Small Business, Equipment Finance

Common Challenges Machine Shops Face (and How to Fix Them!)

Posted by Factor Funding Co. on September 10, 2015

Challenges Machine Shops

Day-to-day operations in a machine shop can be difficult, even on a good day. Challenges seem to pop up all the time, making it near impossible to meet deadlines and keep on budget. Understanding the common challenges faced by machine shops can help you plan for them and mitigate their impact, and maybe even learn how to fix them.

Common Challenges Machine Shops Face

Here are a few of the common challenges that machine shops around the country face every day.

  • Clients run the schedule (into the ground). A client places an order. Then they come back and make a change. It could be in quantity. It could be in design. It could be in priority. A big client may call in requesting that you slip in an emergency job, when you are already overbooked. You want to satisfy client needs, but at what cost?
  • Vendors can be unreliable. Your shop depends on many outside firms for success. Your raw materials provider needs to get you the materials you need, when you need them. That doesn't always happen. The platers need to get the product back to you for finishing by a certain time, so you can meet a client deadline. That doesn't always happen. When a vendor misses your internal deadline, your client deadlines are in jeopardy.
  • Machines break down. And it always seems like it is at the worst time. You have jobs queued and you have strict deadlines. Then, the one machine that is your bottleneck decides to break down. There goes the schedule.
  • Your workers' skill set is not quite where it needs to be. You rely on two or three of your people to do the highly skilled jobs around the shop, like job set-up. You may have a few people who are not much more than button pushers and parts changers. If one of your highly skilled guys is out sick or on vacation, you may find the schedule slipping quickly.
  • Keeping the schedule up to date is near impossible. This is often due to all the challenges above as well as a lack of communication within the shop. One guy is falling behind due, but doesn't tell anyone until his work starts to affect someone else. By then, it's too late. The entire schedule is worthless.
  • New machinery and technology does not fit well with staff skill sets. Smart machine shops are upgrading. They are bringing in machines that rely, at least partially, on CNC technology. This does not always mix well in a shop where computer skills and comfort are lacking.

What Do These Challenges Have in Common

If you look at each of these challenges, what do they have in common? It is lack of resources. Many machine shops are strapped for cash. They are waiting for their customers to pay, often 60 or 90 days after the job is completed. They still need to pay vendors and meet payroll. This constant lack of cash flow makes many of the challenges above almost impossible to manage.

What would happen if cash started flowing like it should?

  • A shop could bring on temporary help to handle the busiest times.
  • The shop could afford to bring in upgraded, up-to-date machinery.
  • The shop could find alternative vendors who could provide product on a more reliable schedule.
  • The machine shop could hire someone to repair equipment and to maintain it properly to reduce down time.
  • The owner could hire one or two new guys with the skill set the shop needs.
  • Everyone in the shop could take time to get familiar and comfortable with new machinery.
  • The shop foreman could take the time to train some of the lesser skilled staff on how to do some of the more highly skilled set-ups.
  • The shop could have someone dedicated to monitoring progress, updating the schedule, and expediting where needed.

If your machine shop has a ton of cash trapped in invoices due in 30 to 90 days, don't let those resources languish. Free up that cash so that you can run the shop as it should be. Contact the factoring experts at Factor Funding to get started today.

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Written by Factor Funding Co.

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