When Too Many Customers Spoil the Part

Tri-State Fabricators

You own a mid-sized job shop that specializes in precision-machined parts. For years your company has been pushing the production needle into the red, maintaining as many customers as it can. You recently hired an experienced general manager who immediately detects two problems: Your company is taking on too many small orders and, more to the point, too many customers. Many of your customers’ orders are limited to one to 10 parts, and the sheer volume of unique setups these parts require are killing your spindle utilization rates, eating into profits and hurting employee morale.

This second scenario is one that recently faced Duo CNC Machining, a mid-sized job shop located in Langley, British Columbia focused on precision machining for the energy, agriculture, clean-tech and packaging industries. For years, the company serviced up to 30 customers that rotated from month to month, forcing Duo CNC to adjust its raw material inventory according to how many customers had been added or dropped from the roster at any given time.

Duo CNC reacted to its new general manager’s audit with a solution that transformed not only the company’s core philosophy, but also helped increase revenue and profits by double-digit margins. But what company leaders might not have expected was the downstream effect of the policy they put in place: Namely, an improved company culture along with more time to implement technical improvements related to programming, fixturing and setups.

Culture Shock
When Terrance Visser acquired Duo CNC in 2016 as its new owner and CEO, he joined a company that had been working under high-pressure conditions for several years. Even without a machining background, Visser recognized that Duo was servicing too many customers who required low-volume production and short lead times —a recipe for stress, burnout and a company culture that had turned sour.

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