Post By adama
Post By racen857
Post By jackal
Post By Gas Ax
Expensing out tooling
Roughly how much do you pass on to your customer if any? If so, is it listed as an itemized expense or strictly figured into the quote? Or do you eat all of it and factor it in with your hourly rate? I would think machine shops would vary one way or the other depending on the type of shop they operate as. We're a large industrial job shop and for the most part we eat the tooling with the exception of special tooling and/or when a job requires an excessive amount. e.g. inserts, taps, endmills. We do figure tooling into a quote but often our line of work is repair and modify.
I long ago gave up giving customers highly itemised bills. Nowadays the most i will list is Parts and labour. Normally i prefer to give just one price, the total. Anything more seams to complicate things.
Just because tooling might not be individually listed on the bill does not mean i have not covered it in the total. Just i have provided x service at x cost. Like this the tooling, the designs, jigs and fixtures, the programmes + the proprietary ip stays mine. At the end of the day its been my experience most customers are happy with this.
I do the same as Adama. Unless someone specifically asks, i give one total for the finished part. My expenses are all accounted for in the quote.
They are right...Simple part price...
I also quote per part or lot price for a assembly. If an assembly is per part the price is usually higher for oblivious reasons.
I use a simple quoting SW that has every cost listed on it, tool life cost, raw stock, plating, setup, inspection, paperwork, cleaning, deburring time, machines used and their various hourly rate... prices for 1, 2, 3, or more parts as needed... hardware... percentage markups for company profit. You name it you can put it on it.
BUT-that is just for my information. Makes things and quoting more consistant.
I suggest just tell them how much per part, or assembly. You will, I've found over the years, just open up a whole can of worms with them questioning each detail of your quote and trying to nickle and dime you down on your price. The next thing you know is your making the parts for free labor and no profit.
Same as everyone, sometimes material, but usually it's all rolled into one price + tax. They can't quibble or say that this or that they paid for. Everything is itemized for me, if they have a few questions I will answer like why it cost more than last time from my itemization, to give them a sense of things.
If you quote with tool in, do you get the tool or do they? See the problem? You can say that they will get a discount on the setup part of the cost next time if they start to ask alot of questions or want to squeeze you.
I usually just include it in my quote.
Unless the customer supplies some kind of tough material ( induction hardened chrome rod), or I'm trying to get out a tap or EZ-out they broke off.
If it starts to eat up more inserts, drills, & end mills than it normally should, I call the customer and tell them it will be extra.
Then, on the bill it will say tooling: $125 or what ever. If they want the broken inserts, etc., they can have 'em.
If an oddball tap is needed, I buy it and charge it under material.
Last edited by jackal; 08-01-2012 at 07:29 AM.
I get stuff done at several cnc shops and I could care less what any of that stuff costs so long as my per part price is what we talked about or close to it. They can cut my parts with an angle grinder and a rabid beaver, as long as they fit and look good that is cool with me. The shops I have used just give me one price they dont separate the labor from material or tooling I just see one bill for the total. I know they have had some trouble on some of my parts with tap breakage so I have bought some taps for my jobs just so they dont have to eat it and then I know they wont scrap parts while using a dull tap just to get the job done.
I would never itemize things like inserts/drills/taps cause then the customer will go on ebay and tell you they found it for half the price.
No businessman I, but I would assume you knew how many inserts it SHOULD take to make XX parts. Ditto for taps and the rest of the tooling. 50 bucks in tool wear, that goes in the Bid. You break or wear out more inserts, you don't tack on a "Tooling Charge", UNLESS you new you COULD have a lot of breakage.
I amortize all tooling into the per piece price of the part. Pretty simple if I have to change out $45 of inserts every 30 parts, I add in $1.50 each for tooling. If the job will run with hardly any tool use I just take a factored amount. If I estimate a set of tools will make 1,000 parts and the customer wants 100, I just factor in 10% of the cost of a set of tools. If it is negligible I don't add anything. I would never give a customer an itemized quote or bill. The only thing I separate out is shipping cost, everything is 100 parts are $5 each, 500 parts are $4.50 each, etc,etc.
Like everyone else posted I enclude the tooling cost into the part price, I break everything down on my end but the customer gets the price per part and thats it.
One shop I worked in would only include a seperate tooling price in the quote if we had to get a special tool that we could not use for anything, but that one certain part. Then they would list it as a ( one time tooling fee ) on the quote. Then let the customer know that the Next time we do the job it will not be charged.
Tack on a "tooling charge" and the customer will demand the tooling, plain and simple.
Years ago I had a tool shop do some rather extensive modifications on an injection mold. Since the cavity work was complicated and fussy, the tool shop really was reluctant to bid, so we agreed on Time and Material. When I got the bill, I was surprised to find multi-hundreds of dollars billed to material, since the only thing they had to provide was a half dozen or so pins.
"What's that for?"
"Graphite. Poco 3 is expensive, you know."
"Fine. Since I'm paying for it, box it up and I'll pick it up when I pick up the tool."
Now, at the time we didn't have an in-house tool shop, and I had no more use for a box of pre-ground graphite EDM blanks than the man in the Moon. But, since I was paying for it, I sure as hell wasn't going to give it away.
Now that we do have a tool shop in-house, we rarely quote outside work, but when we do, we NEVER charge for consumables. The cost is figured in the price, in the case of graphite, the volume that will be machined away to make the trodes, not the whole damned blank.
And I am still using up those pre-ground blanks I insisted be delivered with the job twenty odd years ago.
Last edited by Modelman; 08-01-2012 at 09:00 AM.
Most of the time i don't get to quote the job.
It is repair work. Like making a new rod for a hydraulic cylinder .
But if I have to machine the old clevis/eye of of the bad rod, it can ruin a lot of tooling.
Sometimes, the old clevis/eye is welded back on at the job site just so they can finish a job.
When this happens, it is welded with who-knows-what, by a who-knows welder.
My customer understands that it could take an hour & a half to machine off an old clevis & weld-prep it.
But, If I use $75 worth of inserts to do an hour & a half job ($75), I'm working for free.
Often, they will bring you a cylinder that has the gland messed up, and you have to machine the
gland-nut out of it. < ( This is a 6" bore cylinder with a 4-3/4" rod in it, and you are trying to machine the
threads out without damaging the rod or the threads in the barrel.) You can't just eat the inserts on
something like that. Also, it takes some welded up brazed carbide, and high-speed steel tools.
With anything done with tooling I have/maintain in my tooling inventory, tooling cost dosn't get discussed with the customer. I make the call on what the tooling will cost per part, it is figured into the part cost.
I do have one customer that has gone thru countless "variations" of a product and I spec out the specialty tools needed with his option of buying them himself. I tell him up front. Tool X costs $$, I buy it I charge you $$$. You buy it $$. I don't use them for anything except his product, all that wear/break are replaced by him, and he learned real quick what happens when he tries to use them in the his machinery. This seams to work for him, and has reduced the "variations" of his product.
I agree with previous posts, to much detail on an invoice will lead to problems
I was just thinking, a lot of you guys do production of 1000's of parts, while 8 parts is a production run for me.
If I am making 8 new parts, I just figure in the inserts, etc.
Some of you are dealing with purchasing agents.
My hydraulics customer usually has a couple of mechanics that tear down the equipment and have me repair/make the damaged parts.
Example: 7 foot long 8" round cylinder off of a Caterpillar track hoe. Rod is beat up and threads are stripped where the piston goes on.
I charge $800 + material for making the rod. The piston is OK, other than the threads.
I offer to make the threads larger on the new rod, then bore out and re-thread the piston.
Mechanic is happy as well as the equipment owner.
Caterpillar wanted an arm & a leg for new rod & piston.
I just work on a lot of junk that other shops turn away.
There have been customers come in and say " _ _ _ _ _ told me to come to you, because you work on this
kind of projects."
Last edited by jackal; 08-01-2012 at 03:01 PM.
Sorry but I did a poor job of asking my questions. I was asking what the norm is internally. I didn't mean to imply itemizing an invoice for a customer to see. That will indeed open up a proverbial can of worms. The above reply from JAckal sums up our type of work. You just never know what can happen during a repair of modify job. It's nothing like a production run machine shop.
Originally Posted by jackal
I was just wandering if you guys purchased the majority of your tooling and expensed it as say, a type of shop supply knowing it would be figured in to your hourly rate. Or do you pass every piece of tooling on to the customer in their bill? I guess I'm asking more in a "time and materials" type scenario.
If you are working on a time and materials basis then I would feel free to add a "Consumables" line item to the bill as needed. If it is one of those jobs where you burned up a box of inserts going through a welded up mess put something in there to cover it, on the other end if you only end up using whatever piece of old HSS you have sitting around don't bother. That is suppoed to be the beuty of T&M work is that you don't loose your ass on the unexpecteds.