Three Ways OEMs Overspend on Sheet Metal Fabrication (& What Our Estimators Catch First)
OEMs are under cost pressure from every direction right now. Supply chains are still sorting themselves out, material costs have been volatile, and the margin between a competitive bid and a losing one keeps getting thinner. So when fabrication costs come in higher than expected, the instinct is usually to look at material prices or shop rates. Most of the time, that's the wrong place to look.
In our experience, the biggest drivers of unnecessary fabrication cost aren't market forces. They're design and sourcing decisions that got locked in before production started. Our estimators and engineers regularly catch these problems during the quoting process. Here are the three we see most often.
1. Parts Designed Without the Production Process in Mind
A print arrives that looks clean. The geometry is well-defined, dimensions are clear, and intent is obvious. Unless you've spent time on a production floor, what often isn’t obvious is a particular bend radius that requires additional tooling setup, a hole placement that will cause deformation during punching, or a surface finish specified for a feature that never contacts another component and doesn't functionally need it.
These aren't design errors in the traditional sense. The part will work. It just costs more to make than it should. Design for Manufacturability (DFM) is the process of reviewing those decisions before they become production realities. We apply it during the quote stage instead of after the order is placed. Our team of eight full-time engineers evaluates incoming prints for characteristics that will add cost without adding value and flags them before the quote goes out.
The underlying principle here is what manufacturing professionals call the Rule of 10: the cost of correcting a design problem multiplies at each stage of the value stream. Catching something at the quote stage costs nearly nothing. Catching it after tooling has been built and a first article has been rejected costs significantly more. We'd rather have the conversation early.
When we identify something, we include it in our quote response and ask whether the specification is firm. Often the OEM's engineering team didn't realize the call had that implication, and a minor drawing revision solves it. Sometimes the specification is firm for a functional reason, and we account for it. Either way, you know what you're buying and why it costs what it costs.
2. Tolerances Specified Tighter Than the Application Actually Needs
This one is easy to overlook because tight tolerances read as quality. An OEM specifying ±0.001" is being careful, right?
Sometimes. Often, though, a tolerance that precise is being applied to a feature where ±0.005" would perform identically in service, which results in a pretty big cost difference. Tighter tolerances mean slower cycle times, more inspection steps, and sometimes a different process entirely than the part's geometry would otherwise require.
Our laser centers hold ±0.0019", and our turret punch presses hold ±0.0040". Both are accurate, reliable processes. But not every part needs laser-cut precision, and quoting a part to laser standards when turret punching is the right fit for the geometry adds cost the OEM ends up absorbing for no functional gain.
Our estimators read tolerances the way engineers read intent. When a print calls for a tolerance that exceeds what the part's application requires, we note it in the quote and ask. It's a short conversation, and the answer shapes the process selection. On high-volume runs, getting that selection right compounds savings over the life of a program.
3. Splitting Work Across Multiple Vendors When One Facility Can Run the Full Sequence
An OEM's fabrication program might cut raw blanks at one shop, bend at a second, insert hardware at a third, and finish it at a fourth. Each vendor is competent and has an established relationship, but the total cost, timeline, and accountability picture are more complicated than they need to be.
Every handoff between vendors adds freight, scheduling dependency, and a new opportunity for a nonconformance to travel downstream. When a part arrives at vendor four with a problem, the investigation starts at vendor one, and it's rarely a fast or clean process.
Our facility in White Bear Township spans 110,000 square feet. It handles the full fabrication sequence under one roof, including laser cutting, turret punching, press-brake forming, panel bending, hardware insertion, welding, machining, deburring, CMM inspection, and mechanical assembly. A part that comes in as raw material can leave as a finished, inspected assembly without leaving the building.
When operations run in sequence at a single facility, lead times compress, quality handoffs are internal rather than external, and the people responsible for each stage of your program are in the same building. Your account manager doesn't have to call three shops to tell you where your job is.
For OEMs running programs with multiple fabrication operations, consolidating that work isn't always possible. Sometimes specialized vendors are the right call for a specific process. But it's worth asking the question. The administrative overhead and logistics costs of managing a fragmented vendor base for a program that a single-facility shop can handle end-to-end add up, and they rarely show up as a line item anyone reviews.
The Earlier We See It, the Less It Costs You
All three of these cost drivers are often visible early and much cheaper to address at the quote stage than at any point after production starts. That's why our estimators and engineers work together on incoming prints rather than treating quoting as a purely administrative function.
If you have a current program where costs have come in higher than expected, or a new project you'd like a second set of eyes on before you finalize the design, we're glad to take a look. Our estimating team can turn around a DFM review as part of the quoting process. Request a quote to get started.
