The Off-The-Shelf Alternative

This job shop sees standard products, developed internally, accounting for a growing share of the shop’s business. The latest standard product may be the “big gun” in more ways than one.

The first CNC machine tool for New Age Prototypes—a Plattsmouth, Nebraska, job shop founded in 1998—was a Haas VF-4 vertical machining center with 50 inches of X-axis travel.

Shop owner Dave Wood would have preferred to begin with something smaller, but his first customer was another shop that had an oversize part to outsource. The people running that shop assured him: Buy a big machine, and we'll outsource the part to you. They kept their word. New Age got to machine that part—but only two times. After that, the customer lost the job. New Age was left with a big machine to pay for, and no big parts to run on it.

A subsequent purchase for this shop was a Haas Mini Mill. This is a small machine, but New Age is a small shop, so it was still a significant investment. Mr. Wood obtained a letter from his largest customer promising enough additional work to justify the machine. He showed that letter to the bank. He got the machine. Just 3 weeks later, however, the customer went bankrupt. Never mind the future work that had been promised in that letter—what about the $25,000 that the customer still owed to New Age for work performed in the past? It took 2 years, along with some very accommodating creditors, for the shop to fully recover from this financial blow.

During that period of time, a conclusion crystallized in Mr. Wood's mind. He was searching for an answer to the question, How do I make money machining parts without being so dependent on companies I can't depend on?

The answer, he decided, was to be his own customer. He would develop products that others would buy, so that his shop could make the parts to fill those orders. It might not be easy, but it did seem possible.

A little more drove him to this decision than just the prospect of greater independence. Mr. Wood is 31 and single, with no kids. After two older brothers became police officers, this youngest brother—like youngest brothers everywhere—set off to find something different. After working for a local manufacturer, he parted with that shop amicably to found his own machine shop just two blocks away. Financial help from family members and ongoing advice from his father (Eric Wood, a local attorney) made this possible. In founding his own shop, he built on a discovery he had made while working for that manufacturer nearby. Machining can be fun, he realized. Machining can be something to get jazzed about. Machining can be cool—provided that the part or the end product is sufficiently stimulating or challenging.

Thus the standard products serve two purposes. While they provide a buffer against disruptions in the contract machining work, they also allow Mr. Wood to link various other interests to his machining. Think of it as self-expression through manufacturing. Feeding his interests in this way helps him sustain an enthusiasm for the work that is great enough to keep him happily engaged in the shop through 70- or 80-hour weeks.

The list of standard products developed so far provides a partial inventory of the kinds of things that Mr. Wood and those around him get excited about. There have been sprockets for motocross bikes, components for paintball guns, a police battering ram, a goose call (which was a failure) and also the "Fan Cannon," which is an air-powered launcher for shooting T-shirts up into the stands at sporting events.

The shop has high hopes for this last product in particular. Many characteristics make it promising as a standard product. Its design represents a clear improvement over competing models on the market. The potential market is big enough to be worth serving, but not so big that a competitor would readily be interested in producing a cheaply made rip-off. The product can justify a high margin because of its specialized niche. And the shop has enough ideas for future design improvements that it can keep updating this product even if a copycat does come along.

Today, standard products account for 15 percent of the shop's business. The goal is to raise that to 30 or 40 percent, and Mr. Wood hopes the Fan Cannon can go a long way toward taking the shop to that point.

The Contract Work

But even at that, contract machining will continue to make up the lion's share of this shop's work.

For the contract work, "cool" also tends to be a priority. The shop tries to seek out novelty and technical challenge. Mr. Wood doesn't charge any premium over his normal shop rate for jobs that are urgently needed and/or challenging to produce, because he wants to consider this kind of work the standard fare for his business. He considered it important to have "Prototypes" in the name of the company.

Mr. Wood says machining plastics is an example of work that appeals to him. Various jobs in various plastic materials have given New Age's personnel considerable experience in machining plastic parts effectively. The shop even has its own carefully guarded process for welding parts made of certain exotic plastic materials, he says.

One particular success involved a recent job in which the component should have been molded—it was intended for this—except that the quantity required proved to be too small to justify making a mold. This polypropylene part was a component of a system for delivering medicine in an atomized spray. To machine the part as an alternative to making a mold, New Age first found a polypropylene supplier able to deliver the stock without porosity, so it could be machined with confidence. The shop then machined the part to the shape and dimensions it would have had as a molding. The shop even milled the walls of the part with a pattern of tool paths designed not to impede the flow of the atomized spray.

Name Your Price

The company's Web site has helped to bring in some of this novel business. Jamal Parker, a celebrity tennis professional, recently paid a visit to the shop. He had found New Age by searching on Google, because he wanted a manufacturer to help him develop some new tennis racket counterweights. New Age is working on the prototypes.

The volume of traffic the site brings in presents the problem, ironically enough. Too many inquiries are unlikely to lead to serious work. These inquiries come from hobbyist inventors, or from corporate managers who are looking for the cheapest possible supplier for some commodity part. Mr. Wood could spend all of his time quoting.

To solve that problem, his shop's Web site now asks customers to name the price. That is: How much do you want to pay for this part? The information makes quoting significantly easier, because Mr. Wood no longer has to work out an optimum process for a particular part; he just has to hit the target. If a price is too low, Mr. Wood makes suggestions. Can he provide six pieces instead of four? Can he change a problematic feature? Conversely, if a price is too high, then Mr. Wood charges the real price. He provides customers with all of the processing and cycle time information related to their parts, billing them at his shop rate for the actual amount of work required.

Product Mix

Today, the shop has four CNC machines. All are busy with contract work. That first machining center—the big one—might have four different jobs set up across the table at any given time.

But the shop may not always be so busy. Things can change. The shop continues to rely on just a few big, local customers for much of its recurring business. And as Mr. Wood has learned, a change in any of those relationships could affect the shop immediately and dramatically. The shop's fortunes would be more stable if the shop was better able to provide for itself with a portfolio of products developed internally.

Mr. Wood continually searches for new products. He engages his employees in the search. Every Friday, there is a 15-minute meeting in which the small workforce gathers to throw out ideas.

One employee, Gabe Timm, is a competitive pool player. He envisions an improved design for a pool cue bridge (the accessory used to support the cue to extend the shooter's reach). While this product may not offer dramatic income potential, it is something that could be produced with little difficulty on a make-to-order basis. The shop will probably try to develop this product. In fact, the first standard product that the shop had success with came from an idea very much like this.

That product was a motocross sprocket. On a particular, popular bike model, the factory sprocket breaks too easily. One of Mr. Wood's friends complained about this. Looking at the problem, Mr. Wood realized he could make a stronger sprocket relatively easily. The improved design worked, and word of this new product spread.

A follow-up product was less successful. An accessory allowing the bike's kickstand to work on soft ground was too easily stolen off of the bike.

A police battering ram came about because Mr. Wood's police officer brothers saw how expensive the product was in a catalog. Here New Age became the low-cost alternative; the shop was able to make a competing model for much less. So far, two local police departments have been the only customers.

Other products followed these—including the paintball gun components.

This set of parts began as prototyping work. An existing company, Violent Products, came to New Age with a variety of ideas for after-market components and accessories for paintball guns. Rather than charging for this prototyping work, Mr. Wood offered to do the work for free in exchange for a stake in the company. That's the way the relationship has worked ever since. New Age does Violent Products' prototyping for free, confident that it has an inside track to the regular machining work that will result.

The steady income from the paintball gun components has crystallized another lesson in Mr. Wood's mind—something that his other standard products have also helped to teach. He has seen that a standard product is much easier to profit from when there is a ready and existing marketing arm for presenting this product to the customer.

And that lesson captures the point the shop has reached with the Fan Cannon. Right now, the shop has a winning design. It's breech-loaded, where other T-shirt launchers have to be loaded down the barrel like muskets. It can shoot a T-shirt 100 yards. ("Once you go goal post to goal post, there's not much point in shooting it farther," Mr. Wood says.) In addition, the shop has developed three different models with three different price points, covering markets ranging from high school events to professional sports.

The highest-end version of the Fan Cannon was well received at a recent convention of NBA mascots (yes, there is such a convention), and there have been some sales already through word of mouth. So the signs are encouraging.

The next step is to develop relationships with marketing outlets that specifically reach this group of prospects. Beyond the design and the machining, Mr. Wood is now turning his attention to this next important phase of his work.

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