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How do you account for non-productive time

Jim_Lou

Cast Iron
Joined
Jan 27, 2012
Location
Belleville, Illinois
On a T&M job, when an employee spends a half hour at the end of the day cleaning and putting away tools do you charge it to the job that generated the mess, or is that a write-off? I normally charge it to the job unless the next job uses the same tools and makes the same mess. Then I kind of split it between jobs. But if the same tools are involved in a bunch of similar jobs all day, it's a write-off.
 
I don't think I would count the cleanup time in the billable hours as part of the job.

However, things like cleanup would be included in my billable rate. Say I want to gross $50 an hour, but I know that 10% of the time should be cleanup time. My billable rate just went up to $55 an hour. These are hypothetical numbers.
 
I always billed it same as machine time. On Fridays, we'd spend half an hour before shut down blowing down the entire shop and getting things out of all the nooks and crannies. one guy would go around and top off all the gear boxes with oil etc... Another would haul out all the trash and chip barrels. This time was simply written off.
 
It's part of doing the work to make the parts, just like the time spent doing the paperwork involved. Bill for it, or offer the customer the opportunity to come over themselves to clean up the mess you made making their parts.
 
Considering some of the prices I hear of, I think many are throwing in the programming, quoting time, two 15min smoke breaks and clean up time all in for free.
 
Considering some of the prices I hear of, I think many are throwing in the programming, quoting time, two 15min smoke breaks and clean up time all in for free.

Ummm... some of the prices I see quoted here seem to have a cushion of at least a car payment tossed into the final part price.... Are your people really THAT SLOPPY??
 
My method is to bill it at what it actually costs me, which iis less than full shop rate as no machines are being run.

IMO, keen and competetive but profitable quoting (remember that;)) requires very careful, (bordering on anal) cost analysis.
 
It depends. If you are going to leave your shop in a mess because you think you're not getting paid to clean it up, then bill for clean up.

If you recognise that cleanup is part and parcel of your shop rate, and have it worked in, and your shop is not a mess, then that is fine as well.

Keeping everything in tip-top working order should never be 'free' to the customer. They benefit well enough from everything being ready to go when they need you to do their parts. They should all be paying, all the time, some fraction towards maintenance.
 
Cleaning is part of the job so charge for it, but don't punish your "Time and Materials" customers if you are not cleaning thoroughly after your quoted work.

I've been tempted to roll a bit of the cost of cleaning into the next job when I've under bid-something. But then I stop and think that I'd rather keep the customers who trust me enough to let me run with a job and then bill them fairly than the customers who beat me up over every penny in the quoting process.
 
Time used cleaning is part of the standard overhead and (IMO) in the same category as "house" rent, electricity, book keeping and everything else that goes into running a company.

Just as a different way of thinking, IMO there is no standard overhead.

Everything you do has a purpose and that is shipping product and should be charged for.
If it does not add value why do you do it?
Once you see it as a direct cost in you pricing you may look further into "Why do I have to clean up afterwards?". Just like a faster toolpath or higher cutting speeds, maybe there is a faster way to get it all done. Throw it into overhead and you won't attack it.
Do enough of this and your pricing will be 50% "overhead".

I most certainly charge for receiving, shipping, quoting, AP and AR time as each order results in more work to be done.
Yes the office rate is way lower due to power, machine and tooling cost, but I still pay people to work in the office.

The advantage to a system like this is that you increase the heck out of your billable hours.
Since you will have a fixed nut to crack more hours mean lower rates as you do not load your machines with some absurd "overhead" charge.
Adding overhead to your machines distorts your real incremental cost leading to dumb decisions to outsource basic stuff you should be doing in-house.
Bob
 
Too many line items confuses people. The "discount" line item is always tolerated, however.

Auto shops do have that "shop supplies" line item, where shop towels, LocTite, fasteners, etc. are billed.

Can't recall if percentage or flat charge.
 
Not one mention of burden rate?

Labor rate = hourly charge for the person (or an average of the people who would work on the job)
Burden rate = Lights, shop air, consumables, cleanup or other indirect time

Labor rate + Burden rate = hourly rate charged/quoted for a job
 
Adding a little profit in there usually doesn't hurt. And scrap rate, another thing most don't seem to consider, scrap one of out a 20-100 parts and there goes the profit for that job these days.


Having different rate for different operations does make sense, just like I charge different for a few machines, or for welding.
Since I have no employees I mainly just try to bill a certain amount per month, tracking the extra hours is not good for the moral. Either way you miss quote by 1-2% and there goes your clean up time...
 
If you can only load your crew with 4 hours work, per day, not that you do, you will cut crew in that case, when do they have to clean their machines?

When they have no productive work to do?

IF you have them loaded down, with a full 8 hours of turning or milling, unless it is exotics, not just "scrap", do you insist that they Simonize the machine between every job.

If you can't fill the machine's schedule, you MIGHT screw customers, and insist they pay for cleaning the machine. Were you making parts for me, and charged me an additional half hour for "cleaning up", I would find a new vendor. They DO get the base 8 bucks an hour to keep their workplace clean, when there is no work .

George
 
Since most quoting is price per part, there is no " screwing the customer for cleaning time " that George talks about.
Everything else happens by magic.
 
On time and material jobs, unless the job has taken longer than I think it should have, I will include the time I spend at the end of the job putting tools away and running a brush across my bench, putting away sawhorses etc. I don't count sweeping the floor unless that job made an exceptional mess.

I don't add cleanup to quotes unless the job includes using a machine that is not normally set up such as my large lathe (9'swing post lathe) where the quote includes bringing it into the shop plugging it in putting on the faceplate and then putting it away when done. I do bill the basic cleanup time against the job same as when I am doing time and materials jobs
 
....
It also includes putting tools back where they belong. It doesn't have to be done after every job but should be done as neessary.

Gordon

Why in the world would you store tools more than an arms length from where they are used?
In this case you don't put them down, you just drop them in their spot.
Putting stuff away in some remote location cost money, use this money to buy more tools so each machine has what it needs.
Bob
 
What is the stance on time to get cleaned up before going home or gear up to start for the day? I.e. do you just have to be in the building by start time or running your machine? Come shut down time, do you shutdown your machine at closing time or is that when you are walking out the door? Seems the leanacy has gotten worse. There are guys who slide in the door at 7 but still need coffee and a bathroom break before the day starts, and some that shut the machine off and start cleaning up at 3:15 so they can leave at 3:30. Just curious to what everyone's take on this is.
 








 
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