Challenges Reveal Value and Vulnerability of Small Machine Shops
Small business ownership is conducive to the kind of oversight and commitment that serves machining well, but small business also relies on the support and commitment of enterprises around them.
I want to say some things about smallness. As in, small machine shops — the power of this type of business, and the vulnerability.
In the U.S., many if not most machined parts are produced by small shops. The actual volume of parts is hard to tally, but certainly most shops themselves are small. Census Bureau data say facilities with 19 employees or fewer represent 82% of businesses classified as “machine shops.”
Two experiences of late have reminded me how the work of these small manufacturers plays out, what their prevalence means and what they need.
I recently visited a small shop (under 20 employees) that has seen its business collapse with the decline in commercial aircraft activity. The Boeing 737 MAX debacle was bad enough; then came the cutbacks of the airlines that resulted from the pandemic
Other bigger and better-known manufacturers in the aircraft industry also suffered from the declines in this sector. Some of these companies immediately responded by cutting headcount. This small shop did not; its owner kept everyone on the payroll.
Now, I cannot see into this owner’s soul. I do not know his motives. I credit that he is a man of compassion and loyalty. Meanwhile, I suspect he also knows how hard it is to find manufacturing talent, and how badly the shop might need these employees when business returns. However, even this latter motive says something important, because it illustrates how manufacturing benefits from ownership.
Small shops and larger manufacturers have differed in their responses to business declines resulting from the drop in commercial aircraft work. This photo was taken at Trinity Precision, a shop serving the aircraft sector that we visited for this story back before the recent difficulties in the aircraft sector began.
Senior editor Brent Donaldson and I have been producing a podcast, Modern Machine Shop’s “Made in the USA.” In it, we evaluate choices made in manufacturing in recent decades, including choices that arguably have not served the nation well. One of the unfortunate turns came
For that small shop I mentioned that kept its employees on the payroll, some good news: At this writing, commercial aircraft manufacturing has not yet rebounded, but the shop’s business is starting to. Larger companies nearby cut headcount too much for the increasing work they’re now seeing. The shop is getting some business resulting from these firms’ outsourcing.
From there, another anecdote, also anonymous — this one about the vulnerability of small shops. I have been following the frustrations of a shop that has been saddled with a damaged piece of equipment. An innocent mistake by a visiting service technician resulted in the damage. Since then, the shop owner has faced what he reasonably views as one inadequate response after another from the equipment’s supplier.
The shop owner sees two challenges at the root of the travails. First, he is small. His little shop does not appear to promise large potential business in future orders, not compared to larger facilities that he suspects get more of the supplier’s attention. Second, he is small. Running the shop leaves him so busy, he cannot find time to be the kind of squeaky wheel that might command more of the company’s energy in addressing the problem.
Which brings me to this observation: It is not hard to appreciate and admire small businesses. But in addition to acknowledging their importance, let us also appreciate the companies that serve them well.
I have written about how the distinction in shop sizes is intensifying. Larger shops are getting larger still through acquisition, while small shops are seemingly getting smaller as advances in technology let very small shops do more. In visiting or communicating with some of these very small manufacturing firms, including one-person shops, a recurring theme I encounter is the gratitude they are apt to express for the local machine tool sales agent who has been a valuable source to them for guidance, and even for business connections.
Those kinds of relationships are another example of the long view. Small, independently owned manufacturing businesses can do great work because of the steady attention they can give to investing in capability and expertise. Yet those small manufacturers are greatly helped in turn by a country, by a community and by a network of professionals around them that see the work they are doing and see past the smallness to understand the role these shops play, and what they are working to become. Those of us who know machining appreciate the small shops. But those who run small shops know who their allies are, and they appreciate those supporters just as deeply.
This shop discovered the most profitable thing it could do with certain RFQs is to prevent them from ever reaching the quoting team.
Mergers, acquisitions and other ownership changes are an effect of Boomer-age shop owners retiring, but only in part. Also important: The way we think about machining has changed.
The up-and-coming technologies hinted at during previous shows have now arrived, and they are being accepted as part of the now-standard means of making parts.