How Automation Can Sky-Rocket Growth for Small Engineering Businesses IF they invest wisely…
- Bethan Jepson
- Mar 18
- 8 min read
The challenge of any small business from a technology standpoint, is that we are fundamentally competing with big businesses with bigger investment budgets. So the very first thing to say on this topic is that small engineering businesses will NEVER win on technology alone. Simply because it’s impossible to compete with a business who has 10-100 times the amount of money to invest.
BECAUSE of this, we need to focus on HOW small engineering businesses WIN over big businesses and fundamentally use very SPECIFIC technology to enhance what we are already winning at.
So in a nutshell, why do our customers (even big massive conglomerates!) prefer working with small engineering businesses over our larger competitors?
1. Flexibility
Most small engineering businesses don’t have unnecessary red tape for customers to battle with. I’m talking unreasonably large amounts of paperwork, complex logistics, rigid systems and processes that the customer has to fit into.
Our business for example, has a 1 page customer onboarding form and our terms of business is also just 2 pages long.
We turn quotes around (most of the time - we are not perfect!) in 24 hours.
We advise on "design for manufacturing" i.e. we tell you if we think we can make it cheaper or quicker with some design tweaks.
We have an open door policy to customers for any collaborative problem solving that needs to take place, or if you simply want to see how things are going.
We can fast track projects where needed.
We can put on overtime with very short notice.
2. Priority
You have more of a chance of being the priority in a small business.
One small business tends to have 2 or 3 bigger customers, 10-15 medium customers and dozens of small customers.
So if you have an urgent project, you have a chance of being the priority when you really need to be.
Most small businesses value their customer relationships more because word of mouth marketing is heavily relied on by small businesses, so even if the customer isn’t one of the big customers, if they are pleasant to deal with and reciprocate the flexibility, that relationship alone will be enough for the small business owner to take a bit of a risk and put that customers work to the top of the pile when needed.
3. Relationship driven
Relationships are the heart of small businesses and every role has customer involvement on some level.
Often, the people who speak to customers in small businesses also wear many other hats in the business and therefore can give better information to customers over the customer service team you end up speaking to in big businesses who actually have very little incentive to solve the customers problem.
In our business for instance:
Our GM’s plan production,
Our administrators oversee the majority of the back office systems and create route cards, o
Our estimators are also the technical sales person and design engineers,
Our Directors often get involved with customers when there is a bigger strategic picture going on.
Even our engineers get involved in customer visits and tours around the sites.
WE ALL speak to customers regularly. So customers get better quality information quicker.
So the point of starting here in this article, is to emphasise that whilst we will never be the most technologically advanced, there will always be a place for small businesses in engineering and manufacturing. Our challenge, as margins get squeezed is to use carefully selected technology and automation to enhance the competitive edge we already have.
At the end of day, we are in an industry that’s constantly evolving. Embracing automation isn’t just a luxury—it’s essential for staying competitive on customer-facing pricing, while improving efficiencies behind the scenes to improve the bottom line.
How we have started to use automation to grow our small engineering businesses - a couple of examples:
1. Turning low margin work into profitable, quick turnaround work.
Whilst we like to boast about the big, shiny, complex machining and fabrication work that we make, we also make a lot of small, simple, parts in medium to reasonably large quantities.
Because of the nature of these simple parts, in order to stay competitive with work like this, the go-to in our industry is to reduce margin and compete on price, given that most of our competitors could also very easily do the work.
However, most of our competitors don’t use automation like bar feeds, robot loaders and parts catchers (these are all investments we have made in the past 12 months) to be able to run overnight (when most small engineering businesses are turning their machines off for the night), or allow an operative to operate multiple machines.
As such, costs to make these sort of parts plummet and therefore what was once considered low margin work, is now up there with other high margin work that gets prioritised by the business.
The customer is thrilled because not only is the price great for them, but lead time often improves too.
2. Enhancing customer communication in an industry typically known for it’s terrible communication.
(I'm not going to go into the cultural change that needs to take place alongside discovering the automation tools - but as this is is a topic close to my heart, I'm always happy to discuss this with you as it's a very real part of the journey of improving customer communication!)
We have recently started to experiment with linking our MRP and CRM systems to our email so that we can easily keep customers informed of key milestones in the production of their parts as well as inform them of any challenges or interruptions.
It’s early days with this one, but given that this is one of the biggest frustrations that customers have with their small engineering suppliers i.e. they aren’t easy to get hold of, we consider this to be a very important use of automation in our growing small business where people are only getting busier and desensitised to the customer experience.
And whilst automation is an essential development for small engineering businesses… we are certainly not alone in this technology race.
The beauty of the engineering and manufacturing industry is that we are the foundation of all other industries because we make their products AND the machinery that makes their products - Aerospace, Medical, Pharmaceutical, Food & Beverage, Construction, Rail, Automotive, Marine, Defence, Energy, I could go on and on.
So because of this and the flexibility of our service offerings, we have a window into everything from start ups in the energy sector to global commercial vehicle conglomerates, to government backed defence projects AND technology such as automation and AI is playing a massive role everywhere - there is no escaping it.
As a result, there are actually really interesting business development opportunities as well if you can be part of the technology conversation.
Just a brief example from a conversation I was personally part of…
We sat down with a start up in the chemical engineering space who have designed a sensor (made from CNC machined parts) which will automate key data collection that chemical and food & beverage manufacturers need to reliably and consistently produce their products - from everything from shampoo to ketchup.
For them this automation is key because it provides their customers the guarantee that there will be no pause in production to gain this data i.e. their customer benefits from the reliability and accuracy that automation provides.
The beauty of this for us is that this new technology needs CNC machined parts and fabricated parts just the same as traditional technology in power grids and trains.
Now, let’s dive into how automation can be used to enhance the existing super powers of small engineering businesses that we discussed at the very beginning of this article:
1. Making Flexibility Foolproof
The biggest challenge of being more flexible and fluid is that things can fall through the cracks. Everything from a small detail on a drawing that could be missed by human eye balls, all the way to cash flow issues because someone hasn’t made time for credit control this month.
Automation can be used to make your internal systems more robust and streamlined without adding extra complexity for the customer - it can limit the impact of human error.
Most MRP systems these days have integrated API’s which (for you none-techies out there) basically means that certain triggers in your MRP system can trigger other things to happen in other platforms e.g. when the status of a part changes from ‘in production’ to ‘delivered,’ it can trigger an automatic email which reminds the customer of your payment terms and a link to the delivery note and invoice.
The signed delivery note can be added to the same system which would then trigger an automatic acknowledgment to both the customer and your administrator to then invoice.
Automated systems reduce the margin for human error, ensuring reliability and consistency every time a customer orders. This builds trust with your customers and reduces costs associated with mistakes.
2. Prioritise more customers in a 24 hour period than ever before.
Automation streamlines repetitive and time-consuming tasks, freeing up your team to focus on innovation and complex problem-solving.
Machines can operate longer hours with consistent output, allowing you to meet tight deadlines without compromising quality.
As per our earlier example of using bar feeds, robot loaders and parts catchers to run machines overnight without operators.
As a result, more of your customers feel prioritised as they visibly see lead times and quality of service improve.
3. Reliability equals better relationships
My team and I regularly revisit the fundamentals of business development which is all built on trust.
We are so conscious that when an individual chooses to order from us (especially for the first time), they are essentially taking a risk on us, whether they be small business owners themselves or procurement employees in a larger company.
The quality of OUR performance and products has a direct impact on THEIR reputation and relationships with their own customers / team / managers.
So naturally, as automation improves our reliability, we earn more of our customers trust because it also makes them look good.
Of course from a financial perspective, while the initial investment in automation technology can be significant, the long-term savings will outweigh the costs.
Automation reduces labour expenses, minimises material waste, and improves overall operational efficiency.
Implementing automation can seem daunting and out of reach for small businesses, but if you start small and scale up with the returns you start to see, then all small businesses have a chance of competing in the market.
Identify areas where automation can have the most immediate impact—like repetitive tasks or processes prone to human errors—and start there. Gradually scaling up allows your team to adapt and minimises disruptions.
If you’re a small engineering business owner and want to explore conversations about the future, then don’t hesitate to get in touch.
At Allied Global Engineering, we’re not just engineers—we’re entrepreneurs who understand the challenges and aspirations of small businesses. Here’s how we can help:
1. Join our group of small engineering businesses.
Whether you are looking to sell your entire business, or just part of it, so you can be part of a team of other small business leaders who get the journey you are on, there are a number of ways you and your business could benefit from an alliance with us.
2. A Partnership Approach
We believe in building long-term relationships based on trust and collaboration. Whether that means we subcontract CNC Machining / Fabrication overspill work to each other or you utilise our metrology equipment in service of your own customers, there are plenty of opportunities for small engineering businesses like us to work together to achieve our own goals.
3. Give advice on growing your engineering business or acquiring a complementary business to tack on
We offer consulting services on both organic business growth as well as the ‘buying another business’ strategy.
Both are extremely valuable to helping small business owners achieve their goal of building a strong, resilient, competitive business that gives them the quality of life they deserve.
If any of these options sounds interesting, feel free to reach out to me at bethan.jepson@alliedglobal.co.uk.
Thank you for taking the time to read this article. I appreciate your interest and would be delighted to hear your thoughts or answer any questions you might have.
Take care,
Bethan
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