Getting Some Pie

A metalworking marketing trend of note is the resurgence of the job shop or contract manufacturer. At IMTS, for example, these businesses were the darlings of several machine tool and accessory suppliers, who could be seen tripping over each other to court this seemingly, suddenly rediscovered market.

Columns From: 2/1/1997 Modern Machine Shop, ,

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Chris Koepfer

A metalworking marketing trend of note is the resurgence of the job shop or contract manufacturer. At IMTS, for example, these businesses were the darlings of several machine tool and accessory suppliers, who could be seen tripping over each other to court this seemingly, suddenly rediscovered market.

So what's happened to make job shops so attractive? The simple answer is downsizing. Numerous key or prime industries have moved way down the downsizing road. On their way, they've abandoned the vertical integration conceptmaking every part that goes into a product. Instead, they have pushed the manufacture of these parts to supplierskeeping in-house only the proprietary parts and components. These "big-guys" are moving to become assemblers of parts made for them by others.

It's the impact of this manufacturing push-down that has elevated the viability of contract manufacturers. It's a trickle down that has become a flash flood of work. Tier one suppliers, strapped for capacity, look at tier two for help. Tier two then looks to tier three and so on.

The net result is that many smaller shops, who would never dream of getting a piece of business from a Kodak, Chrysler or Boeing are now in the parts making pipeline for these industry giants.

However, there's more to participating in this wave of business than just hanging out a "machining done here" sign. Many of the quality and procedural expectations that the prime manufacturers place on their immediate suppliers also come down the chain to the lower tiers.

Shops that never had a need for SPC or JIT or any of the myriad of alphabet soup and acronyms that explain today's manufacturing concepts, now find themselves deeply involved. Quality assurance and process controls are part of the ante for playing in the big game.

These shops are purchasing equipment and expertise necessary to qualify for these downsize-induced contracts. That's a major reason contract shops are attracting so much attention from machine tool builders and others.

It's a metalworking market where job shops are in the driver's seat. Enjoy the ride.

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