Part buyer expectations have changed over the past few years; is your sheet metal estimating game holding up?
Sheet metal shop have faced some serious headwinds driven by supply chain difficulties and material pricing. This new world that we live in has made speed, accuracy, and consistency more important than ever.
1. Implement a solid tech strategy
“Industry 4.0” has been upon us for a while, and digitizing manufacturing is imperative for companies to succeed. Some action steps for determining areas for improvement at your fab shop:
- Audit your current processes to uncover opportunities to increase speed.
- Review every facet of your business, from the front office to the shop floor, as well as partnerships and third-party vendors.
- Write down how innovative tech solutions might help you deliver value via increased speed to your customers for each business area.
2. Prioritize cybersecurity
Manufacturing is a critical infrastructure in the United States. Aside from being a highly threatened industry, federal regulations are cracking down on cybersecurity more than ever before; in recent years, there has been a major push by the Department of Defense (DoD) to ensure this controlled information is handled securely by the supply chain. This initiative is called Cybersecurity Maturity Model Certification (CMMC). Achieving CMMC compliance is a lot more involved than simply adding new security functions to your business’s network, but you can click here to learn more about what your shop should be doing today.
3. Direct efforts towards a marketing strategy
It’s important to get in front of the engineers and buyers that are looking to get custom parts made. But how should you go about doing it? Start by:
- Building a company LinkedIn page to connect with potential customers and stay top-of-mind for existing customers.
- Giving your website visitors a reason to return. Prospects are searching for information, and if you have content that answers their questions, they will continue to come back to your site.
- Communicating in ways your buyers will understand. Many don’t understand the nuances of “horizontal and vertical milling” or know what a Tussen Haas machine is. Saying “we make parts that are super complex that you’re struggling to source elsewhere” will resonate much more with your audience.
4. Diversify your customer base
It’s easy to get into a routine of serving a small group of large customers when estimating sheet metal parts is so time-consuming; quoting repeat work is much faster and produces quick wins. But high concentration is dangerous; this occurs when a single customer or business accounts for 10% or more of your revenue, or when your largest 4-5 customers account for 25% more of your revenue. In these cases, just a 10-25% drop in revenue can cause your fab shop to go from profitable to dropping below the break-even point. This poses risk to your ability to grow (or even last).
Additionally, shops with high customer concentration also keep capacity open for these large customers rather than filling it with orders from new customers because they are afraid of losing them if they can’t fill last-minute critical orders. Take the time to invest in growing your shop horizontally to prevent these risks from materializing.
5. Invest in your workforce
When an estimator (or worse, someone who isn’t the estimator who has other priorities) is estimating sheet metal parts all day long, it can lead to serious burnout. Sheet metal estimating is a complex yet trainable process, and in order to ensure that people have ample time to work on, not in, the business, invest in training more people to estimate. This also eliminates the single point of failure that too many shops are guilty of having that leaves your shop vulnerable to missing key jobs when your estimator is out of town or out sick. In order to keep up with the influx of work inevitably headed your way, it starts with investing in your people.
Are you looking for ways to round out this quarter and head into next year better prepared than ever? Paperless Parts can help you implement these 5 strategies into your fab shop’s business plan:
- Our cloud-native quoting platform is as modern as you can get, being constantly iterated and adapted for UX, security, and speed.
- Our software is ITAR-registered, serving clients who work in areas like aerospace and defense and require top-notch security.
- We offer marketing solutions designed specifically for fab shops to cater to their unique audience of original equipment manufacturers and prospective employees.
- Through our data analytics, easily see gaps and areas for improvement to know where to start when looking to go after new types of work.
- Enable your estimators, sales team, and machinists to quote more work with less headaches so they can spend more time doing what they love and find more fulfillment in their role at your organization.
Paperless Parts’ Sheet Metal Estimating Software
Want to see how Paperless Parts can help you estimate sheet metal parts smarter and faster? See how to up your game in a customized demo today.
See how Paperless Parts can up your sheet metal estimating game.