Booming High Tech Economy Puts Strain on California Manufacturing
California's OEMs have been in overdrive lately. With a high concentration of OEMs in a variety of high tech industries, it's not surprise the California machine shops and assembly houses are becoming overloaded with work. Industries like Semiconductor, Medical, Defense and Aerospace are concentrated in Silicon Valley and Southern California. At PEKO Precision Products, our CA customers keep telling us that the smaller shops that help support the massive OEMs in these industries have done a fantastic job in keeping up with demand. But as the pressure for price, delivery and quality increases, OEMs are starting to look to other states that have a strong manufacturing infrastructure.
OEMs: "Low Volume CNC Machine Shops wanted"
High tech OEMs that build products like blood analyzers, medical imaging units, wafer prep and handling, tanks and submarines often require low volume, high complexity machine shops and contract manufacturers in their supply chain. The problem is that with the high costs of doing business in California, the small shops that have the capability to do these this work are more interested in high volume production runs. By looking to other states, California OEMs are noticing that small volume runs of high complexity parts can be done at very reasonable rates.
The Problem with Aerospace Takeover
One comment we hear from a lot of our customers in CA is that when the Aerospace industry heats up, the pressure on small manufacturers is huge. When this happens, the normal customer base is put to the side so that the demands of the Aerospace industry can be met. The good news is that companies like PEKO are insulated from the demands of the Aerospace industry, leaving the normal customer base unharmed by these types of events.
For more information on how California companies are benefitting from benchmarking companies like PEKO Precision Products, contact me and we can give you a quote on precision CNC machining, sheet metal fabrication or assembly.