The value of cheap labor to the end buyer.

Won’t be a long post today and nothing to do directly with CAD. It does however have a lot to do with how your business functions. The ability of leaders in the manufacturing sector of the USA to manage actual factories and produce here has become too much work for many. Primarily MBA and CPA types who understand the dollar today and for the next ninety days as they manipulate things for the dog and pony show at the stock market with the goal of getting more money for themselves in salaries and bonuses they have not truly earned. It’s true believe it or not and their compensation is way out of line with historic norms.

Unlike an Engineering grad running a factory who understands processes and the real end result of stupid cost cutting measures these guys only seem to see cheap labor and parts as the Holy Grail of efficiency.

Two anecdotes come to mind here and they happened to me. Years ago I had a Lincoln SP250 mig welder. Nothing but trouble and I replaced torches and liners with great regularity with invariably short-lived results before erratic wire feed would ruin my days again. At this time Lincoln had been taken over by Bankers who used MBA and CPA types who ran the company according to “cost-effective” savings in components. I struggled with this sorry machine for a few years when one day I get a call from my distributor. He tells me he has the solution to my problem. It turns out that the idler roller on the wire feed drive was made of UHMW which flexed under load allowing for erratic feed speeds. The new replacement one was of Delrin and was rigid enough to do the job.

Lincoln had done this to me in other areas on other machines over the years but this was the last straw. This MBA CPA mentality had made my work and I suffer for years because they could save a dollar on a critical part. The end result of this is that I have never and will never look at another Lincoln machine again. They can’t be trusted to be worried about my bottom line too.

This week I am looking for an air dryer for my new Haas VF4. Shop around and then remember a great big Ingersoll Rand plant north of Nashville. So I call the local Ingersoll distributor and ask about a 25cfm unit. None here but one in North Carolina. Alright do you have anything close to that in stock here? Well no. We have one listed in our catalogue but we won’t have any more of those until JUNE.

OK, the light goes on and my next question is “where are these made”?  The poor lady dreaded this question and it was easy to hear the hesitation in her voice as she admitted that they would have to wait for the next slow boat from China. Parts are the same way and so you run the risk of being shut down because your critical replacement part may well be waiting for the next shipping container to be filled. But these bean counters saved production costs, or so they think.

Ended up with Zeks who makes the units they sell here in the USA. Oh, and they have lots of spare parts too. Ordered it Wednesday and it shipped from the factory Thursday and I will have it Monday. The real kicker is that it was $1,500.00 for a 64cfm unit and the Ingersoll “wait for the MBA CPA China shipping container to arrive” 25cfm unit was almost as expensive.

So all you bean counters at Ingersoll Rand, what is your profit from me now when you have just lost any chance at my business because you care nothing for my business?

Have you ever noticed how so much of this stuff from China never seems to reflect that deep CPA MBA generated cost savings to the end buyer? Or if it is cheap the quality is so wretched that at the end of the year you spent more by having to buy three instead of just one which would have been higher priced but domestically produced.

My whole point in this post today is to let the world know that this guy looks at more than just initial price and so perhaps should the rest of us. It is time we stop hamstringing ourselves with unacceptable quality and support and demand that the people we do business with think of our bottom line to. Ask where it was made and how it is supported before you buy and determine before you buy if your business afford to wait for the next slow boat of parts.

I could fill page after page of things I have seen and personally had to deal with because rather than dig in deep and figure out how to do things more effectively MBA CPA types just slash and burn and look for how to manipulate numbers for their next quarters bonuses. It’s not a very stellar ability to bring to the world of manufacturing.

My old Haas VF3 was built in 11-93. My 18-year-old Haas still has every part available for quick “no boat required” delivery with a superb best in class support network. It is reasonably priced and tons of factories make tons of money with these things every day. But then Haas is not run by CPA MBA degreed idiots.

Since the only thing many of these guys understand is money may I suggest you do like me. Deprive them of your money where ever possible till they get things right. Often wondered who was going to buy their made in China crap if no one was working here anymore anyway.

4 responses to “The value of cheap labor to the end buyer.

  1. Totally agree Dave…and it is not limited to the US either, we have our fair share in NZ.
    I suspect it’s all connected to the GFC….a world full of cost based buying, rather than needs based.

    Sean.

    • Cost based! I went to a shop in Nashville that handles Jet equipment. I am standing at the counter and I hear a sales guy talking to a customer about parts for his lathe. One part would be in in July, another in August and the third in NOVEMBER. Shipping containers you know. Saved money on the lathe though I am sure. At this same shop some time back I buy a reduced shank drill bit. Looked Ok until I get it home and chuck it up. Then I watch it oscillate as the shank was eccentric to the bit. Took it back and told them this was it for Made In China. I buy bits that are twice as expensive and always work and do so four times as long. As you can imagine my business volume with this JET distributor has dropped waaaaay off. Went in their one day and they asked me why my volume with them had dropped off so much. The answer was easy and three words long. Made In China.

      It is a problem that is getting a lot worse this last couple of years instead of getting better as time goes on.

  2. rickmcwilliams

    I am most pleased with tools and parts from McMaster Carr. They do not mention brands, yet the parts they ship are all good quality from reputable sources. A poor tool is not worth having. Harbor freight is all junk, with the exception of the aluminum dustpan.

    • I can’t say the same for MSC and after they sold me a Vectrax bandsaw last year of such mediocre quality they will not sell me anything else made in China. The few times I took a chance and ordered drills and reamers for instance from them that were made in China the quality was so bad I sent them back. I look and if I see China that if humanly possible that vendor does not have a sale. I can’t avoid China with things like my Dell workstations but those seem to be held to a much higher level of consistent quality.

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