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Medical industry machining factory difficult situation - AbleMed

The world situation has a significant impact on some high-end players in China's machining industry. Some high-end machining factories highly rely on the export business. Now the reduced orders, have led to their difficult situation. The domestic business order quantity could not support their used business scale. They can only get a few complex parts orders without ordinary parts orders. Because there is no best price for ordinary standard parts, there is always a lower price for the parts. Suppliers are willing to take no-profit orders, to get in touch with the customers.


Last month, a medical equipment customer praised us for our high-precision capability, saying that we are their A-level supplier. However, they gave the order to another supplier with lower precision. Because they only verified the structure and did not need such high-precision parts. They were willing to sacrifice some precision to save costs during the R&D phase. Would the lower precision affect their assembly? The customer confirmed that it would. And they have to send parts back for rework frequently. But it's just for verifying the structure, as long as it works. The requirements are not that high.



With customer feedback, I felt a little upset. I am considering introducing a new supplier with low precision but a low price to meet the sampling stage requirements. I feedback to the CEO regarding this situation. I didn't expect the chairman to be quite happy after hearing my feedback.


He said it's good that customers recognize our processing capabilities in their hearts. When he started his business 18 years ago, the main customers were from Japan. Many Japanese customers challenge our processing capabilities. They are afraid of wasting costs in not qualified suppliers. It was through years of hard work that we gained recognition from our customers. And now we have gained a good reputation in the Japanese market. Now our new clients have recognized our capabilities in less than a year. It's a great prize for us.

Medical industry machining factory difficult situation - AbleMed


The CEO reminded me that we are known for high-end precision machining and should not compromise our reputation. Once we produce products that do not meet expectations, the customer will not think that we are trying to save costs for them but will doubt our quality team.  He believes that maintaining our image as a high-precision parts supplier is crucial and that if we produce subpar products, customers will downgrade our capabilities. Instead, we should focus on high-precision parts and maintain our reputation as a top-tier supplier. When the customer enters mass production, they will naturally look for a reliable supplier like us.

Medical industry machining factory difficult situation - AbleMed


The chairman has always been optimistic about the high-precision component processing service provider position. I remember the customer did promise me that they would come to us for the production of core precision parts during mass production. But I have a concern, the customers get R&D period samples from lower-cost suppliers. When the customer starts mass production, the lower-cost supplier will also have an opportunity to quote for mass orders. They would be experienced with the parts, at a high possibility improved their capability, and also offer lower cost.  Then is it really our turn to win the customer mass production orders? We may already lose the project from the R&D period. Or finally, the customer only gives some most difficult parts order to us. And other parts are given to the former suppliers. We will take the smallest piece from the big cake.


In this case, many high-precision parts machining suppliers are facing the same difficult situation. The high-precision orders are not as many as the low-cost orders. The factory owners have to stick to their reputation or cater to the market to introduce new low-cost channels to maintain market share.

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