How to build your machine shop network through an RFI
Machine shops are a small but vital part of a complex manufacturing and supply chain ecosystem. According to First Research, there are 20,000 U.S. based machine shops with a combined annual revenue of about $40 billion. These small to large shops can provide a variety of precision machining services, ranging from drilling; boring (enlarging an existing hole); tapping (cutting threads inside a drilled hole); threading (cutting threads on a bolt); cutting; milling (removing material from a surface); and grinding (usually a finishing operation).
A Google search for online machine shops can return over 2 billion results. Finding good partners is akin to finding a needle in a haystack. Even if you use manufacturing database platforms like mfg.com or thomasnet, you’re still facing a huge list of vendors.
A Request for Information (RFI) is used to collect information from a supplier or vendor with no commitment to engage in any particular project. RFIs are most useful since you’re facing a wide range of small precision machining shops, with similar capabilities. David Hulsen, a procurement guru, describes the RFI as a “casual first date in vendor management.” An RFI can help you determine precision machining capabilities ahead of crunch time and allow for a quick shortlist when you need to outsource custom projects. Here are some best practices when you need to search for new machine shop partners.
1. Let vendors know you're issuing the RFI to build an internal partner database
The RFI process, while slightly tedious, can help you assess the landscape, while evaluating potential outsourcing opportunities. You can do this without a specific drawing in hand because you're specifying that your goal is to make a connection first and gather information before any type of RFQ.
Then, when your drawing is ready or even when it’s not, but you just need some quick assessment of costs, you already have the information you need to determine which suppliers should receive an RFP or RFQ.
2. Your RFI should be no longer than 3-5 pages and should include the following:
- Table of contents
- Introduction and purpose of the RFI
- Scope and logistical questions:
- Types of skills and available technicians
- Type of order the precision machine shop manages well, e.g. low volume versus high volume. A related question is around minimum order quantity (MOQ).
- Size and location of facility
- Certifications and standards
- Details of next steps - RFP or RFQ, if any
3. Provide basic information about your business goals and needs. Along with your questions for the machine shop, you should also provide some information in return. For example, briefly describe your company’s focus and the types of operations you need to outsource. Machine shops might also come back with some questions, so it’s good practice to have standard answers to these types of questions so that you can give all the machine shops consistent information.
- How did you find us?
- Why did you decide to include us in the process?
- How many other vendors are in the process?
- Do you have examples of how you would like RFI responses to be formatted?
- Can you give me some context on your priorities for the next 6 months?
4. Be as specific as possible and have a structured format so that you can easily compare shop attributes later on.
5. Be considerate of the machine shop’s time and resources. As long as the questions and request for information are fast and easy, machine shops should be able to respond within 1-2 weeks.
6. Do not request pricing information. Rates and project scope are subject to change and you can always negotiate later on. Accurate quotes are more likely where there is a specific drawing and Request for Quote (RFQ).
After you've developed a database of precision machining shops, you might want the RFQ process to be structured as well. Again, you're going the extra mile so that you get the best quality and prices possible. Here are some of the key differences between an RFI and RFQ:
Want to learn more about the RFQ process and how to identify the right machine shop partner? Click below.