Job Shops - Introduction to Metal and Welding Fab Shops
About three weeks ago I began a series called ‘Niche Market Preparatoires’ with a discussion on Job Shops – Part 1. I told you that Niche Market Preparatoires would be an on-going series, and that it would cover a variety of Niches over a prolonged period of time. In effect, each ‘Niche’ constitutes a mini-series within the overall series as a whole.
As I said, I began this series with a mini-series on Job Shops, but Job Shops is really a ‘huge area’ even though job shops themselves are usually relatively small establishments. What I mean is that job shops can entail anything from machine tools shops and small mill-works to cabinetry shops, leather tooling/repair, lathe and die-cast metal shops, gasket, hose and custom piping assembly fabrication and a wide variety of others. Some of the more common job shops are small welding and metal fabrication shops.
So, I guess if I were going to outline this series structure thus far, including today, it would look something like this:
Niche Prep Outline Structure
Typically, these fabrication shops use a variety of tools to make metal parts 'to order' to fit the specific requirements of their customers. Some ProAdvisors I have talked to in the past have told me things like, “just let me set them up using QuickBooks Online and that’s all they need to keep their business on track. All they really need to know is how much they are spending on materials, what their operating costs are, their payroll expense, and their revenues.”
Another ProAdvisor told me that her job was just to find her clients an App that would work with QBO, that’s all she did in her practice. I then posed a very specific hypothetical to her concerning a Metal and Welding Fab Shop to which she responded, “Well, I am certain that with the right App plus QBO I could get them the extra information they need about how much money they are making on each job. I don’t really need to understand the difference between a ‘Tig welder’ and a ‘Milling machine’ to keep their business running smoothly.”
So, my question is, what happens when the business owner wants to sit down with you as their ‘trusted advisor’ to discuss a three-year plan to begin to replace his major fixed assets like his Tig1 welders, Mig2 welders, Milling3 Machines, and many of the other machines in his shop? Or what if he wants to upgrade from a lot of his manual tools to new Computer Numerical Controllers4, are you going to be prepared to deal with questions about how and if he can afford to finance those costs when you don't have a clue as to what he is even talking about?What are you going to do?
The reality is that you have absolutely NO BUSINESS advising any business if you don’t understand ‘the business of the business along with the numbers of the business and what the numbers of that business mean to that business.’ And I am sorry to say, but ‘No App’ yet developed (including 'Watson') on the planet is going to give you all of that!
Getting back to the day-to-day of our metal and welding fabrication shop, (hereinafter I will call it ‘the fab shop’ just to keep it short) the parts they are producing can be the finished products that their customers require, or they simply may be components that are used by each customer in some larger assembly, or even part of a process or for a service each customer performs.
It really doesn’t matter what the customer is doing with their products; the fab shop is responsible for producing the contracted parts to the specifications set forth in the customer's order and that may require the fab shop to perform any number of operations including brazing5, cutting6, bending7, shaping8, drilling9, welding10, finishing11, assembling12 and other processes. Some of the tools typically used in these shops include metal lathes13, milling machines, shears, brakes14, drill presses, grinding machines, welders (of various types), cutting torches15, metal stamping, casting and machining16 equipment.
The reality is that most accountants, bookkeepers, and ProAdvisors (yes, my beloved ProAdvisors) are too busy trying to teach their clients how to 'speak their accounting speak' then learning to speak their 'client's speak.' You want to teach the client to think and speak like the CFO of their company, when that is what they have you for. But they expect you to be their 'CFO,' and that means they expect you to understand their company from the inside out.
They want you to know what it means when they tell you they need thousands of dollars because their 'brake' has 'broke.' They want to know if they are better off hiring a welder's helper to keep things cleaned up and keep the parts at each work station so the welders are not having to stop their jobs to go get parts, or if they should simply hire another welder to get more work out the door and let each welder take care of their own parts and work station clean-up?
The question is, how are you going to do that when you don't really know a thing about their business except what QuickBooks Online and some App tells you?
That's why you need these Niche Market Preparatoires, and your need more than an attitude of "QBO Plus an App Can Do it All!"
Be sure to join us next time as we continue our look at 'Metal & Welding Fab Shops,' we are far from done with even this one type of 'Job Shop.'
Footnoted vocabulary:
1-Tig welding: a welding method in which a plasma arch is directed through a handheld Tig torch while a filler rod is hand fed by the other hand and a foot operated pedal to control arch and heat.
2-Mig welding: a welding method in which a wire is fed through an electrode tip.
3- Milling: is the process of using rotary cutters to remove material from a piece of metal that will become the finished good. ‘The mill’ or milling machine is used to perform precise and close tolerance shaping of metal parts.
4- Computer Numerical Controllers: If you encounter a fab shop with one of these consider yourself lucky indeed because it means that they are in the ‘big boys league.’ This expensive equipment typically is high tech equipment that allows a computer to replace what skilled machinists have been doing for decades including cutting, milling, grinding, lathing, welding and final finishing.
5-Brazing: a specialized form of welding where a filler metal is liquified above 800 degrees F and beneath the base metal’s solid state.
6-Cutting: cutting may involve multiple methods including ‘shearing’ in which a sharpened blade is applied with sufficient pressure to cut the metal. Power Shears are the most common in use in modern fab shops today.
7-Bending: while ‘metal’ is typically bent with power brake, a tube bender is used to bend tubing and piping.
8 shaping: process whereby a tool uses a linear relative motion cutting action to machine a linear path in the metal as opposed to a lathe which uses a helical action.
9-drilling: drilling methods vary substantially; hand drills and drill presses are both common in fab shops.
10-welding: a fabrication process that joins metals using high heat achieved by any number of methods including gas flame, electric arc, and electric arc. Two of the most common methods used in smaller fab shops ‘Tig and Mig’ have already be covered in this terms list.
11-finishing: another broad range of functions and processes maybe involved in fab shop finishing activities ranging from final grinding, sanding and polishing to some form of metal finishing (although many fab shops will outsource such finishing like ‘powder coating, etc.’.)
12-assembling: is a process that may take many forms, it can combine hand assembly along with welding, riveting, threaded fastening, crimping, and use of adhesives. In some cases, threaded or slip-pipe joints may be incorporated into the finished good.
13-metal lathes: a machine which rotates a piece of metal to perform cutting, sanding, drilling, turning, facing and other actions symmetrically about the axis of the object in a helical fashion in contrast to either shaping or milling.
14-brakes (power brakes): equipment used to bend or press metal into a desired shape or angle
15-cutting torches: gas cutting tools for preheating and cutting metal
16-machining: refers to any of the various processes in which raw metal is cut into desired final shape or size by controlled material removal.
SPECIAL THANKS
A special thanks goes out to Robert and Francis Thomas of Moore, Oklahoma, retired 'Metal and Welding Fab Shop operators' for their assistance with technical content used in the production of this article.