Midtechs by Mechforce

[mitchnola]

I've mostly seen American companies outsource if it's a design that has some of those more difficult features, or they're chasing the very bottom segment of the market. Materials are certainly far less expensive in China, that's an issue in every industry. Actually, materials is kind of an issue of connections and leverage. You can get reasonably-priced materials, but you need to be placing orders in massive quantities or the big Chinese mills won't even pick up the phone.

The point I'm making with American knife manufacturers is more that the profit margins are SO high that they don't feel the need to put much thought and effort into being more efficient. I've seen videos of Chinese knife factories, and they really aren't set up as high-efficiency volume producers at all. It's just the most basic operator-loading-VMC formula, but it's competitive because they're going up against American knifemakers that are still stuck in the stone age. If knife companies here felt the push to be more efficient like American machine shops in other industries, they could bypass the higher labor costs. Even something as basic as improving your spindle utilization with a twin pallet VMC can make a big difference. Implementing a cobot system would improve significantly on that, and a palletized horizontal is an even bigger jump up from there. But in my experience, these guys are so much more profitable than shops that need to compete for weapons contracts that streamlining the operation isn't a priority.

I don’t see the correlation between high profit margin = less innovation. Actually up until recently all the modern knife innovations have been by American companies. Just consider all of the different locking mechanisms that are American designed and made. If anything a lot Chinese companies are very guilty of intellectual theft and ignoring American copyrights and patents.

And as far as streamlining their own manufacturing, I’m sure it comes down to cost of doing so vs long term growth. No company would pass on simple streamlining and efficiency techniques that were cost effective and leading to high profit margins.

You seem to know more about manufacturing then I do but I would bet most of those machines are also made in China and therefore cheaper and easier to acquire. Not to mention China’s economy is manufacturing based. I could imagine there’s wharehouses full of cnc machines etc just looking and waiting for something to make.

Btw, if you go to bladeshow you will see tons of American knife companies you’ve never heard of selling $100-200 knives all made in china. These guys come up with a design on autocad, get a 1000 units made and think they can start a knife company. Arcane designs is an example that has had moderate success. Fortunately imo most don’t succed. It’s the business model I probably despise the most.

 

[madcap_magician]

Well, I talked to John, and he offered to refund, which I accepted and said I'd eat the shipping costs both ways. Mechforce told him that they made all the components and assembled here, but that the blades were sent overseas to be ground. I think that's weird, but maybe that was the most efficient way for them to handle their supply chain. I feel a little better about most of it being made here, but weird enough about the entire thing that while I respect the quality of the work, I would not buy a Mechforce without asking beforehand about the material and parts sourcing and the value add steps, as that seems to vary for them depending on the product.

 

[Tsujigiri]

I don’t see the correlation between high profit margin = less innovation. Actually up until recently all the modern knife innovations have been by American companies. Just consider all of the different locking mechanisms that are American designed and made. If anything a lot Chinese companies are very guilty of intellectual theft and ignoring American copyrights and patents.

And as far as streamlining their own manufacturing, I’m sure it comes down to cost of doing so vs long term growth. No company would pass on simple streamlining and efficiency techniques that were cost effective and leading to high profit margins.

You seem to know more about manufacturing then I do but I would bet most of those machines are also made in China and therefore cheaper and easier to acquire. Not to mention China’s economy is manufacturing based. I could imagine there’s wharehouses full of cnc machines etc just looking and waiting for something to make.

Btw, if you go to bladeshow you will see tons of American knife companies you’ve never heard of selling $100-200 knives all made in china. These guys come up with a design on autocad, get a 1000 units made and think they can start a knife company. Arcane designs is an example that has had moderate success. Fortunately imo most don’t succed. It’s the business model I probably despise the most.

Sorry, I might have been a little unclear. I was comparing American knife manufacturing innovation to American manufacturing innovation in other industries, not American knife design innovation to Chinese knife design innovation. I certainly agree that American designers lead the way on knife design. I wouldn't consider Chinese knife manufacturing to be very innovative, either. That's just the status quo for this industry, there are only a few outliers that approach things differently like Grismo and Koenig.

Unfortunately, I know firsthand that the vast majority of companies resist streamlining their production to increase profit margins, as that's what I do for work. I get it, the high upfront costs of more efficient production can be daunting, but you'd be amazed at how many business owners avoid taking the steps that they need to grow, even when the ROI is obvious.

There are some Chinese-made CNC machines that are only available in that market, but that detail doesn't matter much in the grand scheme of things. The best CNC machines are Japanese, and when used correctly they justify their cost no matter where you are. The smartest and most advanced Chinese manufacturers often go with Japanese machines for this reason; on a few occasions I've been unable to source a Japanese machine here because a Chinese manufacturer bought out the production slots.

Well, I talked to John, and he offered to refund, which I accepted and said I'd eat the shipping costs both ways. Mechforce told him that they made all the components and assembled here, but that the blades were sent overseas to be ground. I think that's weird, but maybe that was the most efficient way for them to handle their supply chain. I feel a little better about most of it being made here, but weird enough about the entire thing that while I respect the quality of the work, I would not buy a Mechforce without asking beforehand about the material and parts sourcing and the value add steps, as that seems to vary for them depending on the product.

That sounds kind of odd, I wonder if something is getting lost in translation. It wouldn't make a whole lot of sense to send the blades overseas for grinding if they're roughed and machined here. Many smaller brands (more than you'd think) just send their blades to Larkin Precision up in the PNW since they have the $1mil+ Burger grinders needed to double disc grind efficiently at scale. It would, however, make sense to have Chinese factories CNC many of the components and send them here.

 

[madcap_magician]

That sounds kind of odd, I wonder if something is getting lost in translation. It wouldn't make a whole lot of sense to send the blades overseas for grinding if they're roughed and machined here. Many smaller brands (more than you'd think) just send their blades to Larkin Precision up in the PNW since they have the $1mil+ Burger grinders needed to double disc grind efficiently at scale. It would, however, make sense to have Chinese factories CNC many of the components and send them here.

I also thought it was a bit odd and also nonspecific, which is why I'm going through with the return.

 

[mitchnola]

Sorry, I might have been a little unclear. I was comparing American knife manufacturing innovation to American manufacturing innovation in other industries, not American knife design innovation to Chinese knife design innovation. I certainly agree that American designers lead the way on knife design. I wouldn't consider Chinese knife manufacturing to be very innovative, either. That's just the status quo for this industry, there are only a few outliers that approach things differently like Grismo and Koenig.

Unfortunately, I know firsthand that the vast majority of companies resist streamlining their production to increase profit margins, as that's what I do for work. I get it, the high upfront costs of more efficient production can be daunting, but you'd be amazed at how many business owners avoid taking the steps that they need to grow, even when the ROI is obvious.

There are some Chinese-made CNC machines that are only available in that market, but that detail doesn't matter much in the grand scheme of things. The best CNC machines are Japanese, and when used correctly they justify their cost no matter where you are. The smartest and most advanced Chinese manufacturers often go with Japanese machines for this reason; on a few occasions I've been unable to source a Japanese machine here because a Chinese manufacturer bought out the production slots.




That sounds kind of odd, I wonder if something is getting lost in translation. It wouldn't make a whole lot of sense to send the blades overseas for grinding if they're roughed and machined here. Many smaller brands (more than you'd think) just send their blades to Larkin Precision up in the PNW since they have the $1mil+ Burger grinders needed to double disc grind efficiently at scale. It would, however, make sense to have Chinese factories CNC many of the components and send them here.

Ahh, I got ya. I actually find that very surprising and interesting that there is any American innovation in manufacturing at all. Though it’s not a subject I know about or pay attention to. Hearing that definitely piques my curiosity.

Being your in the business of streamlining production, is doing so to actually increase profit margins, production or both?

When I think of companies like Crk, Hinderer etc. I could certainly see there being no need to increase production because they build for such an incredibly small niche market that doing so would probably just lead to an over saturation of the market which would not be good for them at all. Right now is a perfect example of the market not exactly having a high demand for these knives.

For example everything was red hot and selling out instantly during the covid bubble. I actually remember people complaining about companies like crk and hinderer not making enough knives because they sold out instantly. But now that the bubble bursted and the market is actually returning back to normal, you can definitely find many of their knives currently available at retail sites.

And you mentioned the up front cost of streamlining which I understand should pay for itself eventually but how long does that take. And considering the fluctuations in such a small limited market I could certainly understand being very cautious in investing more money in production when you currently have products still sitting on the shelf.

I think it’s also important to consider that the high end pocket knife market would be difficult to grow simply by supplying more available products or even advertising. I think we end up being apart of the market through growing as collectors. Starting with your mid range bms and spydercos and then moving on into higher end. I think it’s probably more organic than something that can be manipulated by marketing and availability.

But that’s just me spinning my wheels. I’m certainly no expert.

 

[mitchnola]

I also thought it was a bit odd and also nonspecific, which is why I'm going through with the return.

I remember we were both surprised and I was even a little disappointed to find out that Les sends his blades out for grinding. Maybe he sends them to Larkin precision.

 

[Tsujigiri]

Ahh, I got ya. I actually find that very surprising and interesting that there is any American innovation in manufacturing at all. Though it’s not a subject I know about or pay attention to. Hearing that definitely piques my curiosity.

Being your in the business of streamlining production, is doing so to actually increase profit margins, production or both?

When I think of companies like Crk, Hinderer etc. I could certainly see there being no need to increase production because they build for such an incredibly small niche market that doing so would probably just lead to an over saturation of the market which would not be good for them at all. Right now is a perfect example of the market not exactly having a high demand for these knives.

For example everything was red hot and selling out instantly during the covid bubble. I actually remember people complaining about companies like crk and hinderer not making enough knives because they sold out instantly. But now that the bubble bursted and the market is actually returning back to normal, you can definitely find many of their knives currently available at retail sites.

And you mentioned the up front cost of streamlining which I understand should pay for itself eventually but how long does that take. And considering the fluctuations in such a small limited market I could certainly understand being very cautious in investing more money in production when you currently have products still sitting on the shelf.

I think it’s also important to consider that the high end pocket knife market would be difficult to grow simply by supplying more available products or even advertising. I think we end up being apart of the market through growing as collectors. Starting with your mid range bms and spydercos and then moving on into higher end. I think it’s probably more organic than something that can be manipulated by marketing and availability.

But that’s just me spinning my wheels. I’m certainly no expert.

There are a lot of surprising things about manufacturing here. For instance, everyone says that businesses are all leaving California and it's only tech here, but Orange County and LA are #1 and #2 in CNC machine sales every year.

In theory it should be both, but in practice business owners are not very good at visualizing lost opportunity. So they only invest in streamlining when they can't keep up with production and are facing the more palpable pain point of angry customers. Machinists are in short supply and ones that actually show up on time and do what they're supposed to are even rarer (they know they can play their position), so automation is the most realistic solution.

A big problem is that people think of a CNC machine in terms of the sticker price, and they think of an employee in terms of the hourly pay rate. So they see a big number next to the machine and a small number next to the employee. In reality, machine costs are negligible compared to employee salaries when amortized over the life of the machine. Not investing in better equipment seems like a cost-saving tactic, but it's actually a far more expensive way to run a business. Many of these "expensive" machines have an ROI of less than a year if you have enough work to keep them busy.

 

[mitchnola]

There are a lot of surprising things about manufacturing here. For instance, everyone says that businesses are all leaving California and it's only tech here, but Orange County and LA are #1 and #2 in CNC machine sales every year.

In theory it should be both, but in practice business owners are not very good at visualizing lost opportunity. So they only invest in streamlining when they can't keep up with production and are facing the more palpable pain point of angry customers. Machinists are in short supply and ones that actually show up on time and do what they're supposed to are even rarer (they know they can play their position), so automation is the most realistic solution.

A big problem is that people think of a CNC machine in terms of the sticker price, and they think of an employee in terms of the hourly pay rate. So they see a big number next to the machine and a small number next to the employee. In reality, machine costs are negligible compared to employee salaries when amortized over the life of the machine. Not investing in better equipment seems like a cost-saving tactic, but it's actually a far more expensive way to run a business. Many of these "expensive" machines have an ROI of less than a year if you have enough work to keep them busy.

Very interesting, thanks for the info. I’d love to see a return of manufacturing to the states. Especially in those industries vital to national security like pharmaceuticals and medical equipment amongst many others.

These days I just assume just about all the products I buy are made overseas. The knife industry has remained one of the very few areas where you have the option to buy high quality American made knives. I’d like to keep it that way but unfortunately I think it’s currently under assault by overseas competition which is the main reason I refuse to buy them.

 

[The True North]

I think Chinese manufacturers tend to be machinists who found a market in knives, whereas American brands are usually knifemakers who tried to scale up with CNC machines

That's an interesting perspective. I have not found this to be the case at all. In fact, I can't think of more than a few USA-based high end makers that didn't start out in hobbyist machining, prototyping, or aerospace first.

Many of the high-end American brands make their knives on bottom-of-the-barrel Haas machines

And, respectfully, this is simply false.

 

[knarfeng]

A big problem is that people think of a CNC machine in terms of the sticker price, and they think of an employee in terms of the hourly pay rate. So they see a big number next to the machine and a small number next to the employee. In reality, machine costs are negligible compared to employee salaries when amortized over the life of the machine. Not investing in better equipment seems like a cost-saving tactic, but it's actually a far more expensive way to run a business. Many of these "expensive" machines have an ROI of less than a year if you have enough work to keep them busy.

Agree. The fully burdened pay rate (break time, vacation time, benefits, training, room for parking, heating and cooling the building, required lighting and electricity) is commonly 3x the base pay rate of an employee. If an employee was making $50 per hour, we would estimate the cost to the company at $150 per hour of his time.

 

[mitchnola]

Agree. The fully burdened pay rate (break time, vacation time, benefits, training, room for parking, heating and cooling the building, required lighting and electricity) is commonly 3x the base pay rate of an employee. If an employee was making $50 per hour, we would estimate the cost to the company at $150 per hour of his time.

On the flipside though, not sure how I would feel if for example Hinderer broke the news that they were streamlining and automating their production line but also letting go 80% of their workforce. Even if it meant I could now buy the same quality knife for a $100 bucks cheaper. I enjoy supporting American made companies which in return means supporting American workers and families.

Machines, automation, robots etc have already put a hurting on middle class workers around the world. I have a feeling when AI starts replacing upperclass positions such as accountants, coders etc it will suddenly become a more important subject.

 

[Tsujigiri]

Very interesting, thanks for the info. I’d love to see a return of manufacturing to the states. Especially in those industries vital to national security like pharmaceuticals and medical equipment amongst many others.

These days I just assume just about all the products I buy are made overseas. The knife industry has remained one of the very few areas where you have the option to buy high quality American made knives. I’d like to keep it that way but unfortunately I think it’s currently under assault by overseas competition which is the main reason I refuse to buy them.

Funny you say that, the fact that you could easily get made in USA was one of the things that first got me excited about collecting knives and flashlights about 20 years ago.

That's an interesting perspective. I have not found this to be the case at all. In fact, I can't think of more than a few USA-based high end makers that didn't start out in hobbyist machining, prototyping, or aerospace first.



And, respectfully, this is simply false.

Huuuuuuge difference between a manual machinist and a machinist with a deep understanding of optimizing production processes. Not that one's better than the other, but a machinist with one of those two skillsets very rarely has the other.

Which part do you think is false? I've been in a bunch of these facilities and know a lot people who have been in others. You can make a good product on a cheap machine, it just leans heavily on the operator to work around the machine's deficiencies. Which is not efficient.

Agree. The fully burdened pay rate (break time, vacation time, benefits, training, room for parking, heating and cooling the building, required lighting and electricity) is commonly 3x the base pay rate of an employee. If an employee was making $50 per hour, we would estimate the cost to the company at $150 per hour of his time.

Also an excellent point, so many things come down to how much you can produce in a given time interval, and that's where quality machines, tooling, fixturing, etc become so critical.

 

[knarfeng]

On the flipside though, not sure how I would feel if for example Hinderer broke the news that they were streamlining and automating their production line but also letting go 80% of their workforce. Even if it meant I could now buy the same quality knife for a $100 bucks cheaper. I enjoy supporting American made companies which in return means supporting American workers and families.

Machines, automation, robots etc have already put a hurting on middle class workers around the world. I have a feeling when AI starts replacing upperclass positions such as accountants, coders etc it will suddenly become a more important subject.

Then buy a custom. Then you are paying for individual craftsmanship and individual workers performing the tasks.

The choices are automate, or see the work go elsewhere.

Ever wonder how Mora is able to sell their knives at such a low price? Extreme levels of automation.

 

[The True North]

Huuuuuuge difference between a manual machinist and a machinist with a deep understanding of optimizing production processes. Not that one's better than the other, but a machinist with one of those two skillsets very rarely has the other.

It's not relevant whether they were manual or CNC machinists before getting into the knife industry, nor is it relevant what they are or are not optimizing. What you SAID was:

I think Chinese manufacturers tend to be machinists who found a market in knives, whereas American brands are usually knifemakers who tried to scale up with CNC machines

Which I have not found to be the case at all. Can you provide multiple specific examples?




And yeah, you can make good parts on a cheap machine. Most high end USA-based knife makers however, are NOT using bottom of the barrel machines, as you posited previously. Or does anything not automated automatically fall into that category in your eyes? You seem to be implying that anyone not deeply invested in automation and maximized production output are somehow amateurish, which is of course ridiculous.

 

[mitchnola]

It's not relevant whether they were manual or CNC machinists before getting into the knife industry, nor is it relevant what they are or are not optimizing. What you SAID was:


Which I have not found to be the case at all. Can you provide multiple specific examples?




And yeah, you can make good parts on a cheap machine. Most high end USA-based knife makers however, are NOT using bottom of the barrel machines, as you posited previously. Or does anything not automated automatically fall into that category in your eyes? You seem to be implying that anyone not deeply invested in automation and maximized production output are somehow amateurish, which is of course ridiculous.

Chris reeves, hinderer and Les George are perfect examples of knife makers that grew into machinists to grow their company. Sure it’s not all but there’s plenty. Whether it’s the majority or not is up for debate till some hard nose research is completed.

 

[The True North]

Chris reeves, hinderer and Les George are perfect examples of knife makers that grew into machinists to grow their company. Sure it’s not all but there’s plenty. Whether it’s the majority or not is up for debate till some hard nose research is completed.

Hinderer and Reeves both started as machinists very early (Reeves was even a skilled tool and die maker before making knives at all), and have both utilized machining from the very first day they started making folding knives. So these are not the best examples.





So yes, much more research needs to be done before anyone can categorically claim what USA makers "usually" are and do.

 

[mitchnola]

Then buy a custom. Then you are paying for individual craftsmanship and individual workers performing the tasks.

The choices are automate, or see the work go elsewhere.

Ever wonder how Mora is able to sell their knives at such a low price? Extreme levels of automation.

Even buying from Crk hinderer or even spyderco is still a means of supporting their employees as well as the company.

And while automation may be the future for mass production that doesn’t mean it’s necessary for all companies. What’s good for Mora isn’t necessarily good for Crk. 2 different manufacturers operating in 2 very different markets.

I have actually started buying customs just last year and I agree it’s even more rewarding supporting them. Especially when they’re making them buy hand, one at a time. Knowing the amount of extremely hard work it takes to make a high quality folding knife is extremely impressive and more than justifies the cost. To the point Ive even tipped an extra hundo on a thousand dollar knife just cause I wanted to buy him some beers or whatever he enjoys while relaxing.

 

[mitchnola]

Hinderer and Reeves both started as machinists very early (Reeves was even a skilled tool and die maker before making knives at all), and have both utilized machining from the very first day they started making folding knives. So these are not the best examples.

Interesting, if that’s the case I stand corrected. However that’s not to say it’s not the case for others or the majority.

 

[The True North]

The choices are automate, or see the work go elsewhere.

One of my favourite things about the American knife industry is that, for now at least, this is not true.

 

[The True North]

Interesting, if that’s the case I stand corrected. However that’s not to say it’s not the case for others or the majority.

I guess we'll see if Tsujigiri has a detailed and specific list for us, including professional origins and production ramp-up histories.