The off-the-shelf alternative: this job shop sees standard products, developed internally, accounting for a growing share of the shop's business. The latest standard product may be the "big gun" in more ways than one

Modern Machine Shop, May, 2005 by Peter Zelinski

The first CNC machine tool for New Age Prototypes--a Plattsmouth, Nebraska, job shop founded in 1998--was a Haas VF-4 vertical machining center with 50 inches of X-axis travel.

Shop owner Dave Wood would have preferred to begin with something smaller, but his first customer was another shop that had an oversize part to outsource. The people running that shop assured him: Buy a big machine, and we'll outsource the part to you. They kept their word. New Age got to machine that part--but only two times. After that, the customer lost the job. New Age was left with a big machine to pay for, and no big parts to run on it.

A subsequent purchase for this shop was a Haas Mini Mill. This is a small machine, but New Age is a small shop, so it was still a significant investment. Mr. Wood obtained a letter from his largest customer promising enough additional work to justify the machine. He showed that letter to the bank. He got the machine. Just 3 weeks later, however, the customer went bankrupt. Never mind the future work that had been promised in that letter--what about the $25,000 that the customer still owed to New Age for work performed in the past? It took 2 years, along with some very accommodating creditors, for the shop to fully recover from this financial blow.

During that period of time, a conclusion crystallized in Mr. Wood's mind. He was searching for an answer to the question, How do I make money machining parts without being so dependent on companies I can't depend on?

The answer, he decided, was to be his own customer. He would develop products that others would buy, so that his shop could make the parts to fill those orders. It might not be easy, but it did seem possible.

A little more drove him to this decision than just the prospect of greater independence. Mr. Wood is 31 and single, with no kids. After two older brothers became police officers, this youngest brother--like youngest brothers everywhere--set off to find something different. After working for a local manufacturer, he parted with that shop amicably to found his own machine shop just two blocks away. Financial help from family members and ongoing advice from his father (Eric Wood, a local attorney) made this possible. In founding his own shop, he built on a discovery he had made while working for that manufacturer nearby. Machining can be fun, he realized. Machining can be something to get jazzed about. Machining can be cool--provided that the part or the end product is sufficiently stimulating or challenging.

Thus the standard products serve two purposes. While they provide a buffer against disruptions in the contract machining work, they also allow Mr. Wood to link various other interests to his machining. Think of it as self-expression through manufacturing. Feeding his interests in this way helps him sustain an enthusiasm for the work that is great enough to keep him happily engaged in the shop through 70- or 80-hour weeks.

The list of standard products developed so far provides a partial inventory of the kinds of things that Mr. Wood and those around him get excited about. There have been sprockets for motocross bikes, components for paintball guns, a police battering ram, a goose call (which was a failure) and also the "Fan Cannon," which is an air-powered launcher for shooting T-shirts up into the stands at sporting events.

The shop has high hopes for this last product in particular. Many characteristics make it promising as a standard product. Its design represents a clear improvement over competing models on the market. The potential market is big enough to be worth serving, but not so big that a competitor would readily be interested in producing a cheaply made rip-off. The product can justify a high margin because of its specialized niche. And the shop has enough ideas for future design improvements that it can keep updating this product even if a copycat does come along.

Today, standard products account for 15 percent of the shop's business. The goal is to raise that to 30 or 40 percent, and Mr. Wood hopes the Fan Cannon can go a long way toward taking the shop to that point.

The Contract Work

But even at that, contract machining will continue to make up the lion's share of this shop's work.

For the contract work, "cool" also tends to be a priority. The shop tries to seek out novelty and technical challenge. Mr. Wood doesn't charge any premium over his normal shop rate for jobs that are urgently needed and/or challenging to produce, because he wants to consider this kind of work the standard fare for his business. He considered it important to have "Prototypes" in the name of the company.

Mr. Wood says machining plastics is an example of work that appeals to him. Various jobs in various plastic materials have given New Age's personnel considerable experience in machining plastic parts effectively. The shop even has its own carefully guarded process for welding parts made of certain exotic plastic materials, he says.