Have you ever thought to yourself that it takes about the same amount of time to make a whole pie as it does to make just a slice of the pie? I didn’t think so! But for the sake of this blog post, that perspective about pie making will help you understand Setup Time in a machine shop environment. And how it relates to the cost of a making a single machined part or just a few more parts.
Is it best use of time and energy to run the oven (or machinery) to make just a single slice? Or does it make more sense to run it a bit longer to bake (or make) slightly more?
By adding slightly more labor time, raw materials and energy consumption you can make more than just a slice of pie. And this same methodology applies to precision machining.
Many inventors or engineers that I work with get stuck in the mindset of a “Prototype” as being equal to just one part. Often, my customer overlooks the importance or cost effectiveness of buying more than just one part. Or they just don’t want to pay for more than one regardless of the price for more.
The extra machined parts (or slices) can be used during testing and validation and can be used by others on your team especially if they are designing mating parts of the machined part we are making.
We can’t do precision machining in our precision machine shop until we setup the machinery precisely and that requires working hours. These working hours are factored into your per each price so it becomes obvious that the total setup time should be diluted in to the largest quantity possible so that your dollar goes farther.
You see, if we’re making just 1 quantity or 2 for example, in my shop, the working hours to generate machinery tool path and the hours required to set up work holding fixtures will be the same. If the above setup costs are $1000, that equals $1000 each for 1 quantity or $500 each for 2 quantity. (Note: We’ll spend much more setup time to increase output if we’re producing really high quantity. However, the increased volume output outweighs the added setup time costs at the onset which leads to an overall cost savings.)
In addition to the setup costs, in your per each price I will factor in cost of raw materials, special tooling, outside processes and other costs such as run time each part, scrap rate, labor rate per work center, efficiency rate and percent attended which will all be discussed in a future posting.
The next time you need a prototype you should ask what the cost would be for 2 quantity. Although costing strategies vary among machine shops, even if a customer doesn’t ask, I’ll generally add various quantities on my price quote for them to compare.
Once presented to them, most often the customer will buy more than just one machined (or 3-D Printed) part when they see that it is fairly priced and has value in the scope of their project. It’s much more costly to buy just 1, then find out you needed 2, and then have to buy 1 more which requires us to re-setup all machinery and charge again for 1 quantity.
So, would you like a slice of pie or slightly more? I’m sure that depends greatly on the pie flavor or if you’d just prefer some cake.
More food for thought: Assuming a $1000 setup cost, what quantity would you need to order for the setup portion of your per each price to equal 1 cent?
What parts can we bake up for you in our manufacturing kitchen?
Source: Jason M LaRock
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