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Machine Shops
First Research, Aug 2009, Pages: 10
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Executive Summary
Brief Excerpt from Industry Overview Chapter:
The US machine shops industry includes about 22,000 companies have combined annual revenue of $30 billion. No major companies dominate the industry, which is highly fragmented: the 50 largest companies generate about 15 percent of revenue.
COMPETITIVE LANDSCAPE
Demand depends on US manufacturing activity. The profitability of individual companies is linked to engineering expertise and operating efficiency. Larger shops have the ability to invest in advanced production machinery. Smaller shops can compete effectively by serving specialized customers, or by providing engineering services. Despite continuing automation, the industry is labor-intensive: average annual revenue per worker is about $120,000.
PRODUCTS, OPERATIONS & TECHNOLOGY
Machine shops are intermediaries in metal products production. They work on a job basis: generally, they receive unfinished metal parts or raw materials from a manufacturer, perform various operations, and return the parts to the manufacturer for further processing. They own and operate special machine tools that can perform a variety of metalworking operations, including drilling; boring (enlarging an existing hole); tapping (cutting threads inside a drilled hole); threading (cutting threads on a bolt); cutting; milling (removing metal from a surface); and grinding (usually a finishing operation). These operations involve metal removal, frequently with great precision. The machines that perform these operations are usually expensive and often computer-controlled.
Machine tools vary by the type of operation they perform, the size of a piece they process, and the precision of their operations. Many are ...
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