Just Earning a Hardship Fee, Do You Believe Me?

The first company was naturally Hengli Valve Company—a high-probability target where he could fleece Wang Hengli for all he was worth.

If he didn't start with Hengli Company, Fang Bai would have to spend much more time hunting down orders.

Hengli Company had large order volumes and outsourced plenty of jobs.

Fang Bai arrived at Hengli Company, took a stroll through the workshop, then headed to the second floor of the office building to find Wang Hengli.

The guy was smoking in his office. Fang Bai knocked, and when Wang Hengli turned around, he looked a bit surprised. "Hey, Fang Bai's here."

Fang Bai didn't like this bald fat man, but on the surface, he still put on a show of respect. Walking in with a smile, he said:

"Manager Wang, business looks great lately—you're glowing."

"Not bad, not bad."

Fang Bai shook his hand and probed the other's info, only to find out this bald fat man had ruined another girl. No wonder.

Damn it, a leopard never changes its spots!

"I just took a look around the workshop and saw a pile of your company's 2-inch globe valve carbon steel valve bodies stacked by the drilling and lathe machines. That might hold up the overall delivery schedule."

"Can't help it—I can only push them to work overtime."

"You could outsource the machining. It won't cost much. For a 2-inch globe valve, turning the flange faces and then drilling and chamfering—15 yuan per piece would do it."

"How could it be that low? Three end faces need to be turned into flange faces, and twelve holes drilled. If you can pull that off for 15 yuan and meet the requirements, I'll outsource all of it. Why bother buying my own equipment?" Wang Hengli didn't believe Fang Bai at all. "Are you sure you didn't get the specs wrong? A 1-inch valve body, maybe."

"No mistake. Twelve holes, roughness 12.5, chamfer 1..." Fang Bai was familiar with this product himself—he'd processed countless orders for it in his past life.

Wang Hengli wasn't wrong either; a normal quote would be at least 17 yuan.

In machining quotes, pricing was generally based on processing time, calculating the product cost by hourly rate. Getting huge profits was unlikely unless you had special connections or unique equipment, achieving a monopoly where others didn't have what you had.

Generally speaking, the batch hourly processing cost equaled labor cost plus equipment depreciation and wear plus profit plus tooling plus electricity plus facility fees.

Those were the main costs. In later times, the hourly labor cost would be 20–25 yuan, but in this era, even with higher wages for machinists, a little over one yuan per hour was enough.

Using a standard Lathe 6140 for face turning, the equipment investment payback period could be calculated at 3–5 years (industrial machine tools typically had a design life of 15–25 years, but investment recovery was expected within 3–5 years), so the hourly depreciation was about 3–5 yuan.

The rated power of a Lathe 6140 was about 7.5 kW. Without frequent starts and stops, it consumed about 4 kWh per hour. Electricity rates used industrial power pricing, and in the 1990s, electricity costs were actually a bit higher than in later times.

The purchase cost and energy consumption of a Radial Drilling Machine were slightly lower than those of a Lathe 6140.

Other costs were minor. Roughly estimating, the hourly processing cost for lathe work and drilling in this era was about 10 yuan. After factoring in taxes, rework, payment risk, and other factors, the hourly processing quote had to be above 15 yuan to make a profit.

For Hengli Company, one production line (lathe and drilling took about the same time—one lathe and one drill per line) could only process 2 pieces of 2-inch globe valves per hour. Including breakdowns, scrap rates, and so on, the machining cost per piece already exceeded 15 yuan.

And Fang Bai's quote was only 15 yuan. If he could meet the quality requirements and save on management costs, Wang Hengli would definitely be happy to outsource.

Fang Bai's low quote was mainly because he knew that valve companies in this era had poor machining efficiency.

Low efficiency had two main reasons:

First, globe valves had complex shapes. Although Hengli Company had made face turning fixtures, they weren't suitable—hardly different from traditional clamping methods, resulting in low clamping efficiency.

Second, there were very few CNC drills now; everything was manual drilling. The typical drilling process involved first marking lines (to locate the hole centers), then punching a center mark before drilling (to prevent the drill from slipping), which was very slow.

Hengli Company had no technical staff responsible for designing fixtures or improving processes. Improving the process relied entirely on the workers, but without an incentive system, who the hell would want to do it?

It was thankless work—no worker was willing.

As for thinking that improving efficiency would benefit them?

Dream on!

If efficiency went up, the boss would just lower the unit price. If order volumes were small, the workers would actually earn less.

Fang Bai knew the face turning fixture for globe valves wasn't expensive to make, and he could also create a drilling jig, eliminating the need for marking lines and center punching.

Most industrial valves were standardized, with uniform specifications and sizes. For valves of the same type and size, fixtures and jigs were interchangeable—not just for Hengli Company's valves, but for other companies' valves too.

Once the fixtures and drilling jigs were sorted out, work efficiency would skyrocket. Each line per hour could process 6–8 pieces of 2-inch globe valves.

The hourly processing fee could be charged at 90–120 yuan, which could be called a huge profit.

As long as order volumes were sufficient, the annual profit from three processing lines (three lathes plus three drills) would surpass that of Hengli Company.

"I still don't believe it. How can the cost be that low?" Wang Hengli shook his head.

"Then let me take two blanks first. I'll process them and show you. If they're good, you'll give me your 2-inch globe valves to machine, right?"

"I don't care which shop you use. If you can actually machine them, as long as it's 15 yuan per piece, I'll give you all the work."

Hearing this, Fang Bai stood up and shook his hand again. "Alright, you said it. I'm going to the workshop to grab the blanks."

"Go ahead, I'll wait for your news." Wang Hengli smiled dismissively.

"Haha, no problem!" Fang Bai chuckled, left Wang Hengli's office, went to the workshop to find the workshop director, and took two blanks.

Back home, he measured the blank dimensions and designed the face turning fixture and drilling jig.

The next morning, Fang Bai went to Jiayu Processing Plant again.

He needed to build initial trust with his father-in-law. Once the relationship was solid, he'd partner with him to start a valve factory.

The industrial valve market was huge, and profits were very high in this era.

However, Fang Bai wouldn't spend too much energy on the valve factory. Besides making money, it was also to fulfill his father-in-law's wish—he longed to own a big valve company. If it could go public, he'd have no regrets in this life.

Fang Bai didn't want his father-in-law to know about his relationship with Qin Shuyu yet—at least not until he got into college.

"Boss Qin, what's your quote for facing and drilling these two-inch valve bodies? Surface roughness 6.3, inner bore 12.5, nothing demanding." Fang Bai pulled two globe valve bodies from his bag and set them on the concrete floor. Each weighed several kilograms, making them quite heavy to carry.

"Big order? Small quantities cost more per piece. Do I keep the iron chips? Who handles transport? How long until payment?"

Qin Donghai asked in detail; he had experience machining these two-inch valve bodies.

Fang Bai thought for a moment before replying, "The first order won't be less than five hundred valve bodies, and there'll be more after that. The iron chips are yours, of course. Transport is on the manufacturer—if you want to deliver, that's extra, and I'll aim for payment within sixty days."

Besides Hengli Company, he still needed to find suppliers at other valve firms. His fifteen-yuan quote was easy to work with, but even with improved efficiency, his father-in-law's two lathes wouldn't keep up.

Hearing it was a large batch, Qin Donghai felt a surge of joy. "Sixteen yuan, then. I'm just earning a bit of hard labor money here."

Given his own situation, if the order was five hundred pieces and everything went smoothly, the profit could be over three thousand yuan, finished within a month.

His average monthly profit was about two thousand, so hitting three thousand naturally pleased him.

The two men discussed the price out of earshot of the driller in the workshop—subcontracting rates were a secret for any processing shop.

"The quote's reasonable, but what if I could get you machining over six pieces an hour?"

"How's that possible? Two an hour is already decent. The workpiece has a complex shape, hard to clamp, and you have to drill holes one by one—turning and drilling both take half an hour."

"That's your old method, and you don't have any fixtures. Of course it's slow." Fang Bai smiled. "Here's the deal: I'll find the orders, provide the process and tooling. Your two machines run, and I'll pay you fifty yuan an hour—four hundred for an eight-hour day. With your traditional method, even if you work ten hours straight, you'd max out at three hundred twenty. In reality, you need rest, so two hundred fifty would be generous."

This calculation left Qin Donghai a bit dazed.

If it worked that way, he'd indeed earn more per day than before—actual profit doubled—but he'd also be doing more work, which felt like a loss.

The problem was, if that efficiency was real, he'd finish five hundred pieces in under ten days.

On Fang Bai's end, if he could process fifty pieces a day, the processing fee would be seven hundred fifty yuan. Subtract the four hundred he paid his father-in-law, and he'd net three hundred fifty.

Still, once his father-in-law saw the new molds and fixtures, he'd probably have second thoughts—that could be dealt with later.

The orders were in his hands, and he had to have the skill to deliver.

Even father and son settle accounts clearly, and the same went for future in-laws.

Seeing his father-in-law torn, Fang Bai pulled out the drawings he'd finished last night and handed them over. "You've got materials here, right? Use 45 steel for the drill bushings—40CR's even better. Quench and temper after machining. Start with these two sets of fixtures; I'll cover the materials and labor. Also, I'll take the drawings back when you're done."

After quenching and tempering, the material had higher hardness and better wear resistance. Normally, you machine first and then quench and temper, or the tools can't cut it.

Not every material could be quenched and tempered, of course—low carbon equivalent ones like 20 steel couldn't, and they usually needed carburizing for hardness.

Qin Donghai took the drawings, glanced through them, and with Fang Bai's explanations, quickly understood what they depicted. He gave a thumbs-up and laughed. "Seems pretty clever, but we'll only know if it works once it's made. It'll take at least half a day, and materials plus labor will run about a hundred yuan."

"Money's no big deal. Start with the facing fixture," Fang Bai said.

A hundred yuan for two sets of fixtures, including materials, wasn't expensive. Both sets involved cutting and welding, so his father-in-law wouldn't make a profit and would even lose time.

With that, he pulled a hundred-yuan bill from his pants pocket and handed it over.

After pocketing the money, Qin Donghai immediately set to work finding materials and machining.