Fabricating a formal business identity

Do you identify as a machine shop, general sheet metal shop, plate fabricator, structural steel fabricator, or a manufacturer of miscellaneous fabricated goods? A job shop has a lot to consider when it comes to formally identifying itself.

Unfortunately, when you tell people outside the metal manufacturing world that you work for a publication called The FABRICATOR, they instantly doubt everything about your story. Honestly, the title doesn’t help.

But inside the metal fabricating universe, I have no worries. Even if people don’t know the publication brand, they understand what we’re trying to accomplish. They fabricate for a living and understand all of the nuances of bending, cutting, forming, and welding metal.

Outside of that world, however, people really have no idea how things are made. This is not a new development. It’s one of the reasons that in 2012 the Fabricators & Manufacturers Association came up with the idea of Manufacturing Day, a day dedicated to celebrating and inviting the public into fabricating facilities to see just what modern manufacturing looks like. (If you are up for hosting an event this year, Manufacturing Day is scheduled for Oct. 5.)

This confusion is not just limited to the civilian set. The folks in charge of collecting statistics related to U.S. population and business are kind of vague on the subject as well.

A new fabricating company recently called me with a simple question: “What NAICS code should I use?” (NAICS stands for North American Industry Classification System. The federal government uses this standard to classify companies as it goes about collecting data from them and publishing statistics about the U.S. economy and labor force.) He had just opened a job shop that specialized in precision sheet metal parts for customers in industries such as food processing, telecommunications, and transportation.

I told him that slightly more than 40 percent of the subscribers to The FABRICATOR fall into NAICS 332, Fabricated Metal Product Manufacturing. Within that sector, 6.1 percent identified themselves as part of NAICS 332312, Fabricated Structural Metal Manufacturing; 4.2 percent as NAICS 332322, Sheet Metal Work Manufacturing; 7.7 percent as NAICS 332710, Machine Shop; and 6 percent as NAICS 332999, All Other Miscellaneous Fabricated Metal Product Manufacturing. Those four areas comprise the publication’s job shop subscribers, I think.

I wavered as I wasn’t quite sure what the federal government might think. I told him I’d reach out to a source.

Well, the government source responded in a noncommittal way. It all depends on the “plurality” of the shop’s output and how the shop wants to be perceived.

For example, if a metal forming company is cranking out stampings every day, it can easily be classified as NAICS 332119, Metal Crown, Closure, and Other Metal Stamping (except automotive). But if that same company has seen an increase in value-added activities, such as welding or assembly of parts, it might be a better fit for NAICS 332999, the miscellaneous catch-all category.

Also, the source said that a company is not limited to one NAICS code. It can use multiple classifications to help better define its production capabilities, particularly when working with other entities, such as the federal government. For instance, if a fab shop was pursuing work for machined parts, it might want to use the appropriate code for machine shops, and if it wanted to bid on providing electrical enclosures, the shop might use a NAICS code such as 332439, Other Metal Container Manufacturing.

It should then come as no surprise that I recommended to the fabricator that originally contacted me to use the miscellaneous NAICS code. NAICS 332999, All Other Miscellaneous Fabricated Metal Product Manufacturing, is probably the perfectly awkward place for job shop work. It comprises various fabrications of different sizes, materials, and thicknesses.

The fabricator’s question left me thinking about how other job shops classify themselves. I’ve talked with shop owners in the past who have a machining background but now run fab shops and actually use the verb “fabricate” to describe parts being made, even when they involve milling. Do they see themselves as a “machine shop”? Does a job shop classify itself as a “sheet metal” shop even if it processes a substantial amount of ¼-inch steel, but really nothing more than that?

In the end, fabricators aren’t as wrapped up in formally identifying themselves as others may be. They have parts to get out the door. Call them whatever you want just as long as you remember to call them when you need metal parts.

As confusing as they may be, the NAICS codes do the job they were intended to do. For those who might be interested in updating the current code structure, reviews occur every five years. The deadline for delivering new recommendations is 2022, but initial discussions should start in 2019. Now that’s a lead time that fabricators would kill for nowadays.