Pricing on small qty's of turned parts

moonlight machine · Dec 18, 2016

I have been making little bushes once in a while for a few years, usually 20 or so at a time. 2 diameters, .75, .495 -0 +.002 each diameter is .20 long for a total length of .40, .410 hole through. 304ss. I have been charging 10.00 each up till now. He wants to order 50 now and thinks this huge quantity should get him a discount. No doubt if he was wanting 1000s the price could be a few cents each but for 50 parts what do you think?

Finegrain · Dec 18, 2016

I'd expect 50 to be cheaper than 20, sure. How much cheaper depends on what you need for setup.

If it was me and I knew he'd be buying these once in awhile, I'd make a couple hundred on the CNC and put them in a bin.

Regards.

Mike

DDoug · Dec 18, 2016

Well, describe how you are making them now.

moonlight machine · Dec 18, 2016

digger doug said:
Well, describe how you are making them now.

Miltronics ML20 lathe. Pneumatic 5c collet set up. Dorian manual turret. Cycle start 1st op puts the turret, tool 1 center drill in the correct position to set the material projection from the collet. Then center drill, drill, chamfer hole, turn od chamfer corners, part off 1/2 depth then break corner with parting tool and part off. Then chamfer id with a countersink on the drill press.

DDoug · Dec 18, 2016

moonlight machine said:
Miltronics ML20 lathe. Pneumatic 5c collet set up. Dorian manual turret. Cycle start 1st op puts the turret, tool 1 center drill in the correct position to set the material projection from the collet. Then center drill, drill, chamfer hole, turn od chamfer corners, part off 1/2 depth then break corner with parting tool then part off. Then chamfer id with a countersink on the drill press.

Well your not doing them on a engine lathe.

What is the cycle time ?
How about the setting up time ?

$10 a piece sounds like reasonable for very short runs, done with fast turnaround.

Would the larger order of 50, change the way you do things ? (IE: shorten
both the set-up time, and the cycle time ?)

HuFlungDung · Dec 18, 2016

Don't sweeten the price too much at that quantity. Give him a quote for a 100 or 500 so he can decide if he really wants a price break or not. A large quantity order should be comparatively exciting, not a prison sentence of drudgery for you. If you make the price for 50 too low, then you won't be able to offer much discount for a hundred, and then he'll never grow up and order more at once,

And certainly don't bank 200 parts so you can give him a discount. You make 200 and sit on 180, then you should get $10 per each.

moonlight machine · Dec 18, 2016

digger doug said:
Well your not doing them on a engine lathe.

What is the cycle time ?
How about the setting up time ?

$10 a piece sounds like reasonable for very short runs, done with fast turnaround.

Would the larger order of 50, change the way you do things ? (IE: shorten
both the set-up time, and the cycle time ?)

About 5 minutes each, not really anything I can do to speed it up. The lathe is old and slow, best thing I did is after the first run I got a titex drill, now I get a nice hole in tolerance without an ID turn cycle.

DDoug · Dec 18, 2016

moonlight machine said:
About 5 minutes each, not really anything I can do to speed it up. The lathe is old and slow, best thing I did is after the first run I got a titex drill, now I get a nice hole in tolerance without an ID turn cycle.

Yup, I agree. Thinking on my W&S automatic, I would be setting multiple tools
to come in with one stroke of the cross slide (I only have that available,
unlike your 4 positon turret)
Can you also combine the O.D. turning with the spotting tool ?
(turn O.D. with knee turner from tailstock, center drill nested in center
hole of knee tool, spots at very end of stroke of turning O.D.)

So I have a longer set-up time, but a faster cycle time.

Here is how I make knurled bushing in a simple turret lathe, the cross slide
comes in to face, and knicks a chamfer on both ends at the same time.

moonlight machine · Dec 18, 2016

digger doug said:
Yup, I agree. Thinking on my W&S automatic, I would be setting multiple tools
to come in with one stroke of the cross slide (I only have that available,
unlike your 4 positon turret)
Can you also combine the O.D. turning with the spotting tool ?
(turn O.D. with knee turner from tailstock, center drill nested in center
hole of knee tool, spots at very end of stroke of turning O.D.)

So I have a longer set-up time, but a faster cycle time.

Here is how I make knurled bushing in a simple turret lathe, the cross slide
comes in to face, and knicks a chamfer on both ends at the same time.

Yeah you could spit them out by the thousands on a automatic, Iv'e seen them run circles around a cnc. You could probably do them in about 15 seconds on an old school automatic.

David J. · Dec 18, 2016

Well at 5 minutes each you're at $120 bucks per hour less the material costs.
Some parts you just can't make money on depending on your equipment, and maybe
you shouldn't even try.
I'd just tell him sorry but with my equipment that's were I need to be.
If I were starving and desperate I guess my attitude might change.
David

Limy Sami · Dec 19, 2016

Try this for the two batch sizes and see what answer you get

Set up time in $ divided by # of parts
+
Material price / part in $
+
Time / part in $
+
Clean up, washing, packing etc etc / part in $
+
Margin / part in $

= price per part.

When I do small batches of various quantities, I usually find the set up costs allows for better pricing.

DDoug · Dec 19, 2016

moonlight machine said:
Yeah you could spit them out by the thousands on a automatic, Iv'e seen them run circles around a cnc. You could probably do them in about 15 seconds on an old school automatic.

No that's not my point at all.

I'm saying that as your qty goes up, put a little more time into setting up multiple tools
to lower the cycle time.

it's a balancing act for sure, but setting those 3 tools on 1 face of your square
turret shouldn't take very long. That multiple toolholder is a catalog standard
Hardinge (Help me out here LVanice with the part number)

Same with the O.D. turning, setting a knee tool shouldn't take over 5 minutes.

Here's another facing tool I made (copied the idea from another) that will simply
nick in your chamfer after the facing tool passes center.

Thereby saving the tool retract, turret index, and chamfer tool feed time.

This tool is by no means "specialized for a certain job", the time spent making it
will easily pay, as you keep it on the shelf for many different jobs.

Guest · Dec 19, 2016

Doing a little mathematical guesswork, figuring an hour for set-up plus your run time, with $20 for material and tooling wear. I estimated $67.50 as the set-up charge. That $67.50 if amortized over 50 parts instead of 20 drops the price $2.03, so round it up and I think $8 a piece sounds right for 50.

cg285 · Dec 19, 2016

i'm with the crowd that says breaks start @100 (pieces)

Limy Sami · Dec 19, 2016

Dualkit said:
Doing a little mathematical guesswork, figuring an hour for set-up plus your run time, with $20 for material and tooling wear. I estimated $67.50 as the set-up charge. That $67.50 if amortized over 50 parts instead of 20 drops the price $2.03, so round it up and I think $8 a piece sounds right for 50.

YES

Nice one Dualkit, Whilst not knowing the numbers, that is a very good example of what I was getting at.

FWIW, It's my firm belief that it's the little ''incidentals'' that can make or break a job, E.G......say on 20 off parts 1 hour is allowed for washing, fettling and packing, ........on say 50 off parts it might still only be 1 hour that = more profit / part, .........up it to 100 off and you will NOT do that part of the job in the hour.

Limy Sami · Dec 19, 2016

cg285 said:
i'm with the crowd that says breaks start @100 (pieces)

While I see where you're coming from cg, but IME ;- the real world just ain't like that.

DanielG · Dec 19, 2016

cg285 said:
i'm with the crowd that says breaks start @100 (pieces)

I think that's shortsighted, unless it's the rare part that the time/cost actually scales linearly with number, e.g. if it needed lots of hand work.

As a buyer, I expect to pay your for your time to deal with the order paperwork, set up the machine, etc. as well as your time actually making the part. If I have a quote with price breaks on it, I'll often back out setup vs. per part pricing from the quote.

If you don't give me a price break with quantity, I have a very good reason to get more quotes on the job. I'm also not going to order 40 or 60 of them. I'll keep ordering them 20 at a time and we both miss out on the savings that would come with a larger order. Price breaks done right are win-win.

Guest · Dec 19, 2016

cg285 said:
i'm with the crowd that says breaks start @100 (pieces)

Limy Sami said:
While I see where you're coming from cg, but IME ;- the real world just ain't like that.

I believe the real world has evolved in this business and quoting these days needs to be an exact science. It seems with each passing down turn things become much more competitive. I can remember many years ago in a land far away you could charge for a complete set of tooling and amortize it over a job run even if tooling wear would be minimal to almost non existent. Try that today on brass, plastic or aluminum parts and you will get under bid every time.

Limy Sami · Dec 19, 2016

DanielG said:
As a buyer, I expect to pay your for your time to deal with the order paperwork, set up the machine, etc. as well as your time actually making the part.

Are you sure you're a real buyer

If you are, please can I be one of your suppliers

Mike1974 · Dec 19, 2016

Limy Sami said:
While I see where you're coming from cg, but IME ;- the real world just ain't like that.

Might be true, but it is also ridiculous to expect a break at every 10 parts or whatever. We routinely get requests for 1 part, 5 parts, 10 parts, 50 parts, 100 parts. AND they all seem shocked when 5 parts cost the same (per part) as 1 part. THEN they want to take the 100 part price and try to haggle with you "why is it xx dollars for 1 piece?" :bawling:

Pricing on small qty's of turned parts

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