Who owns a larger shop?

[plastikdreams]

I did not look at this thread for a long time. I thought it was a philosophical question from the title. EmGo would jump in about the glories of the workers paradise where the means of production belong to the workers.
Not sure about his feeling about chinese gangs? bring fentanyl and marijuana to the USA.
BilLD

Why tho...

 

[William Payne]

Don’t ruin this. Houdini has a good thread here. I’ve been an avid reader of it and since I have nothing to contribute I would like to see this keep going. It’s a good read.

 

[Houdini]

So far I have found it quite interesting, there is almost no larger shops on here(that run their mouths anyway).
One man show or a couple guys.

With this thread I have had some large shop guys DM me and have talked a bit.
What's interesting is as comparing the thought process and opinions of the employee vs a shop owner, I have found similar, differences in small shop/one man show mind set/business ideas and opinions different
to larger shop, or larger shops minded people.

Seems there is a large demographic here of old boomers, out in the woods with a large shed, and a bunch of older machines they bought used machines at lowered costs, not a lot of money in the shop. Oh yeah and no teeth
and they more own a job, and are not trying to build a larger business, just chillin!

Very interesting so far. Good thing is I have gotten a couple large shop contacts now willing to give a little "who you know" now SWEET!

 

[artengineering]

I feel somewhat of the "large shop" has gone away. I consistently see large machines shops closing in California all the time on the auction sites. Even in Arizona where I am I have gone to visit and steal (purchase) some of their equipment. Part of it is they are an older generation that I feel unless the work came in the door they didn't know how to go get it, especially after Covid. Also the overhead. Head honcho, Engineering manager if so, Manufacturing manager, Production manager, and more all have massive salaries with not enough work to fill them all. Then not to mention most were in massive buildings. I think if you can handle the ups and down of government/aerospace with some fill gap then you are still around. Or have invented/ built a product and a machine shop came with that.

Otherwise you are getting outbid and losing contracts to all these people with CNC's in their garage, the start ups, low overhead small business.

 

[MillGuy88]

Sort of off topic: What would be considered the threshold between a shop and a factory?

 

[Houdini]

Sort of off topic: What would be considered the threshold between a shop and a factory?

Depends on your description.
But I label the difference in a machine shop and a manufacturing facility differently because they do business different.
A machine shop machining parts for customers is not the same as a manufacturing facility machining and manufacturing its own parts, totally different.

 

[MillGuy88]

I mean to say a shop can make and sell its own widgets and so can a factory. I guess a part of a factory can be the machine shop and a factory could also be just a place where widgets are assembled.

When I think of big shops, places like Toyota, Lockheed Martin and even BorgWarner come to mind.

When we have have the service tech's come in for leveling and what not, I like to pick his brain about some of the large facilities in places like Windsor or ship yards in B.C. that he gets to go and see the inside of. Some of my favorite things to watch are factory tours.

 

[nateacox]

22 CNC'S, 15 full time employees, around 7 mil per year in sales. I still consider myself small to medium at those numbers.

 

[Garwood]

I mean to say a shop can make and sell its own widgets and so can a factory. I guess a part of a factory can be the machine shop and a factory could also be just a place where widgets are assembled.

When I think of big shops, places like Toyota, Lockheed Martin and even BorgWarner come to mind.

When we have have the service tech's come in for leveling and what not, I like to pick his brain about some of the large facilities in places like Windsor or ship yards in B.C. that he gets to go and see the inside of. Some of my favorite things to watch are factory tours.

I've wondered about this myself.

For me, I think the definition of a factory is a business of enough of a footprint they're recognized by folks outside their immediate customer base (like a recognizable brand) and they don't do outside work, strictly their own products.

 

[sansbury]

A big one being when you're on the right track it won't be hard to tell because all the "right people to know" come out of the woodwork.

All the wrong ones, too. Most are easy to spot. Not all, unfortunately, at least not the first time.

 

[TeachMePlease]

I've wondered about this myself.

For me, I think the definition of a factory is a business of enough of a footprint they're recognized by folks outside their immediate customer base (like a recognizable brand) and they don't do outside work, strictly their own products.

Can I still call myself a shop rat?

 

[sansbury]

So far I have found it quite interesting, there is almost no larger shops on here(that run their mouths anyway).

My primary trade is a wholly different one (HR software) but I’m sort of a “large shop” in that with a little over 300 employees, PE investors, 9 yards etc.

While I participate in public forums (eg linkedin) relating to that, I post almost nothing there but bland promotional statements. My restrictive covenants run into dozens of pages, I don’t want to tell competitors about my problems, and my hardest questions are likely not going to get answered there anyway. But by far the biggest factor is complexity of what I’m allowed to speak about, and what I even want to.

 

[Maintenance guy]

Not an owner but full- time in house mechanic, 93 CNC machines of various makes and models, 3 shifts, 250+ employees 24/6 (Closed on Sundays) 60,000 sqft facility production based for customer parts. But I'm just the grease monkey

 

[William Payne]

If I may but in and ask a question. When I look at little guy businesses many don’t don’t want to grow big, they don’t want employees, some are terrible people people which is why most appear to be self employed to begin with.

For you big guys. What was your mindset and culture behind your wanting to be a “big” company?

 

[cnctoolcat]

93 CNC machines of various makes and models, 3 shifts, 250+ employees 24/6 (Closed on Sundays) 60,000 sqft facility production based for customer parts.

I've always been fascinated that machine shops can grow so big machining other company's parts!

Precision machining is so damned competitive, it's wild these big shops can make significant hourly rates, which are required to grow and maintain such large businesses.

When I think of a large machine shop, my mind automatically assumes it is a "factory", that is machining their own products.

There can be huge differences between hourly rates for subcontract manufacturers versus product manufacturers. Subcontractors are offering essentially a commodity, and thus have to compete with many rivals. Whereas product companies offer their own products to the market---priced at where the market will bear.

And the markups on products can be substantial enough to produce an equivalent to hundreds of dollars per hour (or even thousands) for a shop rate.

Highly specialized subcontractors may be in this pricing category, but I can't see how a CNC subcontract machining company can compete at "product line hourly rates"?

How can job shops grow so big, from a pricing-power standpoint?!!

ToolCat

 

[Ox]

This guy sure seems to have had no issues dooing just that:

CNC West June-July 2024

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

I am Ox and I approve this here post!

 

[Houdini]

I've always been fascinated that machine shops can grow so big machining other company's parts!

Precision machining is so damned competitive, it's wild these big shops can make significant hourly rates, which are required to grow and maintain such large businesses.

When I think of a large machine shop, my mind automatically assumes it is a "factory", that is machining their own products.

There can be huge differences between hourly rates for subcontract manufacturers versus product manufacturers. Subcontractors are offering essentially a commodity, and thus have to compete with many rivals. Whereas product companies offer their own products to the market---priced at where the market will bear.

And the markups on products can be substantial enough to produce an equivalent to hundreds of dollars per hour (or even thousands) for a shop rate.

Highly specialized subcontractors may be in this pricing category, but I can't see how a CNC subcontract machining company can compete at "product line hourly rates"?

How can job shops grow so big, from a pricing-power standpoint?!!

ToolCat

Actually I find it the opposite.
I think it seems to be easier to make a profit, and even offer lower pricing with a larger shop.
Each employee compounding profits, and an increasing scalability.

 

[William Payne]

This guy sure seems to have had no issues dooing just that:

CNC West June-July 2024

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

I am Ox and I approve this here post!

Thanks for that. I love those stories. Every time I get the feeling something is too hard or not going right I read stories like that.

 

[SeymourDumore]

Actually I find it the opposite.
I think it seems to be easier to make a profit, and even offer lower pricing with a larger shop.
Each employee compounding profits, and an increasing scalability.

In no way can I see a larger shop offer lower pricing unless your request falls within their core operation.
But, larger shops have two things ( among others ) that's going for them:

1: They have the capital and manpower to expand their core operation if it's financially feasible to do so.
2: They can usually afford to cater only to those requests that falls within their core operation.

As a matter of fact, I owe my very existence to those shops that found outsourcing non-core processes or operations to be more cost effective than to do them in house.

Again, they do have other benefits that goes with their size, but the wholesale "lower pricing" comment I do not believe to be correct.

 

[William Payne]

I was watching a video the other day about a one man welding shop from Michigan. The guy is swamped with work but he said that one job he has is welding caterpillar oil pan casting from the factory. He said he did more than 1000 a year. If a one man shop can have a contract like that, I can only imagine what kind of production contract big shops have.