Precision Machined Parts Manufacturer Helps Improve Production and Reduce Costs

Sourcing metal fabrication processes from suppliers is not always an easy decision. Many OEMs retain their core competencies internally. However, few have their own metalworking, industrial welding, machining, metal finishing and assembly. Market leaders typically rely on contract manufacturers for 80 percent of their production.

Choosing to manufacture custom metal fabrications in your precision machined parts processing facility means you must cover the capital investment cost of equipment and maintain adequate labor. These are not small expenses. If your employees are unionized, you should also be prepared to reduce strikes that could shut down production lines.

Cost overruns are another disadvantage. Your workforce may require more time than originally estimated. Alternatively, quality, inventory and raw material price issues may arise.

Precision machined parts Machining low-quality components can negatively impact the price you're able to charge for your product, severely impacting your budget. Inventory differences often result in expedited shipping costs. Worst of all, machine and equipment failures bring your production to a standstill.

These unplanned costs require funding from other departments, such as marketing, research, development and design. In other words, when you pay a metal fabricator a fixed price, your business plan is at risk.

Suppliers of precision machined parts processing should develop processing plans and control costs to achieve the lowest cost in the case of service or on-time delivery. Most importantly, the right supplier provides sustainable solutions for your metalworking needs. In part of this three-part blog series, learn one way metal fabricators can dramatically reduce OEM costs:

To keep costs down, many OEMs try to maximize the use of raw materials, especially when scrap rates are high. However, achieving low scrap rates for metal fabrication suppliers is very difficult. Precision machined parts processing suppliers are able to take advantage of other customers' demands for the same materials to increase efficiency and utilization.

Competitive demands within your organization may prevent you from taking full advantage of strategies such as lean manufacturing as a precision machine parts processing supplier. Metal fabricators focus on improving their manufacturing processes with this systematic approach to eliminating waste.

Without having to worry about all the processes OEMs have to deal with, your manufacturers can reduce disruption and reduce the chances of implementing lean manufacturing. Full immersion in the model allows your suppliers to significantly reduce production time and costs.