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Custom Metal Fabrication Personnel Series Part 1: Forecasting Labor Needs

When discussing labor in metal fabrication, both direct and indirect, accurately forecasting the need for personnel is admittedly tricky. Estimators must make reasonably close guesses of the time required for tasks within specific departments. Automation, investments in capital equipment and outsourcing to contract manufacturers all muddy the waters when attempting to forecast labor needs as an original equipment manufacturer (OEM). Better forecasting product demand, and perhaps getting a little help from a contract manufacturing partner, could be in the cards.

Automation vs. Personnel in Custom Metal FabricationCustom-Metal-Fabrication-Personnel-Series-Part1-Forecasting-Labor-Need-small (1).jpg 

By all accounts automation is the way of the future, just as it is now the way of the present. Still, the competitive fight between labor and machines doesn’t and shouldn’t always go the machine’s way by default. As an OEM, does it really matter if you’re relying on slightly less labor if you’re not shipping out parts at a faster rate? Your revenue derives from shipping and selling parts. Understanding where a lack of labor is hurting your throughput is as important as finding ways automation can do the same.  

Your Forecast Makes or Breaks You 

Being acutely aware of the demand of your product in the market can help you project your annual labor needs. Forecasting demand isn’t a one-and-done ordeal, and must be reviewed consistently in order to analyze trends and spot spikes or dips. The last thing you want as a manufacturer is an overwhelming surplus of inventory and labor. The more accurately you can predict the amount of throughput required, especially months in advance, the more effectively optimized your labor force will be. This is among the top manufacturing struggles in OEM manufacturing. 

What Contract Metal Fabrication Brings to the Table 

Success in OEM manufacturing is obviously more involved than reducing labor overhead. Even so, OEMs will eventually be measured by the parts they ship and sell to clients. With this in mind, diverting labor investments to the assembly and shipment of parts could be the ticket to higher return on investment. A contract metal fabricator, meanwhile, can take the burden off the OEM for tasks at the front of the supply chain. This would include inventory management and, of course, the management and investment in labor.

OEM Struggles