Machine Shops Industry Overview

Excerpt from Machine Shops Report

Companies in this industry use machine tools to modify metal, plastic, and composite materials to produce finished products. No major companies dominate the industry.

Competitive Landscape

Demand depends on US manufacturing activity. The profitability of individual companies is linked to engineering expertise and operating efficiency. Larger shops have the ability to invest in advanced production machinery. Smaller shops can compete effectively by serving specialized customers, or by providing engineering services. The industry is highly fragmented: the 50 largest companies generate about 10 percent of revenue.

Products, Operations & Technology

Machine shops are intermediaries in industrial production. They work on a job basis: generally, they receive unfinished parts or raw materials from a manufacturer, perform various operations, and return the parts to the manufacturer for further processing. They own and operate special machine tools that can perform a variety of operations, including drilling; boring (enlarging an existing hole); tapping (cutting threads inside a drilled hole); threading (cutting threads on a bolt); cutting; milling (removing material from a surface); and grinding (usually a finishing operation). These operations involve material removal, frequently with great precision. The bulk of machine shop work is performed on metal, but plastics and composite materials are also machined.