Almost every shop owner I talk to wants to grow. Far fewer build something that can survive a real downturn. That's the thread running through my whole conversation with Chris Welch of Swissomation, and it's why I wanted him on after we met at Machining on the Summit. Chris runs a high-mix Swiss machining operation, two locations and around 120 spindles, and just about everything he does comes back to one idea: build a business durable enough to ride out whatever the market does next.
We get into the moves that kept him standing when other shops folded. The 2001 telecom crash nearly took him out, and he came out of it refusing to let any single customer pass 20% of sales. He advertises hardest when he's slammed, which is why he was up 35% in 2009 while friends were calling him looking for work. He buys used machines with cash, adds his own live tooling and indexing, and stays out of debt so he never has to lay anyone off. In 29 years, he hasn't.
Chris is a systems guy too. We talk through his sales-based bonus program and why he steers clear of profit-sharing, the twice-daily blueprint checks that make quality everyone's job, the quarantine-and-lot-ticket process running on an ERP he wrote himself, and how a fleet that size lets him slip short-run tech jobs in between the longer ones. He doesn't dodge the hard parts either: the Google AdWords money pit, the rough jump from owner to CEO, the training program he admits he's behind on.
If one line sums up the episode, it's how Chris describes the shops that don't make it: everybody wants to milk the cow, nobody wants to feed it. Watch your debt, save your money, invest in your people, find your niche. Coming from someone who's lived all four, it's worth the hour.
What's Covered in this Episode
- (0:00) Meet Chris Welch and Swissomation, two shops with around 120 spindles
- (3:08) From a 1997 start to launching Swissomation Virginia with his parents
- (7:49) The product side: firearms, dive gear, Peak Fishing, and AIQ Manufacturing
- (10:07) SMW Autoblock and the seven habits of workholding (RASRAM)
- (10:54) Diversifying away from telecom and surviving the 2001 crash with no layoffs
- (12:09) The 20% rule after losing a customer worth half his sales
- (13:36) Why he advertises hardest when busy, and was up 35% in 2009
- (19:53) Staying debt-free: used machines bought with cash and live tooling added in-house
- (23:31) Riches in the niches and why handling tiny parts is the real challenge
- (26:04) The most effective types of trade shows for Swissomation
- (27:20) The Google AdWords trap and why carpet-bomb RFQ buyers stay disloyal
- (30:24) The $16,000 UPS theft and choosing the long game
- (32:38) Increase your spindle uptime with the Hennig WorkFlow Automation System
- (33:31) On the floor: short-run systems, twice-daily blueprint checks, in-house ERP
- (39:54) Cutting setup time with tooling strategy and job grouping
- (43:37) Get a free report of sales opportunities in your area from FacturMFG.com/chips
- (44:44) The bonus program: sales-based, not profit-sharing, with rejections counted twice
- (50:02) Boosting throughput through hiring, training, and tools he built himself
- (52:19) The best decision: staying debt-free and feeding the cow
- (54:48) The owner-to-CEO transition and knowing when to add leadership
- (59:04) Best advice for newer shops: watch debt, save, invest in people, find a niche
- (1:02:30) Where to connect with Chris and Swissomation
Resources Mentioned
Connect with Chris Welch
