Author: OMS

The Total Cost of Ownership for Manufacturing Equipment

It may seem like owning your own manufacturing equipment would save you a lot of money–but when you get down to brass tacks, this isn’t always the case. Let’s take a look at what owning your own manufacturing equipment really costs you.

Procurement Challenges

When setting out to purchase your own machine, you will be met with a wide variety of options–everything from simple designs to complicated multi-axis machines functioning in multi-machine cells. Procurement is a critical part of manufacturing, but it can be time-consuming and costly. Depending on how many people and platforms are involved, it can also be difficult to control. Not only is it hard to find high-quality suppliers, it can also be difficult to qualify them. And then, once you’ve got them? You have to manage them. That can be just as hard, if not harder, than finding them in the first place.

Then there’s the challenge of keeping costs low. If you already did a lot of negotiating with your supplier on the front end of the process, then it may not be possible to negotiate more in the future. And if you’ve already gone beyond the point of increasing your economies of scale, this can be a hurdle that’s extremely difficult to jump.

Additionally, many OEMs struggle with keeping their data consistent and accurate. While the procurement process is becoming more automated, there are still multiple platforms and programs involved, which can lend itself to errors and inconsistencies.

There’s also the potential of a hidden acquisition cost: Integration of new machines into existing manufacturing systems. This process may be simple and require only basic updates, but there’s also a chance that it will be incredibly complex, involving custom engineering solutions and multiple updates for many parts of your facility.

The bottom line: Procurement can be a tedious, complicated, time-consuming process that doesn’t always turn out well for you as the OEM. Not only could you lose money, you could also lose a lot of time.

Maintenance Costs

There is always some burden of equipment maintenance on manufacturers, regardless of what kind of manufacturing equipment they’re working with. Because of this burden, OEMs must invest in the most crucial pieces of equipment, calculating a machine’s annual returns vs. yearly costs.

Proper maintenance is essential, but sometimes, it’s ignored in favor of keeping the machine running. While the machine may earn money for the operation in the moment, when proper maintenance is pushed to the back burner, something much more inconvenient than planned downtime happens: unplanned downtime. And nothing throws a wrench in a facility’s plans like a machine going down unexpectedly.

One of the greatest maintenance costs comes with equipment that isn’t often used. Sometimes, OEMs may overinvest in capital equipment, thinking they’ll use it more often than they do. Whether it’s due to cyclical production times or an inaccurate prediction of future workload, machines sometimes end up sitting around a lot, which really drives up their TCO.

Take, for example, a laser cutting machine. The cost of owning one of these machines can be split into three categories: labor, operations, and depreciation.

For labor, costs include time allotted to the handling of raw material, completed parts, and remnants, plus a person attending the machine while it is running. To understand the total sum of this cost, one must understand how much it costs per hour to pay an operator, how long each part spends on the machine, how long it takes to set up the machine, and how much time the operator spends actually attending the machine. Each of these elements will probably be different for every application and every facility.

Operational costs include gas/power, maintenance and repairs, consumables, and the like. These costs are incurred only when the machine is in operation.

Depreciation costs take into account the machine’s estimated value at the end of the payment cycle, regardless of whether it was a monthly lease or a purchase over time. These costs occur whether the machine is in operation or not.

Laser cutting machines can cost as much as $1.5 – 2 million, plus an estimated $50,000 – $75,000 in annual operating costs. Factoring in a yearly maintenance cost of 3-4% of the original purchase price, an OEM is already looking at extremely high costs–and that’s not even accounting for investments in spare parts. Additionally, maintenance costs tend to go up as the machine ages, so one year’s 2% maintenance costs could become 4% in just a few short years. In some instances, the annual maintenance cost for a laser cutting machine can add up to almost $250,000 over the course of a decade.

Why Outsourcing Makes More Sense

By working with a contract manufacturer, you remove the risks listed above and set yourself up for success in many other ways. Not only do you massively increase your capacity by outsourcing, but you also reap the benefits of higher quality parts, reduced costs, and no lost time and money due to procurement problems.

Ready to talk to one of the biggest names in manufacturing? Contact O’Neal Manufacturing Services today.

O’Neal Manufacturing Spotlight: Amanda Wood

The first International Women’s Day was held in 1909, and since then, it has been an annual celebration of women’s rights, gender-equality, and social progress. The theme for International Women’s Day 2019 is #BalanceforBetter, encouraging everyone to think about how they can contribute to a more gender-balanced world. This starts in the workplace, and it starts with people like Amanda Wood.

We asked Amanda to tell us a little about herself and her experience as a woman in the male-dominated manufacturing industry, and she was kind enough to indulge us. Read on to learn more about Amanda!

1) Where are you from and what is your background?

I was born in Valparaiso, Indiana, but never lived there. My Dad was working a job up there and my Mom went with him, not expecting to greet me so soon. When the time in the hospital was over, we were back in Birmingham. I grew up in Alabaster, Alabama and graduated high school from Thompson. I have a Bachelor’s degree in Business Administration.

2) What has your career path been like?

I worked in banking for about 5 years and thought it was an industry I wanted to continue in. I had a customer offer me a job working as a manufacturing rep, and dabbled in that for about two years. I really didn’t feel like I was being challenged enough and felt like I could do more. My mother in-law works in the steel business and I started talking to her about wanting to do more with my career. She talked passionately about her job and what she did and I thought maybe it was something I could be good at. She sent my resume out to several people around Birmingham, and I was lucky enough to end up interviewing with O’Neal Steel. I started working with them in Supply Chain, 5 years ago this May, and transitioned into a Supply Chain Specialist position with O’Neal Manufacturing in March of 2017. I just recently took a position as the Materials Manager and moved to Greensboro, NC to work at the plant. I am excited about being at the shop and seeing our machines at work. I enjoy being able to walk out in the shop every day and know that I am a part of something big. I love seeing what we are making for our customers.

My career in steel has just begun and I’m looking forward to the future and seeing where it takes me.

3) What’s it like working in this kind of industry as a woman?

It’s funny, I tend not to give it much thought. People ask me all the time if it’s hard being a woman in a man’s business. I guess not! Heck, I’ve been at work functions and outings and have had people stop me to ask what the event is or what company we are with. I’ve gotten chuckles, and comments like “I didn’t know women were in the steel business”.

I guess when I really stop and think about it, I’m pretty lucky. I’m lucky to have been raised by such great parents that made sure to set examples about great work ethic. Work hard, and don’t worry about anything else. Sure, sometimes I think that certain people will judge me or not think I can do as well or be as successful as a man could in the same role. People think ‘steel’ and assume a man would fit the part. Those things challenge me more and make me want to be a successful businesswoman in the steel industry. I want people to see and hear about what I do, and think, ‘Look at her, killing it. Look at her doing what she loves and being a role model for other women in metal.” Most importantly, I want people to look at me and what I do and see how happy I am and how much I love what I do.

I’m comfortable being a woman in the steel industry because I work for a company that doesn’t treat me any differently because of it. That’s the most important thing.  I have seen and heard other women talk about the struggles they face with their company because of their gender. It’s a real thing, and it’s unfortunate. The best thing we can do is work hard and be good at the job. Prove that we deserve what we are fighting for because we are the best fit.

4) What do you enjoy doing outside of work?

I spend a lot of time with my family. My husband and I have a travel trailer and we enjoy tailgating at football games, NASCAR races, and taking it camping. We have two precious dogs that we treat like children and we love being outside with them. I enjoy cooking and learning new skills in the kitchen. I also like to volunteer and am passionate about being able to help others when I can.

5) Anything else you’d like to include?

Not long after starting with O’Neal, with their support, I joined the Association of Women in the Metal Industries. There was an opening for the Vice President position with the Birmingham Chapter, and I was happy to take the position, hoping it would help me network with other women and men in the industry and learn about the business. I finished my term as VP, moved into the President position, and just finished my two year term this past December. It’s great to be a part of the organization and not only have I been able to network with people in the industry, but it’s helped me gain confidence in the workplace, speak in front of large groups, and work with other members to set up events and fundraisers. I have been able to attend conferences, listen to top executive speakers, and be a face for the O’Neal company. My grandfather worked in the steel business, my Dad still works in the industry, and my step dad sells steel parts to his customers. My husband is in steel, and his dad, and his step-mother. I guess you could say it runs in the family. I get to wake up every day and go to a job I love.

Maintaining Agricultural Equipment and Other Heavy Machinery

Your heavy machinery requires a lot of maintenance to keep it working for you and not against you. Poorly maintained machinery not only runs inefficiently, but are extremely expensive and can compromise the safety of you and your workers. If you follow these five simple (but important) tips, your heavy machinery will perform better and last longer.

Operator Training

Many types of large machinery have multiple operators, and you need to make sure all operators are trained the same way to have consistent maintenance. Overseeing the correct operation of your equipment should be an ongoing inspection for you. Before you train your operators, make sure your machinery is inspected thoroughly! This inspection should take place right after you purchase the machinery.

Employees can come and go, skills become rusty and people grow more lax on policies and procedures, so make sure you’re keeping your training up to date. Operator manuals can be revised or condensed and given to your operators—especially if you’re paperless, you can rest assured that your operators will have access to the most current version of each manual.

Take the time to identify best practices so you can send the best versions of your information to other facilities or geographic locations. Determining the most effective knowledge and using that everywhere will help you maintain consistency, and therefore efficiency, throughout your staff.


Lubricants are essential to a well-functioning piece of machinery. They reduce friction around any moving part, which leads to smoother operation and a longer life for the machine. You should schedule lubrication maintenance to ensure that it’s done frequently and consistently. This will be one of your most important maintenance checks, so make sure these schedules are passed on to your operators. Always check the manufacturer’s recommendations so you’re getting the right kind of lubricant for your machine as well as the right kinds of oil and grease for its specific parts.

It’s also crucial to get your lubricants checked by an expert. They can analyze particles in the used oils and employ this information to diagnose possible problems with your machine. The makeup of any contaminant will indicate which part may be suffering from wear or breakdown.

Signs of Wear

A lot of different things can contribute to the breakdown of one of your machines, so it’s important to address all of them. Vibration from gears or belts that are out of alignment, shock from accidents or poor operator technique, high temperatures from extended use or poor lubrication and so many other things can wear your machine down faster than usual.

The key is to have frequent inspections and to replace any worn parts as soon as you notice something is worn down. Changing these parts sooner rather than later will save your machine in the long run, and it’ll save you money.


There are plenty of external things that can affect your machines, so pay attention to what’s going on around them. Large machinery should be stored in a shed or other large building if possible, to avoid the effects of wind and rain. Exposure to bad weather like this can lead to rust and rot. Just like your car, if you don’t plan on using your machine for a while, make sure to run it periodically.

There are a lot of seals and filters in place on heavy machinery that keep working parts clean and free of contamination—you should inspect and replace these regularly. Breathers should be kept clean, too, to avoid contaminants in the cab of your machine. The electronics in the cab are very susceptible to breakdown if contaminated, so make sure these inspections are scheduled as well.

Schedule and Keep Records of Heavy Machinery

Staying organized will significantly increase the life of your heavy machinery. Knowing what needs to be inspected, how often and when will increase the productivity and efficiency of both your machines and your team.

For more manufacturing tips and services, contact O’Neal Manufacturing Services today.

The Latest in Construction News

Tech powerhouses like Apple, Microsoft and Alphabet—Google’s parent company—have expanded far beyond their West Coast roots. For example, Amazon doubled its workforce over the past two years to 613,000 while Google expanded its worker pool 35% to 94,300. Essentially, these companies have outgrown the talent pool, space and cost of living of Silicon Valley.

Big Tech Companies

Because of this growth, big companies are looking to set up shop in cities with concentrations of highly educated workers, like Washington DC and Boston. For example, Google has laid the groundwork for a $1 billion Manhattan campus called Google Hudson Square and has offices and data centers popping up in Michigan, Colorado, Tennessee, Alabama and more. The obvious question—how does this growth affect the construction industry?

Impacts on the Construction Industry

The majority of these projects are undertaken by local construction firms, and city leaders are excited about the jobs and economic benefits such projects could potentially bring to their region. A lot of this excitement comes from the specific projects as well—big tech companies like these are always seeking out cutting-edge designs that constantly raise the bar for corporate social responsibility. A prime example of this is Facebook’s Frank Gehry-designed Menlo Park headquarters. It’s lined with acres of rooftop green space and includes a greywater system designed to save 17 million gallons of water each year.

In addition to these multi-billion dollar headquarter projects, contractors in rural towns and small cities benefit the most from big companies’ demand for two other types of facilities—data and fulfillment centers.

With a massive rise in the distribution and fulfillment market, companies like Amazon sprinkle these facilities across the country in proximity to its consumer bases—but even a company as big as Amazon can’t just build wherever they want. There’s still a massive labor shortage that’s not only crippling the construction industry but also stopping big tech companies from building.

Most of the pressure is felt in the data center sector. Tech companies are known to be extremely schedule-driven and often have aggressive rollout programs across the world. While smaller subcontractors are benefitting from some of this work, there’s a steep learning curve when it comes to meeting technical requirements, not to mention meeting them at the speed Amazon and other similar companies expect. The pressure has doubled down on design and construction partners to get everything done as quickly as the tech firms’ supply chain management allows.

Despite the pressure this puts on the construction industry, innovation is the ultimate result. While these tech giants have been dubbed “thought leaders” in energy-efficient design and economical power solutions, contractors have had to step up their use of prefabrications and other lean methods to better serve them.

For more construction news and services, contact O’Neal Manufacturing Services today.

OMS in 2018: Looking Back

2018 was a great year, full of progression and growth for our company. Here are a few of our favorite moments.

The Birmingham O’Neal team joined 700 other volunteers to read to students in every Birmingham City School. The O’Neal team had volunteers reading to 25 classrooms at our partner school, Hayes K-8 School, and afterward each child was given a book to take home. So many of Hayes’ children come from underserved communities and don’t have access to a home library, so this was such a special gift for them.

The OMS Houston facility moved locations to better serve its customers and future growth. “We are excited to continue our long tradition of providing quality fabricated products to Houston and surrounding markets. Our new location is more modern, better sized for our operation, and adds in house painting capability to our business.  We look forward to continuing a strong manufacturing presence in Houston for years to come,” said Kent Brown, President & CEO, O’Neal Manufacturing Services. OMS has been in Houston since 1988.

Additionally, TRUMPF Inc., the leader in Laser fiber technology, partnered with Iowa Laser (a division of OMS). Together, they brought the First TRUMPF Inc. Fiber 10K to the United States. Both TRUMPF Inc. and Iowa laser are working together to test the capabilities and develop the world’s standards on laser cutting. TRUMPF Inc. selected Iowa Laser based on their leadership in the industry, and the fact that they have the ideal fit for production in sheet thickness and job variance. Iowa Laser is staying on the cutting edge of technology to meet customer demands in a changing industry.

U.S. Congressman Keith Rothfus (R-PA 12th District) visited the OMS Pittsburgh facility and was given a plant tour led by General Manager Gus Cassida. Mr. Cassida led Congressman Rothfus and his group through the plant and showed them the unique machining capabilities that OMS Pittsburgh has to offer its customers.

We’re proud of everything 2018 brought for us, and can’t wait to see what the rest of 2019 holds!

To learn more about O’Neal Manufacturing Services and what they can do for you, contact them today.

Tariffs and the Manufacturing Industry

The tariffs imposed by President Donald Trump last year are raising a lot of debate concerning their outcome—some think these will invigorate the American steel industry, while others think we’re only hurting ourselves.


Engineering plays such a huge role in redefining the supply chain and altering the way things are made. Economists believe that these tariffs will indirectly impact the quality of products, the types of materials used and the use of new tools and techniques. Not to mention that taxing global trade is getting more and more complex. With geographical borders dissolving and high-tech engineering contributing to the price of end products, trade isn’t as simple as it used to be.

The most impactful tariff up for discussion is the tax on steel and aluminum, 25% and 10% respectively. This tax will affect everything from soda cans to cars and industrial equipment.

These tariffs are not expected to change the basic job of an engineer, but instead provide a path for engineers to rethink how their products are made. They’ll be encouraged by these tariffs to take new approaches to manufacturing in an effort to keep prices in check. Because of this, engineers will engage the supply chain in order to source cheaper parts or even different materials altogether.

The Good and the Bad

Trump’s point in imposing these tariffs is to encourage a more self-sufficient U.S. By imposing rigid tariffs on certain products from other countries, the hope is that threatened American industries will be saved, intellectual property will be more protected and there will be a stronger “made in the USA” mentality.

The problems with these tariffs arise with American companies that have their sourcing, manufacturing and assembling in other countries. This could cause some companies to move production to less expensive countries, promoting inefficiency in production. Essentially, products that come to us from China are often created by American firms—and both suffer under these new tariffs.

For the latest news and help with all things manufacturing, contact O’Neal Manufacturing Services today.