Unless things are really bad and you can’t make payroll don’t lay people off. Use that downtime for training. Make operators out of helpers, setups out of operators, etc. There simply are not enough people out there that want to get dirty during the day. You’ve already weeded out the ones that don’t like working so keep the ones you still have. They are a more valuable asset than any machine.
This is extremely true! Once you lose that person, there's little chance of getting them back - and enough people are leaving the trade altogether as is!
We have been in business full time coming up on 4 years this month. This is the most unstable year by far. Ever since rapid inflation in March, shit has been all over the place. One minute we are slammed busy and can negotiate 2X price on rush work, the next minute jobs are priced at 50% of normal costs and other shops are taking it. It happens every few weeks/ months now. At this point we are used to it. It still makes me incredibly anxious when things are slow (Right now we are wrapping up some of our last jobs). But there is always cleaning and organization that can be done and give us enough time to breathe and think before the flood gates open back up. The key that I have found is to not take on work just for the sake of making $35 an hour shop rate. I would rather let machines sit and strategize than complete work like that just for the sake of getting work in the door. Interest rates recently went up, so I think that has a direct correlation to some of what we are seeing now. Again, we have had slowdown periods in the past, sure. However, this has been incredibly unstable unlike any other time.
The instability is the toughest part, I agree - I'm often slammed so I want to add more guys / more machine capacity, but when it comes down to it - it's difficult to make those kinds of investments and potentially increase my overhead when it feels like everything is so in flux. Thanks for watching!
its my pet hate when a company takes on work cheap as the customer's never want to pay the proper price , 1 place i worked boss took on a 10,000 off for .51p i quoted £2.10 , his reason the customer was paying .52p and we have quick machines , machines ran at a loss , we found out after getting the part we competed against a prison lmao
@@markhorner4982 Jeeeeez that's a real kick in the pants - I've been in those scenarios as well. I used to let myself get beat up on price a lot more than I do now, only because I don't really want the customers where I'm constantly going to be having to justify my price points - those customers tend to also want things yesterday, etc etc etc. I'd rather lose out on the cheap stuff and fight a bit more for the customers who respect what we do - but when times get tight, it can be a real struggle to stick to that!
@@markhorner4982 I agree. It doesn't help anyone and hurts everyone long term. I used to get in price matches, now I don't unless we are close. If they are wanting to pay $5000 and I am at $5500, then we can probably make a deal. But if they want to pay $1200 and I'm at $5500, we aren't going to get it done. As Ian has touched on before, the race to the bottom does not help anybody.
@@iansandusky417 we have 1 customer in UK i have tried getting my boss to drop for years they never like the price, they want a 10off the same price as a 100 off , want inspection reports done and expecting it in the price of the part , they reject parts because of a tearing finish but send a 1000 times magnification picture , reject parts because wrong to their calibrated thread gauges but right to ours . Think they are a big customer and expect us to drop everything for them . the only reason we do the work is their machine shop can't as they don't have any skilled people yet call the machine shop ??? advanced machining , we do work for a company in the US that is part of the group and they never moan at price send nice emails on turning parts around fast and quality .
We have never been busier, and our backlog keeps growing. While I am always looking for signs of what the economy is doing, it doesn't impact how I manage my shop for the most part. I've been thru 3 major downturns in my career (9/11, 2009 recession, covid pandemic) and while the economic impact is initially scary, we always find a way to keep moving forward and in the end always come out better and stronger. My strategy now is adding automation (robots and pallet machines) as fast as I can, and pay that debt down like there's no tomorrow. If things slow down, we can still make parts with almost no labor. If things don't tank, we are very profitable. If there's no work at all and the machines become boat anchors, then I sell what makes sense, keep the one's that are paid off, and rebuild.
Good topic. We work in a very specialized area that sells to scientific labs and technology developers (think, lasers, aerospace, microwave). Q1 was 3x our usual job log. We’re now at the lower end of our normal job log. Most of what we’re seeing is research parts as opposed to high volume commercial lots. Just have to gut through the recession.
Totally agree, the main problem of most enterpreneurs in machining business - they get over-focused on projects they currently run. Usually they have couple of customers which "occupied" all of the machine time and shop owner does not want to start another projects considering them redundant. However there a big chance that when all the parts are being shipped the curent customers will take a pause and you will find yourself in the madness of searching for a new client to keep the machines running. That's why i never reject any project I find interesting to run. Usually we have day and night shifts on every machine running orders of different customers or their projects and when the new wealthy customer shows up we can always put him into our current machining time splitting the day and night shift partly to do the new job. i.e. usually our shifts are 10-12 hours so we spend 8 hours on one customer and 2-4 hours of day and night shift on another customer and the rest of 8 hours of night shift on third customer. God bless Zero-point and mitee bite clamps
This is very true! Most customers don't order big runs back to back to back, so it's very important to keep the pipeline going with other work in case a specific industry / sector slows down. Diversification in both industries and customers is key!
I have noticed our business selling a lot more repair parts this year and a lot less of brand new units. Mainly due to the massive rise in raw material costs. My customers are kind of waiting for the economy to stabilize before making a large purchases.
I've been swamped with work but have been putting off buying more machines just because I don't trust the economy... sitting here running 24/7 waiting on the economy to crash.
Busy af out here in the oil patch...I know one shop looking to hire 6 Journeyman Machinists...best thing I ever did was get out of Ontario, the shop I worked for there was dead since February
Man, that's tough. I've had more guys than usual applying to my job listings due to restructuring at their companies - so it feels a bit precarious at the moment.
@@iansandusky417 What most people forget, is when times are good you bank the money and live like they're lean times. That way, when times do get lean you have money to fall back on.
I been in the welding/metal fabrication business 12 years 5 in my current role which is more of a machine shop. We been up & down the last year now they’re forcasting we’re pretty much gonna be slow till next year. No mention of Layoffs or anything like that just no overtime went from 50-60 hours a week now to straight 40. Some older guys are retiring they’re not gonna refill those roles.
No disrespect to any Machinist, but as a customer waiting 3+ weeks for my 4 cylinder engine block to be honed I'm pretty frustrated. I'm waiting on the machine shop and my customers are waiting on me. The slow down will be great to finally get things done. It should not take several months to get work to be completed.
If there's an impending slow down then it's time to come up with a clever product that doesn't cost too much to make. In fact, any given shop should ALWAYS have a product that is made in-house as a backup source of income, imho......
I do job shop work, pretty much all repair or prototype. It’s been insane all thru Cov!d, like unlimited over time for over 2 years and it’s not looking like it’s slowing down. That is the joy of repair I guess, it will never run out of work. But it’s dirty and I’d say the most stressful side of machining.
Ah that's interesting, if disappointing - I had a feeling more 'recreational' / luxury type items might be taking a hit. Hopefully it pops back up with end of season sales!
Great video it seems to be the hot topic at the moment A few things we do at our shop to weather downturns which I agree with some of the it’s good right now“BUT” You mentioned my number 1 thing which is to not be over leveraged. I think being in a few different industries so hopefully when one goes down you have the others. You made a video about differentiating your shop. I think for our area we do this with our turning capacity/capabilities. I’m curious what you think were rock’n rollen it doesn’t seem to be slowing down any time soon but I’m always a little pessimistic
Thank you very much sir - this is all critical advise! I second being involved in multiple industries for sure - when my automation / conveyor customers slow down, the sod farming equipment customers pop back up, and so on - if we were all in one industry (as we have been in the past) it can lead to some pretty dead months which isn't good for anyone. For us as well, it feels like we've been riding right at the edge of max capacity (or over max capacity) for about 18 months now - every time it starts to slightly die off, it seems everybody puts in big orders again. That said, I'm finding it hard to trust it. While I don't think we're going to hit a COVID level of slowdown again, that was a very eye-opening experience - we're lucky that we don't finance machines (we buy them outright) and we own our units, so our overhead was as low as it could be - but with some months barely even managing to cover payroll and expenses even with the government programs, it's made me hesitant to expand capacity. We could add another lathe today and have it packed for the foreseeable future, but I remember months in 2020 where our one lathe sat for weeks without work. My personal opinion is that we're probably going to see a slight clawback in some sectors, but I think it's the companies that are primarily serving the more luxury / recreational markets that are going to feel it. Coca Cola isn't going to not invest in a new bottling plant, but Jim down the street might not be in the market for a new CNC machined fly fishing reel this year.
Work is there, my guys are doing 45-50hrs. Myself I'm in 55-60 range. It's manpower or help isn't for new hires. Been having to turn down work. Doing it politely that is to make sure they call me on another day. If I can grab one or two jobs from a new company , at least to help out them out.
Work is up then down but are biggest problem is tooling and material cost and the time it takes to get them . a lot of tooling company's so called have it in stock but it takes 1 or 2 weeks sometimes to get . Not sure if this is just a shipping problem with drivers quiting or gas prices so they cram trucks full and use less of them and can't make the delivery on time like they did a few years ago.
That's a fantastic problem to have! It's strange how it seems most industries seem to be crushed with work right now, but there's these other stories popping up saying the opposite. I wonder if it's more regional at the moment.
Lads, take this supply chain disruption and capitalize on it. I'll take Lordco Autoparts here in British Columbia for example. There are now several shop owners I know that have parts on their shelves now, displacing the made in China stuff that is sitting on a dock somewhere. Better parts for the same price and my friends are making a very good buck on said parts. Open your eyes. Opportunities come in storms. Come up with your own products. Better margins.
My industry is like most, suffering & hemorrhaging skilled people. They company I work for has not invested in themselves by keeping talented hands & teaching the up & coming generation. Essentially they are putting themselves out of work. Invest in your skilled people, once the skilled folks are gone, its too late. I think the skilled trades is only going to get worse.
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Unless things are really bad and you can’t make payroll don’t lay people off. Use that downtime for training. Make operators out of helpers, setups out of operators, etc. There simply are not enough people out there that want to get dirty during the day. You’ve already weeded out the ones that don’t like working so keep the ones you still have. They are a more valuable asset than any machine.
This is extremely true! Once you lose that person, there's little chance of getting them back - and enough people are leaving the trade altogether as is!
YES! Finding good people is hard. Hold on to them and use the time to treat them kindly.
It's the slowest we have seen it in 15 years a machine shop in Silicon Valley. Thank you offering a informative video.
We have been in business full time coming up on 4 years this month. This is the most unstable year by far. Ever since rapid inflation in March, shit has been all over the place. One minute we are slammed busy and can negotiate 2X price on rush work, the next minute jobs are priced at 50% of normal costs and other shops are taking it. It happens every few weeks/ months now. At this point we are used to it. It still makes me incredibly anxious when things are slow (Right now we are wrapping up some of our last jobs). But there is always cleaning and organization that can be done and give us enough time to breathe and think before the flood gates open back up. The key that I have found is to not take on work just for the sake of making $35 an hour shop rate. I would rather let machines sit and strategize than complete work like that just for the sake of getting work in the door. Interest rates recently went up, so I think that has a direct correlation to some of what we are seeing now. Again, we have had slowdown periods in the past, sure. However, this has been incredibly unstable unlike any other time.
The instability is the toughest part, I agree - I'm often slammed so I want to add more guys / more machine capacity, but when it comes down to it - it's difficult to make those kinds of investments and potentially increase my overhead when it feels like everything is so in flux. Thanks for watching!
its my pet hate when a company takes on work cheap as the customer's never want to pay the proper price , 1 place i worked boss took on a 10,000 off for .51p i quoted £2.10 , his reason the customer was paying .52p and we have quick machines , machines ran at a loss , we found out after getting the part we competed against a prison lmao
@@markhorner4982 Jeeeeez that's a real kick in the pants - I've been in those scenarios as well. I used to let myself get beat up on price a lot more than I do now, only because I don't really want the customers where I'm constantly going to be having to justify my price points - those customers tend to also want things yesterday, etc etc etc. I'd rather lose out on the cheap stuff and fight a bit more for the customers who respect what we do - but when times get tight, it can be a real struggle to stick to that!
@@markhorner4982 I agree. It doesn't help anyone and hurts everyone long term. I used to get in price matches, now I don't unless we are close. If they are wanting to pay $5000 and I am at $5500, then we can probably make a deal. But if they want to pay $1200 and I'm at $5500, we aren't going to get it done. As Ian has touched on before, the race to the bottom does not help anybody.
@@iansandusky417 we have 1 customer in UK i have tried getting my boss to drop for years they never like the price, they want a 10off the same price as a 100 off , want inspection reports done and expecting it in the price of the part , they reject parts because of a tearing finish but send a 1000 times magnification picture , reject parts because wrong to their calibrated thread gauges but right to ours . Think they are a big customer and expect us to drop everything for them . the only reason we do the work is their machine shop can't as they don't have any skilled people yet call the machine shop ??? advanced machining , we do work for a company in the US that is part of the group and they never moan at price send nice emails on turning parts around fast and quality .
We have never been busier, and our backlog keeps growing. While I am always looking for signs of what the economy is doing, it doesn't impact how I manage my shop for the most part. I've been thru 3 major downturns in my career (9/11, 2009 recession, covid pandemic) and while the economic impact is initially scary, we always find a way to keep moving forward and in the end always come out better and stronger. My strategy now is adding automation (robots and pallet machines) as fast as I can, and pay that debt down like there's no tomorrow. If things slow down, we can still make parts with almost no labor. If things don't tank, we are very profitable. If there's no work at all and the machines become boat anchors, then I sell what makes sense, keep the one's that are paid off, and rebuild.
Good topic. We work in a very specialized area that sells to scientific labs and technology developers (think, lasers, aerospace, microwave). Q1 was 3x our usual job log. We’re now at the lower end of our normal job log. Most of what we’re seeing is research parts as opposed to high volume commercial lots. Just have to gut through the recession.
Totally agree, the main problem of most enterpreneurs in machining business - they get over-focused on projects they currently run. Usually they have couple of customers which "occupied" all of the machine time and shop owner does not want to start another projects considering them redundant. However there a big chance that when all the parts are being shipped the curent customers will take a pause and you will find yourself in the madness of searching for a new client to keep the machines running. That's why i never reject any project I find interesting to run. Usually we have day and night shifts on every machine running orders of different customers or their projects and when the new wealthy customer shows up we can always put him into our current machining time splitting the day and night shift partly to do the new job. i.e. usually our shifts are 10-12 hours so we spend 8 hours on one customer and 2-4 hours of day and night shift on another customer and the rest of 8 hours of night shift on third customer. God bless Zero-point and mitee bite clamps
This is very true! Most customers don't order big runs back to back to back, so it's very important to keep the pipeline going with other work in case a specific industry / sector slows down. Diversification in both industries and customers is key!
Lots of loyal small customers is who has kept me going over the years… the big order customers seem to be the first to drop off.
when times get tight, folks repair old stuff, instead of buying new....always look to benefit from that...
This is key! If you can tap into that, you're pretty much stable regardless of what happens.
My thoughts exactly!
I have noticed our business selling a lot more repair parts this year and a lot less of brand new units. Mainly due to the massive rise in raw material costs. My customers are kind of waiting for the economy to stabilize before making a large purchases.
I've been swamped with work but have been putting off buying more machines just because I don't trust the economy... sitting here running 24/7 waiting on the economy to crash.
I feel this, I'm in the same situation at the moment!
Busy af out here in the oil patch...I know one shop looking to hire 6 Journeyman Machinists...best thing I ever did was get out of Ontario, the shop I worked for there was dead since February
My son-in-law who's a department manager, went from 70 hour weeks to barely getting 40.
Man, that's tough. I've had more guys than usual applying to my job listings due to restructuring at their companies - so it feels a bit precarious at the moment.
@@iansandusky417 What most people forget, is when times are good you bank the money and live like they're lean times. That way, when times do get lean you have money to fall back on.
I been in the welding/metal fabrication business 12 years 5 in my current role which is more of a machine shop. We been up & down the last year now they’re forcasting we’re pretty much gonna be slow till next year. No mention of Layoffs or anything like that just no overtime went from 50-60 hours a week now to straight 40. Some older guys are retiring they’re not gonna refill those roles.
No disrespect to any Machinist, but as a customer waiting 3+ weeks for my 4 cylinder engine block to be honed I'm pretty frustrated. I'm waiting on the machine shop and my customers are waiting on me. The slow down will be great to finally get things done. It should not take several months to get work to be completed.
If there's an impending slow down then it's time to come up with a clever product that doesn't cost too much to make.
In fact, any given shop should ALWAYS have a product that is made in-house as a backup source of income, imho......
I do job shop work, pretty much all repair or prototype. It’s been insane all thru Cov!d, like unlimited over time for over 2 years and it’s not looking like it’s slowing down. That is the joy of repair I guess, it will never run out of work. But it’s dirty and I’d say the most stressful side of machining.
Busier than I have ever been but my sales for my own product line for dirtbikes have been down big time this month
Ah that's interesting, if disappointing - I had a feeling more 'recreational' / luxury type items might be taking a hit. Hopefully it pops back up with end of season sales!
Great video it seems to be the hot topic at the moment
A few things we do at our shop to weather downturns which I agree with some of the it’s good right now“BUT”
You mentioned my number 1 thing which is to not be over leveraged.
I think being in a few different industries so hopefully when one goes down you have the others.
You made a video about differentiating your shop. I think for our area we do this with our turning capacity/capabilities.
I’m curious what you think were rock’n rollen it doesn’t seem to be slowing down any time soon but I’m always a little pessimistic
Thank you very much sir - this is all critical advise! I second being involved in multiple industries for sure - when my automation / conveyor customers slow down, the sod farming equipment customers pop back up, and so on - if we were all in one industry (as we have been in the past) it can lead to some pretty dead months which isn't good for anyone.
For us as well, it feels like we've been riding right at the edge of max capacity (or over max capacity) for about 18 months now - every time it starts to slightly die off, it seems everybody puts in big orders again. That said, I'm finding it hard to trust it. While I don't think we're going to hit a COVID level of slowdown again, that was a very eye-opening experience - we're lucky that we don't finance machines (we buy them outright) and we own our units, so our overhead was as low as it could be - but with some months barely even managing to cover payroll and expenses even with the government programs, it's made me hesitant to expand capacity.
We could add another lathe today and have it packed for the foreseeable future, but I remember months in 2020 where our one lathe sat for weeks without work. My personal opinion is that we're probably going to see a slight clawback in some sectors, but I think it's the companies that are primarily serving the more luxury / recreational markets that are going to feel it. Coca Cola isn't going to not invest in a new bottling plant, but Jim down the street might not be in the market for a new CNC machined fly fishing reel this year.
Work is there, my guys are doing 45-50hrs. Myself I'm in 55-60 range. It's manpower or help isn't for new hires. Been having to turn down work. Doing it politely that is to make sure they call me on another day. If I can grab one or two jobs from a new company , at least to help out them out.
Where I work didn’t slow down and hasn’t slowed down yet. We did get a lot more medical work though.
Work is up then down but are biggest problem is tooling and material cost and the time it takes to get them . a lot of tooling company's so called have it in stock but it takes 1 or 2 weeks sometimes to get . Not sure if this is just a shipping problem with drivers quiting or gas prices so they cram trucks full and use less of them and can't make the delivery on time like they did a few years ago.
good video
Thank you very much for checking it out!
The guitar hero music in the back 🎸
We are a mold shop in SoCal. We are slammed with work.
That's a fantastic problem to have! It's strange how it seems most industries seem to be crushed with work right now, but there's these other stories popping up saying the opposite. I wonder if it's more regional at the moment.
Lads, take this supply chain disruption and capitalize on it. I'll take Lordco Autoparts here in British Columbia for example. There are now several shop owners I know that have parts on their shelves now, displacing the made in China stuff that is sitting on a dock somewhere. Better parts for the same price and my friends are making a very good buck on said parts. Open your eyes. Opportunities come in storms. Come up with your own products. Better margins.
My industry is like most, suffering & hemorrhaging skilled people. They company I work for has not invested in themselves by keeping talented hands & teaching the up & coming generation. Essentially they are putting themselves out of work. Invest in your skilled people, once the skilled folks are gone, its too late. I think the skilled trades is only going to get worse.
It's a really difficult situation, I agree - training people up is the only real way forward at this point.
What are YOU doing to recession-proof your business?
drive uber
bruh, what's your height? :) The VF4 behind you looks like Minimill
Haha I'm 6'4, the boots probably add a bit!
Yea pretty much it sucks
Why are machine shops so damn slow!!! And it’s like they don’t want work such shitty service most of them don’t answer
Turn your hat around.....I wouldn't hire a shop, that doesn't know which way to screw his hat on
Cool tip man, thanks for the insight
Yep, let’s judge a shop based on how someone wears their hat vs. the quality of their work…