Deburring and Packing costs...how do you charge them?

Something I have never even considered when quoting jobs, (and ashamedly must admit have most likely been doing this for free for the last couple of years since getting into CNC) is deburring and packing.....not the packaging itself...but actually wrapping parts and packing the parts into the box for shipping.

For the past 12 years I have always quoted material, and plating with a mark up, added in my labor costs and when invoicing add in UPS charges plus $3.00 to cover the cost of UPS, and the packaging. Again.....I have been doing it this way for years, but in an all manual machine shop so my quantities were never that considerable.

Enter into the equation now cnc equipment with much, much higher quantities more complex parts that require individual wrapping for shipment and with some new quoting software I am trying out that is asking me to enter in a deburring shop rate, and a packing shop rate.....it has me thinking, what do you charge for that?? And why the hell have I NOT been doing that all these years???

Seriously...you guys who actually do charge for it, what do you charge?

I feel like I've just been punched in the gut, because all these years I've always deburred while the machine is running, and quite honestly never thought about all the time it takes to ship out some of these orders. I simply figured the shipping as overhead.

I'm not really a good businessman when it comes to all that stuff......I'll give myself a pat on the back for being a very good machininst, and my company is known for its outstanding quality and customer service, but even though we've run a successful business for over 12 years now I still lack in the "business knowledge" side of things.

Had I not been setting up this "Kipware Cost Estimating" software this morning I never would have even thought about the packing costs, and deburring costs as a separate item.

I just shipped out some parts Thursday that were done in one of our cnc lathes....only a 100pc order, all 6061 aluminum and every surface was a 32 microfinish. Nothing difficult or fussy and they came out gorgeous, BUT, it took my wife almost an hour and a half for the whole lot just to wrap each piece individually for shipping! And my wife is no slouch when it comes to work either....she's all out, all the time!!

I always joke to others about her....

"My wife will work til she drops, and then she'll work laying there on the floor!"

That's EXACTLY how she is.....an amazing woman!!

So the packing was something I never even considered when quoting the job....I mean, I knew as I was running the job they would require special care for shipping, but never even thought about the time involved. Now, thanks to this software I will never lose time again in shipping because I will account for that extra care at the quoting stage. My question, though is this......

Do you charge a different rate for deburring pieces when done as a separate op, and for packing parts for shipment? We have some orders of 10,000 pcs we are running now and packing one box of 500pcs takes approx. 50-55 minutes.....I could just scream!

I have two people working full time on machines, and two part time, and also just hired another part time person strictly for sawcutting, and deburring ops. I used to always deburr everything while the machine is running, but with one operator running two machines now it's impossible to keep up thus the part time deburring help.

Ahhh...Growing pains.......love the work, love the money, love keeping busier than I know what to do about.....hate the associated costs and problems!

Oh well, just another chapter in this unfinished book, and looking for some advice from those of you who have "been there, done that".

Best Regards,
Russ

Deburring and packaging should probably be charged at a lower rate than machining, because _theoretically_, the skill level required for the job would be much less than that required to actually make the parts, thus that position would carry a lower salary rate.

That's the way it works at our facility anyway.

To add to Tony's post...a much lower burden rate...unless you have a cnc packaging machine .

Just remember that you have to still be competitive, so be careful about adding too much if you are in a situation that cannot handle the extra costs to be passed on.

Think of other ways to package - ziploc bags of the appropriate size, plastic sleeving, heat sealed bags, paper bags, compartmented cartons (like a 12 pack of beer bottles ) can all be used and combined if necessary. As you walk different stores and such, look how retail things are packaged - it should give you some new ideas. If you are running repeat production for customer that is XX parts per month, can you make some returnable packages that you rotate (returnable dunage)? We switched one of our products to the plastic sleeve netting from paper wrapping...we can pack 100 parts in about 10 minutes vs. 60 minutes before, and looks much more professional.

Ditto for deburring...is there more that can be done in the cnc's, can you tumble, etc??? Even if you buy a couple of tumblers (for say different media), it's only a small amount of money in the big picture...and they show up to work every day. Compare their annual cost in comparison to a fully burdened worker. I know you cannot always use them, but just something else to consider. We use three tumbling methods...a cement mixer for flame/plasma/water jet cut heavy steel parts or for descaling HR prior to welding (extremely crude, but good enough for the task at hand - BTW, run it outside behind a closed door -it's LOUD), a Burr King bowl type with ceramic or plastic media, and a bowl with dry walnut shells.

But to your original question, use a labor rate and overhead burden that fits the operation and tools that you will use in the "center". This should be relatively low in comparison to your cnc OH rate. When you quote/cost the job, you can assign an approproate time based on the CNC operator having time, your deburr hand, or your wonderful wife having to do it- if you want the cnc operator doing it, put it in the setup/run instructions so there is no confusion. Any way you look at it, it's a cost, but not a value added cost, so cut as much of it as you can.

Steve

I've always considered deburring to be part of the making of the part. That is definitely in the cost of the part, weather you do it on the machine or by hand or by secondary machine, its in the cost.

Packaging, if its just to get it to your customer unharmed, part of the job. If its a specific packaging required, still part of the job.

Here is a story on packaging that killed a job.

The idiot I worked for bid a Gov job. 13,900 o-rings, he bought them off the shelf for 5 cents less than he sold them. Quick $700 bucks right? Wrong. They came in boxes intertwined like night crawlers. The packaging spec said that since they were "big" o-rings they had to be restrained, cardboard flat, masking tape, then into the nice little brown government baggies, which now had to be much bigger because of the flat.

The packaging for the job showed up, 2 pallets, almost 8 feet tall, loaded. $8k in packaging. It took 4 people working 20-60 hours a week 6 weeks to package these things. Quick $700.

So packaging needs to be figured in, depending on the job.

Just down to a one man operation but I just charge 50% of shop rate for deburring, packaging
and cleaning of parts. Almost every place I ever worked did the same thing, as previously
mentioned the salaries for those skill sets are much less than those programming and setting up
the machine.

Here's how I look at it. The only thing you have to sell is your time, what is that time worth?

We deburr while the machine is running and it doesn't show up anywhere as a cost to the customer. If the machine operator/programmer has to leave the machine sit idle while he is deburring, then it adds to the cost of the part to us so it also is added to the cost of the part to the customer. Same with packaging, if that man is worth $X per hr running the machine or doing something else and the machine is idle while he is wrapping parts and packing them for UPS shipment, I'm charging the customer the full rate for that. If I(or you) want to charge less for that work, I'm free to do so, but that's a business strategy issue. I have customers who send people in to wrap and box their parts so we don't have to charge them for that.

If you are large enough to have someone that is paid a lower rate to do that work, that changes things a great deal.

All the replies have good points, however I'm inclined to run with Mudflap. Your skill is important because as the owner, you will have the need to do a better and more careful job.
So you get the high rate too.

Regards,

Stan-

I wrote my own quoting system in an excel file. I have various shop rates for the tasks required to complete the job. Sawing, deburring, packaging, driving parts to the plater or heat treat are about half the normal shop rate. I figure on covering costs only for that work. Full shop rate for a couple hours of standing in front of the saw will take us right out of the running on many jobs.