CNC Industries in 2011

CNC Industries is very excited to be starting a new year. At the end of the decade as well as the year, I thought it would be interesting to see how CNC Industries has performed over the course of the last 10 years. Looking at 2000 compared to 2010 we can see a drastic change in the scale and methods of work for CNC Industries.

Overall we have had a 15%/ year average growth maintained – obviously some of those have been better than others. As a precision machine shop, this is an impressive growth to maintain over 10 years. With manufacturing jobs disappearing every year, we are especially proud of our track record of growth.

The primary industries that we served in 2010 were the Aerospace and Defense industries. We fully support Kanban on-site delivery arrangements for our customers, deal mostly with electronic ordering systems and are releasing our second major version of Job Manager – our internal ERP system. In 2000 we were working primarily with industrial customers, shipping most orders in a single shipment, and we had just released version 1 of Job Manager. While we still work with many of the industrial customers that we had in 2000, we have grown further in the precision Aerospace and Defense machining markets.

Over the last 10 years we have shipped nearly 10 million individual precision machined components to our customers, in nearly 50,000 individual shipments for an average of 200 parts in each shipment. We have produced everything from single prototype components, to mass run quantities of 100,000 or more.

Over the last year we have had more RFQ’s from a larger variety of potential customers than we have in the prior 5 years put together, which leads us to feel that 2011 will be a great year and a great start to the next decade.

We look forward to growing further, and continuing to produce high quality precision machined components for our customers.

January 21st, 2011|

CNC Industries 2010 Customer Satisfaction Results

At CNC Industries we take pride in our ability to provide all of our customers with the highest quality precision machined parts, on time delivery, competitive pricing, and overall customer satisfaction. At the end of each year we conduct a survey of all customers that we conducted business with in the prior year. In 2010 CNC Industries had our 3rd best sales year of all time. Even in the down economy that is affecting so many companies, we increased our sales by 10% over 2009.

For 2010 we asked for feedback on the following areas:

1) Timeliness of receiving quotes from CNC Industries

2) Ease of placing a new order with CNC Industries

3) On time deliveries

4) Overall quality

5) Price competitiveness

6) Responsiveness to any special considerations or needs

7) Engineering support

8 ) Responsiveness to Corrective Actions

9) Friendliness and professionalism of CNC Industries employees

10) Shipping methods and shipping terms

11) Responsiveness to changing needs

12) Please rate your overall impression of CNC Industries

13) Would you be to recommend to CNC Industries to a colleague?

14) Do you plan to order from CNC Industries again?

The results of the survey are as follows:

Our average rating for all categories for 2010 was a 4.5 out of 5. Overall we have improved our ratings in virtually every category from the 2009 ratings.

Some quotes from our survey:

“Quotes are always with-in or ahead of the requested due dates.”

“Impressed by CNC’s commitment to address process and product controls. This goes a long way towards preventing quality issues.”

“CNC’s flexibility has helped us in a lot of tough situations.”

“I just wish I had more product that I could move to CNC.”

Thank you again to all of our many customers and we look forward to working with you again in 2011.

January 7th, 2011|Tags: Customer Feedback|

A frank discussion of the time value of Precision Machine Shops…

By: Steven Deam, Sr. – CNC Industries, Inc. Fort Wayne, Indiana

A few days ago a friend of mine from another job shop gave me a call. He wanted us to quote a simple job for them. Since we had not talked for a while, we did some catching up on each other’s families. After explaining Steve Jr’s role in CNC Industries as Vice President of Finance, I asked if he currently had any children in his company. He indicated that one of his sons worked in the business for a while, but then went to college and earned a MBA. I asked if his son planned to work in the business now. My friend laughed and said his son once told him “dad, you have the stupidest business I have seen.”

I was a little taken back and asked how his son meant that. He said his son explained it this way: The last time you hired a plumber, what did they charge? Probably $90 to $110.00 an hour. A copy machine repairman? Probably about the same. How about an electrician? About the same. A mechanic? Roughly the same…

Now, how about (U.S. based) web site developers? Maybe $150-$200.00 per hour. Sales consultants? About the same. And most of those companies have a relatively low capital investment compared to a job shop. The typical precision machine shop will have several million dollars worth of CNC equipment on their floor, will have a sizable investment in real estate, will provide good health insurance and benefit packages, will inventory large amounts of raw material (as well as finished goods), and then put large amounts of labor into the product. After all of that, they are lucky to make a shop rate of $60.00 per hour!

Unfortunately, I had to laugh at the situation too! I can remember that most precision machine shops made a shop rate of $60.00 to $100.00 an hour forty years ago! You might say, yes but the equipment today is much more efficient than it was forty years ago. That is very true. But that is an argument for why the hourly rate should have significantly increased. Due to amazing advance in CNC equipment, much more output is being produced in a given amount of time! Remember, I’m not talking about unit price, I’m referring to a shop’s hourly rate. With increased productivity the unit price will go decrease, but the hourly shop rate should increase.

Additionally the equipment of today is vastly more expensive than it was forty years ago. I recall purchasing our first CNC turning center in the early 80’s. It cost $80,000. At the time, you could purchase a dozen manually operated lathes for the same cost. Today it’s not uncommon to spend $100,000 to over a million dollars for a single CNC machine. Our Toyoda CNC horizontal machining center pictured below, represents an investment of over $500,000.

So, how can it be that after forty years of substantial inflation and almost unbelieveable advances in efficiency and productivity a modern CNC machine shop is still making about the same hourly rate? The answer lies in the fact that for the last twenty years or so U.S. based CNC machine shops have been forced into global competition from countries with extremely low wage rates.

Consider that in the United States the hourly wage for a first class machinist is $18.00 to $25.00 per hour. In China a first class machinist earns the Yuan (CNY) equivalent of $.90 to $1.30 per hour. Given that countries like China have the same equipment as U.S. shops and they have well educated people to program and operate the CNC machines, it’s very easy to see why it is literally impossible for U.S. shops to compete with “global” sources on a purely “shop-rate” basis. Additionally, most foreign countries have significantly lower real estate costs as well as substantially lower regulatory and benefit costs. In many cases the costs associated with operating a U.S. based shop may be 20 or 30 times as high!

As if the extremely low global labor rates aren’t enough, the cost of doing business in the U.S. has been steadily rising for small machine shops. The cost of health insurance, for example, has been skyrocketing. The cost of raw materials, utilities, capital equipment, wages, fuel, etc. has been rising. Small machine shops are being squeezed from every direction. This fact explains why so many small shops are simply fading away.

Where does all of this leave us – the small (U.S.) machine shop? Obviously it leaves us in a very challenging position. Global competition is the new norm. It’s not going away, so we must adapt to the situation. We have to understand the dynamics and find creative ways to stay in the game. In most cases, it means becoming ever more lean and productive. It means finding ways to operate on extremely thin margins. Unfortunately, it also means that many more U.S. Job Shops will be forced to close their doors!

At CNC Industries, we believe that we have taken the steps necessary to stay in the game. Even as shops all around the country are struggling for survival, we are thriving. We believe that along with all of these challenges comes opportunity. With careful planning and maximum use of Information Technology, we have positioned our company to take advantage of the opportunities that lie ahead!

In the final analysis it’s all about providing the best value. When a customer factors in the cost savings associated with:

> Dependable quality

> Dependable on-time deliveries

> Inventory reduction through Kanban, demand-flow manufacturing, on-site stocking service, etc.

> Rapid development of new parts

> World-class Information Management

> Outstanding customer service

we believe that CNC Industries is very competitive – even with global sources.

Despite all of the conditions and challenges that I have talked about, I am more optimistic about the future of CNC Industries now than I have been in many years.

December 1st, 2010|

CNC Industries produces a new brochure for 2010

By Steven Deam, Sr. – CNC Industries, Inc. Fort Wayne, Indiana

November 4, 2010 – – – –

CNC Industries has produced a new sales brochure for the company. The new brochure can be downloaded from

[here].

November 8th, 2010|

The Fort Wayne News-Sentinel prints Steve Sr’s opinion piece

By Steven Deam, Sr. – CNC Industries, Inc. Fort Wayne, Indiana September 16, 2010

– – – –

After writing an entry for the CNC Industries blog, I decided to submit my thoughts to our local newspaper.

You can read my guest Op-Ed piece in the Fort Wayne News Sentinel

[Here], or below…

– – – –

We can all enforce term limits at the ballot box on Election Day on Nov. 2

While reading our local Business Weekly newspaper, I ran across a syndicated article written by Douglas Holtz-Eakin and Michael Ramlet. Douglas Holtz-Eakin is currently the president of the American Action Forum. But it is his previous role as director of the Congressional Budget Office (CBO) that is most meaningful to me.

He begins the article with the statement “The new health care law is a threat to the health of small business. Its heavy dosage of mandates and penalties will be a financial burden, and the law is riddled with hidden barriers to stronger job growth.” That is quite a statement coming from a former director of the CBO.

Having been a small business owner in the precision machining sector for the last 40 years, I have personally seen all of the ups and downs of the manufacturing industry during that time. Even prior to the current wave of anti-business legislation it is no secret that America has been shedding manufacturing jobs at an alarming rate for the last 20 years or so.

Given the fact that America became the greatest nation in the world primarily because of manufacturing, it is amazing how tone deaf the career politicians are to cries for help from the private sector. The help we want isn’t any sort of bailout or assistance. We simply want government to get out of our way and let us do what we do best – grow our businesses and create jobs! Not only are the politicians not enacting policies that will help businesses of all types expand, they continue to pass legislation that will further cripple what’s left of our manufacturing base. Even CEO’s of major companies – who mostly supported President Obama – are now speaking out against the anti-business climate which his administration has created.

To site a few more points from the article… “Sadly, the new health care law is an assault on small business, beginning with the 3.8% Medicare tax on net investment income – a direct tax on many business owners.” “…the mandate will compete for scarce capital that might be used for hiring and expansion.” “The insult to these injuries is a draconian requirement that businesses submit Form 1099 paperwork to the Internal Revenue Service for every supplier from which they purchase more than $600 of goods each year.” Now what in the world does that requirement have to do with health care? Even the IRS admits that it will have little use for the information, yet it will add a costly burden onto every business.

I think most business people agree that health care needed reforming. The cost of health care has been spiraling out of control for years. We just don’t believe that the so-called Obama-Care is the best way to reform it. And, we certainly don’t believe that this new health care legislation is going to bring costs down. Instead, we believe the burden of paying for it will fall squarely on our backs! In fact, I would be willing to wager that any and all small business stimulus will be more than offest by higher health care costs and tax increases. So, while the politicians will tout small business stimulus as wonderful programs – as usual the overall-all net effect will be negative for small business.

At CNC Industries, we plan to continue to grow despite the never-ending hurdles placed in front of us. We have increased employment by more than 10% in just the last few months – with no thanks to any “stimulus” programs. Unfortunately, though, our politicians are making business growth much more challenging than it needs to be.

Many people use the current one party control of government as well as the career politicians as good examples of why we need term limits. We must remember that every two years we have the power to impose term limits with our votes! This fall promises to be a very anti-incumbent election.

If you are unhappy with the job your representatives have been doing, here’s what you can do: Get all of your friends to join you on November 2nd to tell them – Your Fired! On the other hand, if you are happy with your representatives let them know they are re-hired – at least for a few more years! Either way, please get out and vote. Our system is only as representative as we make it.

Then, let’s hope they correctly interpret our not-so-subtle message that they work for us!

September 16th, 2010|

The impact of health reform on small business

By: Steven Deam, Sr – CNC Industries, Inc.

While reading our local Business Weekly newspaper, I ran across a syndicated article written by Douglas Holtz-Eakin and Michael Ramlet. Douglas Holtz-Eakin is currently the president of the American Action Forum. But it is his previous role as director of the Congressional Budget Office (CBO) that is most meaningful to me.

He begins the article with the statement “The new health care law is a threat to the health of small business. Its heavy dosage of mandates and penalties will be a financial burden, and the law is riddled with hidden barriers to stronger job growth.” That is quite a statement coming from a former director of the CBO.

Having been a small business owner in the precision machining sector for the last 40 years, I have personally seen all of the ups and downs of the manufacturing industry during that time. Even prior to the current wave of anti-business legislation it is no secret that America has been shedding manufacturing jobs at an alarming rate for the last 20 years or so.

Given the fact that America became the greatest nation in the world primarily because of manufacturing, it is amazing how tone deaf the career politicians are to cries for help from the private sector. The help we want isn’t any sort of bailout or assistance. We simply want government to get out of our way and let us do what we do best – grow our businesses and create jobs! Not only are the politicians not enacting policies that will help businesses of all types expand, they continue to pass legislation that will further cripple what’s left of our manufacturing base. Even CEO’s of major companies – who mostly supported President Obama – are now speaking out against the anti-business climate which his administration has created.

To site a few more points from the article… “Sadly, the new health care law is an assault on small business, beginning with the 3.8% Medicare tax on net investment income – a direct tax on many business owners.” “…the mandate will compete for scarce capital that might be used for hiring and expansion.” “The insult to these injuries is a draconian requirement that businesses submit Form 1099 paperwork to the Internal Revenue Service for every supplier from which they purchase more than $600 of goods each year.” Now what in the world does that requirement have to do with health care? Even the IRS admits that it will have little use for the information, yet it will add a costly burden onto every business.

I think most business people agree that health care needed reforming. The cost of health care has been spiraling out of control for years. We just don’t believe that the so-called Obama-Care is the best way to reform it. And, we certainly don’t believe that this new health care legislation is going to bring costs down. Instead, we believe the burden of paying for it will fall squarely on our backs! In fact, I would be willing to wager that any and all small business stimulus will be more than offset by higher health care costs and tax increases. So, while the politicians will tout small business stimulus as wonderful programs – as usual the overall-all net effect will be negative for small business.

At CNC Industries, we plan to continue to grow despite the never-ending hurdles placed in front of us. We have increased employment by more than 10% in just the last few months – with no thanks to any “stimulus” programs. Unfortunately, though, our politicians are making business growth much more challenging than it needs to be.

Many people use the current one party control of government as well as the career politicians as good examples of why we need term limits. We must remember that every two years we have the power to impose term limits with our votes! This fall promises to be a very anti-incumbent election.

If you are unhappy with your representatives, on November 2nd get all of your friends to join you in telling them – Your Fired! Then, let’s hope they correctly interpret our not-so-subtle message that they work for us!

September 2nd, 2010|

Who Does America Trust? Small Business!

By: Steven Deam, Sr. – CNC Industries, Inc. Fort Wayne, Indiana

According to a recent article in the NFIB (National Federation of Small Business) “My Business” magazine, a recent Pew Research Center poll shows that when asked who they trust, 71% of respondents said small business. That contrasts with 25% for big business, 22% for banks, and 25% for the Federal Government.

Given that small businesses account for over 70% of new job creation, it seems that rather than burden small business with even more paperwork and costs the government would be more interested in creating a business-friendly environment. Unfortunately, at CNC Industries we have seen no indication whatsoever that the government is trying to actually help small businesses grow and, in turn, expand employment. All indications are that the cost of doing business will continue to rise – which is precisely why businesses of all size are very reluctant to hire.

The politicians seem unable to understand that it requires a demand for our products and services along with the ability to generate a profit in order for business expansion and job creation to occur. Possibly if more of the politicians had a business background and had actually run a small business they might be able to understand these relatively simple principles. The threat of Cap & Trade, Card Check, and substantial tax increases – in addition to a host of new regulations and requirements recently put in place are putting a huge damper on business expansion.

At CNC Industries we are continuing to expand – despite the bloated government bureaucracy which works against us. It would just be so nice if, for a change, our government would work with small business. Unfortunately, I don’t see that in the cards!

August 30th, 2010|Tags: America, Small Business, Trust|

CNC Industries Certified to AS9100 Rev C

By Steven R Deam – CNC Industries, Inc. Fort Wayne, Indiana

CNC Industries Completes AS9100 Rev C Certification

Fort Wayne, IN 8/12/2010

For Immediate Release

Date: Thursday, August 12, 2010

Contact: Steven R Deam

CNC Industries

Fort Wayne, IN

260.490.5700

Email: stevendeam@cncind.com

Fort Wayne, IN-CNC Industries is pleased to announce that they have successfully completed their AS9100 registration effective on July 31, 2010. CNC Industries had previously been certified to the ISO9001:2008 standard – the AS9100 certification is recognized as including all aspects of the ISO 9001 certification as well. SGS served as the registrar and auditor for CNC Industries.

CNC Industries, established in 1995, specializes in precision machining, milling, turning, and assembly of custom parts for the aerospace and defense industries. The company uses the latest machinery as well as custom written ERP software to facilitate high levels of quality demanded by their customers. CNC Industries has a 35,000 square foot facility on the north side of Fort Wayne, IN.

AS9100 certification is an international standard for quality and management systems for the Aircraft, Space and Defense Industries. CNC Industries’ Vice President of operations, Dustin Kimbrell, has said “The implementation of AS9100 standards throughout the company has helped to make us a successful supplier to many aircraft and defense contractors. We are better able to serve our customers needs and expectations through our internal processes and systems at this point than we have ever been. We have become the premier supplier for many of our customers, and the AS9100 certification is another indication of our commitment to always uphold a superior level of quality throughout our production processes.”

By becoming AS9100 certified CNC Industries joins a small group of companies that demonstrate their superior quality management systems. In Fort Wayne, only 7 companies are AS9100 certified – of which only 3 of these companies are local businesses. CNC Industries is the only precision machine shop in Fort Wayne to become AS9100 certified. In all of Indiana only slightly over 100 companies have managed to become certified to the full AS9100 level.

CNC Industries attributes much of its success in obtaining the AS9100 certification to its’ internal ERP system called Job Manager. Steven Deam Jr, the IT Administrator at CNC comments, “The ability to adapt our software systems to the higher standards of AS9100 regulations has allowed us to adjust our processes to the increased demands placed upon us by increasingly complex parts and orders. Our customers expect high levels of quality and service. With Job Manager we are able to meet their stringent quality and service requirements while additionally offering them better overall pricing”.

For more information regarding CNC Industries Inc., please refer to the company web site: http://www.cncind.com or call 260.490.5700 begin_of_the_skype_highlighting 260.490.5700 end_of_the_skype_highlighting.

For additional information about SGS visit .

August 12th, 2010|

CNC Industries’ Stimulus Sign – One Year Later

By Steven Deam, Sr. – CNC Industries, Inc. Fort Wayne, Indiana

August 7, 2010

– – – –

One year ago I place a banner in front of our company that expressed my frustration over the $787 billion dollar “American Recovery and Reinvestment Act of 2009”. It was my belief that the so-called “stimulus bill” would do very little to “stimulate” the economy. Why? Because I thought it was very much misdirected.

The stimulus bill was touted as being used for mostly “shovel ready projects”. Even on the surface of it that didn’t make much sense to me. Since we were in the grip of a very broad-based recession, which was impacting almost all professions, what was everyone supposed to do – become construction workers? What about all the people in a wide variety of other professions who found themselves unemployed? How was the much touted ARRA going to help them?

Now, a year later, we know the answer…. the Recovery Act was a big failure. Not only did it not bring unemployment down and stimulate the economy, the opposite has happened. Is the country any better off today than it was a year ago? I suppose a few segments of the population might say yes it is. But I venture to say that the vast majority of people believe we are much worse off, for a number of very important reasons. And what do we have to show for the hundreds of billions of dollars in TARP, ARRA, and all of the other spending? Nothing but an astronomical debt! And now, at the mid-term elections they expect us to re-elect them??

During a recent trip my wife and I saw at least a half dozen signs saying: “This project was paid for by the American Recovery and Reinvestment Act of 2009”. I guess my wife and I think differently than our esteemed politicians do. Instead of making us feel good about all of the money that was spent, those signs were nothing more than a reminder to us of how wasteful our government is. Let’s at least hope that some privately owned sign shops have been stimulated by all of the signage business. I hear the signs were very expensive!

– – – –

August 7th, 2010|

CNC Industries is AS9100 Certified.

We will be issuing a press release about this early next week, but we are now fully certified to AS9100 B. The official certificate and press kit came in the mail today, and we were placed in the OASIS online database of certified suppliers earlier in the week. Overall the auditing to certification process was relatively painless, for a four day audit at least.

We have researched the AS9100 certification statistics a little bit:

In Fort Wayne there are only 8 AS9100 certified companies, including CNC Industries. CNC Industries is the only precision machine shop in Fort Wayne to receive an AS9100 certification. Likewise we are the only custom machine shop certified in Fort Wayne as well.

In Indiana there are now 112 companies certified to AS9100. The vast majority are service or assembly houses. We have not looked at all of the certifications, but our estimation is that we are one of only 10 or so machine shops to be certified to AS9100.

In the United States there are 5725 total companies certified. assuming the same approximate ratio of machine shops, I would assume that we are one of 575 machine shops in the country with the AS9100 certification. This puts us in a very elite class of machine shops, one that we are proud to be a member of.

The full press release will be issued early next week.

August 6th, 2010|