Controlling costs is crucial to maintaining competitiveness and profitability for businesses engaged in sheet metal fabrication. There are various cost considerations in sheet metal cutting processes that help a business manage the costs in the process.
In this guide, we will explore the cost considerations in sheet metal cutting and provide practical insights into the variables that affect cost. We will also offer actionable strategies for minimizing waste and maximizing resource utilization.
How to Calculate the Cost of Sheet Metal Cutting?
Before we go ahead and calculate the cost, you need to go through the different factors that affect the cost.
Shearing vs. Non-Shearing
Shearing and non-shearing are two basic types of sheet metal cutting methods. Both methods have different cost structures. Let’s see how the costs compare for the two cutting methods –
Shearing
Here’s how the cost structure goes for shearing techniques –
Initial Investment
Shearing machines generally require a lower initial capital than advanced non-shearing equipment. This makes them a more accessible option for smaller workshops or businesses with limited budgets.
The simplicity of the mechanical design translates to lower manufacturing costs, which are passed on to the buyer.
Long-Term Savings
Shearing excels in the high-volume production of straight cuts, offering exceptional speed and efficiency for repetitive tasks. Due to the minimal energy consumption and simpler mechanical processes involved, operating costs are typically lower.
Shearing provides a cost-effective solution for basic shapes and straight-line cuts, minimizing the need for complex programming or specialized tooling.
Material Limitations
Shearing is inherently limited to straight-line cuts, restricting its application to simple geometric shapes. The process may be unsuitable for materials prone to fracturing or deformation under shear stress.
Complex contours, intricate designs, or tight tolerances are generally unachievable with shearing.
Tooling Costs
The cost for tools to cut sheet metal is relatively low, primarily involving the purchase and maintenance of shear blades. However, blades require periodic sharpening or replacement to maintain cutting accuracy and prevent material deformation.
The cost of sharpening or replacing the blades must be factored into the overall operating costs.
Material Waste
Shearing can produce some material deformation, particularly in thicker materials or when blades are not properly maintained. Achieving tight tolerances is challenging, leading to potential material waste due to inaccuracies.
Due to the straight-line cutting limitations, nesting of complex parts to reduce waste is not possible.
Non-Shearing
When it comes to non-shearing techniques, then the costs will vary based on the following factors
Initial Investment
Non-shearing equipment, such as laser cutters, plasma cutters, and waterjet cutters, requires a significantly higher initial investment. The advanced technology, precision control systems, and specialized components contribute to the higher cost.
Long-Term Savings
Non-shearing methods offer greater flexibility for cutting complex shapes, intricate designs, and tight tolerances, reducing the need for secondary finishing operations. They can handle a wide range of materials and thicknesses, providing versatility for diverse applications.
The high precision reduces scrap, and the ability to cut complex shapes reduces post-processing costs.
Material Limitations
Non-shearing methods can process many materials, including metals, plastics, composites, and even stone. With exceptional precision, they can accommodate various thicknesses, from thin sheets to thick plates.
Each non-shearing process has its own material limitations. For example, plasma cutting is better for electrically conductive materials.
Tooling Costs:
Laser cutting involves consumable costs for gases and nozzles, while plasma cutting requires gases and electrodes. Waterjet cutting utilizes abrasive materials, which contribute to ongoing operating costs.
Although the machines are more expensive, their versatility allows for a wider range of projects, which increases the ability to recoup the cost.
Material Waste
Non-shearing methods can achieve high nesting efficiency, minimizing material waste, especially for complex parts. Their precision reduces the risk of errors and inaccuracies, further contributing to material savings.
Speed
Laser and plasma cutting are high-speed for thinner materials, offering high production speeds. Waterjet cutting is generally slower, but it excels in cutting very thick materials and heat-sensitive materials.
The speed of the cutting must be weighed against the material type and material thickness.
Factors Affecting Cutting Costs
A variety of factors affect the cutting costs of sheet metal fabrication processes. Go through these factors to understand how they can help you consider the cost.
Material Costs
The type, thickness, and grade of material are paramount. Specialized alloys like stainless steel are pricier than mild steel.
- Shearing: Relatively unaffected by material complexity, as it relies on brute force.
- Non-Shearing: Can handle diverse materials, but material properties like reflectivity (for laser) or hardness (for waterjet) impact efficiency and cost.
Estimation: Mild steel is the least expensive, followed by aluminum and then stainless steel. Specialty alloys are the most expensive.
Equipment and Maintenance:
Cutting equipment dictates operational and maintenance costs. Non-shearing methods include laser cutting, plasma cutting, and waterjet cutting.
- Shearing: Lower equipment cost, simpler maintenance.
- Non-Shearing: Varies greatly. Laser cutting has high initial investment, complex maintenance. Waterjet has high pump maintenance. Plasma has consumable electrode replacement.
Estimation: Shearing equipment is typically in the tens of thousands of dollars, while non-shearing systems can range from tens of thousands to millions, depending on the specific technology.
Labor Costs
Skilled labor for CNC programming and operation is a significant expense.
- Shearing: Requires less skilled labor for basic operations.
- Non-Shearing: Generally requires highly skilled programmers and operators.
Estimation: Shearing operator wages are generally lower than non-shearing CNC programmers.
Tooling Costs
Tool quality and lifespan influence replacement frequency and downtime.
- Shearing: Relatively low tooling costs (blades), but requires periodic sharpening/replacement.
- Non-Shearing: Varies. Laser cutting has expensive optics. Waterjet has expensive high-pressure nozzles. Plasma has consumable electrodes.
Estimation: Shearing blades are cheaper, but non-shearing tooling can be very expensive.
Cutting Speed and Efficiency
Faster speeds reduce labor costs but can increase tool wear.
- Shearing: High-speed for straight cuts, but limited to simple shapes.
- Non-Shearing: Speed varies greatly depending on the process, material, and thickness. Laser and plasma can be very fast. Waterjet is generally slower.
Estimation: Shearing is faster for straight cuts on thin materials. Non-shearing methods have varying speeds depending on the technology.
Volume of Production
Higher volumes distribute fixed costs across more units, reducing per-part costs.
- Shearing: Efficient for high-volume, simple cuts.
- Non-Shearing: Versatile for both low and high volumes, especially with complex parts.
Estimation: Shearing is most cost effective for high volume of simple parts. Non-shearing has lower per part cost for low to medium volume complex parts.
Complexity of the Cut
Complex shapes and tight tolerances increase production time and costs.
- Shearing: Limited to straight cuts and simple shapes.
- Non-Shearing: Highly versatile, capable of intricate designs and tight tolerances.
Estimation: Shearing is very limited in cut complexity. Non-shearing methods can create very complex 2d shapes.
Energy Consumption
Different cutting methods have varying energy requirements.
- Shearing: Lower energy consumption.
- Non-Shearing: Higher energy consumption varies by method. Laser and plasma are high. Waterjet is also high due to pump pressure.
Estimation: Non-shearing generally consumes significant electrical power. Shearing consumes far less.
Scrap Rate
High scrap rates increase material costs and waste.
- Shearing: Higher potential for scrap with inaccurate setups or material movement.
- Non-Shearing: Generally lower scrap rates due to precision and nesting capabilities.
Estimation: Non-shearing generally produces less scrap due to precision.
Quality Requirements
Tight tolerances and smooth finishes increase costs.
- Shearing: Limited precision, may require secondary finishing.
- Non-Shearing: High precision and smooth finishes, depending on the method.
Estimation: Non-shearing methods can provide a higher quality edge. Shearing may require deburring.
How to calculate the cost?
Now, let’s get through the calculation process for both the techniques.
Material Cost
Obtain precise pricing from suppliers, considering volume discounts and delivery fees. If required, factor in material certifications or testing costs. Account for material variations that might lead to higher waste.
Use CAD software or nesting tools to determine the sheet metal area needed for each part accurately. Calculate the scrap allowance based on the cutting method, part geometry, and material properties. Consider the cost of remnants that might be usable for other projects.
Example: If a sheet of steel costs $100, and your nesting software tells you that you will use 75% of the sheet and that you estimate a 5% scrap cost, then you must calculate the price of the 80% used.
Labor Cost
Break down the labor time into specific tasks: setup, programming (if applicable), cutting, quality control, and cleanup. Assign labor rates based on the skill level required for each task. Include benefits and payroll taxes in the labor rate calculation.
Allocate a portion of supervisory or management time to the cutting process. Include time spent on material handling and movement.
Example: A skilled CNC operator may cost $40 per hour, while a general laborer may cost $20.
Equipment/Machine Cost: Hourly Rate Analysis
Calculate the depreciation of the cutting equipment based on its purchase price, salvage value, and useful life. Use a consistent depreciation method such as the straight-line method.
Measure or estimate the equipment’s power consumption during operation. Calculate the energy cost based on the local electricity rates. Include the cost of scheduled maintenance, preventive maintenance, and unscheduled repairs. Factor in the cost of spare parts and consumables.
Calculate the costs associated with machine downtime. Lost production and lost labor costs.
Example: A laser cutter may consume a lot of energy and require frequent maintenance, while a shear may have lower operating costs.
Tooling Cost
Determine the cost of each sheet metal cutting tool. Consider the quality and lifespan of the tools. Estimate the number of cuts or operating hours that each tool can provide. Calculate the cost per cut or per part based on the tool life. Factor in the cost of sharpening, reconditioning, or replacing tools.
Example: Laser nozzles wear out over time and need to be replaced, while shear blades may need to be sharpened.
Overhead Costs
Allocate a portion of rent, utilities, and property taxes to the cutting area. Include costs for accounting, purchasing, and other administrative functions. Factor in the cost of liability and property insurance.
Example: If the cutting department occupies 20% of the factory floor, allocate 20% of the rent to the cutting overhead.
Programming Costs (CNC)
Estimate the time required to create or modify CNC programs. Assign a labor rate to the programmer. Include the cost of CAD/CAM software licenses and updates. Time spent verifying the program and simulating the cut.
Example: Complex parts may require more programming time than simple shapes.
Post-Processing Costs
Estimate the time and labor required to remove sharp edges or burrs. Include the cost of cleaning solutions or equipment. Factor in the cost of grinding, polishing, or other surface treatments.
Example: Parts made with plasma cutting may require more deburring than those made with laser cutting.
Scrap Costs
Determine the value of scrap material based on current market prices. Subtract the scrap value from the original material cost. If the scrap material cannot be sold, calculate the disposal cost.
Example: Steel scrap may have a resale value, while certain alloys may be more difficult to recycle.
Calculation
Use a spreadsheet or cost accounting software to track and sum all the individual costs accurately. Calculate the cost per part by dividing the total cost by the number of parts produced. Produce reports that show the cost breakdown for each project.
Contrast table
Get a quick overview of the cost comparison between the two sheet metal cutting processes with this table –
| Cost Factor | Shearing | Laser Cutting |
| Material | Generally, less material waste, as cuts are straight and efficient. | More material waste due to kerf (width of cut) and potential for nesting optimization. |
| Labor | Lower labor costs for simple, repetitive cuts. Higher for complex setups. | Higher labor costs for setup and programming, but lower costs for repetitive cuts once programmed. |
| Equipment | Lower initial equipment cost. Lower maintenance costs. | Higher initial equipment cost. Higher maintenance costs (laser components, gas, etc.). |
| Tooling | Lower tooling costs (blades) but requires sharpening/replacement—simple tooling. | No physical tooling is required in the traditional sense. Requires gas and potentially specialized fixtures. |
| Programming Costs | Minimal to none. Simple setups. | Significant programming costs for complex shapes and nesting optimization. |
| Overhead Costs | Lower overall overhead due to lower energy consumption and maintenance. | Higher overhead costs due to higher energy consumption, specialized gas requirements, and maintenance. |
Tips for Cost-Effective Cutting
Here are the tips that will help you achieve cost-effective cutting for your sheet metal cutting process –
- Use nesting software to minimize scrap. Implementing nesting software allows for the efficient arrangement of parts on the sheet, significantly reducing material waste.
- Purchase materials in standard sizes to reduce offcuts. Standardizing material purchases minimizes the need for excessive trimming and facilitates the generation of unusable offcuts.
- Select the most appropriate cutting method for the material, thickness, and complexity of the job. Choosing the right cutting method minimizes unnecessary costs associated with using overly complex or inefficient techniques.
- Use modern, well-maintained equipment to maximize productivity and minimize downtime. Investing in modern equipment enhances cutting precision and speed, boosting overall productivity.
- Ensure operators are properly trained to optimize cutting parameters and reduce errors. Well-trained operators can effectively optimize cutting parameters, leading to higher efficiency and reduced material waste.
- Regular maintenance can prevent costly breakdowns and extend the life of equipment and tooling. Scheduled maintenance reduces the likelihood of unexpected equipment failures, minimizing downtime and repair costs.
- Optimize the flow of materials and parts to reduce handling time and improve efficiency. Streamlining material handling and workflow minimizes unnecessary movement, reducing labor costs and production time.
- Establish relationships with suppliers and negotiate favorable material prices. Building strong supplier relationships enables businesses to negotiate better material prices, directly reducing input costs.
Conclusion
In conclusion, the effective management of sheet metal cutting costs requires a multifaceted approach, encompassing meticulous planning, strategic process selection, and continuous improvement. This guide should have given you an overview of all these considerations to make the process cost-effective.
With all these cost considerations, you have to choose the perfect sheet metal cutting partner for your projects. In that case, Zintilon, with its sheet metal fabrication services, provides exceptional results with great quality and precision.
Great, Together
