What is the lowest margin composite market?

General Composites Discussions Composites Talk
#1

Hi everyone,

I think we are all aware of where high tech composites are utilized (Aerospace, racing, high end vehicles). Ever since the BMW i series there is also big discussion on automation/high volume production. I am interested in the complete opposite :slight_smile:

I was wondering what your guess to this little brainteaser is:

  • Where are low cost / low margin composites utilized?
  • Where are super small production volumes from 1-10 the usual number?
  • We are talking about composite shells (GF,CF, …) but not about tubes, plates and other semifinished goods!

I am interested to hear your thoughts :slight_smile:
Cheers from Germany!

#2

Its no brainteaser to me as I do exactly that , I do small productions for airplane kits and race cars building companies, only few to around a dozen a year are typically sold plus some replacements.

#3

But this is still a highend market isnt it?

#4

Sorry, your question really makes no sense, what does high mean ? what is high ? how high is high ?

same goes for your “low cost”, I just don’t assume you are trying to produce eight two dollar parts per year

My answer matches the number of parts produced and sold .

#5

Low margin and low volume? Sounds like a good way to go out of business quick. Find the dumbest businessman on the planet and you’ll have your answer.

#6

Have you read “the Innovator’s Dilemma”? It argues, that manager thinking this way in companies are failing in the long term.

#7

Composite Race Yacht Construction.
Very low production runs, normally one of a kind.
99% hand crafted, tolerances to 0.1mm
Typically 25,000 - 50,000 construction hours.
Notorious formula for not making much money!

#8

Thanks! That’s a great tip. What are the main requirements beside the geometrical aspect there? Strength? Eveness ?

#9

I haven’t read the book but I’ve heard the theory. I thought it was based on the idea that established companies get too comfortable and/or afraid to stick there neck out to try new things and in doing so, lose market share. Trust me, I know that part all too well. I beat my head on that wall on an almost daily basis.

As part of a larger organization that can absorb some of the cost while R & D looks for cost savings/new methods/other ways to make those low margin parts more profitable, I could see where the theory has some validity. Or, if you are a small operation with a great big pot of somebody else’s money, you could build and break things until you find something that works.

Based on your original question, I thought you were asking about making parts that are low margin and low volume as a small, stand alone business. Based on that my answer seems reasonable - sounds like a good way to go out of business. I may be totally wrong as I’m no expert on business theory but I know if you are making pennies on a product, you better make a whole bunch of product if you want to keep the lights on.

#10

Low margin mass market is for example production of “Kälberställe” and other agricultural products.
Small series is nearly 90% in composites. At the moment the whole market is a low margin market. Too many capacities at the moment.

#11

Hmm, “calves stables”. Not quite sure how this relates to low margin. Not really sure what he’s after. Either low volume/high margin or high volume/low margin. Pick one.

Guessing something is being lost in translation.

#12

Couple of years ago there was a contract floating round for ages for kiak paddles ÂŁ25 pair 40,000 pairs to make
That was a slim margin don’t think they ever got anyone to take it up

#13

Well at 28-34 euro’s an hour, 50-65 hours a week, and accommodation paid for I can;t say it’s very bad at the moment for a boatbuilder.
For company’s however, they don’t seem to survive long term…

#14

Slightly different operating scales here…

Yes, what you say is true of The Netherlands, but it also very expensive to live there… I did so after living in Sweden, and I found the two are comparable cost wise… Except for a couple of things.
But, this is the clincher, the work is predominantly Super-yacht orientated, not Race Yacht. So, MASSIVE margins/markup to help support the wages.
Try asking for those deals else where in race boat circles, not going to happen except, perhaps, for those exceptional individuals…:wink:
The hours you mention 50 - 65 per week (although you are not allowed to work more than 60 over there) are a clear indication of the lack of skill in the sector. The work still needs to be done, but not enough people to go around.

“I can;t say it’s very bad at the moment for a boatbuilder.” No, it is not that great as you need to get a new job every 2-6 months…!

#15

Focus is - “right first time”. There is no margin for errors.

Reliability is paramount. To finish first -First, you have to finish…!
Safety is right up there with that too. If you bond any component poorly, at best - It will cost them the race, worst is - It will cost them their life.