3 ms·

>Ex-workers said the automated method was supposed to increase the yield well above the traditional toolmaking process, in which more than half of a billet’s st

>Ex-workers said the automated method was supposed to increase the yield well above the traditional toolmaking process, in which more than half of a billet’s steel is trimmed away. So, in chasing the pennies lost in material cost of the billet steel, they threw away a billion dollar investment. That material could be sold as scrap, or recycled and reused. The whole point of the forging process is to orient the grain structure of the steel to maximize strength in the desired places. It seems obvious that you're going to have to trim some material to make this happen. I've seen scrap recycled and sold in a job shop, with the volume that comes with mass production, they could probably get a far closer payback for their scrap to the original costs. This whole thing seems more like management failure, rather than anything intrinsic to the labor or US market conditions. Had they started with a goal of turning out quality tools, then working towards production increases and cost reductions after that point, it might have worked out. The chasing of the next quarter's profit seems to always be the wild goose chase that results in failure.

mindslight 3y ago
It's even worse than that. According to the article, the sockets were basically alright, perhaps with some QC issues. They could have paused the automated line for the ratchets, ramped up hand production of them using the knowledge from their existing facility in the same region, and been selling sets that were mostly produced by automation. Instead they just threw the whole thing away? I've got to wonder how much the problem is due to consolidation (see: infamous toolguyd picture of power tool brands). If there were a healthy market of competing independent companies, when SBD executives couldn't figure out how to get it up, another company would have bought the complete factory and made it work. I find it amazing that so much VC money is (was?) slushing around trying moonshot ideas like littering sidewalks with e-scooters and hoping loose change falls into them, but there is no motivation to start new companies doing traditional things in stagnant markets. I mean a "$90M factory" is like a tenth of one Instagram [0] ? I guess it's just not exciting enough. [0] an old arcane unit of a currency that has since become obsolete due to its small size

mindslight 3y ago

It's even worse than that. According to the article, the sockets were basically alright, perhaps with some QC issues. They could have paused the automated line for the ratchets, ramped up hand production of them using the knowledge from their existing facility in the same region, and been selling sets that were mostly produced by automation. Instead they just threw the whole thing away? I've got to wonder how much the problem is due to consolidation (see: infamous toolguyd picture of power tool brands). If there were a healthy market of competing independent companies, when SBD executives couldn't figure out how to get it up, another company would have bought the complete factory and made it work. I find it amazing that so much VC money is (was?) slushing around trying moonshot ideas like littering sidewalks with e-scooters and hoping loose change falls into them, but there is no motivation to start new companies doing traditional things in stagnant markets. I mean a "$90M factory" is like a tenth of one Instagram [0] ? I guess it's just not exciting enough. [0] an old arcane unit of a currency that has since become obsolete due to its small size