Are they that low on work?
I have no idea. What I do know is that for a business to perform x task at a certain volume they sometimes need a specific machine and someone to operate it. That machine is VERY expensive. Operators arent cheap if you want them to stick around. So in order to make the investment work, you have to keep that machine in use at all times, and you have to provide reliable work for the operator—you basically need a full business plan for that one machine, because you cant just put the machine in a corner and break it out every couple weeks when you need to perform this one task. Additionally, if you lay off a skilled machinist during a slow time of year (say, for example, when you cant get actions to do builds with because they are only available to order at one time of year and you ran out or couldnt afford to buy a full year of inventory all at once), well that machinist is likely to find employment somewhere more consistent because they have kids that need feeding year-round, and probably wont be available when you need them again. Maybe you could farm it out, but then thats likely subject to long lead times and availability as well. BUT, if you have 3 or 4 projects that all use that same machine and operator that allow you to better manage your inventory through the year, as well as better manage your cash flow, then it could make a lot of sense from a lot of perspectives to make that investment and do those extra projects, because it adds a layer of control (aka security and reliability) to your whole business.
The calculus looks like: “we cant get enough of this component on time, the supplier isnt able or willing to make a change, and its preventing us from growing. We can produce the component, but only if we can buy $$$ tooling, etc, which financially requires making more than just the one component. But we can also do these three other things with it, and together they make the investment worthwhile. Therefore by adding those FOUR projects, we can add to our offering in a way that is financially responsible, and also eliminates a bottleneck to the growth of our existing business.”
Thats all. Again, I have no inside knowledge and I have no idea if this is in play at all, it’s simply something that I have seen a number of times in small businesses, and only meant to add it to the conversation because people are focusing so much on their personal decision of buying a Tikka versus a different action. I’m only suggesting that there’s potentially more to it than only that.
