4 Key Considerations for Sourcing a Metal Fabrication Supply Partner

4 Key Considerations for Sourcing a Metal Fabrication Supply Partner

As we mentioned in a former blog post, there has been significant consolidation and subsequent closings of many small to mid-size companies in the plastic injection molding, metal stamping, precision machining, and metal fabrication industries since 2008. From the first part of the current decade, when the economy regained some of its strength and began building momentum, to the present day, certain industries began thriving and achieving record profits, like the automotive industry; demand for fabricated components, especially metal fabricated components, is at an all-time high.

Today, a considerable number of companies across industries can perform fabrication of some sort, however, there is limited capacity among premier metal fabrication companies, globally. With this in mind, procurement professionals are left with major challenges to locate and source capable metal fabrication supply partners.

Before deciding on the best supply partner for metal fabrication services, remember to be aware of all aspects of the parts and assemblies and to look at each option from multiple angles.

Challenges

Sourcing the right metal fabrication supply partner is challenging because of both internal and external factors. Supply partners, across commodities, are often selected based solely on cost, a result of corporate procurement teams’ cost initiatives that focus on, and reward, cost reductions above all other key performance indicators (KPIs).

While cost remains critical in any sourcing activity, large or small, one could argue that overall capabilities, experience, and quality are equally as important and should be weighted as part of the decision criteria, accordingly. Before moving forward with a metal fabrication supply partner, a procurement professional must have a though-out supplier development process that ensures the following considerations are met and the results meet company goals.

Metal Fabrication at a Glance

The metal fabrication industry has evolved in the last decade. Metal Fabrication, by definition, is the building of metal structures by cutting, bending, and assembling processes. Metal fabrication capabilities vary from company to company. Some focus on larger production runs at a lower cost, while others focus on low volume with greater options for customization. In today’s world, the more capabilities that a company offers, the more appealing they are to any procurement professional. The right metal fabrication company will offer services such as cutting, stamping, forming, extruding, bending, assembling, etc. Truly capable players will offer value-adding services such as welding, plating, heat treating, coating, painting, etc.

When comparing suppliers, it is extremely rare for a supply partner to only provide one service. This common discovery is why it is so essential for a procurement professional to find the right metal fabrication partner and why leading procurement professionals are not making sourcing decisions with a supplier attitude, but instead with a supply partner mentality.

Key Considerations

Capabilities

When considering the capabilities of a potential metal fabrication supply partner, a procurement professional must analyze and evaluate every offering that partner provides or has the capacity to provide. One must ask, “Is this potential supply partner capable to meet all my business needs, and more, without the risk of problems during prototype runs or production?” Below are a few common, yet extremely vital questions a procurement professional should ask regarding the capabilities of any metal fabrication company that is being considered for a program:

Which metal fabrication services do they offer and specialize in?

There are many different types of metal fabrication capabilities for a given component. It is important for a procurement professional to understand the many types of metal fabrication processes that a potential supply partner can offer. This is not only helpful for understanding of the supply partner, but it may help to save on total program costs. The most common metal fabrication processes are described below:

  • Cutting
    • Includes sawing, shearing, or chiseling, with manual and powered processes. These include torching, CNC cutters, lasers, water jet, etc.
  • Bending
    • Includes manual or powered hammering, or via press brakes and similar tools. Most modern metal fabricators use press brakes to either coin or air-bend metal sheet into form. CNC-controlled back gauges use hard stops to position cut parts in order to place bend lines in the correct position. Downloadable programing software now makes programing the CNC-controlled press brakes seamless and very efficient.
  • Assembling (joining of the pieces)
    • Includes welding, binding with adhesives, riveting, threaded fasteners, or even yet more bending in the form of a crimped seam. Structural steel and sheet metal are the usual starting materials for fabrication, along with the welding wire, flux, and fasteners that will join the cut pieces. As with other manufacturing processes, both human labor and automation are commonly used.

What materials does the potential supply partner work with and what can they suggest?

There are many different materials that can be fabricated, most notably steel and aluminum variants. Certain supply partners specialize in the different material types so it is important to know not just what your potential supply base is capable of, but also what each supplier is known for and specializes in. It is also important for the potential supplier partner to understand all material variants and alternatives. Many projects or products will be designed in other areas of the world and will kick off development builds in those regions, with the end goal to have production sourced in another region. In this case, it is always helpful to work with a metal fabrication partner that understands material equivalents (EN, SAE, etc.) and can suggest alternatives that are more available in the production region. The most common raw materials used by metal fabrication companies include plate metal, formed or expanded metal, tube stock, welding wire or rod, casting, etc.

What production services are offered by the potential supply partner?

Procurement professionals need to inquire on the specific production services and/or secondary operations that are offered by the potential supply partner. Some programs will require simple fabricated parts and others full, finished and tested assemblies. The following is a list of important questions to ask regarding production services:

  • Can the supplier finish machine the assembly, to print, or will they have to send out a portion of these services?
  • Can the supplier clean the part to company cleanliness spec?
  • Can the supplier assemble the rivets and fasteners required to make it an assembled finished good?
  • Can the supplier do leak testing or conduct additional testing that is required by before final shipping? Knowing all this information ahead of time will save you the heartache down the road.

What design capability does the potential supply partner have?

It’s one thing to take a prototype through production, but what if design services are necessary? Not all metal fabrication companies offer these services or provide them as a one of their core competencies. Ask each company in consideration whether they can work based on a drawing (digital or printed), whether they can translate the drawings to shop drawings, and whether they are capable of starting from scratch without the help of an initial design provided. Getting these questions answered upfront eases communication with supply partners throughout the entire process.

Experience & Quality

Metal fabrication is an art. Not everyone can fabricate metal components or assemblies; experience is key. No matter the industry, metal fabrication requires experience both at the individual level and the company level. A procurement professional must be assured that the potential metal fabrication supply partner has sufficient experience to avoid costly mistakes.

Ask metal fabricators about their knowledge as it relates to industry codes and regulations. For automotive companies, being knowledgeable, experienced, and certified in various ISO/TS standards is recommended, and in many cases required for certain OEMs and Tier Is. ITAR is a common certificate for the defense industry and so on. Be sure to have potential supply partners describe how operations have continuously improved over the years to be as efficient and safe as possible. Ask about similar projects they have completed and parts they have fabricated. Further, do not hesitate seek references from past customers. A good metal fabrication company will have plenty that are willing to speak on their behalf and will welcome this due diligence.

Costs

As a rule of thumb, one should always strive to get at least three quotes from highly qualified potential supply partners. Once attained, compare costs across the board as it relates to the program. Attaining an apples-to-apples comparison amongst metal fabrication companies is not always easy. One company might use a higher quality material or more precise cutting tools, where fewer costly mistakes are expected in the long term. Some are priced higher because they are smaller shops that offer more customized services or less common metal fabrication process. While bulk can be cheaper, it might not be right for a given project. Certain projects and designs will require metal fabrication processes that may offer higher tooling costs and lower piece costs, or vis versa. It is important to understand the full program costs before rushing into any sourcing decision.

Make sure that the RFQ sent to each supplier details the specifics of exactly what is needed. The supplier development initiatives and Supplier Capabilities Assessments, that should be sent to each potential supply partner along with the RFQ, should also down-select many of the unknowns and discrepancies. Also, a procurement professional must be cognizant of supply partner location as that may negate the cost savings of a less expensive quote.

Conclusion

There are many items a sourcing professional should be cognizant of and consider before choosing a metal fabrication supply partner. There must be full awareness on the bigger picture and not just the short-term cost savings or avoidances. Too often supply partners are chosen for the wrong reasons or for short-term gains. Understanding a potential metal fabrication supply partner’s capabilities, experience, quality, and costs will put you and your company in the best position to win for the long term.

-Tony