Old 08-31-2018, 07:10 AM
  #20  
Macybaby
Super Member
 
Macybaby's Avatar
 
Join Date: Jul 2013
Location: South Dakota
Posts: 8,138
Default

the days of manufacturer making their own parts is pretty much a thing of the past. They hire a machine shop to make them an order. The machine shop tools up to make them based on the spec, and the first part may cost $1,000 or more, and then the cost goes way down as more parts are made. When the Manufacturer uses them up, they'd have to pay for the setup fee again and with a smaller "parts" order, the cost per part is going to be much higher. With advances in technology, it is getting cheaper to retool to make different parts, but the initial outlay for equipment is still high. We are seeing shops being able to be cost effective on smaller jobs (like 10,000 instead of having to order 100,000 of one item). But these shops may have more work than they can handle, so they will accept those they can make the larger profit on, which are normally larger jobs.

if you need a part for an old machine and are willing to pay, you may be able to get a small shop to tool up and make you one. Most people feel it's more cost effective to buy a new machine.

there is nothing wrong with a business doing what is most profitable for them given the resources they have. If they did not do that, their investors would take their investment capital somewhere else. All of us with pensions and 401Ks do not want to see our invested funds losing value, and we will move our funds to areas with more growth than those that are stagnating.
Macybaby is offline