Small Shop, Big Profits

With over 20 years of industry experience, Alan is president and owner of an Ohio Screw Machine shop. “My dad bought the business in 1969,” Alan said. “I worked with him during the summers and finally joined full-time in 1986.

According to Alan, all 30 of his B&S machines are running at full capacity. “Currently, we’re at about 60 to 70 percent capacity, but in our kind of work — small lots of small parts, mostly commercial jobs and with the majority going in to inventory for quick, on-demand delivery — it is difficult to put a firm number on capacity and utilization.”

Alan says that at any given time there are 12 employees in his shop; however, his employees don’t work standard 9-5 hours. Some of this is driven by the fact that one of Alan’s main customers, who had been a couple of blocks from his shop, moved to Iowa and then filed Chapter 11.

“Losing your biggest customer makes things pretty uncertain. Right now I’ve got my secondary ops staff limited to a flexible 40 hour per week schedule. My only work rule is that if you’re here, you punch in and go to work. If you don’t want to work, punch out and take a break or go home or whatever. I don’t set hours for my staff, all I ask is that they come in and get the job done.”

According to Alan, about 80 percent of what his company ships usually goes out within in a day or two and almost always comes from inventory. “So, we rarely have delivery concerns. But when a hot job hits the shop, my guys will want the work and will come in over the weekend to get the job out.”

Alan says that about the same time his largest customer was moving to Iowa and filing Chapter 11, he came across MFG.com. He then looked at what was happening in Rockford and other mega-metalworking hubs in the Midwest, and took into account the number of shops that were talking about losing business to offshore competitors. He decided to take a chance and sign up for an MFG.com test-drive.

In order to get an idea of how MFG.com worked, he took one of his parts and put it on MFG.com in the form of an RFQ. “I posted the part for $0.15, and I got one bid at $0.13 from a company overseas. But I also got four or five other quotes from overseas companies that were all higher than the $0.15 I could make the part for. This was for a simple part with little labor. I thought to myself, what is the price advantage of going overseas?”

“With MFG.com, I look at what RFQs are out there and decide based on my needs what to quote on. We’re a low-to-medium volume shop specializing in small, rather noncomplex parts. And even though Ohio may really be suffering, by quoting on work on the Internet we’re not locked in geographically. We can bid on jobs from the West Coast to the East Coast, from the South to Canada. We can literally quote on jobs and get new customers from anywhere in the world. And trust me, there is an enormous amount of business out there that fits our profile just perfectly.”

“I used to have three computers in my office,” Alan says. “But now I’ve got a three pound IBM laptop, and I can be sitting in the car waiting for the kids to come out of swim practice, and I’ll be checking MFG.com, or checking or receiving invoices from customers or requesting the release of part of an order. I can also be sitting on the couch on the weekend, watching a game and checking MFG.com, quoting on RFQs, checking what’s on the site and what’s new.

Alan says that a couple months back he added up all the sales that he could attribute to new work, and he’s got a customer base of 40 different companies, and since joining MFG.com about a year ago, he’s added five to ten new customers – and one of his new customers has already placed 20 different jobs.

While he continues to get work from this customer, the customer still has 27 other jobs posted on MFG.com for other suppliers, or Alan, to quote on. “I once received an order from this company and they needed parts right away. The best thing about MFG.com is that you don’t have to worry about paying a commission or worry about who takes credit for the order. You just pay your annual fee and that is it. But what is most interesting is that from 1986 until we started with MFG.com, we did 1000 quotes. In the past year alone since joining MFG.com, we’ve done 700 quotes.”

So, how much work is out there? “When I came back to work with my dad in 1986, there was a company here that made electronic dartboards,” Alan says. “We had an order for 50,000 of the bodies for the plastic darts, and we worked day and night to get the 50,000 out. Then, we found out that those 50,000 sold in one weekend. I have realized that there will always be a tremendous amount of work that needs to be done - MFG.com is just helping me to find that work.”

According to Alan, there are other Internet sites out there that you can join, and they are all set up differently. “There is one site that I belong to where you buy certain regions, but with most of these sites there is always a catch that largely benefits the provider. But none of these sites come close to MFG.com, especially because you have the ability to take a free test-drive to see how the site works. For me, nothing works better than MFG.com,” says Alan.

“With MFG.com, I can continue to grow my business at my speed. I’m truly amazed every time I open the site to check on my activity, and then I’m blown away by how much work is out there, work that is just right for us.”