What can set a job shop apart in the modern steel industry?
Fabrication job shops and contract manufacturers may all seem alike. Many use the same type of fabrication equipment/machinery, serve the same customer base, use the same manufacturing processes, and use the same basic business structure. Of course, job shops will always be competing for the best quality, lead times, and prices. However, there are three primary areas where custom fabrication shops can separate themselves from the masses of competition. These three areas are the steel industries’ largest pain points when it comes to outsourcing.
Ease & Promptness of Communication:
It’s 2023, and gone are the days of the pony express, telegrams, and (almost) faxes. Today, we can send all types of content digitally in an instant to any recipient anywhere in the world at any time. That is the beauty of the modern age and something many of us take for granted. There should be no excuse for slow responses whether it is returning a phone call, email, or DM; especially when it comes to returning RFQs (which should be of the highest priority).
With the instantaneous communication and instant gratification that affects every area of our individual lives, Buyers have higher expectations for responsiveness and prompt communication for their suppliers. Many times, the lowest bid doesn’t even get the job but the quickest returned does.
How does a fabrication job shop, service center or contract manufacturer return custom cutting quotes faster?
Jobs shops, service centers, and contract manufacturers must look at their quoting processes and ask themselves questions. What are the ways to cut back on manual and time-consuming cost estimation? What software our automation can we integrate into our estimating processes?
Of course, there will always be some waiting. For example, waiting on mills for current pricing and availability or waiting on vendors for cost of purchased items cannot really be helped. However, job shops can always streamline and simplify their own internal quoting processes to reduce the total amount of a time that a prospect or customer waits for a quote.
To really streamline internal quoting processes, we use Pronest quoting module for primary fabrication processes such as hi-def plasma cutting and bending. Instead of more traditional methods such as quoting off of PDF files or part weights, we actually import the part CAD files and input material type, thickness, and quantities. After nesting the job, Pronest gives all kinds of part data such as material utilization, production time, pierces, area of part, weight of part (allocated or true), material cost, and production cost. You can find more details on how we calculate our pricing for quotes here.
That is just an example of how we speed up our quoting processes. If the customer can provide CAD files, typically it would only take a programmer 5 or 10 minutes to load say 50 unique part numbers, thicknesses, and qtys, and have a quote to a customer in under 15 minutes. The entire process isn’t always this fast of course, but it doesn’t take long to get the numbers themselves. NC1 files, for structural plate packages, are even better as NC1 files already contain the part thickness and qty and the programmer doesn’t have to manually enter that information.
Even better are the companies that provide an instant quoting module for their customers. The customers upload their CAD files, material type, thicknesses, and qty’s and get instant pricing without waiting on any type of human review. This system is awesome, as long as their quoting algorithms are accurate. You run the risk of quoting getting an order for complex or even impossible to fabricate job at too low of a price. To avoid this, the quoting algorithms must include DFM, design for manufacturability, which can be computationally intensive and very complex to program. Also, a downside to the instant quoting system is the lack of human connection between the buyer and supplier. It certainly isn’t ideal for negotiation large contracts or jobs that have very complex processes. However, instant quoting seems to be at the cutting edge of the steel manufacturing for high-mix low volume type jobs.
Aside from quoting, there are other options that can be streamlined. Once the customer sends a PO, how easy is the production process? Are there DFM checks in place to avoid quoting a job and then realizing that you cannot manufacture it upon receipt of a PO? Did the job shop do its due diligence to ensure it has the necessary materials and tooling for the job and that it can receive them by the order due date? Its best to communicate any challenges or nuances with customers up front instead of partway through an order. Job shops need to be proactive not reactive to difficult situations. If an order is delayed for some reason, is it communicated, or does the customer have to call first wondering where on earth is their order? Again, it is always best for the job shop to reach out first and communicate if its schedule changes.
Clear and prompt communication is key to any long term B2B relationship. Job shops should always be reducing the amount of friction, effort, and time that it takes for a customer to place an order. By being proactive and prompt with communication, a job shop can really stand apart from the crowd.
On Time Delivery:
The Achilles heal to outsourcing…
Most customers request a lead time before ordering. Lead time can be a bigger factor than pricing in many cases as to whether or not a PO is awarded. But, job shops should never over promise to their customers, especially with the sole intent of getting the order even when it isn’t possible to get it done in time. Most customers are more likely to remember whether or not the order was delivered on time than the price that was paid for it.
It’s the classic domino effect. The more links in the chain, the worse the problem. If one of the first links (suppliers) delays an order, it holds everyone else up going down the line of the supply chain. During the COVID pandemic, buyers dealt with an abundance of issues with the supply chain. You were fortunate to find what you needed when you needed it. Companies that stepped in and took on these prospective buyers flourished by supplementing the supply chain.
In 2023, it seems that many supply chain problems have resolved themselves, but not entirely. A steel fabrication job shop can easily pick up and retain customers by delivering on time, every time. Its incredible that late fabrication orders have become the norm, but it shouldn’t be that way.
Of course fabrication equipment can break down, employees can get sick, steel orders can get delayed, but plan for some of that when scheduling lead times.
Of course, it is almost impossible to never make a mistake in the constant moving, flowing, job shop environment. There are many unique parts, fabrication processes, and customer requirements. A job shop can utilize ERP software to better track time, track materials, track parts through the fabrication process, and get a feel for the overall efficiency of an organization. An error may have nothing to do with the shop floor, but in the engineering/programming department. Accuracy starts there; parts must be nested on the correct thickness and at the correct quantity. After the parts are cut, stack or part labels with bar codes can be used from blanking (plasma, laser, waterjet), and stay on the part throughout additional processes (drilling, bending, rolling, welding, powder coating, etc.). When blanking, material can often be saved by combining and nesting jobs together, however, it can lead to a giant headache it comes to sorting. Parts need to be counted after every fabrication process to ensure that none are missing and before the final delivery.
Ways to increase job shop order accuracy:
- Use software or some time of collaborative job board to track orders throughout production.
- Post these job boards throughout the facility on large digital screens where anyone can see them.
- Part drawings, nest details, bend layouts, assembly notes, material certifications, and any other job specific documents should be stored on a local server. iPads can be distributed to employees to access these as required.
- The more accessible part information is to employees, the less room there is for errors.
- Use stack and or part labels for part identification through all of the fabrication processes.
- Keep the shop floor organized and clean. Have designated areas for fabrication processes and pallets of work in progress parts.
- Work in progress (WIP), should flow through a facility (never jump around). WIP parts should flow in one direction and fabrication machinery should be laid out in a way that complements fabrication processes. For example, you would not want to have braking, then plasma burning, then welding. Instead, place fabrication processes in an order used for a typical custom fabrication job, first blanking (plasma/laser), then drilling, braking/forming, welding/assembly, and finally coating. This is not only the efficient way to do this but also will help alleviate part shortages, and order errors.
- Have quality assurance programs in place. Parts should be checked against drawings for every piece or periodically, whatever the customer requires.
When a mistake does happen, we all make them, does a job shop urgently correct their mistake. For example, if a customer receives a part out of tolerance, do they have to wait at lead time for a replacement or can the get it right away? Job shops need to be able to credit their customers for mistakes. Let’s say some holes were too small by fault of the job shop, and the customer has to spend extra time reaming them out. A job shop should automatically send a customer a credit for their extra wasted time. Customers will remember that, and you can bet they will keep coming back.