OEMs: 5 ways outsourcing tubing fabrication can save time and money

5 ways outsourcing tubing fabrication saves time and money

Andy Parsche has toured many OEM plants. He has seen multiple approaches to manufacturing – and, in doing so, he has identified a host of cost-savings opportunities that outsourcing can deliver.

“We often ask customers, ‘What if we did it for you and you skipped that process?’” explains Parsche, vice president of sales at Sanborn Tube & Fab.

OEMs that explore such options are often rewarded, sometimes handsomely. One recent process improvement led a Sanborn customer to save $250,000 per year.

Parsche pinpoints five ways outsourcing tube fabrication can save OEMs time and money.

1. Access to the best materials

Sanborn maintains close relationships with tubing suppliers. That means it’s always up-to-date on the newest and best material options.

“There have been some significant advances on the materials front,” Parsche indicates. High-strength, low-alloy tubes are one such trend.

“It’s a lighter tube with the same strength,” he explains. He says this material is a great fit for recreation companies such as boat manufacturers and furniture makers.

It can also be a boon to other OEMs – including those that don’t have access to or knowledge of the material. “It can be used to produce high-strength hydraulic tubing, too,” he points out.

Sanborn utilizes a wide range of suppliers, ensuring it stays abreast of the latest trends. “We have really good relationships with the mills,” he says. “We’ve been doing this for 63 years. We work with the best mills, and they’re at the forefront of these material specification changes.”

Sanborn’s broad customer base means it has hands-on experience with new materials and the best processes associated with them.

2. Less process work

OEMs often handle all facets of the manufacturing process, and each step has a potential pitfall:

“Many of these OEMs would benefit from allowing us to do their first operation – which is tube cutting or tube lasering,” Parsche states. “We would ship the tubes from our dock to the customers’ bending, assembly or welding cell.”

The time saved is invariably worth the cost of outsourcing. “It eliminates so much of the process work at their facilities and gives them a chance to focus on increasing throughput,” he says.

For example, a manufacturer might bring in long tubing, cut it to a shorter length, punch a hole on each end, deburr it on both ends, load it and then cart it to the welding cell.

“They have four operations – receiving, cutting, punching and deburring – before they get to a weld cell,” Parsche details. “Instead, we can deliver finished parts directly to the weld cell.”

A company that has a handle on internal costs will likely find using Sanborn is cheaper and faster – and also opens up a great deal of floor space. Outsourcing also enables employees to be reallocated to maximize productivity.

“We’ve seen customers double their throughput by purchasing a fabricated part instead of trying to do it all themselves,” Parsche indicates.

3. Reduced inventory

Additional floor space is just one of the inventory improvement opportunities for many OEMs.

“I don’t recommend they carry a lot of raw materials at their facility,” Parsche advises. Doing so hampers cash flow, and that’s just the start.

“Why tie up your plant floor with raw materials when you can use that space to process products and push them down the line?”

Parsche elaborates: “The name of the game for them is to ship a completed product. Put the process on us and use your space to complete products and improve your cash flow.”

Sanborn stocks both raw materials and fully-fabricated parts for its OEM customers. “We inventory the finished goods,” Parsche notes. “That’s our business model.”

He explains the arrangement: “Our customers provide forecasts. We bring in the raw material and process it to meet the min/max level. We offer a contractual business program where we invest in the warehouse space and have the equipment capacity to meet their needs.”

This business model incorporates a just-in-time approach. “With just-in-time, the fabricated tubing goes right to the machine where it’s going to be used,” he says.

Ordering is easy, too. “Some customers have two bins at their weld cell,” he explains. “Every time they empty one, they order two. By the time they use the second bin, two replacements have arrived.”

Orders can be placed from the shop floor instead of through the office, a more efficient process that ensures bins are refilled regularly. “The parts they need are always there,” Parsche says.

4. Improved parts

Part optimization can be an enormous cost-saver.

For customers considering this course of action, a print review is often the ideal place to start. “The OEM provides the blueprint and we explore it for opportunities to improve its fit, form and function,” Parsche explains.

For example, Sanborn might discover that a part has a tighter tolerance than needed. “Will the part work if we loosen up tolerances and make it more cost-effective?” Parsche asks the OEMs.

“Print reviews can uncover a lot of cost savings,” he explains. “We look at tolerances, holes, etc., and say, ‘If we do this or that, we might be able to take some cost out of this part?’”

A seemingly small change can make a big difference. Sanborn saved one OEM $250,000 annually by optimizing a single part. “There are big opportunities out there,” he says.

Sanborn keeps an eye out for creative solutions for its customers. Welding is a case in point:

“In some cases, we can eliminate welds by fabricating slots and tabs,” Parsche says. “The OEM can put it together like Lincoln Logs. It eliminates the time and money needed to create weld fixtures.”

Assembly is easier and the cycle time is faster. “We can write a number on each part so they know exactly where it goes.”

The process of switching to a new part is typically smoother than most OEMs expect. “The appeal of a tube laser is that there is no tooling,” Parsche explains. “We can play with the design of a part very easily. We just have to reprogram the machine. That’s the true beauty of the tube laser – there is no physical tooling.”

5. Equipment and labor efficiencies

Manufacturers that handle their own fabrication face two potential inefficiencies: finding a workforce to run the equipment and the cost of the machine itself.

“The OEMs we talk to often have older equipment and find it hard to staff it,” Parsche points out. “Why not just decommission the machine and outsource that process?”

Equipment quickly ages and new, more efficient machines constantly enter the market. There is also the cost of maintenance, repair and downtime associated with aging machines.

In addition, utilizing existing manpower and equipment can cause a negative impact on the OEM’s ability to scale its production. “Do they want to allocate space for production equipment versus assembly equipment?” Parsche asks.

An OEM would be wise to explore outsourcing before investing in new machinery. “If you’re going to spend more than a million dollars on a piece of equipment, you’ll need to run it quite a bit before it can pay for itself,” he states. In contrast, the savings from outsourcing begin almost immediately.

Investing in costly production machinery can lead a business away from its core competency as it looks for outside work to keep the machine busy to help recover its costs.

The next step

How can OEMs determine whether they are using tried-and-true processes – or being victims of the, “because we’ve always done it that way” mindset?

Parsche recommends that OEMs bring Sanborn in for a plant tour. “We can see your processes and help you determine if outsourcing can help you to improve throughput, streamline your operations, reduce labor cost and improve your parts.”

Contact Sanborn today to discuss your fabrication needs.


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