What’s the Best Way to Purchase Precision Machined Parts?
There are several different ways to approach purchasing parts from a precision machine shop.
Standalone purchase orders (POs) are the default option for many customers—and most shops are always happy to get a PO. A simple PO is sufficient if you occasionally need low volumes of parts or have a straightforward repair for which you have the drawings.
But depending on your part requirements, you could save time and money with another purchasing method that mutually benefits both you and your precision machining partner.
How Should I Purchase My Parts Based on My Needs?
Here are four alternatives to a PO and when to use them:
1. An online solution
If you need one part made and don’t want to enlist a precision machine shop, you might consider working with an online manufacturing broker that uses algorithms to price components.
We typically caution customers against using online manufacturing brokers over trusted contract manufacturers because there’s very little visibility into the precision machining process when buying parts online. However, the “click and ship” model can be useful if you’re only requesting one part that you won’t have to make again and the end result is not critical to your operation.
2. Time and materials contract
If you need a part faster than the time it will take to generate a quote, or if you have a repair that requires reverse engineering, a time and materials contract is the ideal purchasing option.
With a time and materials contract, manufacturers add up the cost of labor and materials at the end of the project rather than providing an upfront price.
Customers are sometimes nervous about having their parts made without knowing the final cost, but we promise a fair price at our machine shop in Georgia regardless of how you order your parts.
We calculate track instead of calculate labor hours down to the minute, and when parts take longer than usual, we never pass the extra labor costs on to our customers. We can often machine parts more quickly than we can quote them, and quotes build in risks that drive up the price.
When you get a time and materials contract, you’ll definitely save time, and you will likely save money.
3. Blanket order
If you buy many of the same parts regularly, a blanket order is a great way to optimize costs and lead times.
When we receive a blanket order from a customer, they’ve outlined how much they’ll need of one part for the whole year and when we need to deliver each order. We have the opportunity to purchase raw materials in bulk and get better pricing—savings we pass on to the customer.
With the materials on hand, we can easily accommodate tight deadlines for each run. We’ll also take advantage of open capacity on our shop floor—if a machine that we need for the part is free, we can pull the material from our shelves and begin running the part sooner than anticipated.
Blanket orders are mutually beneficial for precision machine shops and customers. We highly recommend setting one up if you consistently need the same parts throughout the year.
4. Long-term agreement
Do you buy many different parts per year and want the best possible discount? A long-term agreement (LTA) will best suit your needs. An LTA is similar to a blanket order, but it’s a more formal contract. Typically, an LTA encompasses multiple blanket orders for various parts.
Because the customer commits to spending a large sum throughout the year, the precision machine shop may be able to offer discounted pricing. LTAs offer fixed prices throughout the year, saving the customer money and ensuring pricing consistency.
At Arbiser Machine, we want to help our customers have the best experience possible. When customers understand the various purchasing options available to them, they can make the right choice for their needs. If you want to work with a precision machine shop that puts your needs first, request a quote today!