, the other day he programed a job to run at 30 min/part and I had to go in and reprogram to run at 7 min/part to make the delivery date. At 50-100pc quantities that is a lot of time. I already have a standard library of tools with feeds and speeds already set, but even so he manages to make the program take long. He says that in his last job they didn't care too much about the run time and just wanted to make a good part. I told him I need to make a good part with a short run time or else we won't make any money.

I am starting the think that contract manufacturing isn't a viable business with employees. There is no room to move on prices and my pricing is already higher than others. What is discouraging me is that I think this employee is actually pretty good and definitely the best out of all the ones I interviewed, but I can't make the numbers pencil out. I plan on trying to coach the guy to be faster and also make improvements around the shop to make his job easier. I am wondering what other people's thoughts are on this subject? How much can your machinists make on low volume work?
 
I think you might have issues at both ends.
He does sound really slow, if you reprogrammed something from 30min. to 7min.
If he is a good worker, what my old owner used to say, find what he can do and have him do that.(not always doable I think)
So train him to be faster, but in the mean time you could also divide up the work differently.

We have 4 VMC's
My son is new, only 2-3 years training, He is far slower than me, even though he works as fast and hard.
So if I need things done quick we switch modes, Instead of he programs, set's up and runs 2 machines.
I program, setup, everything, and he runs the 4 machines, this can be daunting, So I usually run one machine and program and setup, and he runs 3 machines.
When we are slower or all is running, we revert back to 2 machines each.
he is slower, but learning to get faster.

need to come up with fluid efficient systems differently for a small shop I think.
It was easier when I had a shop full of guys.

Also needing him to make $120hr from what I know is not correct. I heard once of an average of 50%, So if your shop rate is $80hr per machine, you should be able to pay a guy 50% so $40hr.
This doesn't sound that reasonable to me because its based off a percentage instead of a money amount.

But I can pay an employee based on one guy running one machine.
The fact we/they can run two or three, is just way more profits.

2 cents, grain of salt. we're all different in the baby shop arena. :cheers:
 
For example, the other day he programed a job to run at 30 min/part and I had to go in and reprogram to run at 7 min/part
First improvement seems pretty obvious - you program, he runs. Maybe he'll pick up your methods as time goes by, or maybe he's just not a fast programmer. If so, adjust :)

Two sets of hands is always going to do more than one set ... if you can keep him and yourself busy, you'll make more even if he isn't as good as you.
 
First improvement seems pretty obvious - you program, he runs.

This sounds like a reasonable first step. Next, what CAM are you using? I switched a little while ago and spent a long time setting up all the formulas and defaults so the CAM can really do most of the work for you. Maybe you already have done this, but it is unbelievable how much time this can save both in programming and machining. I can spend far less time now worrying about all the little details that might crash my machine than I used to. Also, I invested in a really powerful computer (Liquid cooled) to do my CAM processing, which also saves time programming.

If the guy is nice to be around and seems to not mind working hard and doesn't have any substance issues it seems you have plenty to work with there. Just my thoughts!
 
I've been that guy. I've started on jobs, proofing programs I didn't write, single-blocking stuff the first time through and had the owner come up behind me and max out the feed override before walking away. I've also been told to just load a program and work off the setup sheet and press cycle start. Because " I set up and ran it last month and it worked fine". That drove a 1/2" endmill at a million ipm down into the Kurt. I tiptoe around until I'm sure. Still my fault.
I didn't much care for the feeling that if I had a personal feed override knob between my shoulder-blades, it would have been set to 150 and removed to prevent tampering.
I think you use fusion?
There are a lot of hacks to speed up stuff depending what and how you're programming. Clearance holes and aggressive contouring vs. a lot of low-stepover pocket clearing etc. If he's making parts, smart enough to program and setup, easy to get along with and does this for 40p/h ? I'd work with that.. he's only going to get faster and when he catches on, the speedios are both going to be running so fast that it'll sound, from the office, like they're going to break. Maybe he hasn't seen what the maximum output of the machines is? Show him something you wrote and run it so the chips are hammering off the back of the door. Then tell him " gimme summa dat".
It's a Star Trek thing ..
Even if Scotty says "she canna take it, she'll fly apart.."
It's your ship, your call.
Fusion does have the "machining time" information for each part of the program.
So if you refine a section with him, you can see where you can save time in the simulation.Check retract heights, rapids, stepovers, stepdowns and finish cuts for the tooling along with stuff fusion can throw in that slows things up like unwanted or unnecessary ramping
 
I am starting the think that contract manufacturing isn't a viable business with employees. There is no room to move on prices and my pricing is already higher than others. What is discouraging me is that I think this employee is actually pretty good and definitely the best out of all the ones I interviewed, but I can't make the numbers pencil out. I plan on trying to coach the guy to be faster and also make improvements around the shop to make his job easier. I am wondering what other people's thoughts are on this subject? How much can your machinists make on low volume work?

It's funny, because in one of the other threads, you said something about this that really made me second guess my own business model. It was basically - If you can't find work that is profitable when somebody else is running it, then you aren't finding good work.

My shop was pretty profitable when it was just me and one other employee. I did 90% of the programming, and he kept machines fed, etc... Every time he programmed parts, we lost money, so he just worked on the parts that were a distraction to me. Now I have between 8 - 10 employees, spend about 50% of my time on admin duties, and we are barely scraping by.

When I do find time to program and run machines, I can pretty consistently out earn my employees by 2x, and often 5x or more... My wife constantly accuses me of basically subsidizing all of their wages. :o

If there is a formula to have great success with low volume, high mix, and a handful of employees; I'm not sure what it is. My shop rate hasn't really moved for 5 years, my costs have absolutely skyrocketed, we've added ITAR, AS9100, and a fairly robust quality managment system, and still I am winning less bids than ever. Even when I look at the shops I know that have 50 or more employees, they seem to be doing well from the outside, but are all in a state of cashflow crisis every year or two. So I'm not convinced the bigger guys really have it figured out either.

My next move is to invest in a sales presence this year. If that doesn't pan out, I think I might lay everybody off except one or two and try to move the business into a cheap building that I can own.
 
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Also needing him to make $120hr from what I know is not correct. I heard once of an average of 50%, So if your shop rate is $80hr per machine, you should be able to pay a guy 50% so $40hr.
This doesn't sound that reasonable to me because its based off a percentage instead of a money amount.

The flat percentage doesn't work, because everybody's overhead burden is different. Also, it's trending up dramatically. We pay 100% of medical insurance (it's our one major perk), and the cost went up 35% this year. Material is up, rent is up, maintenance on software, electricity, etc...

Early on I had an employee that I paid ~$40/hr, and I gave him a little too much visibility into job pricing. He was constantly running long projects where he made the shop $70/hr or so, and he had a really hard time understanding that I was loosing money with that arrangement.
 
The company where I work has about 200 employees and 110 machines. We are generally profitable but nothing is easy and you have to stay vigilant. Our process engineers write programs and hand off to the production floor. The operators feed the machines, check and claim parts, and make offsets - but only the most advanced journeymen are authorized to modify a program, and then only with engineering approval.

I really hope you’re also keeping a close watch on your scrap; often a job isn’t profitable until the scrap has been sold. After all, machine shops peel away everything that’s not needed until the finished part is left, so any shop which doesn’t manage scrap will likely go broke.
 
I just wanted to put this out there also, to whom ever.
I have seen small shops and large shops, and have managed both that have this mentality of,
They want all their guys to be Rockstar's, they all can do anything and all have every necessary skill.

This would be awesome as a machine shop manager, or supervisor.
A shop where everyone can get stuff done!!!

This is absolutely incorrect for a business model though.
This is the classic a machinist owns a business, instead of a business owner owns a machine shop.

Normally, with some exceptions, you would want the least qualified, lowest paid person in each position, who can get the job done efficiently.

Not a bunch of extremely skilled, high paid employee's.

This is also well know in business as the small business owners way to improperly delegate excess tasks and responsibilities he has in his current system.

In the context of the OP, he has 3 VMC machines and does it all, this is really the maximum a single person can run at 100% and killing themselves.
Been there done that.

You should have, or create, a future model, at least a small one so you know, who is the next employee, and what responsibilities and costs are associated with that employee.

But anyway, the second employee in this instance is not a full Rockstar machinist, programming, setup, operator....
the next guy in this scenario I would hire is a operator, and one of the lowest cost employees really (under programmer, setup, then operator).
You should have hired an operator at $20-25 hr. and you do all the programming and setups. IMHO
 
I really hope you’re also keeping a close watch on your scrap; often a job isn’t profitable until the scrap has been sold. After all, machine shops peel away everything that’s not needed until the finished part is left, so any shop which doesn’t manage scrap will likely go broke.
This is something I think some don't look at, with just 2 guys grinding it out, we were creating in excess of $300 a week($1200+/month) in scrap.
last shop was 5 of us doing the same thing $$$
Something to be acknowledged for sure.
 
For example, the other day he programed a job to run at 30 min/part and I had to go in and reprogram to run at 7 min/part to make the delivery date. At 50-100pc quantities that is a lot of time. I already have a standard library of tools with feeds and speeds already set, but even so he manages to make the program take long.
Yeah, this is a perfect example of no sense of urgency. If I were knocking out a single part, in a difficult material, I could see it taking 30 minutes. 50 pieces? Oh, hell no. How big of a part was this and what material? I can't imagine what you'd do for half an hour on a lathe.

I'm not asking because I'm focusing on that part but, trying to understand where the gap exists in his knowledge. Too light a feed rate? Too shallow? Is he at all familiar with how some of these inserts like to be run? I can only imagine super conservative, 0.080 deep passes at 0.003" feed and spending all day making and clearing stringy chips.

This is why I linger in the various machine demo booths at trade shows. Cutting technology is a culture and that's where we have the opportunity to see the various MTBs and cutting tool companies showing off their best.
 
My next move is to invest in a sales presence this year. If that doesn't pan out, I think I might lay everybody off except one or two and try to move the business into a cheap building that I can own.

I had some super shitty landlords that cured me from ever leasing again. I tried like hell to buy an 11k sq ft commercial building back in 2014 when they were cheap ($220k), but couldn't pull it off. That refusal to rent pushed me to buy in the country and build a giant building behind my house and I don't regret it for a second. Lots of guys doing the rural shop thing successfully.

Friend with a local small shop and I were just talking about King Machine in Corvallis going from a big thing with a dozen guys to a firesale overnight because the building sold.

There's probably downsides to choosing the rural shop/minimal employees route, but I can't think of any at the moment.
 
I had some super shitty landlords that cured me from ever leasing again. I tried like hell to buy an 11k sq ft commercial building back in 2014 when they were cheap ($220k), but couldn't pull it off. That refusal to rent pushed me to buy in the country and build a giant building behind my house and I don't regret it for a second. Lots of guys doing the rural shop thing successfully.

Friend with a local small shop and I were just talking about King Machine in Corvallis going from a big thing with a dozen guys to a firesale overnight because the building sold.

There's probably downsides to choosing the rural shop/minimal employees route, but I can't think of any at the moment.
You'd never be able to build a really big business with the shop behind your house/ minimal employees route, but for most if you can make a decent living and build up a fleet of machinery that you can sell off for retirement funds that's probably all you need.
 
You'd never be able to build a really big business with the shop behind your house/ minimal employees route, but for most if you can make a decent living and build up a fleet of machinery that you can sell off for retirement funds that's probably all you need.

I heard of a Billionaire in my neighboring province (BC) that built his business initially at his property with minimal employees and developed prototypes and technology that he was then able to translate into a large business in the city. I like this model because if you are a the inventor-type that likes to work long hours on concepts that need to be kept concealed you can do this easier without having to sacrifice time with your family, as tending machines with longer cycle times allows you to come in a play with the kids for a few minutes.

I hate renting, but having a large mortgage is pretty much the same only instead of a landlord taking all the money it's the bank. Things are probably a little different in Canada as far as taxes and insurance goes but it is nice having more control and knowing that the building's value is changing as inflation erodes the dollar.
 
I like the guy overall. He is a good worker and we get along. He doesn't waste time and works pretty diligently, but not fast enough.
How sure are you that he isn't wasting time?

Spot checks throughout the day are insufficient. You may have to drop everything you're doing and shadow him for an entire day or two to figure out how exactly he's managing his time. The results may be eye opening.
 








 
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