The future of the medium-sized metal fabricator

Garry Griggs, CEO of Magic Metals, a custom fabricator based in Union Gap, Wash., launched his shop in the mid-1980s, and has seen customer demands and inventory requirements ramp up over the years. “We have one customer that we ship about 15,000 parts a day to on a just-in-time basis, and we don’t know what we’re to ship them until the night before.”

Magic Metals has 160 employees and made $25 million in 2013, and Griggs said he has been touring vendor showrooms on the lookout for new, capacity-building equipment. He has a positive outlook for his company and for manufacturing overall. He added, however, that modern manufacturing demands may change the metal fabrication landscape.

“Small mom-and-pop shops will always have the business,” he said. “It’s not hard to keep them busy. And we’re big enough that if somebody throws a large opportunity at us, we’ve got the capital and wherewithal to gear up for it.”

As for the medium-sized fabrication business, he’s not so sure. They may be too large to survive as a small job shop, yet too small to afford all the automated equipment you need to compete in the contract fabrication arena. “It’s going to be tough if they’re not fast enough.”

Of course, how you define a small, medium, and large shop depends on the local market and sectors a shop serves. But considering customer demands, Griggs observations make some sense. Large OEMs have put more inventory demands on the contract fabricator. Meanwhile, myriad small companies still call to the mom-and-pop to produce one of this, a dozen of that, and perhaps eventually a few thousand of this and that.

But what about the shops in the middle? As Griggs said, it’s about quick response. If a fabricator reduces its lead-times through lean techniques and technology, it can act big, no matter its size.