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Thread: CNC Shop Rates

  1. #1
    keydiverfla's Avatar
    keydiverfla is offline Cast Iron
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    Default CNC Shop Rates

    This thread will get closed but I will try : ). NOT looking for a menu of services from anyone, just a rough idea of rates while a CNC is running for one off parts. Designing and programming aside, is there a rule of thumb? Our manual machines, when they are running and attended (obviously) is $55 / hour. Is CNC more? I would think so. Regards and thanks in advance.

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    Dave Cross is offline Stainless
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    I wouldn't turn the power on for less then $100/hr.
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    Stuart Caruk is offline Hot Rolled
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    And then you'll have the fun of some customers who want to know your hourly shop rate. And yet, everything we do for them is on a bid only basis, and they come to use because they have noted the competition's quality doesn't even come close. I don't have a flat hourly shop rate simply because each machine carries a different burden and rate. Would you put the same hourly rate on a robotically tended B axis turn mill, as you would for a manual mill for example. Or rate a job that routinely comes back, is quick to set up, and leaves several hours of unattended production to work on other projects around at the same rate as prototype work where each and every part has to be figured out, fixtures built, etc.?

    When I finally set a rate they come back and say that they can have the work done in Louisianna for $28 an hour. I say have fun. But wait says I, if I need to compete on an hourly basis, my rate is $8.75 and hour. It's just going to take a lot longer to get the parts done. My prices still didn't change, I still bid by the job. Thye are happy to see the lower shop rate. Beancounters... sheesh...

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    Would say from a variety of construction, electrical, and custom machinery jobs I've observed, bidding by the job would be much more advantageous to the customer rather than a "time and material" type of agreement as the latter is really open-ended, and really hard to compare apples-to-apples. Just my .02.

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    jimfnd is offline Aluminum
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    I was just down at a Iscar seminar.
    They based several studies for this presentation on a shop rate of $80/hr.
    As they have their ear close to a good many shops that is as good a number as you will find.

    Cheap isn't it though?
    The local PC repair shop, with nothing more invested than a workbench gets $100 per.
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    TurboFabSupply is offline Hot Rolled
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    I haven't run a machine shop (yet) but when I thought I found one I could buy I planned on being bid only. I made an invoice tool that factored in fixed costs as well as paying myself, two lower cost, part-time employees, and some savings for a used $30k machine in 15 months. The equivalent shop rate was $74.08 per hour with 160 billed hours per month for all machines. In this shop model I owned the machines. The hourly price estimated did not include cutting tools.

    I would then take this estimate of the hourly cost and change it up a bit for different stuff. Actual machining time in the cut was $100/hr to account for cutting tool use and also figured in a scrap rate or setup part. Deburring was $72, bs/phone time was 70, etc. Material was billed by multiplying actual cost times a risk factor and stated at the top of the invoice.

    Also this question or one like it gets asked almost monthly. Use the search.

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    SND
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    Based on some prices I've seen I'd say anywhere between $10 and $300/hr depending on how busy things are, there's some dirt cheap quoting happening when things go slow.
    I'd say 60-80 is the hopeful average when nobody screws up anything, scrap a few parts and its gone, or most often is getting the time wrong. I quoted $100/hr for 2 hrs but it took 4... type thing. Hitting it right on the shop rate when its all said and done on any new part is quite rare, if you run it a few times its easier to dial it in properly.

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    SIM
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    Quote Originally Posted by SND View Post
    Based on some prices I've seen I'd say anywhere between $10 and $300/hr depending on how busy things are, there's some dirt cheap quoting happening when things go slow.
    I'd say 60-80 is the hopeful average when nobody screws up anything, scrap a few parts and its gone, or most often is getting the time wrong. I quoted $100/hr for 2 hrs but it took 4... type thing. Hitting it right on the shop rate when its all said and done on any new part is quite rare, if you run it a few times its easier to dial it in properly.

    That just about sums it up.



    A CNC is just a tool...can't charge more or less just because it is done on a CNC. If a drilled hole done in a drill press runs .25, then you cannot charge a buck for it in a CNC. However, if it is a heavily contoured part and you need to orient hole to a tight positional tolerance and require a 5- Axis machine to do it...you cannot charge .25.

    Some unattended jobs that take 15 minutes to setup and run for an hour or two before machine needs to be reloaded, setup will run a for a couple days, I get to stock parts so I can pick and choose open machine time to run, I'll charge 50/hr and I'm happy to do it.
    Other jobs I need a machinist at the CNC from beginning to end and that machinist will not oversee any other machines as he need 100% concentration on that particular job, I'll go in at 100+/hr.

    The CNC is just a tool...and overhead.
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  9. #9
    Radar987 is offline Aluminum
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    With one-offs, most of your time is in programming and setups, so yes, your shop rate sure as hell better be higher.

    Doesn't mean you need to tell your customers that though. Most customers would rather hear low shop rates and high hours "to ensure higher quality and precision".

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    keydiverfla's Avatar
    keydiverfla is offline Cast Iron
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    Thanks for the replies, gives me a good idea. Sorry my search-fu is not up to snuff.

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    NTM
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    I'll beat this dead horse a little more...

    I'll preface with: I'm basically a 1 man shop.

    I charge what I think the job is worth, regardless of how long I think it will actually take. Just because I happen to be good at something or already have a specialized setup well suited to a particular job doesn't mean I should just give it away at a lower price because it can be done quickly. And alternatively, just because I'm not as efficient at a particular operation as I ought to be (example, I'm slow on the turning center) doesn't mean I ought to charge more per part because of it.


    On another subject... I have one particularly good customer of many years who just has a hard time grasping that setup and programming a one-off represents the majority of the cost. For example, a fairly simple widget machined on six surfaces in two setups isn't worth $150 to him. He doesn't see the value of it. He seams to think that is a $75 part. But, the flip side to this is he doesn't have a problem paying $75 each for ten of them the next time around. So I've adapted my quoting for him and it has worked out okay.

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    Parkerbender is offline Hot Rolled
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    Quote Originally Posted by NTM View Post
    I charge what I think the job is worth, regardless of how long I think it will actually take. Just because I happen to be good at something or already have a specialized setup well suited to a particular job doesn't mean I should just give it away at a lower price because it can be done quickly. And alternatively, just because I'm not as efficient at a particular operation as I ought to be (example, I'm slow on the turning center) doesn't mean I ought to charge more per part because of it.
    We use that same rule of thumb, for the most part. I can kindof gauge what I would pay for a part, and go off of that. If there is something that I don't know how to do yet, i quote my lead out in the distance... As of late that policy has been really helping me out on repeat work, where my price was pretty spot on with 70-something an hour the first go-round, but after a few subesuquent orders, and a little specialized tooling, some parts i have even cut times in half.

    I quote parts far better if I have a contract for repeat work... way better. But I almost never turn down work, and don't crank up the price on stuff i don't want to do, instead I stretch out the lead again... rather have work to do 3 months from now on that slow week, than chase off a shit job because I am busy now...

    We're also a 2-man shop... And we've been getting a lot of repeat customers lately... =-)

    -Parker

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    keydiverfla's Avatar
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    Understood and thanks. Our business presently is repeat customers who we cherish. Just looking for ideas, thanks again

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    Dave K is offline Diamond
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    I find quoting one of the hardest things to do. I thought with my years of experience, it would be easy to figure out how long it takes to run a given part, but no way!
    I recently started to get tired of just "making ends meet", and decided there's no use in doing this if I'm not making some money that I can set aside and allow it to pile up. So, the next quote that came along, I started quoting my usual way, then jacked it up about 30%. It was about a 20 job pile that I quoted that way. I didn't get one single job from it.
    The next batch I quoted, I did the same thing because I was busy, and didn't need the work anyway. I got every job in the batch. These two examples were both from the same company, too. How the heck am I supposed to get a feel for that? I was told by the customer how much cheaper the competition was, so I know they're watching the pricing. If both were quoted at the same rate, why did I get one batch, but not the other?

    I simply give up on trying to figure it out. From now on, I have to "not give a crap" if I get jobs or not. I'm just quoting them for what I want to make, not what I think will get the job.
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    Quote Originally Posted by Stuart Caruk View Post
    And then you'll have the fun of some customers who want to know your hourly shop rate. And yet, everything we do for them is on a bid only basis, and they come to use because they have noted the competition's quality doesn't even come close. I don't have a flat hourly shop rate simply because each machine carries a different burden and rate. Would you put the same hourly rate on a robotically tended B axis turn mill, as you would for a manual mill for example. Or rate a job that routinely comes back, is quick to set up, and leaves several hours of unattended production to work on other projects around at the same rate as prototype work where each and every part has to be figured out, fixtures built, etc.?

    When I finally set a rate they come back and say that they can have the work done in Louisianna for $28 an hour. I say have fun. But wait says I, if I need to compete on an hourly basis, my rate is $8.75 and hour. It's just going to take a lot longer to get the parts done. My prices still didn't change, I still bid by the job. Thye are happy to see the lower shop rate. Beancounters... sheesh...
    This requires a stretch of the imagination but imagine your wife going into a shoeshop, trying on only 2 pair before buying and insisting on a rebate because she's saved the assistant's time?

    I agree with your post and all that matters is getting what you wanted at the correct price and on time. how long it takes and how it's done is no business of anyone but you, unless of course the law is being broken somehow.

    Gordon

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