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Inventory of Standard Parts and Bulk Purchasing Used to Control Costs

We often get asked, why does the price of my caster change so much if I only order one or two pieces?  This is because Caster Concepts is a make-to-order business. We do not keep finished goods inventory of complete casters.

Our business is much like any other manufacturing or production business. The amount of product you buy can directly affect manufacturing costs. As a company that manufactures our products in house, the number of casters ordered can determine the amount of set-up time associated with producing that order.

Quantity-Based Pricing Used to Mitigate Costs

Quantity-based pricing affects us as the manufacturer as well (costing is the term we use to describe our manufacturing costs). Purchasing things such as steel and parts for casters become cheaper in the long run by purchasing in bulk. It helps us mitigate the potential cost changes we may experience with things such as steel, rubber, and aluminum. We do purchase materials in large quantities when feasible. But due to the custom nature of our products, most materials have to be ordered by job.

In an interview with our Vice President of Manufacturing Andrew Dobbins, it was clear how and why quantity-based pricing (or costing on our end) affects manufacturing. “We feel the effects most with our machining and tooling. The setup time of one piece in the CNC machine is the same as the setup time of five pieces or a 100 pieces. We feel the effects of someone spending an hour changing the settings on the CNC machine to make a couple of pieces for three different parts. Many of the components machined are standard components of an industrial caster. And since we manufacture many special configured casters, there are  parts we must make specific for the application.”

To ensure the highest level of productivity in our manufacturing plant, we inventory our most common parts such as castings, forgings, nuts, bolts and bearings, and then integrate special parts that are needed from there.

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