May 30, 2014
Fabricators might have something in common in the way that they bend, cut, form, and join metal, but the way that they run their businesses is completely unique.
The more I talk with metal fabricators, the more I realize that about the only thing they have in common is that they bend, cut, form, and weld metal. The way they build and sustain a successful business is as varied as the parts they ship out the door.
Working on a profile for an upcoming issue of The FABRICATOR, I learned about a metal fabricator that is actually undergoing a yearslong evolution from being primarily a fabricator of low-volume, highly customized parts for OEMs to one that is bringing in more production-type work. This isn’t production on the automotive level, but volumes of about 500 per order. In a way, it’s the exact opposite of what I have been learning about other shops, which are going out of their way to attract that type of complex work.
When metal fabricators are in the business of just getting the print and running the part, they can find themselves in a situation where customers view their fabricating services and products as a commodity. The customer issues a RFQ, and the fabricator has to respond promptly and favorably to get the work. There aren’t too many favored parties in those types of supply chain relationships. That’s why many fabricators work hard to be true partners in the supply chain and not just a link. They want to engage their customers with design for manufacturability ideas and have an impact on their customers’ successes. They want to prove their value, so that they aren’t so easily replaced as a supplier.
The staff of Deltec Inc., Batavia, Ohio, already has that going for them, but that type of specialized fabricating work wasn’t enough to maintain a consistent flow of orders through the shop. After the Great Recession, Jason Dugle, company president, set forth to try to diversify the types of jobs the company quoted. The higher-volume work may not have been what the company’s skilled craftsmen were used to, but it would boost the bottom line.
“It’s been difficult to move into that direction,” Dugle said. “Again, we are staffed to handle specialty jobs. We have a few project engineers that have been here for a long time. They can handle the small quantities, talk to the customer directly, walk them through the manufacturing process, and get them what they need.
“But this is the way that we are going to diversify our business strategy,” he added.
The business approach appears to be working. The company has had consistent and sustainable growth from 2010 to 2013, and “sustainable” is the key, Dugle said. The company culture has been challenged, but it has survived; meanwhile, Deltec’s foundation for future endeavors is much stronger because it can depend on a wider variety of customers, not just a traditional handful.
“What’s wrong with going to the market and taking on other customers? We have the equipment, the staff, and the capacity,” Dugle said.
While all metal fabricators do not use the same playbook to run their companies, they do seem to have the same goal.