That's a fact for sure. There's good money in repair work when its billed as it should be (for every minute it takes to do the job), but if a man tries to do it and just bill for the machining time, he'll starve to death with a shop full of work. As an offhand guess, I'd say the machining time on average is less than 50% of the total time billed on most repair jobs I do. The way I see it, if they want the price to be less, all they have to do is gather up all the materials, do all the thinking, and give me drawings of exactly what is required. Hell, I don't ever even get anything where they've even cleaned off the chips, dirt, grease, or whatever, so I assume if they can't be bothered with flunky work like that, then obviously the price is no object
Davis.. So many new guys don't realize the time it takes to do the things you describe.. That really adds up.
On another note, someone mentioned the going rate for earthmoving equipment in an earlier post. A machine tool can easily run relatively trouble free for 20 years running 8 hours a day, 5 days a week. Some run a lot more hours than that before major work is required. Earthmoving equipment will be fortunate to run full time for 5 years before requiring major work, so the payback period has to be a lot shorter. Also, on a year round basis, you'll be fortunate to average 30 hrs/week paying work with earthmovers due to weather, etc even when you have the work on the books. That's why you see them working from daylight to dark when the weather is decent.
I think so much of what keeps shop rates down, at least as far as repair-type machine shops goes, is the fact that replacement parts are:
Intricate: Many parts are machined in a very sophisticated machine nowadays that can do the job in one setup. OEM factories are full of such modern equipment.
Relatively cheap (belive it or not): By this, I mean that the setups I would have to do to make this part would take hours and hours, and much measuring and reverse-engineering to copy. Cheaper to pay the price from the OEM made on the faster, therefore less costly (per part, not actual purchase price!) machine.
Also, the "throwaway" thinking that prevails due to the above-mentioned factors just pushes competitive rates down, and takes potential work away from repair shops. Instead of fixing the older equipment, as in the case of the above mentioned earthmoving equipment, the equipment gets replaced. I think also that newer equipment being inherently easier to finance plays a role in the throwaway route being taken.
Of course, I could be completely wrong!
But, I will also say that machine shops are underpaid for the value given. Charging for actual machining time, and not the rest of the time spent on a job, is a ticket to the poorhouse, I'll agree with that too.
I'm working cheap from my garage, almost no overhead.
Time and material at $40/hr for PLC programming, panel wiring, general machine shop work and some R&D. I shoot for at least $60/hr running production. One automated production job pays me over $100/hr and repeats every month.
However, the customer brings me the material and drawings then picks the stuff up when finished. I just furnish the labor. They make it so easy I'm reluctant to increase my shop rate. When I retire from my ful-time job I'll get more aggressive with pricing.
Take away that easy payment plan and the repair business would suddenly become the most lucrative game in town.
Seems there's no rhyme or reason to parts prices. We've been doing some work on our cranes as Dad is getting them ready to sell off. I made a part that engages the pump drive on one of them the other day, using half inch drill rod, in less than an hour. Price from Grove: $515 Yet, we needed a bunch of various slide pads for the boom in another one, various shapes, all made from Nylatron. Price from Grove: Almost exactly the same as I would have paid for the raw material. Hell, we woulda bought the slide pads instead of making them even if the price were double the current level. Just makes no logical sense to me.
Charging by the hour in a machine shop makes about as much sense as me charging by the hour to make a casting in the foundry. I could mold up and pour a casting in a minimum of about 30 minutes time, or i could take a couple of hours or a couple of days to do it. You don't know how long something takes for me to do so charging you by the hour wouldn't help you out at all.
The hourly rate should be a figure for internal use only as an aid to help you arrive at your per piece price. In my opinion the per piece price would be the only figure given to the customer. However a couple of local machine shops have told their customers that they charge $40 an hour and another is $60 an hour.