The first company was naturally Hengli Company, which had a higher success rate and allowed for a good opportunity to benefit from Wang Hengli.
If Fang Bai didn't start with Hengli Company, he would have to spend more time looking for orders.
Hengli Company had large order volumes and outsourced many jobs.
Fang Bai arrived at Hengli Company, walked around the workshop, and then went to the second floor of the office building to find Wang Hengli.
He was smoking in his office. Fang Bai knocked on the door and saw him turn around, slightly surprised, "Oh, Fang Bai is here."
Although Fang Bai disliked this bald, fat man, he still maintained a respectful facade. He walked in and said with a smile,
"Boss Wang, business seems to be doing very well lately; you look radiant."
"It's alright, it's alright."
Fang Bai shook his hand, probing for information about him, only then realizing that this bald, fat man had ruined another girl. No wonder.
Damn it, a leopard can't change its spots!
"I just walked around the workshop and saw a lot of your company's 2-inch globe valve carbon steel valve bodies piled up at the drilling and lathe machines. This might affect the overall delivery schedule."
"There's nothing I can do; I can only urge them to work overtime."
"You could outsource the processing. It wouldn't cost much. To machine the flange faces and then drill and chamfer the 2-inch globe valve, 15 yuan per piece would be enough."
"How could it be that low? Three end faces need to be machined into flange faces, and 12 holes need to be drilled. If it can be done for 15 yuan and meets the requirements, I'd outsource all of it. Why would I buy equipment and do it myself?" Wang Hengli didn't believe what Fang Bai said. "Did you get the specifications wrong? That's more like a 1-inch valve body."
"No mistake, 12 holes, roughness 12.5, chamfer 1..." Fang Bai himself was familiar with this product, having processed countless orders in his previous life.
Wang Hengli wasn't wrong either; the normal quoted price would be at least 17 yuan.
Machining quotes are generally based on processing time, calculating the product price by how much per hour. It's unlikely to make exorbitant profits unless there are special connections or unique equipment that creates a monopoly.
Generally speaking, the hourly processing cost for a batch includes labor costs + equipment depreciation and wear + profit + tools + electricity + site fees, etc.
These are the main costs. In later generations, the hourly labor cost would be 20-25 yuan, but in this era, even if machine workers' wages were higher, a little over one yuan per hour would be enough.
Generally, a universal lathe 6140 is used for machining end faces. Equipment investment recovery can be calculated over 3-5 years (industrial machine tools typically have a design life of 15-25 years, but equipment investment costs need to be recovered within three to five years). The hourly depreciation cost is about 3-5 yuan.
The rated power of a universal lathe 6140 is about 7.5 KW. Without frequent starting, it consumes about 4 kWh per hour. Industrial electricity rates are used, and electricity costs in the 90s were actually higher than in later generations.
The purchase cost and energy consumption of a radial drilling machine are less than those of a universal lathe 6140.
Other costs are minor. Roughly estimated, the hourly processing cost for a universal lathe and drilling in this era is 10 yuan. Including factors like taxes, rework, and payment risk, an hourly outsourced processing quote of 15 yuan or more would be profitable.
A single line at Hengli Company (lathe and drilling take roughly the same time, 1 lathe and 1 drill make one line) can only process 2 2-inch globe valves per hour. Considering breakdowns, scrap rates, etc., the machining cost per product already exceeds 15 yuan.
Since Fang Bai's quote was only fifteen yuan, if he could meet the quality requirements and eliminate management costs, Wang Hengli would certainly be happy to outsource the processing.
Fang Bai's low quote was mainly due to the low efficiency of valve processing in various valve companies at that time.
The low efficiency was mainly due to two reasons:
First, the globe valve has a complex shape. Although Hengli Company made fixtures for machining the end faces, they were unsuitable and not much different from traditional clamping methods, leading to low clamping efficiency.
Second, there were very few CNC drills at that time; all drilling was done manually. The general drilling process involved marking (locating the center of the hole), punching (to prevent slipping during drilling), and then drilling, which was very slow.
Hengli Company did not have technical personnel responsible for designing tooling or improving processes. Improving the process could only rely on workers, but without an incentive system, who the hell would be willing to do it?
It's a thankless job, and no workers would be willing.
As for whether improving efficiency would benefit them?
You're overthinking it!
If efficiency increases, the boss will want to lower the unit price. If the order volume is small, workers will earn less instead.
Fang Bai knew that the clamping tools for machining the globe valve's end face were not expensive to make, and he could also make drilling molds, eliminating the need for marking and punching.
Most industrial valves are standardized, with uniform specifications and dimensions. For valves of the same type and size, the tooling and molds are universal, meaning they can be used not only for Hengli Company's valves but also for other companies' valves.
With the tooling and drilling molds resolved, work efficiency would greatly improve, allowing 6-8 2-inch globe valves to be processed per hour per line.
The hourly outsourced processing fee could be 90-120 yuan, which could be considered exorbitant profit.
As long as the order volume was sufficient, the annual profit from three processing lines (three universal lathes + three drilling machines) would be higher than that of Hengli Company.
"I still don't believe it. How could the cost be that low?" Wang Hengli shook his head.
"Then I'll take two raw blanks first, process them, and show them to you. If it works, will you let me process your 2-inch globe valves?"
"I don't care who you find to process them. If you can process them, as long as it's 15 yuan per piece, I can give you the processing work."
Hearing this, Fang Bai stood up and shook his hand again: "Alright, you said it. I'll go to the workshop to get the blanks now."
"Go ahead, I'll wait for your news." Wang Hengli said with an indifferent smile.
"Haha, no problem!" Fang Bai chuckled, left Wang Hengli's office, went to the workshop to find the workshop manager, and then took two raw blanks.
Back home, he measured the dimensions of the blanks and designed the tooling fixtures for machining the end faces and the drilling molds.
The next morning, Fang Bai came to Jiayu Processing Factory again.
He wanted to build initial trust with his father-in-law. Once their relationship was good, he would partner with his father-in-law to establish a valve factory.
The market for industrial valves was large, and the profits were very high in this era.
However, Fang Bai would not spend too much effort on the valve factory. Besides making money, it was also to fulfill his father-in-law's wish. He longed to have a large valve factory, and if it could go public, he would have no regrets in this life.
Fang Bai temporarily did not want his father-in-law to know about his relationship with Qin Shuyu, at least not until he was admitted to university.
"Boss Qin, what's your quote for machining the end faces and drilling holes for this kind of 2-inch valve body?
The end face roughness is 6.3, and the inner hole surface is 12.5, so the requirements are not high." Fang Bai took out two globe valve bodies from his bag and placed them on the concrete floor.
Each valve body weighed a few kilograms, making them quite heavy to carry.
"Is the quantity large? Small quantities mean higher unit prices. Do I get the iron chips? Who is responsible for transportation? How long until payment is settled?"
Qin Donghai asked in detail; he had experience processing this type of 2-inch valve body.
Fang Bai pondered for a moment and said, "The first batch will be no less than five hundred valve bodies, and there will be more in the future. The processing iron chips will, of course, be yours. Transportation will be the responsibility of the manufacturer, but if you want to deliver, you can charge extra for shipping. I'll try to settle payment within 60 days."
Besides Hengli Company, he also needed to find sources of goods from other valve companies. His quote of 15 yuan would make it easy to find orders. Even with increased efficiency, his father-in-law's two machine tools would be too busy.
When Qin Donghai heard it was a large batch, he was secretly pleased and said, "How about 16 yuan? I'll just earn a bit of hard-earned money."
According to his own situation, if the order quantity was five hundred pieces and everything went smoothly, the profit could be over three thousand yuan, and it could be completed within a month.
His average monthly profit was about two thousand yuan, so he was naturally happy to reach three thousand yuan now.
The two discussed the price, avoiding the driller in the workshop. Outsourced processing prices were a secret of a processing factory.
"The quote is reasonable. What if I could process more than 6 pieces per hour?"
"How is that possible?
Processing two per hour would be good enough. This workpiece has a complex shape, it's difficult to clamp, and the holes have to be drilled one by one. Both turning and drilling take half an hour."
"That's your old method, and you don't have tooling fixtures, so of course, the efficiency is slow." Fang Bai smiled, "How about this: I'll find the orders, and I'll provide the process and tooling. Your two machines will operate, and I'll give you 50 yuan per hour, which is 400 yuan for an 8-hour day.
According to your traditional method, even if you work a full 10 hours a day, you'd earn a maximum of 320 yuan. In reality, people need to rest, so getting 250 yuan would be considered a lot."
Fang Bai's calculation made Qin Donghai a bit confused.
If calculated this way, he would indeed earn more than he did daily, with doubled actual profit, but he would also be doing more work, making it seem like a loss.
The problem was, if that efficiency was truly possible, 500 pieces would be finished in less than ten days.
On Fang Bai's side, if he could process 50 pieces a day, the processing fee would be 750 yuan. Subtracting the 400 yuan given to his father-in-law, he would net 350 yuan.
However, once his father-in-law learned about the new molds and tooling fixtures, he would likely have other ideas, and that could be discussed then.
Orders were in his hands; he had to be capable of taking them.
Even between father and son, accounts must be clear, and it's the same for future in-laws.
Seeing his father-in-law hesitate, Fang Bai took out the drawings he had made last night and handed them to him: "You have materials here, right? Use 45# steel for the drill bushing part, 40Cr would be better. After processing, they need to be heat-treated. First, process these two sets of fixtures. The material and processing costs are on me.
Also, I'll take back the drawings after you're done with them."
After heat treatment, the material has higher hardness and is more wear-resistant. Generally, it's processed first and then heat-treated, otherwise, the tools won't be able to work on it.
Of course, not all materials can be heat-treated. Materials with low carbon equivalent cannot be heat-treated, such as 20# steel, which is usually hardened by carburizing.
Qin Donghai took the drawings, glanced at them, and with Fang Bai's explanation, quickly understood what the drawings depicted. He gave a thumbs-up and said with a smile, "It seems to make a lot of sense, but we'll have to make it to see if it works. It will take at least half a day, and the material and processing costs will be a total of one hundred yuan."
"Money is a small matter. Let's process the end face clamping fixture first," Fang Bai said.
One hundred yuan for two sets of fixtures, including material costs, was not expensive. Both sets of tooling involved cutting and welding processes, and his father-in-law wouldn't make money, and would even spend time on it.
After speaking, he pulled a hundred-yuan bill from his pocket and handed it to his father-in-law.
After receiving the money, Qin Donghai immediately started looking for materials to process.