Like any other business, machining shops and companies must maximize profits and reduce CNC machining costs to prolong their operations. Thus, an understanding of machining economics is essential. This knowledge helps you optimize the productivity, efficiency, and effectiveness of CNC machining operations. A direct result of such an intervention is the reduction in some of the costs that would otherwise have affected future operations; it enables you to minimize the cost per part. In addition, it allows you to maximize the production rate.
This article delves into the various cost items to consider if you run a CNC machining operation. We discuss the factors affecting CNC machining costs, how to optimize various aspects of your CNC machining business to reduce costs, and how to leverage software and technology to achieve this target.
Table of Contents
Breakdown of CNC Machining Costs
CNC machining costs naturally vary from one machining shop or manufacturing company to another. That is simply because of the choices these shops or companies make. For instance, small machining shops can purchase cheaper CNC machines that align with their needs. On the other hand, large machining shops and companies often opt for more expensive parts, which can run continuously, generating thousands of parts within each shift. Generally, machining shops and manufacturing companies consider the CNC machining detailed below.
1. Equipment Costs
There are numerous categories and types of CNC machines that cater to the needs of hobbyists, entry-level machinists, manufacturing shops, and woodworking shops. Obviously, the price tags attached to these machines are not uniform. Machines designed for desktop use are a lot cheaper than machines meant for large-scale metal fabrication or parts production.
Thus, the cost of a CNC machine does impact the CNC machining costs. In addition to the initial capital outlay on equipment, machine shops should also factor in repair and maintenance expenditures as well as depreciation. These additional overheads contribute to the total cost of the equipment.
2. Tooling Costs
Within the context of CNC machining, the term ‘tooling’ simply refers to the cutter you intend to use. However, in addition to cutting tools, you also need a variety of additional tools, including inserts, honing wheels, drill bits, work-holding components, and additional consumables for machining. The range of tools is necessary to achieve a particular desired surface finish, reach hard-to-machine areas, perform optimal cuts at speeds the machine can support, and so on. Also, these tools have a limited life and must be replaced periodically. In this regard, the amount spent purchasing and replacing these instruments increases the overall CNC machining costs.
3. Material Costs
Material costs as a share of total production costs vary greatly based on location, type, quantity, and availability of material, prevailing market conditions, and much more. Logically, for example, metals are more expensive than plastics. But these two types of materials are susceptible to market conditions, which cause price fluctuations.
The bottom line, therefore, is that material costs are always bound to fluctuate in response to the above-mentioned factors and more. In this regard, CNC machining shops and companies should always strive to maximize material utilization, as this can dramatically reduce both waste and cost. And as we detail later, machine shops can also reduce material costs – and, by extension – overall CNC machining costs, by having engineers or designers recommend cheaper materials.
4. Inventory Costs
Once you purchase material, the next step is ensuring the material reaches your storage facility or workshop. And in taking this step, you must also consider additional factors, such as how you will store, carry, and manage the material. Against this backdrop, inventory cost refers to any direct or indirect cost that arises from transporting, carrying, storing, managing, and processing inventory.
5. Labor Costs
Machine shops require and pay machinists and operators to perform a number of duties, which include changing tools, programming parts, performing quality control against applicable standards, ensuring regulatory compliance, monitoring to promote CNC machine safety, assembling parts, and operating machinery, just to mention a few. For these machine shops, the cost of labor will depend on the prevailing wage rates, the machinists’ experience level, the availability of talent, and their productivity. And with high costs impacting the machine shop’s competitiveness and the cost of the parts, labor is a crucial consideration in CNC machining economics.
6. Energy Costs
There are many types of CNC machines, from waterjet machines, laser cutters, plasma cutters, and routers to lathes, milling machines, and grinders. And while you would ordinarily expect the machines’ cutting or machining operations to consume a large percentage of the electricity, this is not usually the case.
CNC machines comprise many additional components, including motors, fans, computers (machine control systems), coolant pumps, feed drives, and spindles. These auxiliary systems account for much of the energy consumption, up to 85% of the total energy consumption. It is worth pointing out that some machines lack certain auxiliary systems. This means that the specific energy consumption profiles vary from one CNC machine to another.
In addition, parasitic losses and energy losses from inefficient designs (e.g., the design of machining tools as well as the designs fed into the machines for fabrication) can increase energy consumption. It goes without saying that high energy consumption increases energy costs.
7. Overhead Costs
Overhead costs include utilities, rent, insurance, administrative expenses, and taxes. And while they are indirect costs, they are still linked to machining operations. Therefore, overhead costs influence CNC machining costs.
Factors Affecting CNC Machining Costs
There are a number of factors that directly affect CNC machining costs, including:
- Cycle time and machining time
- High part rejection rates
- Complexity of designs
Cycle Time and Machining Time
Also known as part-to-part turnaround time, cycle time refers to the time required to unclamp and unload a finished part and then load and clamp the second one. In addition to covering the time taken to unload and reload, cycle time also encompasses the time a machinist takes to clean the setup of chips and dirt. A long cycle time reduces the efficiency of the CNC machine, as less time is spent on actual machining. This subsequently increases the machine’s idle time, negatively affecting the economics of the machine.
On the other hand, the duration of machining operations has a direct bearing on the CNC machining costs as well as the machine’s productivity. How so? Firstly, it results in the production of fewer machined parts within a given time, ultimately reducing the efficiency of the CNC machine. Secondly, longer machining time increases the energy and labor costs per part. In addition, longer machining time may result from wrong selections of parameters such as the cutting speed, feed rate, and rate of discharge of the coolant or lube, which, in turn, negatively affects the tool life by increasing tool wear; in this regard, longer machining time may increase the tooling costs.
To better understand how both the cycle time and machining time directly impact CNC machining costs, let’s remind ourselves of one crucial fact: CNC machines have a high capital cost. So, for a CNC machine to pay for itself, generate profits, offset overhead costs, and pay wages, it must be productively working 90 to 95% of the time. Thus, long cycle and machining times reduce the machine’s productivity, affecting its ability to offset CNC machining costs.
Fortunately, machinists can get around this problem by implementing simple strategies that increase productivity and reduce the costs per part. They can streamline machining processes, use better tools, and implement automation.
Quality and Rejection Rates
A high part quality rate is an excellent indicator of efficiency in CNC machining. Conversely, a high rejection rate, i.e., a high production of scrap parts, signals inefficiency. A high part quality rate optimizes material usage, reducing wastage. It also leads to fewer revision requests and reduces supplementary processing costs. Overall, a high part quality rate reduces CNC machining costs. The inverse is true with high rejection rates.
Conveniently, a machine shop contending with high part rejection rates can remedy the situation by providing training, implementing better processes that effectively reduce defects, and adopting quality control measures. These measures can help the shop optimize the CNC machining costs.
Complexity of Designs and Parts
It is advisable not to overly complicate your designs because it makes fabrication difficult. You can look at a few characteristics of your design to assess whether it bears the hallmarks of a complex design. The first obvious characteristic is the number of features. To some extent, more features require that you make various numerical callouts describing measurements. Unfortunately, such numerous callouts and features increase the likelihood of errors during machining, which can increase waste and scrap.
If you discover that you have designed an overly complex part, you could choose one of two options. You could redesign the part or split it to create an assembly or multiple separate parts that can be welded or bolted together.
Surface Finish
The consensus is that the surface finish directly affects CNC machining costs. This is because achieving a fine surface finish will require multiple passes as well as a selection of precise tools and machining operations. This translates to longer machining times and, by extension, higher costs due to more energy consumption and labor costs.
Strategies for Cost Optimization
Here are the various strategies you can employ to optimize the cost of CNC machining operations:
1. Quantify Machining Costs
Making decisions from a point of knowledge has always proven wise. And within the context of CNC machining costs, you cannot optimize that which you do not know. Thus, to optimize cost, you have to determine how much it costs to run a machining operation. This is a foundational strategy for cost optimization.
For the best results, you could conduct a feasibility analysis before purchasing a CNC machine. In fact, it is normal for businesses to embark on such a study whenever they want to spend large sums of money on assets and machinery. Such a study helps the company determine the type of machine to purchase, energy consumption, number of CNC axes required, spindle configuration, and much more.
Through the feasibility study, the machine shop also investigates how the machine’s productivity could impact the harmonious flow of parts and whether this could trigger bottlenecks. But perhaps the most important study item, at least within the context of this article, is cost.
A company pegs the decision to purchase high-cost machines on its ability to minimize the payback period. As such, the company considers the overall cost over the lifetime of the machine and comes up with a minimum payback period. It then comes up with measures to maximize the financial rewards by, for instance, using the machine on more shifts. This strategy helps lower the hourly machine rate. The intensive utilization compensates for the high initial investment.
2. Re-engineer Parts
As introduced earlier, the machining time directly impacts the cost of machining as well as the pricing of machined parts. In fact, the machining time is considered the most significant cost driver during machining. So great is it, in fact, that it outweighs the setup costs, material costs, and costs of achieving custom finishes through plating or anodizing. In this regard, it is crucial to reduce the machining time. And that is where re-engineering of parts comes in; it involves going back to the drawing board, as it were.
As an engineer or designer, you can re-engineer parts by ensuring your 3D model has rounded internal corners. This accommodates tools like mills, which, due to their geometry, leave rounded inside corners. In addition, you should avoid designing parts with deep internal cavities, which are often time-consuming to machine. Other considerations include:
- Limit the number of features, if possible
- Thicken thin walls to avoid vibrations (chatter) and distortion, which prompt a reduction in cutting speeds
- Recommend and use less expensive materials
- Avoid mixing finishes
- Do not overly complicate parts
3. Reduce Part Rejection Rate
Manufacturers worldwide are increasingly targeting zero defects in their manufacturing processes. One strategy they are using to achieve this target is lean manufacturing. Lean manufacturing aims to identify and eliminate waste by continuously improving the product. Another strategy is the Six Sigma managerial approach, which looks to enhance performance by eliminating defects and resource waste. The implementation of this approach results in 3.34 defects per million produced. Incidentally, the lean manufacturing philosophy can be combined with the Six Sigma tools to create Lean Six Sigma.
4. Implement Just-in-Time (JIT) Manufacturing
Also known as the Toyota Production System (TPS), just-in-time (JIT) manufacturing is a strategy that helps manufacturers improve efficiency and decrease waste by receiving materials only when they need them for CNC machining. This strategy reduces CNC machining costs by lowering the inventory cost.
5. Select Optimal Tools and Parameters
One of the ultimate goals of CNC machining, which incidentally impacts costs, is efficiency. Efficiency in CNC machining refers to the number of parts produced within a given timeframe. High efficiency depends on the selection of optimal parameters like the appropriate feed and feed rate, cutting speeds, revolutions per minute, and much more. Similarly, you should use the right tool for each operation to avoid tool breakage and unnecessary tool wear.
Leveraging Software and Technology
You can use a number of technologies to reduce CNC machining costs. They include:
- CNC automation
- Predictive maintenance
- Simulation
- Prototyping
- Multi-tasking CNC machines
CNC Automation
CNC automation takes many forms. The first involves the use of computer-aided manufacturing (CAM) software, which generates NC code (G-code) that controls the CNC machine’s machining operations. Once the machinist uploads the NC code into the machine control system, they can rely on several built-in robotic tools.
CNC machine manufacturers often include these robotic tools to increase productivity. The tools automatically load and unload parts, suppress vibration upon detection, clean the work area, and remove chips. In addition, some machines can be configured to include automatic tool changers (ATCs), designed to change tools more rapidly than manual approaches.
Predictive Maintenance
A CNC machine is only profitable if it is up and running. This only means that besides being potentially expensive to repair, unexpected breakdowns cause manufacturing downtimes. Even more concerning, the breakdowns can stop production for prolonged periods. However, given the evolution of modern monitoring technology, the ripple effect can be nipped at the source through predictive maintenance.
Predictive maintenance involves monitoring a CNC machine’s performance, health, and status during machining. It relies on sensors and modern technologies like the Internet of Things (IoT), the digital thread, and the digital twin to track and represent various machining parameters and conditions.
Typically, the sensors collect information such as sound, temperature, vibration, lubrication, etc. If, upon analysis, it is noted that the new data varies from what is considered normal, the monitoring tools send out real-time alerts. This way, the operator knows beforehand of any emerging issue. They then schedule the repair well in advance, before the issue boils over, enabling better planning and avoiding unplanned downtime. Put simply, predictive maintenance prevents breakdown, helping curtail losses and, in effect, reduce CNC machining costs.
Simulation
CAM software ships with numerous features, including cutting simulation. Alternatively, you can use dedicated CNC simulation software, which use better simulation engines to improve simulation performance and speed. This software simulate the movements of the cutting or grinding tools per the selected toolpath and NC program, allowing you to visualise the process. This visualization facilitates collision detection, enabling you to correct the toolpath/code. By avoiding collision, which can cause tool breakage, simulation enables you to lower CNC machining costs. In addition, the simulation lets you to compare different toolpaths and, using that information, choose the best, most cost-effective alternative.
Prototyping
We have discussed the importance of re-engineering parts as a cost-reduction measure in CNC machining. In some cases, however, it may not be possible for design teams to assess the actual cost of manufacturing parts without relying on a physical model. During such instances, prototyping and rapid prototyping become a reliable mechanism to fabricate models that teams can use to assess the potential cost of manufacturing parts.
If the assessment shows that the manufacturing cost will exceed the budget, companies can consider either of two approaches. First, designers can opt to modify the design to create parts that are less complex or parts that require less expensive fabrication processes. Alternatively, the machining team can choose a different machining process.
Multi-Function/Multi-Tasking CNC Machines
Certain parts need to go through different CNC machines. For instance, a motor vehicle engine housing has to go through a vertical lathe for internal and external turning. Next, it needs to be machined using a machining center to reduce weight. While necessary, this procedure loses plenty of valuable time when setting up, loading, and unloading. And as we have already detailed, such time penalties increase CNC machining costs.
Fortunately, some modern CNC machines can perform two or more machining operations. For instance, the duoBLOCK series from DMG Mori combines 5-axis milling with 5-axis turning. Others, like the G5 CNC Grinder 5-axis horizontal machining center from Makino, can mill, drill, tap, and grind, all on the same machine.
Makino’s G5 CNC Grinder 5-axis Horizontal Machining Center (source)
When it comes to machine economics, such machines, while expensive, can lower CNC machining costs because they can be cheaper than the combined price of separate machines that individually perform a different machining operation. They also occupy less space, eliminating the need to lease, rent out, or build larger warehouses. In this regard, they reduce CNC machining costs even further.
Conclusion
Understanding the CNC machining costs helps you arrive at the cost per part and the machine cost per part. This information then enables you to optimize the CNC machine as well as your operations by adjusting various parameters and implementing cost optimization strategies, thereby ensuring profitability and sustainability. Typically, you should consider the equipment costs, labor costs, overhead costs, energy costs, tooling costs, material costs, and inventory costs. You should also take factors like the required surface finish, complexity of parts, cycle and machining times, and part rejection rates, which, in the end, affect CNC machining costs.
