Of course, the first company was Hengli Valve Company. The odds of success were higher there, and he could fleece Wang Hengli for a bit.
If he did not start with Hengli Company, Fang Bai would have to spend more time looking for orders.
Hengli Company had a large order volume and outsourced quite a few jobs.
Fang Bai arrived at Hengli Company, took a walk around the workshop, then went to the second floor of the office building to find Wang Hengli.
The guy was smoking in his office. Fang Bai knocked on the door and saw him turn around in mild surprise. "Oh? Fang Bai's here."
Although Fang Bai disliked the bald fat man, he still had to put on a respectful front. He walked in with a smile.
"Manager Wang, business must have been going well lately. You look positively radiant."
"Not bad, not bad."
Fang Bai shook his hand and checked his information, only to learn that the bald fat man had ruined another girl. No wonder.
Damn it, a dog really can't stop eating shit!
"I just took a look around the workshop. I saw quite a few carbon steel valve bodies for your company's 2-inch Globe Valves piled up by the Drilling Machine and lathes. That might affect your overall delivery schedule."
"There's nothing we can do. We can only urge them to work overtime."
"You could subcontract the machining. It wouldn't cost much. Turn the flange faces on the 2-inch Globe Valves, then drill and chamfer the holes—fifteen yuan apiece would do."
"How could it possibly be that cheap? There are three end faces to turn into flange faces and twelve holes to drill. If it can be done for fifteen yuan while meeting the requirements, I'd outsource all of it. Why would I bother buying equipment and doing it myself?" Wang Hengli did not believe Fang Bai at all. "Did you get the specifications wrong? That price would make more sense for a one-inch valve body."
"I didn't get it wrong. Twelve holes, roughness of 12.5, one-millimeter chamfers..." Fang Bai was familiar with the product himself. In his previous life, he had subcontracted more orders like this than he could count.
Wang Hengli was not wrong either. A normal quote would need to be at least seventeen yuan.
Machining quotes were generally based on processing time, with product prices calculated according to an hourly rate. Huge profits were unlikely unless one had special connections or unique equipment that created a monopoly where if others don't have it, I have it.
Generally speaking, the hourly cost of batch processing = labor costs + equipment depreciation and wear + profit + tooling + electricity + site expenses, and so on.
Those were the main expenses. In later years, hourly labor costs would be twenty to twenty-five yuan, but in this era, even with machine operators earning relatively higher wages, a little over one yuan per labor hour was enough.
When using a Lathe 6140 to turn end faces, the equipment investment could be recovered over three to five years. Industrial machine tools generally had a designed lifespan of fifteen to twenty-five years, but the equipment investment had to be recouped within three to five years. The hourly depreciation cost came to roughly three to five yuan.
A Lathe 6140 had a rated power of around 7.5 kW. Without running it constantly, it used about four kilowatt-hours of electricity per hour. The electricity rate was based on industrial power charges, which were actually somewhat higher in the 1990s than in later years.
The purchase cost and energy consumption of a Radial Drilling Machine were lower than those of a Lathe 6140.
The other expenses were minor. By rough calculation, in this era, the hourly machining cost for turning and drilling came to ten yuan. Factoring in taxes, rework, payment-collection risks, and other considerations, subcontracting had to be quoted at more than fifteen yuan per hour to turn a profit.
One production line at Hengli Company—since turning and drilling took roughly the same amount of time, one lathe and one drill made up a line—could process only two 2-inch Globe Valves per hour. Including breakdowns, scrap rates, and so on, the machining cost per product already exceeded fifteen yuan.
Yet Fang Bai had quoted only fifteen yuan. If he could meet the quality requirements while also eliminating management costs, Wang Hengli would definitely be willing to outsource the work.
Fang Bai's low quote was mainly based on the poor valve-processing efficiency at valve companies these days.
There were two main reasons for the low efficiency.
First, Globe Valves had complex shapes. Although Hengli Company had made a Face Turning Fixture, it was unsuitable and not much different from traditional clamping methods, resulting in low clamping efficiency.
Second, there were very few CNC drills now. Drilling was all done manually. The usual process was to first mark lines to locate the hole centers, punch center marks to prevent drill bits from slipping, and then drill. It was extremely slow.
Hengli Company had no technicians responsible for designing tooling or improving processes. Improving the process depended entirely on workers, but there was no incentive system. Damn it, who would be willing to do that?
It was thankless hard work, and no worker wanted it.
As for whether improving efficiency would benefit them?
They were dreaming!
Once efficiency improved, the boss would start thinking about lowering the piece rate. If order volume was low, the workers would actually earn less.
Fang Bai knew that the clamping tool for turning Globe Valve end faces was not expensive to make. He could also make a Drilling Jig, eliminating the need for line marking and center punching.
Most industrial valves were standardized, with uniform specifications and dimensions. For valves of the same category, specification, and size, Workholding Fixtures and jigs were interchangeable. They could be used not only for Hengli Company's valves, but for other companies' valves as well.
Once the Workholding Fixtures and Drilling Jig were solved, work efficiency would rise dramatically. Each line could process six to eight 2-inch Globe Valves per hour.
The hourly subcontracting fee could be ninety to one hundred twenty yuan. That was practically a windfall.
As long as there were enough orders, the annual profit from three processing lines—three lathes plus three Drilling Machines—would exceed that of Hengli Company.
"I still don't believe it. How could the cost possibly be so low?" Wang Hengli shook his head.
"Then let me take two blanks first. I'll bring them back after machining them for you to see. If they're acceptable, you'll let me process your 2-inch Globe Valves, right?"
"I don't care which processing plant you find. If you have the ability to make them, as long as it's fifteen yuan per piece, I can give you the work."
Hearing that, Fang Bai stood and shook his hand again. "All right, you said it. I'll go take the blanks from the workshop first."
"Go ahead. I'll wait for your news." Wang Hengli smiled dismissively.
"Haha, no problem!" Fang Bai chuckled, left Wang Hengli's office, found the workshop supervisor, and took two blanks away.
After returning home, he measured the blanks and designed a Face-Turning Fixture and Drilling Jig.
The next morning, Fang Bai went to Jiayu Processing Plant again.
He wanted to establish some initial trust with his future father-in-law. Once their relationship improved, he would partner with him to start a Valve Factory.
The industrial valve market was huge, and profits were extremely high in this era.
However, Fang Bai would not devote too much energy to the Valve Factory. Apart from making money, he also wanted to fulfill his future father-in-law's wish. Qin Donghai longed to own a major valve factory himself. If it could go public through an IPO, he would have no regrets in this life.
For the time being, Fang Bai did not want his future father-in-law to know about his relationship with Qin Shuyu. At the very least, he had to wait until he got into college.
"Boss Qin, how much would you quote for turning the end faces and drilling holes in these 2-inch valve bodies?
"The end-face roughness needs to be 6.3 and the inner-bore surface 12.5. The requirements aren't high." Fang Bai took two Globe Valve bodies from a bag and set them on the concrete floor.
Each valve body weighed several kilograms and was quite heavy to carry.
"Is the quantity large? Small batches cost more per piece. I keep the scrap iron, right? Who handles transportation? How long until payment?"
Qin Donghai asked in detail. He had experience machining these 2-inch valve bodies.
After thinking briefly, Fang Bai said, "The first order will be no fewer than five hundred valve bodies, and there will be more afterward. Naturally, you keep the machining scrap. The manufacturer handles transport, though you can deliver them too for an additional freight charge. I'll try to settle payment within sixty days."
Aside from Hengli Company, he also needed to seek supplies from other Valve Companies. With his fifteen-yuan quote, finding work would be easy. Even if his future father-in-law's two machines became more efficient, they would still be too busy to handle it all.
Hearing that it was a large batch, Qin Donghai was delighted. "Sixteen yuan, then. I'm only earning some hard-earned money here."
Based on his family's situation, if the order quantity was five hundred and everything went smoothly, the profit could exceed three thousand yuan. They could finish it within a month.
His average monthly profit was around two thousand yuan. Naturally, he was happy to see it reach three thousand.
The two discussed the price away from the driller in the workshop. Subcontracting prices were the secret of every processing plant.
"The quote is fairly reasonable. But what if I have a way to process more than six an hour?"
"How is that possible?
"Doing two in an hour would already be pretty good. This workpiece has a complicated shape and is difficult to clamp. The holes have to be drilled one by one, and both turning and drilling take half an hour."
"That's because you're using the old method and don't have Workholding Fixtures. Of course it's slow." Fang Bai smiled. "How about this? I'll find the orders, provide the process and tooling, and your two machines can work. I'll give you fifty yuan per hour, four hundred yuan for an eight-hour day.
"Using your traditional method, even if you worked a full ten hours a day, you could earn at most three hundred twenty yuan. In reality, people need rest too. Earning two hundred fifty yuan would already be a lot."
Fang Bai's calculation left Qin Donghai somewhat dazed.
Calculated that way, he really would earn more per day. His actual profit would double, but he would also be doing more work. It somehow seemed like he was getting the short end of the stick.
The problem was, if the efficiency really was that high, they could finish five hundred pieces in under ten days.
On Fang Bai's side, if they could process fifty pieces a day, the processing fee would be seven hundred fifty yuan. After giving his future father-in-law four hundred yuan, he would net three hundred fifty yuan.
However, once his future father-in-law learned about the new jigs and Workholding Fixtures, he would probably have other ideas. They could discuss that when the time came.
The orders were in Fang Bai's hands. He had to have the ability to take them if he wanted them.
Even fathers and sons had to settle accounts clearly, let alone future in-laws.
Seeing his future father-in-law hesitate, Fang Bai took out the drawings he had made the previous night and handed them to him. "You have materials here, right? Use No. 45 steel for the Drill Bushing section. 40Cr would be even better. It needs to be quenched and tempered after machining. Make these two sets of fixtures first. I'll cover the materials and machining costs.
"Also, I'll take the drawings back once you're done with them."
After the material was quenched and tempered, it became harder and more wear-resistant. Generally, it was machined first and then quenched and tempered, otherwise the cutting tools could not handle it.
Of course, not every material could be quenched and tempered. Materials with a low carbon equivalent could not undergo that treatment. For example, No. 20 steel was generally hardened through carburizing.
Qin Donghai took the drawings and gave them a rough look. After Fang Bai explained them, he quickly understood what they depicted. He gave a thumbs-up and smiled. "It seems to make sense, but we'll only know whether it works after making it. It'll take at least half a day. Materials and machining together will cost one hundred yuan."
"Money is a small matter. Make the Face-Turning Fixture first," Fang Bai said.
One hundred yuan for two sets of fixtures, including material costs, was not expensive. Both sets of tooling required cutting and welding, so his future father-in-law would not make much money and would also be putting in his own time.
After saying that, he pulled out a one-hundred-yuan note from his pocket and handed it to his future father-in-law.
After receiving the money, Qin Donghai immediately began looking for materials to process.
Before you continue