A Visit to Roco Manufacturing

Roman, Andrii, and me

A few months ago I found Roco Manufacturing on Reddit while doing industry research. Their slick (and entirely produced in-house) video intrigued me, and I reached out to Roman, its 23 year old founder.

In January I arranged a trip to go visit them and learn their story. Roco Manufacturing is a startup machine shop based in Newington CT, just down the road from Sikorsky Aircraft headquarters. After getting an early morning start from New York, I was soon shaking hands with Roman (CEO) and Andrii (VP Operations) as they showed me around their small but rapidly growing shop.

Roman founded his company in 2020, in the midst of the COVID pandemic, with one vertical milling machine. Since then, the shop has grown to six machines, including a new Haas VF 2SSYT. They specialize in the manufacture of precision metal parts, often taking jobs that require tight tolerances and short-notice delivery.

As they told me their story, I was struck by Roman’s scrappy “make it work” attitude. Early on after their launch, a client contacted them with a rush order for a run of stainless steel parts. Roman and his team have extensive machining experience, but as a new shop, they had never cut stainless steel for profit before. Using their first and only machine at the time, a Matsuura dating from the 90’s, they engineered a process that shocked the customer with how fast they were able to deliver. When the client got the parts they remarked “you guys clearly have a lot of experience working with stainless steel!”

It’s not easy getting a new venture off the ground, and Roman and his team are making it work. It took them two years to reach break even, during which time he and Andrii didn’t pay themselves salaries, a story I am sure most software startup founders can relate to. Now they have more machines, a larger team, and are thinking about expansion. It isn’t easy, but it is possible to manufacture in America, and Roman and Andrii are proving it.

Roco Manufacturing's brand new Haas VF2

The precision parts industry in the United States is a 36 billion dollar market served by almost 20,000 machine shops, a highly fragmented market. Precision metal parts are key inputs for aerospace, automotive, medical, energy, and the defense industries. While large scale parts production for American prime manufacturers is almost universally fulfilled by overseas factories (particularly in China) that can often produce parts at 10% of the cost of domestic manufacture, the consistent demand for highly custom and short order parts has ensured the survival of American machine shops that use highly flexible CNC machine tools. These sophisticated machines (examples: Haas USA, Okuma Japan, Studer Switzerland, Heller Germany) use computer guided tools to cut metal into any design imaginable. Flexibility is limited only by working envelope constraints, design time, run-time, and the time it takes an operator to tend a machine and set up new batches.

While mass production runs will usually rely on capital-intensive manufacturing lines that can produce one specific part at scale, machine shops can rapidly flex to produce smaller part runs for virtually any application/ industry with little relative set up cost. However, they require more human intervention to operate because parts must be switched out, and CNC processes must usually be constantly monitored for errors. Even large professionalized shops often don’t have the resources to support good process optimization. There is a famous case covered in the New York Times of one Texas-based manufacturer who lost a contract with Apple to a Chinese company because they couldn’t produce screws in sufficient volume to meet Apple’s needs. Interestingly, it wasn’t a cost issue, it was an optimization issue. Processes were not optimized and they couldn’t get sufficient throughput. Processes that in China would have a dedicated team of optimization engineers would often be managed in the United States by one over-tasked employee. In the words of Tim Cook, “In the U.S., you could have a meeting of tooling engineers and I’m not sure we could fill the room,” he said. “In China, you could fill multiple football fields.” (NYT)

While it is true that the United States remains the most expensive place on earth to manufacture, three trends could change the balance more in favor of U.S. manufacturers in the future:

• First: decoupling of supply chains from China due to political / strategic considerations.

• Second: rising wages overseas which erode cost advantages for foreign manufacturers

• Third: Automation.

To expand on automation trends, for many years now some U.S. companies (Like Hadrian) have been chasing the ideal of “lights out manufacturing,” where flexible production cells could be rapidly reconfigured for the mass-manufacture of virtually anything without human intervention. Such an approach would combine all the benefits of a machine shop’s flexibility and low capital commitment for new production setup with all the efficiencies of a dedicated factory. As these technologies are perfected, they will become accessible to even small shop owners. For example, this fully automated one-man garage shop in California has to be seen to be believed. It would be impossible for one operator to set up a mini lights-out factory in his garage in China, but in the US, operators can make the jump from employee to owner in just a few short years and immediately begin implementing advanced technology at individual scale. If the balance of manufacturing favorability shifts in favor of the US, such owners are poised for enormous growth.

For now, the ideal of lights out manufacturing is a long ways off for most U.S. manufacturers, and the Chinese and American economies remain firmly coupled. Until these factors change, machine shop owners like Roman are showing that it’s possible to make things here in America. The challenges are great, but not insurmountable, and there are good reasons to expect a brighter future for the domestic US manufacturing industry in the coming years.