If you’ve spent any time in Theory of Constraints, you know the first rule: find the constraint, because everything else is noise. For most of the last two years, the constraint in American manufacturing was demand. Orders were soft, customers were burning down inventory, and a lot of shops were just trying to keep spindles turning.

That’s not where we are anymore. Demand is back. The constraint has moved, and it’s moved to the supply side: materials, lead times, tariffs, and above all, people.

Here’s what the data actually says, what it means for the OEMs who depend on suppliers like us, and why Big Rocks is choosing this moment to invest harder than ever.

The demand signal is real

The Institute for Supply Management’s September 2026 report put the Manufacturing PMI at 54.5. That’s the ninth straight month of expansion, the longest run since 2022 (ISM). Anything above 50 is growth, and this isn’t a squeaker.

The forward-looking numbers matter more than the headline. New Orders climbed to 55.3, and the Employment index rose to 52.7 (First Trust). Order backlogs have grown every month this year, and in September the Backlog index jumped from 51.8 to 56.4 (Trading Economics).

The growth is broad, too. Twelve of the 18 industries ISM tracks expanded, including Fabricated Metal Products, Primary Metals, Machinery, Transportation Equipment, and Computer & Electronic Products. Those are our customers’ industries. We’re seeing the same thing across the five Big Rocks companies: more RFQs, tighter timelines, and more customers asking whether we can take on work their current supplier can’t. Our current backlog has more than doubled in the past quarter alone.

The supply chain is the new constraint

Here’s the other half of the same report, and it’s why nobody in our industry is popping champagne.

Costs. ISM’s Prices index jumped 6.8 points to 77.9 in September. Raw material prices have now risen for 24 consecutive months. ISM pins it on three drivers: steel and aluminum prices, tariffs on imported goods, and petroleum-based costs tied to the Middle East conflict (Distribution Strategy). A year ago that index sat at 61.9.

Lead times. Supplier deliveries have slowed for 10 straight months. Average lead time for capital equipment is now 176 days, and production materials sit at 84 days. When survey respondents complained, they named pricing volatility (46%), tariffs (34%), the Iran war (30%), and longer lead times (21%). One machinery manufacturer told ISM that cross-border tariffs scrambled supply chains that “took years to develop and nurture.” Their factory backlog had nearly doubled (TextileWorld, reprinting ISM).

People. This is the one that keeps me up at night. U.S. manufacturers had 522,000 open jobs in August 2026, per BLS JOLTS data (Alpha Apex Group). Deloitte and The Manufacturing Institute project the industry needs 3.8 million new workers between 2024 and 2033, and that 1.9 million of those jobs could go unfilled (Deloitte). Machine shops have the oldest workforce in manufacturing, with a median age around 49.

Put it together through a TOC lens: demand is pulling hard, and the system is choking on materials, lead time, and skilled labor. The OEM that wins the next three years isn’t the one with the best design. It’s the one with a supply base that can actually deliver.

The hidden backbone: small and mid-size suppliers

The headlines go to the primes and the mega-plants. The parts come from shops like ours.

Small businesses make up about 70% of the companies doing business with the Department of Defense (WashingtonExec). Yet DoD’s own Small Business Strategy admits small business participation in the defense industrial base fell more than 40% over the past decade (DoD Small Business Strategy). At a House Small Business Committee hearing this June, lawmakers and witnesses wrestled with that exact tension: the base keeps shrinking while defense budgets keep climbing. NDIA’s Vital Signs 2026 found 66% of industry respondents named complex procurement as their top barrier (Legis1).

That’s the bad news. Here’s the part that doesn’t make headlines: plenty of small and mid-size manufacturers aren’t retreating. They’re doing the hard, unglamorous work of getting CMMC-ready, registering on SAM.gov, buying equipment, training people, and buying the shops down the road whose owners are ready to retire.

Those companies are becoming the shock absorbers of the American supply chain. When an OEM’s long-time supplier closes, gets acquired and redirected, or simply can’t staff a second shift, somebody has to catch that work. The shops that invested ahead of the curve are the ones who can say yes.

Where Big Rocks is putting its chips

At Big Rocks, we’ve brought five companies under one roof: Big Rocks Engineering, Mack Hils Metal Fabrication, CED Precision Machining, Roberts Tool and Die, and Total Powder Coat and Finish. Together we cover engineering, fabrication, precision machining, tooling, and finishing for aerospace, defense, and industrial OEMs. Big Rocks Engineering is the front door for new OEM relationships, and the rest of the family delivers the work. Here’s where we’re investing, and why.

Our people. You can’t buy your way out of a 1.9-million-worker gap. You have to build your way out. We’re investing in training on the floor, cross-training across companies, and giving people a reason to build a career here instead of trading up for fifty cents an hour. Deloitte’s own research found apprenticeships, work-study, and internships are the most effective way to attract people into manufacturing. Big Rocks has taken on more interns and offered more assistance to students in the trades in the last year than the previous 5 years combined.

Our leaders. The labor shortage hits supervisors and plant managers just as hard as operators. A weak leader in a constrained system costs you throughput every single shift. We’ve invested in leadership development and Theory of Constraints training for our plant managers. The goal is a bench of leaders who manage to the constraint, not to the loudest fire.

Acquisitions. Every one of our five companies represents capability, customers, and skilled people that might otherwise have walked out the door when an owner retired. Acquisition isn’t just growth for us. It’s how we keep proven capacity in the U.S. supply base.

Automation. We’re adding automation where it frees our skilled people to do skilled work. We hold every project to a full business case: true labor burden, quality, throughput, and a documented baseline before we buy. Automation in a job shop isn’t about replacing people. It’s about getting more out of the people we’re fighting so hard to hire. Whether it is the cobots in our weld department or the ones on our machining centers for machine tending they are freeing up time for more skilled work.

Our new laser. Our newest capital investment is a high-power fiber laser that runs on high-volume nitrogen assist. It’s built for clean, fast cuts and long production runs.  For our OEM customers, that means shorter lead times on cut parts, more capacity to absorb surge demand, and one more operation we control in-house instead of farming out to a supplier with a 12-week backlog.

A word to the OEMs

If you buy machined, fabricated, or finished parts, your supply base is now your constraint. And a constraint you don’t manage will manage you.

So take a hard look at your tier-two and tier-three suppliers. Who’s investing, and who’s coasting toward a retirement sale? Who can absorb a 30% demand spike, and who’s already turning down work? The answer tells you where your risk lives.

We built Big Rocks to be on the right side of that question. If you’re feeling the squeeze on lead times or capacity, let’s talk. Bring us the part that keeps slipping, and let’s find out where the constraint really is.

Sources and further reading

Mike Hill, Big Rocks Engineering

Mike Hill is General Manager at Big Rocks Engineering, with over 20 years leading engineering and new product development teams across defense, power electronics, and consumer goods industries. He specializes in helping small to medium OEMs streamline engineering processes and accelerate product development through systematic process improvement.

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