For instance, a 35-year-old bulldozer or skidder in good condition can be very productive (though probably not quite as productive as a new one of equivalent size), but a 35-year-old chain saw would be considered unsafe and unreliable by today’s standards. It is important to bear in mind that these are average costs and that the actual flow of money out of your business for the machine may vary dramatically over short periods of time. This is the one where everyone wins. By then it may be too late and in any case, that is certainly the most expensive way to produce a part. A need to draw on it for other purposes is a sure sign that all is not financially well with the business. Instead, we might commonly accumulate them all together into a single “Overhead” category, and then try to create an hourly cost of some kind divided into the various machines or work centers that can then be allocated to jobs based on how many hours were used. There will be considerable inefficiency and potential error due to the need to rekey information. There’s a lot to recommend spreadsheets–they’re fast, easy, and very flexible. •Technology improves over the years, but at different rates for different types of machines. Sproing Fitness. Use a CNC Machine Hourly Rate Calculator to figure out what hourly rates to charge for your machines. As mentioned above, the more closely the Estimation Algorithm matches the Machining Processes used to manufacture the part, the more easily and confidently we can use the Estimate to gain insights. It’s important that any calculated information match what will happen when you actually manufacture the part or else your Estimate will be less accurate. Even though I couldn’t put a monetary value on it, I recognized that there would be a significant advantage to having the excavator on-site all the time. I did have a major engine problem, which cost about $2,500 in parts and mechanic’s time, plus a few days of my time. Running is at the core of every interval-training workout at Sproing Sport. The Cost Breakdown: Machines retail for $6,499 compared to the commercial treadmill which runs about $3k. In addition, I would have to buy special insurance for the full value of the machine. I would also have to buy the fuel for which I used my earlier estimate of $3.25 per hour. If this is the case, your large motor can cause a “brownout” whenever it is started or has a heavy load and its life will be significantly shortened. Armed with my analyses, I set out to find a suitable machine. For example, consider a one-person, full-time, custom-sawing business with a portable sawmill. Splicing Machine Price 740 Splicing Machine China Best Fusion Splicer DVP 740 Core Alignment Fiber Fusion Splicing Machine Discount Price US $500.00-$900.00 / Piece 1 Piece (Min Order) Some people like to maintain separate accounts – either on paper or actual bank accounts – for the depreciation and maintenance and repair categories. While some tasks can be successfully completed with just a few hand tools, machines can greatly increase productivity and reduce the physical effort required. If the machine is leased or bought on a loan, this adds costs. Some investigation into the used-excavator market indicated that I should be able to find a good machine that would meet my needs for about $20,000. Some of this information can be gathered once in a database when you set up the Estimation Software. Note that if you keep the machine after a loan is paid off, you will then have a lower money cost and, hence, lower annual fixed costs. Major breakdowns can be very expensive, both in lost-production time and in parts and labor costs. There is some logic in doing this in situations where the labor and machine hours are nearly the same. Repair and MaintenanceMaintenance refers to all those activities that should be done on a regular basis to keep your machines running in tiptop shape. Three-phase power is rarely available in rural areas, so to use 3-phase motors, you will have the significant added expense of a phase converter. script.async = true; In my business, I prefer to keep these costs separate. Your shop probably doesn’t change Machines very often, for example. Good financial management is essential for any business to survive for the long term. Since there are no consumable costs with an excavator, my total estimated variable cost came to $19.25 per hour. Getting together appropriate Feeds and Speeds given some idea of the Operation, Machine, Material, and Tooling will be important. The failure of your estimating process would be that you don’t bid enough jobs, your bids are too high so you don’t win enough jobs, or perhaps worst of all, you get locked into an unprofitable job by bidding too low. What would be the consequences of a major repair, such as having to replace the engine or a final drive or the main hydraulic pump? For any type of “one off” work, it’s hard to argue they aren’t the most effective tool available. It was time to get the calculator out. The more detailed the Estimate, and the more it matches the Machining Processes that will be used to manufacture the part, the more easily and confidently look to sharpen our pencils and get to a better estimate. Others come at other stages, such as at the end. In contrast, there is a very limited market for older large and specialized equipment, so salvage values for skidders, industrial woodworking machinery, and large earthmoving equipment tend to be low. Some people include the cost of operator’s labor as part of the variable costs of running a machine. It can be instructive to do the computations both ways. 410-964-9858 Thus, the business should have been putting aside $5,000 + $1,500 + $3,920 = $10,420 per year. In addition to helping with purchasing decisions, the sensitivity analysis provides a better understanding of how differences in projections will affect the financial picture. The rates for your area and specific machine can be obtained from insurance agents. The amount of the annual interest payments can then be set aside for increased maintenance costs as the machine ages and for eventual replacement. Needed repairs are often detected and performed when doing maintenance, so which category should they be put into? ... Sproing … Because of scheduling considerations, I realized I had better estimate three separate rentals rather than three back-to-back weeks; this would entail a need to pay for three separate deliveries and pick-ups for the rented excavator. New, Slightly-Used, Well-Used, or Used-and-Abused?When buying machines, one generally has a choice between buying new and various conditions of used. Remember that other factors such as probable reliability, availability of parts, safety, and level of technology are also important considerations in buying decisions. Join 100,000+ CNC'ers! As a case in point, consider someone who decides to go into a full-time portable sawmilling business. Achieving Consistency requires the use of Automation. That all goes to more profits. Since I knew that the engine wouldn’t operate at full load most of the time, I decided to decrease fuel cost by 1/3, which comes to $3.25 per hour. Thus, the cash flow curve can be very bumpy. Many jobs will require parts be inspected. Sproing Fitness Columbia MD at SynergyFX. THE COST. The cost of money is tied to interest rates. With hiring, there would be the advantage that I could do other work during the time the excavator was working, though supervision time would definitely be required. The ultimate Feature-Based Cost Estimation would be to actually do the CAM work for the part, generate the g-code, run it through a simulator, and base Estimates of that information. There are a few ways around this. At the end of the five years, there would have been money to purchase a new mill. In this type of software, you’ll be working with a list of Operations that is strikingly similar to a textual list of Operations a CAM program might have to convert to g-code. In addition to putting in a long driveway, clearing land, burying utilities, and excavation that would be required for buildings and a septic system, I knew I would be building a lot of woods roads on the new land. Ultimately, your shop will need to know what the “walk away” number is for profitability. There’s still a little bit of complexity, for example, if a shop recycles chips, do we credit the return from recycling from recycling to particular jobs that produced the chips, or do we simply use it to reduce the overhead? Repair costs can be scheduled or totally unexpected. For a small business with only a few machines, we need to use rules of thumb to estimate the costs. They may buy sub-components, such as fasteners, from an Outside Source. Repair is a wild card. Vending Systems. By the time I had the splitter in A-1 operating condition, I had replaced everything except the I-beam and some hydraulic hoses. But where is the money for the new sawmill? (For this reason, I try to keep a good selection of spare parts at my work site. A drop-in class at Sproing costs $25. For 75 hours of use per year, the hourly fixed cost computes to $14.67. In most applications this is not the case, so you can often decrease the costs generated by the formulas based on experience. Such a tool can at least give you consistent feeds and speeds as well as performing simple machining time estimates. Thus $5,000 in repair costs over and above what was already budgeted would add about $13 per operating hour. Endmills, inserts, sand paper, abrasive discs for deburring–there are all sorts of consumables to account for in a manufacturing process. Volume can allow you to purchase materials and other outside services more cheaply, and it will help you to justify costs for things like better fixtures or tooling to reduce the cost to manufacture. The class itself is 30 mins with about 15 mins of stretching/warm up & cool … What happened? We need to talk about Back-of-Envelope Cost Estimation. Setup costs include machine idle time as well as the time the operator spends loading/unloading parts, changing tooling, changing fixturing, and so on. It’s usually better to lose the bid on those kinds of jobs. Alternatively, Feature Recognition Software can analyze a CAD model and output a set of Features. Some items, such as loan payments, insurance premiums, and taxes, occur on a regular basis. It can be estimated in a variety of ways. A key question to understand is how good you need to be at quoting and cost estimation. Other maintenance and repair costs have been fairly small so far, so I am running about $1,400 behind budget in the maintenance and repair category when I include the value of the time I spent doing maintenance and repairs. Sproing Fitness Lincoln Park, Chicago, IL. For older machines, age and condition are more important than the number of hours. I estimated that the delivery, pick-up, and insurance would cost $300 each time I rented. If you don’t have relevant experience, the formulas below can help in estimating energy costs per hour: Electricity: hp x 0.83 x cost per kWh;Diesel: hp x 0.037 x cost per gallon (source: p. 30 of How to Improve Logging Profits by Benjamin F. Hoffman); Gas: hp x 0.043 x cost per gallon (source: p. 30 of How to Improve Logging Profits by Benjamin F. Hoffman. From a bookkeeping standpoint, you’d love to precisely allocate those costs by job, but from a practicality standpoint, it might not be worth your trouble. 4 cylinder - 4 valve Honda / Nissan (over-size valves) (less camshafts) 6 cylinder - 4 valve inline (over-size valves) (less camshafts) OHV 6 cylinder in line - 2 valve. This isn’t always easy. Both amounts need to be estimated to determine your annual fixed costs. The owning and operating costs of machinery are major expenses for most timber harvesting, sawmilling, and value-added businesses. When planning my recent move, I considered whether or not it made sense for me to buy an excavator. There are multiple types of Cost Estimate, and each merits different levels of investment and accuracy. For example, CNCCookbook’s CADCAM Estimator uses the same Feeds and Speeds Engine in G-Wizard Calculator that thousands of machinists use for their everyday machining. If the market isn’t too competitive, this is the easiest way to make a job more profitable. Cash flow was basically good for the past five years, so it seemed like the business was doing just fine. Customers can make an appointment up to six months in advance or for the next day online at Michigan.gov/SOS. Good maintenance is good for business: It increases machine life and salvage value and decreases unexpected breakdowns and repair costs. •For high-priced machines (say over $10,000 new), the anticipated annual number of operating hours is often a major factor in choosing from new, slightly-used, or well-used. I can budget for the costs and schedule the work for a convenient time. – Machine: The capabilities of the machining center used to make the part are an important input. One factor is that most large motors require 3-phase electricity (large 3-phase motors cost far less than equivalent single-phase motors and can use smaller diameter wires and less expensive switches). Since I would buy the machine from savings, I would have a lost-opportunity cost, which I estimated at 5 percent, or $1,000 per year. Just having someone sit down with yellow pad and 10-key calculator or even a spreadsheet leaves too many variables in how the estimate is done each time. But when it came time to replace the sawmill, the cash was not there – in other words, the cash flow for a longer time period was terrible. I’ve sometimes gone for more than a year without a major repair and other times I wonder if I have been cursed. I found a 16-year-old excavator in good operating condition with about 5,500 hours on it for $18,000. Thus I would need three weeks rental per year to average 75 hours per year. In practice, you can estimate the cost of money by multiplying the amount of money you put down by a lost-opportunity cost and adding the annual interest cost of your loan, if any. The accuracy of the Estimate tells you how much you have to pad the bid to be sure you’ll make your desired profit. Really efficient machine shops can get more done, and can therefore charge less per part. A significant repair to a major piece of equipment can cost many thousands of dollars and may sometimes cost more than the machine is worth…rdquo;in which case, replacing the machine may make sense. Amount: $500,000. While more favorable than hiring the work done, renting was still significantly more expensive than buying; I would have to have really bad luck in the repair department for the cost of buying to be as great as that of renting. Get Exercise & Fitness Equipment at incredibly low prices with our Best Price Guarantee! The overall size of a part can play a role in the Estimate. This is because annual ownership costs aren’t much greater than for a used machine (usually less than $100 more) and I get the warranty, latest technology, and spare-parts availability advantages of a new machine. “Good” can be measured along a variety of dimensions. Disadvantages would include scheduling problems and, depending on the operator, potential difficulty in getting the job done the way I wanted it done. 2. Material Costs are easier to allocate to jobs. We need to gain insights well before that stage. The owner told me some mice had eaten the wires on the engine, but that everything else worked well. – Reduce manufacturing costs. Fixed CostsFixed costs are the costs of ownership; the expenses incurred, whether the machine is parked or used every single day. Energy UseEnergy usage is a significant variable cost for many types of machines. Machines desired by homeowners and part-time users, such as wood planers, smaller farm tractors, and small bulldozers, tend to have high salvage values. They may use a subcontractor for all sorts of things, ranging from making some components of an assembly to doing heat treating, to coatings, or at the very least, to provide a freight service to deliver the finished goods to the customer. The machine would be well-used, so I should expect my maintenance and repair costs to be significantly higher. Designed to be low impact for runners, we also fit our high intensity cardio workouts into quick 45-minute classes so you can get … In the worst case, you may wind up losing money on a job. Most shops won’t do everything themselves in a manufacturing process. Large Electric Motors in Rural Areas I want to make special mention of electricity as an energy source. I include the time spent sharpening saw blades and chain saws in the consumables category, though one could argue that they belong in the maintenance category. Another advantage to owning an excavator would be the potential to do work for others at a profit. What’s left is largely packaging. Unfortunately, that is a lot of work for an Estimate. A good Cost Estimation process will capture all of this in a way that makes it easy to understand, easy to account for, and easy to dig into and improve as need be. These are the costs that like the way oil, coolant, rent on the shop space, or even the shop electrical bill, are probably not worth trying to split up properly among jobs. The innovative machine … It is impossible to project exact costs and probably not worth the bookkeeping time to precisely track all the costs for a small business.  Get our latest blog posts delivered straight to your email inbox once a week for free. Purchasing looked like a good decision when compared to hiring. These numbers may be very different from the actual life span of any given machine and appropriate judgment should be used to take into consideration the quality of the machine and how it is used. We want to be able to understand how we got there. The key to using spreadsheets is to confine their use to what they’re good for and augment them with other tools that minimize spreadsheet weaknesses. Together, Paul and Steve brought Sproing to life by integrating their manufacturing, operating and user experiences to make a … In all likelihood, you’ll at least need some minimal help for the spreadsheet, perhaps in terms of a Feeds and Speeds Calculator like our G-Wizard product. I once made the mistake of buying a used wood splitter that didn’t run. 4 cylinder - 2 valve ea. $ 180.00. While this is often true in factory situations, it would be rare for small timber-harvesting, sawmilling, and woodworking businesses. Since it is a track-type machine, I used 100 percent of new value, which yields an estimated average maintenance and repair cost of $8 per hour. In fact, if the list is good enough, it is a useful thing to have on hand while you’re doing your CAM work. Here are the ones I use: For most machines, the total maintenance and repair costs over the life of the machine will equal 75 percent of the new cost of the machine. A wide variety of spinning machine price options are available to you, There are 643 suppliers who sells spinning machine price on Alibaba.com, mainly located in Asia. For a Job Shop, “Good” will entail an ability to do the estimates quickly enough that you can bid a lot of jobs and good enough that you are competitive against other bidders and can still make a profit on the jobs. Let’s assume this person invests their savings into the mill and sharpening equipment (say $28,000) and an initial supply of consumables and miscellaneous items (another $2,000). As a rough guide, new generally makes sense for over 1,000 operating hours per year, slightly-used in the range of 500 hours, and well-used for fewer than 200 hours. Some of the information can be calculated, for example the Feeds and Speeds. I’d have to keep this in mind; with really bad luck I could have even higher, unbudgeted repair costs. This tool fixes the rekeying problem, and in conjunction with the CADCAM Wizards, it greatly simplifies creation of a Cost Estimate Spreadsheet. The failure of a “good enough” estimating process will be that your profit margin is less than it could be, and that it will be expensive to redesign your product or manufacturing process to recover that margin. Rather, the Sproing trainer is a new-fangled machine designed by bio-mechanic experts to optimize injury-free movement, thanks to its soft, almost bouncy surface. At that point, you have a set of very high quality data on which to base your estimate. In particular, Design For Manufacturing changes are invariably extremely profitable. It even has a feature called “DFM” (Design for Manufacturing) that makes suggestions for changes that would make the part cheaper to manufacture. 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