By Lloyd Graff
DuPage Machine Products President, Dave Knuepfer
Dave, do you consider DuPage Machine Products a job shop?
We’re still a traditional job shop. We run 5,000 and 500,000 pieces, but we’re not always profitable doing that. I have thought about changing the mix, and we’ve gotten more into dedicated and longer runs, but we’re still dealing with shorter runs, and I don’t think we make money on those jobs. I know you want to know about the economics of buying an Index. Why would somebody spend $1.4 million on an Index machine? The way I see it, at least for my survival, it is the only way we can survive as DuPage. We must get into a niche, and that is not doing commercial work.
How do you define commercial work?
I consider commercial work hardware-type parts, home appliance, plumbing; not the techy stuff that you’re grinding and lapping and honing. I think hardware will be gone from this country, certainly in our lifetime. We had several million dollars worth of commercial work in fire suppression systems for restaurants, which we ran for years. It was a couple of nuts with different types of washers on them – Screw Machine 101. The customer came to us 3 or 4 years ago and said, “We’re going to go to China with this thing.” At one time, we shipped 100,000 of these into one of their 15 warehouses throughout the country. We said, “Listen, we will add some value. Rather than ship 100,000 of these for you to assemble, we will assemble, package them in your bag and identify the part number, and when the Denver warehouse needs 15, we will send them 15.” Out of sight, out of mind. That bought us about 2 or 3 more years; it finished last year. $2 million worth of business they could buy delivered here for about $1 million. They would have been foolish not to shift. I don’t think there is any future for that type of work in this country unless you’re interested in just getting along and not making a reasonable rate of return on your investment.
You’ve chosen high-volume, high-precision.
It’s not all high volume to begin with. We hope it matures into that, but it is certainly high-precision. That’s how you afford an Index. We went with the Index for two reasons; one was to get that high-volume, high-precision dedicated part; and the other was to run a family of parts. We run a family of hydraulic cages, and these parts run anywhere from 500 pieces to maybe 7,000 to 10,000 pieces a week per part. Our biggest problem was the big run that ran 10,000 pieces a week. We were running 50,000 pieces and couldn’t get to the next job because we had all this production time, and everything was waiting in the queue before we ran the 50,000 pieces off. With the Index we can run 10,000 pieces or 2,500 pieces, switch over to a similar part where we run the same size stock, and it reduces our inventory. But more importantly, it reduces that queue time, where we couldn’t get to the next job because the machine was tied up with a job and we couldn’t ship for 4 or 6 weeks.
