Productivity or Price?

 Your customers pay attention to the price they pay per piece, and so should you. Companies
making precision parts today—if they are to survive and profit—must look at the actual cost per machine, which includes not only the price of the machine, but its share of the shop’s overhead. Only then can you know the actual cost per piece produced.

If you do not realistically consider the complete cost of operating a machine in your shop—your true overhead—you are likely losing money or not earning as much as you could on each part you ship.

Interestingly, machine price is not the deciding factor. Machine productivity is 5 times more influential on cost per piece than is the selling price of the machine, which is why the more you can do in a single setup, the more profitable you can be.

With turn-mill type machines, completing parts in a single clamping is typical. But U.S. manufacturers have seemed slow to take advantage of this capability.

When you can make the parts complete in one setup, you can reduce labor costs and improve quality. The relationships among features on a part are kept consistent and accurate, reducing scrap rates. And the ROI on the turn-mills can be much faster because of this, not to mention work-in-process inventory cost and handling.

On our three-turret multitasking machine, we completed a part in 72 seconds. A lower cost competitor completed the same part in 90 seconds. Although our machine was more expensive, it was faster by 24 percent. When you properly assign each machine’s share of shop overhead, the cost per piece produced by the more productive machine was 11 percent less.

In this actual head-to-head comparison, a competitive three-turret turn-mill machine price would had to have been cut 50 percent to deliver the same cost per piece that the more productive machine provided.

Because the more productive machine, with 42 live tools (part of why it costs more initially), drops more parts faster, it is available to quickly accept a new part program and move onto other jobs. Therefore, the shop owner can reduce cost per piece on a wider variety of parts in less time than would ever be possible with less capable, less productive turning centers—even a bank of them. It’s that kind of productivity that turn-mills should be evaluated on.

One of the key ways machines can be productive is not simply having high-rpm spindles and counterspindles, but high torque, which accelerates the spindle to rpm much more quickly, lopping precious seconds off the cycle time.

Torque also allows the spindle to go from full rpm forward to full rpm reverse in seconds. Torque also gets the tool into position much more quickly; it’s not simply a matter of rapid traverse speed. Most machines never actually see their rapid spec in any case because travels are so short with small precision parts.

A cycle time improvement of 10 to 15 percent can make a tremendous difference to ROI, despite a higher initial acquisition cost and higher depreciation and interest costs.

To really understand what each machine on the floor costs to operate, you must consider each machine individually; you will not get an accurate picture of the cost to operate by simply lumping overhead costs (setup time, energy use, labor, scrap rate and production) in a pot and dividing by the number of machines on the floor. That gets you the wrong answer because not all machines cost the same to operate. Back in the “manual” days, you may have been able to get away with that.

Getting it right with respect to true cost of operation is going to be even more important in the near future as machine capabilities become even better. Multifunction machines that permit dropping virtually any part complete are what machine builders are creating. The way machine tools were justified even a few years ago is already not realistic in many plants, large and small. Going forward, U.S. precision parts producers must look at their costs accurately if they are to survive. 

 

 

 

jreinert@index-usa.com