Engine Builders Quandary: Time or Money?

Dec 1, 2009

A phrase heard universally in the high performance engine marketplace is, “How soon can I have that?” As a shop owner you’ve juggled the cost of complex and expensive machinery against the demands of a restless and sometimes fickle customer base.

The pitfalls are many. Have a machine go down and time and productivity are lost. The frequent need to replace consumables such as cutters and stones is a fact of life and not inexpensive unless you have a substantial scale of equipment. A crew of skilled employees to operate the tools is a major addition to overhead.

Time Equals Money

So how does one solve the outwardly simple equation of time equals money? One way is to reduce the costly and labor-intensive machining “basics” of a build. That way, time can be better spent on the “custom” or tailored areas based on customer specs and preferences.

To do this, it’s best to seek a quality machining facility equipped to do the largest jobs to very high standards. With the economies of scale, they absorb the overhead of costly machinery while you as the builder enjoy the dividend of time. To subcontract in this manner is both prudent and profitable-provided of course that the supplied sub-assembly is of sufficient quality as to be trouble free.

The first step along this path is to determine what best meets your needs in a cost effective way. The least expensive option is the prepped engine block. Operations such as boring and torque-plate honing, align honing, decking, block cleaning, installation of cam bearings, frost plugs, ring dowels and pins can comprise this option.

Production and Blueprint Standards

Some clarification is in order at this point. There are two ways to consider a prepped block; either finished to a production standard or, finished to blueprint standard. The first method entails a prep which is done to a production-style set of parameters and clearances which will work on 90% of non-critical high performance builds.

For builds which demand ultra-high performance such as compression ratios above 11-1, boost or spray, a blueprint prep is necessary. Each engine builder has preferences for deck height, compression, honing patterns and oil clearances for his build, or his customer will specify preferences. No matter the method chosen, a builder is still hours and dollars ahead by subcontracting the foundation of the build-provided he can get the type and standard of finished product he needs.

Short block assemblies take the process one step further. If you can get your preference in the rotating assembly and have it built to an acceptable standard, this is a further economy you can convert into time saved. Generally, that’s four more hours [after block prep] you can add to your productivity or leisure time. If you have solid demand and can give your supplier a forecast order, you can have quantity on your shelf and no delay.

Dollars And Sense

Let’s look at the rough numbers of hours and dollars to see the advantages. The process of inspecting, honing, cleaning and “dressing” [cam bearings, pins, dowels, frost and galley plugs and paint] a bare block takes approximately four hours. Ask yourself if you really need to spend one-half or one-third of your day involved in that. Multiply that by five blocks a week. You can see where this is going.

Dollars are a sobering thought when examined carefully. Here are some approximate equipment costs for quality machines and their needed parts:

A Rottler HP6A honing station costs $40,000 to $50,000 dollars [not counting the BHJ deck plates for a variety of engines and replacement diamond stones]; a Sunnen Line Hone is $25,000 and a hot tank and rinse station from Axe Equipment is $15,000.

For the more demanding functions such as boring and decking for example, a Rottler F68A machine, its tools and cutters will deduct $70,000 to $100,000 from your retirement fund. A Hines balancing station is $30,000.

Now, using $300 to $500 as a range for quality prepped block prices and a conservative cost of $195,000 to $200,000 for the above equipment, it becomes apparent that you have to perform about 500 preps and shorts to amortize the cost of this equipment in one year. Remember, one of the keys to making this work in your situation is to find the facility that can produce the volume and quality of work that you can live with and then stand behind it in the completed engine package.

Finally, Cash Flow

The other key point to understand is the “cash-flow factor.” Think about this: let’s say you get a customer order to build an engine. Assume you take a 50% deposit. Now you begin to order parts, but parts take time, time to order and time to arrive.

Pistons alone can take three to five weeks to arrive, as an example. Soon, you’re out of pocket all the deposit money you collected. The customer’s deposit may not cover all you need to complete the build. Now, you have to begin all the machine work yourself [assuming you own all the equipment above and have people to run it], or you have to pay outside machinists to do it out of your own pocket.

Now let’s compare this up-side-down situation to the subcontracting idea. You get 50% deposit. You order and receive a short assembly in three days. The deposit can pay for cam heads, intake and so-on. It’s helpful in this strategy if you keep a small inventory of popular shelf items, rather than wait for one week to 10 days for deliveries. You complete the rest of the build in a day or two and get paid in full by the customer, and you’ve still got 30 days to pay your supplier.

Clearly, this is a less financially painful way to do it.