production shop rates?

I have spoke to several machine shops I'm familiar with and gather that the average job shop rate it 60.00 and hour of cycle time. Now I'm wondering if there is a difference in rate for a production shop rate? If I bring them a part that is going to be made consistently and in reasonably large numbers should the price go down.

Thanks

I would say no... not really. If you're doing a higher volume you should aim at increasing efficiency if the part cost needs to come down to secure that volume of work. Even at a higher volume you still have all your overhead and fixed costs... So you should still aim to make your shop rate to cover these and make a profit.

Its really not about your shop rate... its really about how many widgets can you do in that hour.

What you'd likely find is that they can do the parts on a volume basis substantially cheaper than on the basis of 5 or 10 at a time, but it won't be because they cut the shop rate. Its because they're amortizing the setup and programming costs across a larger number of parts, and most likely trimming a little time out of the cycle here and there as they tweak their code. Of course on a production basis you should be getting a price per part and not an hourly rate.

A shop may quote a production part based on $60/hr but that part will seldom generate that exact amount in practice. Some will turn out to have something that always seems to be nibbling at your pocketbook while others might be tweaked and refined to the point that they'll generate 1 1/2 times that rate. As long as their price is satisfactory and they're making good parts for you, what they're generating per hour off your parts should be of no concern to you. If anything, you should hope they can refine it to the point where its a solid $90/hr job because that puts you solidly in the preferred customer zone where your work is always a top priority for them.

well I was given a verbal quote but my fault for not getting it in writing because the lead time to get the part was off by 500% and the price is off by 350% so there is no way I can get these made since I cannot compete in the market at those prices.

Ouch... maybe someone here could help you.

Hope you told them to keep it and charge it to experience. One of the reasons we're so buried in paperwork as a country today is the proliferation of jackasses who won't stand behind what they say.

If you've got a drawing you could post without revealing any secret info, feel free to do so and we can see what different people think the part is worth. Such things always make for interesting and educational threads IMO.

I charge the same hourly rate whether I am running 1 part or 10,000. I charge out all time. I feel I am in the minority and I constantly get way underbid on jobs that would be on a machine over a day. I believe a lot of production shops have a lot of operators, but few set-up men, so they cut rates on jobs that stay on machines for long periods of times as they aren't paying their operators much. I have been doing some government jobs lately and can bid short runs (1 to 4 hrs) at $75 an hour and get 50% of them. On 2 day plus jobs by knowing the winning quotes I see them go cheap $25-$30 an hour and less if you count all the special packaging time.

How many parts is "reasonably large numbers"? How complex is the part? What are the inspection requirements? These items really play a major role in determining costs when it comes to volume production.
With enough volume, dedicated fixtures, gauging, process parameters, tooling and other items can significantly reduce costs.
We make complex parts where small, one-off orders, say 10-40 parts might be $150-180 each. But up the volume to the 100-300k range and the price is probably going to be in the $8-12 range. Mainly because the part goes into an entirely different, very optimized process stream when the volumes reach a certain level.
It's all based on manufacturing costs.
In the 10-40 volume part, you've got 6-8 people handling each part, depending on the feature set. These machines utilize universal type fixturing that limits process parameters. On the 100k and up volume, you've got 3 people handling the parts, and those are 2 inspection people (at different parts of the process) and 1 utility person loading the automation que. Otherwise, it's all automated, it's running on dedicated fixtures without the fixture process limits of the universal fixturing.
So you've got 6-8 peoples labor in 40 parts, or you have 3 peoples labor in 300k parts....bit of a difference in manufacturing cost....
Of course, you do have the initial and usually up front significantly higher costs of the tooling on the high volume stuff, but your piece price is going to go way down.

I just don't get this obsession with "shop rate." Unless you are quoting time+materials, the customer doesn't need to know. Shop rate is something I use to figure out how much to charge.

grinch,
If you are having the parts made, you need a per unit price at various quantity break points, in writing. Sometimes the shop with a "shop rate" of $200/hr will be able to do it cheaper that the shop with a rate of $60/hr. If the shop can't look at the print and estimate how much to charge, and tries to charge time and materials, I'd walk.

I paid for the material and had it delivered. It starts as aluminum extrusion I had the die made and got the material. A reasonable size run is 700 parts in the first batch and if thing were to go well the parts continue to run. At the first price structure I was looking at having several customers I'm already talking to ordering thousands and it would continue to run. With the new pricing I hope to stay in biz at this point.

I cant post the part without and NDA

there are patents pending ect.