What if decreasing project costs was possible without sacrificing time or quality? Here are 7 solutions and opportunities from real world projects and conversations we have had with customers.
It has always been said that there are certain jobs in the world that you do not want to go to the lowest bidder. Pilots and surgeons for sure, but we’ll include custom precision manufacturing with machining, fabrication, and assembly as the third.
The old joke of choosing two options from the three options of good, cheap, or fast is well alive in most examples of products and services you can purchase. There is even a joke about charging more if you attempt to help the supplier as pictured on our shop wall in our assembly area.
As described in a previous post about the changes in your supply chain and improving lead times by taking control of a few things, the following is seven of our solutions constantly presented to customers to stop scope creep and control pricing on quoted projects.
1. Stop over engineering
Manufacturability seems to be left out of a lot of prints we review and over tolerancing is the biggest perpetrator. Bolt holes that call for three place tolerance that could be fractional, a surface finish of 16 called out when that surface is the underside of a mounting, and true positions of .002 that could be +/- .005. All of these features would require an additional operation or even an outside surface that do not help decreasing project costs.
2. Communicating fit, form, and function
Helping your supplier understand the environment your project will exist in, what the use is, what the impact and wear conditions will be and the large picture of where the project fits into other projects will also help decreasing project costs.
3. Making sure the material types and sizes are available
Engineering projects using nominal sizes and common standards help increasing the chances of material being available, having a lower cost, and shipping with a faster lead time. Additionally, changing the internal call out from the 1954 prints and bills of material that are still used will help as well.
One project we quoted required purchasing round stock since square was not available hence increasing machining time. Another assembly project was designed with a 1-1/8 -8 thread 40 years ago which requires a special-order tap and special-order bolts when 1-1/8-7 is common and off the shelf available in 24 hours with 1/10 the cost.
Another project originally designed with a particular hydraulic pump is not even able to be quoted because the pump supplier has disappeared, and the purchasing contact cannot get an answer internally from the engineering team to find an equivalent.
A quick search of material, hardware, and parts suppliers’ websites before final print revisions are sent to quote would be beneficial to decreasing project costs.
4. Assigning one point of contact and decision making
We believe that a horse designed with input from committee members gets you a camel.
The larger the organization and the greater number of remote working team members is destroying timelines to send you a quote and will destroy production times when questions arise from discrepancies between solid models and provided prints.
Having a single point of contact that can direct your internal resources for timely answers will decrease time to quote, time to produce, and could decrease project costs because any shop will pull your project to keep their spindles cutting chips if you do not respond.
5. Supplying the material, hardware, and purchased goods
The larger your company, the greater purchasing power you will have and providing the material, coordinating services with established vendors, and providing the hardware used for the project will decrease your project costs as well as lead times.
Some material, hardware, and service suppliers are unwilling to sell lower quantities and if they are willing, it will be at a higher price and will be be marked up accordingly as normal business practices.
As an example, we were stocking castings to machine to order based on the EAU that a customer provided. The casting supplier cancelled our order 10 weeks after the PO was sent because furnace time was repurposed to more important customers. The end customer ordered the castings directly and shipped them to us sooner to be machined because of their purchasing power with the vendor. We can provide numerous other examples where you, the customer, was given greater priority and lower pricing because you were worth more to the vendor than we are.
6. Allowing equivalents
Updating those 1960 prints and BOM should be completed before you submit them for quoting otherwise critical time is spend sourcing and coordinating with you which increases quoting time.
Minimally, providing equivalents for obsolete material and items such as motors, gearboxes and pumps will accelerate quoting times as well as production times. This will also decrease project costs since equivalents and alternates may be off the shelf versus special order, may be available locally versus overseas for shipping, and can lower total costs of ownership for your customer with improvements in availability and serviceability for later maintenance and repairs.
As an example, a specific size and color of a Pelican Case that has been on print for 25+ years was moved to a 16 week lead time due to production delays after an ice storm destroyed production capacity. The same case in a slightly different color was cheaper and faster but it took 8 weeks for the customer to give us a variance.
7. Ordering more than quantity one
We guarantee that quoting and ordering a quantity one of anything in the custom manufacturing space will be the highest price you can pay. There are ZERO efficiencies to be realized with material, hardware, tooling, labor, set up costs.
Quantities of 5 to 10 are ideal but after those quantities, there are only minor material discounts to be realized. The variable costs of production with tooling, coolant, utilities, set up, packaging, and shipping reach a diminishing impact after that.
Summary
These seven suggestions are based on real world solutions we have provided across all of the market segments we serve. In fact, we built a project center just for meeting with you and the team to look at and discuss the roadmap to success of your project and plan on staying within budget.
For 70 years, Allis Manufacturing Corp. in Milwaukee, WI has proudly provided large machining, welding, assembly, repair and rebuild, and now painting and engraving for over a dozen industries. We consider ourselves a learning and teaching organization that not only takes pride in our quality and on-time rating but is also dedicated to helping #Neurodiverse individuals find meaningful employment in manufacturing.
