The RFQ Tidal Wave Coming for Manufacturers

Over the last few years, there has been a consistent, and effective, effort to revitalise manufacturing. The result is an increase in work and RFQs, but some manufacturers are struggling to keep up. So why is this happening, and how can you keep your shop ahead of the RFQ Tidal Wave?

Where is this coming from?

Efforts to incentivise reshoring are driving more companies to bring their work home, increasing the number of jobs and RFQs in every state. While reshoring is having an impact, it can take a while for the effects to trickle down to machine shops, so what else is driving the RFQ tidal wave?

Manufacturing-friendly legislation like the CHIPS and Science Act of 2022 has invigorated the semiconductor industry, with companies taking advantage of grants and tax breaks. This has resulted in an influx of new work, but only for specialised shops.

The growing skills gap has also contributed to a tidal wave for RFQs. With older workers retiring from the industry and a lack of younger manufacturers taking over, it doesn’t take much for machine shops to become overwhelmed.

An increase in the private space sector has also led to an increase of RFQs. What is essentially a new industry has taken off in the last few years, and now a vast range of companies are requesting large quantities of aerospace parts.

So what do we do?

An increase in RFQs present an opportunity to increase profit margins and grow, but there is also a risk of developing a bad reputation. Sometimes, in order to avoid becoming overwhelmed, you have to turn down work. Knowing when to turn down work will free up some of your time, and prevent you from over-promising and under-delivering.

Turning down the work can be a chance to build a strategic relationship with your colleagues and customers. Instead of just turning people away, send the work to someone else that you trust will do a good job. This will help you build up a community of manufacturers, and the customer may return to you for another job in the future.

You can also outsource your overflow, which also connects you to your wider community while simultaneously freeing up some of your time. However, outsourcing overflow can raise your costs for the job, so pricing correctly is paramount.

Pricing is an important strategic concern. If you’re turning down work or outsourcing, then it’s important to ensure the work you take on will cover costs. Using an automatic quoting and estimating software can help you ensure your work will always cover costs. AMFG’s instant quoting portal runs on a tailored pricing engine to ensure that your shop’s margins and requirements are always accounted for correctly when sending out quotes. It also responds to RFQs automatically, and within seconds, freeing up workers time so they can spend less time estimating, and more time machining.

Freeing up time is also a major benefit of hiring interns or engaging in education schemes. This can be a great way of bringing on more workers temporarily, especially if your workflow is seasonal or fluctuates regularly. And, if all goes well, you may have a future employee you know you can trust.

And finally, if all else fails, try and work with your customers to arrange a realistic timeline for the jobs that satisfies both parties. This needs to be balanced with responding quickly to a quote, but if your competitive advantage is low pricing, they won’t mind waiting a little longer for a better price. And vice versa, if they come to you for the quickest turnaround time, they won’t mind paying slightly more.

Being flexible in your offerings and approach is ultimately the best strategy, for some shops a combination of internships, turning down work, and automation software may work best, while others may find that outsourcing and negotiation achieve the best results.

About AMFG

AMFG works with high-mix, low-volume manufacturers across the globe to streamline their operations with our cutting-edge software platform. Our scalable tools automate multiple stages of the manufacturing operations, providing automatic quoting, reducing human error, and cutting down on monotonous admin work, while maintaining the highest level of data security. We enable high-value manufacturers to adapt to complex demand with efficiency and precision, securing their place at the forefront of the manufacturing industry.

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For more information, please visit www.amfg.ai or contact: press@amfg.ai