One standard and affordable manufacturing process for creating prototypes is sheet metal metal fabrication. This versatile and durable process produces sturdy components needed in high-volume manufacturing and rapid prototyping. Metal fabrication projects can have varying costs depending on the design, potential prototypes, finishing techniques, and other factors. The selection of materials impacts the price in addition to the process itself. Thus, selecting suitable materials for metal fabrication projects requires a budget-friendly plan.

This distinctive guide will explore how to calculate sheet metal fabrication cost, the factors affecting the cost, and the various ways to cut the cost.

Sheet metal fabrication
Sheet metal fabrication

How to Calculate Sheet Metal Fabrication Cost?

Here is a step-by-step guide to calculating sheet metal fabrication costs: 

Break Down the Production Cycle

Product development involves cycles of any kind. Additionally, numerous distinct phases and production cycles differ depending on the application. Therefore, we must simplify the cycles into a single process. We concentrate on a cycle at a time in this manner.

Work on the Cost of Materials

One or more raw materials may be required for a product. For instance, straps, timber tiles, and metal coils are needed for plasterboard studs. Therefore, we must estimate the materials required to create a product. The formula to find the cost of raw materials per product unit is volume x density x cost per kilogram. 

For instance, if the cost of material per kilogram is USD 1.5, the density is 8/Kg/dm3 with a dimension of 70 x 60cm and thickness of 0.9mm. The material cost will be = (7×6 x 0.009) x 8 x 1.5 = USD 4.54

However, the process should be done with each raw material used in the sheet metal fabrication procedure.

Add the Cost of Machining

The system or machine’s cost, efficiency, and productivity measured in hours must be known to add the machining cost.  The formula for determining the cost of machining is Hourly cost x  cycle time for a unit) / efficiency 

For instance, if the efficiency is 85 percent and the cycle time is 12 seconds with an hourly cost of 70 dollars. The machining cost will be (70 x 12) / (0.85 x 3600) = 0.27 dollars

Thus, raw material and machining costs equal the total product cost for each part’s direct production cost. Total cost of product (part) = $4.54 + $0.27 = $4.81

Given that raw material costs account for a large portion of product costs, it is evident that cutting them can help.

Repeat the Calculation for Each Process

From raw materials to output, we have the production cost machine. We can repeat the process for additional machines and production stages using the cost of sheet metal fabrication. The production cycle will end here and continue until the products are delivered.

What Are the Factors Affecting Sheet Metal Fabrication Cost?

These are some of the possible factors that can affect the cost of sheet metal fabrication:

Design Complexity

An increase in the number of requirements needed to fabricate leads to an increase in the costs associated with the molding. Making parts with complex engineering components usually requires several fabrication stages, such as cutting, bending, and welding, which can significantly increase labor and material costs. Simplicity can be achieved by deleting all the extra details and changing to standard geometrical forms. 

These measures will result in generating higher savings in fabrication expenses. In general, the simpler the configuration, the more accurate and repeatable it is during the fabrication, which means fewer errors and repeated processing, yet another expense point reduced.

Material Selection

The choice of material represents the main factor in defining the prices of sheet metal construction. The costs of different metals and their weights are not universal. High-performance alloys that are unique in materials are the most expensive choices, whereas standard options such as steel and aluminum are the most economical. 

These attributes are also important as the material governs the properties such as strength, resistance to corrosion, and the ability to be molded. The materials selection process requires a trade-off between cost-efficiency and performance parameters to ensure the best possible performance without reinvesting the money spent on the procurement of materials.

Material Thickness and Size

The thickness and size of the material directly affect the relevant costs for fabrication. Using thicker and larger metal sheets means more material will be needed, and broader usage of additional steps, such as cutting, bending, or shaping, could happen. Hence, higher fabrication expenses follow. The optimization of sheet materials by considering project requirements in terms of their thickness and size would enhance the volume of waste produced and bring down costs. 

Businesses can successfully perform the targeted tasks by choosing material dimensions, thickness, and texture based on their desired results and efficiently spend fabrication money and resources.

Manufacturing Processes

Two important factors impact sheet metal material cost: the production process and the manufacturing process. Cutting, bending, welding, and finishing incur separate costs for personnel, equipment, and materials, and each stage contributes to the final bill. Complex production involving numerous processing steps usually lead to increased expenditure, paying off to more man-hours and time spent in these processes. 

Sheet metal fabrication process
Sheet metal fabrication process

A manufacturing process tightening and adding efficiency by mirroring the number of needed operations effectively reduces fabrication costs. Besides, production with efficient methods such as laser cutting or CNC machining will become possible, leading to more productivity and lower costs.

Production Volume

In addition, the fluctuation in production volume is essential when calculating sheet metal fabrication costs. Economies of scale mostly prevail, so more volumes of products are an opportunity to lower per-unit costs. Mass production or large orders allow firms to explore the gain in these cost-reducing opportunities, entailing reduced fabrication costs. 

Nevertheless, the high cost of unit-based setup has to be inscribed to smaller production runs. Hence, the output volume should be balanced with the cost considerations so that the income should match the expenses derived from project requirements and market demand.

Labor Costs

Labor is a major part of the many sheet metal fabrication costs. Much manual work requires skilled labor to craft components using machinery like welders and finishing machines. Wage, benefits and training, and supervision for on-the-job employment are some of the significant costs of labor. 

The fabrication process is usually a mixture of easy tasks and simple assembly, with complex projects with intricate elements or tight tolerances that may take up additional labor hours, leading to higher fabrication costs per unit. By simplifying manufacturing procedures, prioritizing workforce training, and optimizing work labor, it is possible to keep labor costs under control and achieve better budget effectiveness in sheet metal manufacturing.

Equipment and Tooling

Appropriate equipment selection is the most important concern in these production operations. The manufacturing process typically begins with a major purchase of machinery and the maintenance of tooling, which creates the initial expenses and additional expenditures. 

Specialized tools, like CNC machines or laser cutters, can entail high initial costs but also bring about productivity gains that will benefit you. Apart from that, continual checking and calibrating of equipment are indispensable to preserve their efficiency and reduce production downtime. These are  two factors contributing to operation expenses.

Ways to Cut Sheet Metal Fabrication Cost

There are different ways you can minimize the cost of cutting sheet metal fabrication cost, and they are:

Design Optimization

The design optimization is a standard technique applied to the sheet metal cut as a cost reduction strategy. Simplifying designs is cost-effective by shortening time and fabrication costs and reducing material usage. Complex characteristics often necessitate custom tooling, preliminary processing stages, and surging expenses. Through reduced designs, the business has a well-organized production process, and the chance of wrong products is minimized.

Adapting the standard geometries and dimensions will use off-the-shelf tools and machines, cutting the setup cost and lead time. Along with their design, designers must consider the manufacturer’s regular equipment since building complicated machinery would lead to high costs and low delivery rates.

Material Selection and Efficiency

The choice of specific materials and the efficiency also play a role in fabrication cost reduction. Attention to material type is necessary as more expensive materials offer better performance, but ending up with cheaper materials for trivial reasons can be expensive in the long run. Furthermore, using the correct material dimensions can minimize waste and cost regarding the material.

Companies should consider using everyday materials to save on the weight of special orders, consequently allowing faster production. By employing repurposable materials, companies can accomplish their production logistics quicker with decreased lead times. Also, choosing alternative materials or searching for different sources can be key in spotting cost-saving options that don’t make a bad product or worsen its performance.

Process Optimization and Automation

Regarding labor cost reduction and production efficacy enhancement, sheet metal fabrication often relies on process optimization and automation. You can identify and eliminate inefficiencies through lean manufacturing principles, resulting in efficiencies in the production process and minimizing the lead time of product production. However, adding to automation, including welding and CNC machines, can significantly increase performance and reduce labor costs.

We can use lean manufacturing techniques, for example, the 5S approach or creating value stream maps, to pinpoint possibilities for process improvement and eliminating waste. Through the constant review and improvement of the manufacturing process, companies can succeed in lowering costs, improving efficiency, and striving for unbeatable competition in the market.

Sheet metal fabricating parts
Sheet metal fabricating parts

Supplier Relationships and Negotiations

Establishing solid supply agreements and the right negotiation tactics can eventually result in substantial price cuts for sheet metal fabrications. Closely working with suppliers to negotiate suitable pricing options, terms, and delivery times will reduce material prices and decrease lead times. Managing orders jointly and the possibility of enjoying volume discounts will additionally drive down the procurement costs for businesses.

For instance, gathering feedback from providers regarding cost-saving alternatives and different materials or procedures allows the company to obtain beneficial insights that would aid in minimizing fabrication costs. Fostering strategic alliances with vendors who can provide efficiency to the supply chain, mitigate the risks, and decrease the costs in the long term will be a great benefit to sheet metal fabrication.

Quality and Tolerance Management

Ensuring high-quality standards and keeping the sheet metal precision at an optimum level is crucial for reducing overall fabrication costs. Businesses can reduce redoing and scrapping through strict quality control procedures and minimize the associated expenses. Using state-of-the-art inspection equipment is essential as it enables manufacturers to ensure that fabricated parts meet the prerequisite standards and are free of defects or deviations.

Tolerance optimization requires finding a trade-off between effectiveness requirements and monetary considerations. By discriminating tolerances in parts and performing adjustments wherever needed, businesses can keep production costs down without sacrificing the functionality or quality of the parts. Development efforts focused on continuous improvements in quality management may drive efficiency gains and cost reductions over time.

Production Volume and Batch Ordering

By utilizing the economy of scale by increasing the production lots, we can reduce the overall costs of sheet metal fabrication. Companies can share their costs and gain a bigger production volume, averaging the fixed costs among more units and reducing unit throughput costs. Manufacturers can better time-schedule production with batch ordering, reduce set-up times, and maximize production efficiency.

Sheet metal fabrication in high volume
Sheet metal fabrication in high volume

Accurate forecasts and demand plans to determine the best amount of items to manufacture and purchase at once are imperative. Through skillful forecasting and changing production plans, businesses can eliminate high holding costs for inventory and save themselves from unsatisfactory situations, including stockouts or shortfalls. Moreover, applying just-in-time inventory management methods will enable the implementation of different process stages and work-in-progress inventory more efficiently to reduce costs for working capital building.

Tooling and Equipment Optimization

A smart move is the provision of multiple and flexible tools to lower the costs of metal sheet fabrication. Nevertheless, by choosing equipment that can hold down various sizes and geometries of the parts, enterprises can end up with fewer special tools and machines, consequently cutting down the initial or setup costs of capital investment. Proper upkeep and frequent calibration of machinery are not an aid but rather the basic necessity for achieving ideal productivity.

Similarly, searching for alternative tooling variants or outsourcing exclusive procedures from external sources may help cut fabrication costs. By offshoring and working with external suppliers to supply the special toolings, companies can prevent themselves from big capital expenditures and have a shorter lead time. Extra efforts to improve, especially those related to optimizing equipment, bring greatly higher efficiency standards and decrease costs.

Continuous Improvement and Cost 

The main factors behind reducing sheet metal manufacturing costs are striving for maximum performance and adopting effective cost-tracking methods. Organizational effectiveness is improved by soliciting input from employees and others, which will reveal gaps and optimize chances to respond to increasing business costs. Soon, companies will also be able to determine where the problem is.

Cost-tracking systems can track expenses and discover cost-saving opportunities before they occur. Businesses can effectively pinpoint costs connected to labor, materials, and overhead by appropriately tracking these costs. As a result, they may opt to implement cost-saving measures that focus more on reducing costs. Furthermore, this practice can be benchmarked to several industries standards and competitors to give valuable indications for improving efficiency and increasing competitiveness.


Improving sheet metal fabrication costs is paramount for businesses to thrive in the manufacturing sector. Consumers will feel more optimistic about a brand if they believe its products or services are helping the environment or local communities. This article has exposed the various parameters influencing sheet metal fabrication cost, such as design complexity, materials selection, production volume, labor costs, and supplier relationships. In addition, we have discussed the approach to lower fabrication costs, such as simplifying the design, optimizing the utilization of materials, reducing economies of scale, and working with suppliers.Do you need a lower sheet metal fabrication cost while maintaining quality? Zintilon offers amazing sheet metal fabrication services for the best price.  Get a quote today to get started!

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