Senior Editor
- FMA
- The Fabricator
- FABTECH
- Canadian Metalworking
Categories
- Additive Manufacturing
- Aluminum Welding
- Arc Welding
- Assembly and Joining
- Automation and Robotics
- Bending and Forming
- Consumables
- Cutting and Weld Prep
- Electric Vehicles
- En Español
- Finishing
- Hydroforming
- Laser Cutting
- Laser Welding
- Machining
- Manufacturing Software
- Materials Handling
- Metals/Materials
- Oxyfuel Cutting
- Plasma Cutting
- Power Tools
- Punching and Other Holemaking
- Roll Forming
- Safety
- Sawing
- Shearing
- Shop Management
- Testing and Measuring
- Tube and Pipe Fabrication
- Tube and Pipe Production
- Waterjet Cutting
Industry Directory
Webcasts
Podcasts
FAB 40
Advertise
Subscribe
Account Login
Search
Mr. Bureaucracy, tear down this wall
- By Tim Heston
- February 12, 2013
This shop is one of many I wish more journalists and government officials would learn about--and I’m talking about more than the grip-and-grin coverage, like the “Good American Job” stereotypical photo op we continually saw during the presidential campaign.
Milwaukee is a highly competitive area for metal fabrication. Workers have plenty of options, but, according to company sources, they choose Super Steel because of its competitive pay and benefits. And it’s an engaging place to work, one that continually focuses on product and process improvements.
And, oh yeah, the company also sends its products to Mexico and other so-called “low cost” countries.
In FMA’s most recent financial ratio survey, many respondents said their direct labor costs amounted to less than 13 percent of sales. On the other hand, most said that material costs made up more than 30 percent of sales.
As the numbers show, so much of metal fabrication isn’t driven by labor costs. If a fabricator cuts labor costs, that’s great, but on its own, labor represents a small portion of overall sales (depending on the product complexity, amount of manual processes like welding, etc.).
Instead, this business is driven by service and quick response. The service comes from highly knowledgeable and (perhaps most important) engaged individuals who communicate well.
And considering the material costs in this business, fabricators need to respond quickly. If they let material sit on the floor for months, it bleeds the company of cash. The fabricator may have plenty of booked orders and inventory assets, but you can’t make payroll with inventory.
Many perceive U.S. manufacturing’s niche to be in high-value, highly engineered products that require highly skilled people. Of course, I’ve talked to shop managers in Mexico and in Asia who also say they employ a highly skilled staff that produces highly engineered products. And unlike the U.S., many countries to the south and west of us also happen to have a lot of engineers entering the workforce.
While the “high tech” nature of U.S. manufacturing is real, does it really separate us from the rest of the world? Sure, we have advanced machine tools, but so do companies in Latin America and Asia.
A technically skilled workforce provides a vital foundation, but that alone may not separate a company from global competition. I think companies like Super Steel sells products to Mexico because its people apply that technical foundation to the logic of running a sound business, where employees communicate continually and efficiently.
Bureaucracy builds all sorts of “walls” in a business, be it the wall between product design and manufacturing at an OEM, or the wall between sales and the shop floor at a contract fabricator. At many businesses I’ve covered--from Horton Emergency Vehicles to the companies on our annual Fab 40 ranking of contact fabricators--those walls are coming down. Salespeople talk to engineers; engineers talk to shop supervisors; supervisors talk to front-line machine operators and welders.
When those walls come down, good things happen. For the right product in the right market, such a manufacturer can beat the China price, the Mexico price--heck, any price.
subscribe now
The Fabricator is North America's leading magazine for the metal forming and fabricating industry. The magazine delivers the news, technical articles, and case histories that enable fabricators to do their jobs more efficiently. The Fabricator has served the industry since 1970.
start your free subscriptionAbout the Author
Tim Heston
2135 Point Blvd
Elgin, IL 60123
815-381-1314
Tim Heston, The Fabricator's senior editor, has covered the metal fabrication industry since 1998, starting his career at the American Welding Society's Welding Journal. Since then he has covered the full range of metal fabrication processes, from stamping, bending, and cutting to grinding and polishing. He joined The Fabricator's staff in October 2007.
- Stay connected from anywhere
Easily access valuable industry resources now with full access to the digital edition of The Fabricator.
Easily access valuable industry resources now with full access to the digital edition of The Welder.
Easily access valuable industry resources now with full access to the digital edition of The Tube and Pipe Journal.
Easily access valuable industry resources now with full access to the digital edition of The Fabricator en Español.
- Podcasting
- Podcast:
- The Fabricator Podcast
- Published:
- 04/16/2024
- Running Time:
- 63:29
In this episode of The Fabricator Podcast, Caleb Chamberlain, co-founder and CEO of OSH Cut, discusses his company’s...
- Industry Events
16th Annual Safety Conference
- April 30 - May 1, 2024
- Elgin,
Pipe and Tube Conference
- May 21 - 22, 2024
- Omaha, NE
World-Class Roll Forming Workshop
- June 5 - 6, 2024
- Louisville, KY
Advanced Laser Application Workshop
- June 25 - 27, 2024
- Novi, MI