That makes good sense. The question I have is why does it take 6 months even with an order in hand? Is it because of the uncertainty in overall demand preventing you from wanting to invest the capital to increase capacity? A lack of availability of good personnel? Raw material supply? Something else entirely? It seems to be a common state throughout the industry, so I assume there is a good reason. And these demand spikes driven by politicians can't help.
The demand in the spike with all the gun stuff hasn't effected us a ton but it has effected us some what. With that being said we're just flat out busy due to the demand for the product.
Personnel/training is one. You don't just hire someone for what we do and expect them to turn stuff out the next day.
Raw material supply can factor in. Average lead times on steel is around 4-5 months. We try and stay ahead with demand in case of unforeseen needs by our customers etc...
Can we build more riflers and add more machines. The answer is yes. To get a rifler on line from scratch we're looking at about 4-6 months. Can we buy another lathe for turning? Sure! Figure in a lead time to order the machine (lets just say it's 4 weeks). When it gets here you have to have a spot ready for it, get an electrician here to wire it up for power, get tooling....., get the steady rest set up properly etc...your looking around 8 weeks before it's online. Now you still have to have someone hired etc...to run it and your back to training etc...sometimes this stuff is easier said then done. One change in the can lead to other bottle necks you have to take care of as well. So you can turn more barrels but do you have enough machine time in the rifling department to handle the extra turned barrels that are going to be coming thru? If not you have another problem to deal with.
I'm back to the biggest factor you have to consider....demand and orders coming in that we cannot predict.......not to long ago I talked to a customer who had questions and wanted to order one barrel. No big deal. Went over everything with him (this was like on a Tuesday) he still had some decisions to make but he asked my a lead time. I told him 4-6 moths at the time. So he hangs up the phone. In the next two days Brian and I took enough orders for 6-8 weeks worth of work. The guy calls back on Friday and says he's ready to order. I said hold the phone a minute just so you know our lead times are no shorter than 6 months and could be around 8 months or longer. The guy blew a gasket on my on the phone. Again we took enough orders in two days for almost 2 months worth of work.
A manufacturer is also very cautious about adding equipment (capital expenditures) hiring people unless they know the work is going to be consistent/be there to support the additional people and machines they are going to put on line. A spike in business doesn't always mean you jump on and order machines and hire workers right away.
You have the whole trickle down effect going on also. We have steel here, we have steel on order/scheduled etc...we cannot just cut our lead times to say 8 weeks with out having a problem like effecting our steel deliveries. I cannot always call the steel mill up and say hey can bump up the orders and I need the next batch in 8 weeks. It doesn't always work that easy.
Also when you place an order there are already X amount of orders in house. It's basically first come/first served.
Places like GAP, AI, our Gov't etc...sometimes before even the end of the year they are giving us a schedule for deliveries for the whole next year. Also factor in the customer who wants one here or there and new customers that we get. Again we just don't know what the next phone call is going to be.
We don't have that crystal ball. If I did I could work at any company in the world and name/dictate what I want for a wage!
Later, Frank
Bartlein Barrels
