Welding Company Perspective on Vetting Factors.

Written by admin, 14 May 2021

Welding company makes money on simple welding projects

As interesting as certain client’s projects can be, the ordinary welding company looks through a different magnified glass on them. The client’s headaches are client’s headaches. And as long as a welding company does not accept the project these project’s headaches stay with the client. Once the company accepts the project then client passes its project’s headaches on welding company’s management. Therefore, the welding company’s management must feel comfortable with accepting the client’s headaches upon themselves for a quoted price.  

The welding company sees the welding project as a series of challenges/vetting factors that have to be managed in order to get paid. Therefore, sometimes the welding company choses the easy road. They accept projects that contain relatively less challenges. This is the road of easy money with relatively assured small profits. Unfortunately, such position will sooner or later cause a severe decline of company’s market share and associated decline of sales. Soon, your competition will figure it out and will start to follow you and your sales will start declining.

The growth of welding company is in accepting more challenging projects.

In order to grow, welding company must accept more and more challenging projects. This is how any company establishes its reputation and how it establishes its market share. Therefore, sooner or later the management of a welding company must figure out how to eliminate the vetting factors. They have to figure out how to transform project challenges into opportunities.

As catchy as it sounds this is exactly how it is. The opportunity to do challenging and more profitable welding projects using more advanced welding technology will lead the welding company into the future. The management should seek new welding technology that offers flexibility of use in many different projects. And probably approach very cautiously new welding technologies that offer no flexibility and is useful in relatively few projects.

The welding company should monitor the projects they did not get to develop a list of challenges to overcome. Then they should seek the welding technologies to overcome these challenges. Also, some reward and investment calculations could point into area of welding technologies that could provide a new area of specialization for the welding company.

These areas of interest could focus on improvement of weld characteristics and ability to weld new materials and alloys. Increasing the variety of welding consumables opens the door to more flexible and more resistant welds that can sustain more severe environment. Ingenuity in machine designs can lead to development of products demanded by more industrial or commercial customers.

Project’s specific welding requirements could pose challenges to a welding company.

Project’s welding requirements could present challenges to the welding company. Consequently the welding company could find itself lacking the proper welding machine or a trained welder to do this project.

Such specific project’s requirements could involve

  1. unusual joint preparation
  2. use of chemically resistant welding consumables
  3. flexible welds
  4. abrasion resisted welds, or even
  5. vibration resistant welds

Although, penetration usually does not cause any troubles to most welding companies, the unusual thickness of material welded could pose a problem. The combination of specific consumable alloy with joint preparation and thickness of material or its shape could prove to be a vetting factor for small welding company.

Management can mitigate these vetting factors through increased welding knowledge and purchase of relatively inexpensive auxiliary equipment. The welding machines owned by the welding company should be pushed to their maximum operational capacity prior purchasing new and more advanced units. The more advanced welding consumables provide easily accessible competitive advantage in industrial and commercial environments. These advanced welding consumables provide resistance to mechanical stresses and chemical degradation. Once again, the flexible approach to variety of projects should help in welding company’s development

New materials increase the cost of welding service.

The unusual materials used in a project could cause major problems for any welding company. In fact, most welding companies specialize in one material only. For instance, most welding companies in construction industry are certified to produce quality welds in mild steel. The welding of structural aluminum or stainless-steel structures will cause the need of their employees to be train in different procedures. And possibly the need to purchase more modern welding equipment. This is additional cost that company has to manage if it wants to move into a new direction.

Aside of traditional certifications that cost a lot and have to be renewed periodically, the new metal would possibly require new certification for the whole crew. Moreover, the welding company’s management could be forced to become aware of new welding technology limitations and how to avoid them. Such increased awareness could lead to purchases of additional peripheral equipment. This peripheral equipment will increase welders’ efficiency and allows them to avoid common pitfalls. And, again this could be perceived as never-ending cost increase.

The new welding materials increase temporary cost of doing business. But, welding and/or fabricating from multiple materials allows to create competitive advantage over your competition. A proper marketing strategy will create the clients’ awareness that the company is slowly building a new specialization. Therefore, welding company’s effort should be focus on cashing in on each movement into the new direction.

Difficult access – the macro and micro perspective

Difficult access complicates the project. The difficult access could involve remote location, confined space, or welding on high elevations. Reaching the project in remote areas can become success by itself. Then welding company must deal with welding equipment’s fumes monitoring as well as quality of air in the confined spaces. This means hiring a safety subcontractor or cost of training own crew.

Welding on high elevations could also push the welding companies to uncomfortable zone. Management could become uncomfortable dealing with heavy welding machines placement on top floors of apartment buildings. They could become uncomfortable placing their welding equipment on top of industrial stacks too. These machines can be damaged due to improper rigging and during the landing on the spot due to very limited space. Many welding companies will think twice before attempting to move their expensive welding machines to high elevation.

Welding company should systematically work on replacing old welding machines with new ones. Their effort should also include increase the number of more advanced or specialized welding machines. The easy modifications of older machines can focus on specialization areas.

Additionally, looking from the micro perspective

  1. limited space for welder’s hands,
  2. limited visual access, and
  3. inability to use certain tools

can make the difference between a profitable project and the hell on earth. As true as it is, the modern auxiliary equipment eliminates many of these obstacles. The modern auxiliary equipment makes the working environment relatively comfortable for the welder.

T&M for high risk factor projects – mitigates risk for welding company

It is a common knowledge that quoting a project is an art that also involves a risk factor. The risk factor increases the quoted price. Risky and difficult projects usually carry a high price tags. Therefore sometimes making a project Time And Material is a better solution for welding company and for their client. Obviously, certain agreement’s clauses must protect the client against the non-performance. Generally speaking, however the efficiency achieved is much higher for high-risk welding projects involving T&M. This also allows to maintain a high quality of workmanship throughout the project.

T&M projects are not as profitable as quoted ones and welders have to sweat for their money. However, a proper strategy of T&M projects can develop your marketing niche at relatively low risk. Once the welding company will become more comfortable with the niche specialization, it can withdrawal from T& M projects and it can be tempted to quote these projects.

Involvement of too many subcontractors – increases the risk for a welding company

Projects impacting welding company’s limitations force the company to subcontract certain tasks. Welding company usually subcontracts machining, bending, drilling, heat treatment, and painting etc.. Obviously, a welding company with years on the market behind the belt is well connected to multiple suppliers. They know what to expect from each of them. However, in case of custom services the risk of inaccuracies and mistakes will increase their cost of possible corrections. Then the whole project can become the chain of headaches that will limit project’s profitability. Management of project’s critical path efficiently could become very difficult. Therefore, welding company should perform most tasks in house even if they reduce profitability.

Developing of good relationship with your suppliers is paramount in welding business. One way to do it is to start paying them much sooner than they expect. The suppliers will reward you with less mistakes and more accurate service. Moreover, occasional increase of payment for custom work makes the relationship with your supplier magical. Next time when facing the challenges, you can relay on your suppliers support even more. They know they will be paid accordingly. 

Partnering up for challenging projects

Partnering up for challenging project is an option to reduce the risk associated with more advanced welding processes. Obviously, it is better to partner up with a full service company that can offer mobile welding, portable welding and fabrication in a welding shop. JW Portable Welding & Repairs welcomes inquiries for partnering up in more complicated welding projects. You can contact us through contact page. Alternatively, you can contact owner on LinkedIn. You can also contact us through messages on Google profile. We are welcoming comments to our posts. We will promptly engage in conversation with you regarding any post on the website.

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