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Monday, August 25, 2014

Guidelines for Calculating Machining Hourly Rate

We tout this fact all the time in our marketing ... at Kentech Inc. we are MACHINISTS ... we cut chips, we programmed, we ran shop floors for years ... then we became software engineers and designers and built software products we saw were lacking during those years. What we refer to as Real World Machine Shop Software. 

As a result, many of our clients come to us to take advantage of that experience ... especially those just starting out. Since quoting and estimating is one of the first tasks a new shop needs to get right ... we get asked quite a lot of questions about these areas. Our KipwareCYC® ( machining cycletime estimating software ) and KipwareQTE® ( cost estimating / quoting software ) titles are two of our most popular titles. One of the "hot" topics we encounter during online presentations of these titles is often concerning the cost to charge for a machining or a shop rate. So we thought it was a good time to add a blog post with some guidelines we feel are simple enough ... but important enough ... that can get you to an accurate figure.

Since many shops will utilize an hourly rate as a basis for charging for machining time, this post is dedicated to some helpful guidelines on how to calculate that machining hourly rate. Below are some points we consider important when calculating the hourly rate for a particular machine. The areas requiring calculations include :

Equipment – Cost Per Hour of Operation ... a common formula :
(machine purchase cost + expected lifetime maintenance cost) / expected hours of operating life.

Direct Labor Cost per Hour ... a common formula :
(total annual labor costs + taxes + benefits + paid time off) / (total annual hours worked – breaks and training time)

Overhead Cost Per Hour  :
Any costs not directly involved in machining a part is overhead. These include costs for administrative staff salary, equipment, furniture, building lease, maintenance and office supplies. Calculate the annual costs of these, then divide by total labor or machine hours for the year. This will be your overhead cost per hour

Once the above costs are calculated … you can use the formulas and guidelines below to arrive at either a
“general” shop hourly rate or an hourly rate based on a specific piece of equipment.

General Machine Shop Hourly Rate ... a common formula :
Average overall shop rate = (average machine cost per hour + labor and overhead cost per hour) x markup

Machine Specific Hourly Rate ... a common formula :
(specific machine(s) cost per hour + labor + overhead cost per hour) x markup

Somewhat simplified ... and usually a work in progress as factors may change. It is important to gather all the figures in the formulas above as best you can ... as accurate as you can ... and to keep tabs on any factors that may change along the way.

Kenney Skonieczny - President
Kentech Inc.

You can check our all our Real World Machine Shop Software at our website :

Tuesday, August 12, 2014

Why Use Cutter Compensation - Follow the Crowd ??

The story has been circulating here about a support issue that was raised recently where a Kipware® conversational customer inquired about how to have KipwareT® output program coordinates using the tool center vs. using G41/G42 cutter compensation and the imaginary tool tip on the control. The conversation went something like this :

Support Staff : "Why would you want to do that? That's really not a good programming practice."

Client : "Well all our programs are written like that."

Support Staff : "OK ... but that's not a good programming practice. When we created Kipware® conversational we wanted to include best programming practice so KipwareT® outputs G41 / G42 and does all the calculations and automatically includes all start-up and cancel blocks and code ... so it creates a better program. No worries ... even if you don't know how to program it KipwareT® does it all for you."

Client : "Yes but nobody programs like that."

Really? Nobody out there programs like that? We find that hard to believe.

So ... we decided to post some of our main reasoning for considering the use of cutter compensation on the control as "Best Programming Practice". If you agree with our points ... we hope that you will consider making the change ... getting educated ... and to start creating your G code programs using G41 / G42 cutter compensation.

  1. Program Coordinates ... programming to the tool tip center means that coordinates in the program do not reflect actual part print coordinates. Coordinates are based on the tool tip center rather than on the part dimensions. You can imagine the trouble and confusion that happens when edits need to be made.
  2. Tool Interchange - Turning ... since the G code was written for a specific tool radius ... the program will only function correctly for that tool radius. Decide to use a 1/64 radius for finish when the program was written for a 1/32 radius ... re-program or re-generate the toolpath. 
  3. Tool Interchange - Milling ... I think this point probably comes into play more for milling G code than turning G code. Does your shop always have perfect .500 end mills? If so ... WHY ???? Re-grinding end mills is quite a cost saver ... but it means your end mills might be .485 or something odd. If you use G41 / G42 ... who cares? Just enter the correct offset value.
  4. Dimensional Adjustments ... Come on, this is the real world. There is no reason to keep running back and forth to the CAD/CAM guy or programming office when dimensional adjustments need to be made during production ... and they will be because cutting conditions are not theoretical, they're real !!. Cutter compensation and part / tool offsets can handle probably 99.99% of all dimensional adjustments. Use the power of the control !!
Some of the main reasons we hear for why clients don't use cutter compensation ( and none of them are valid by the way ) ...
  1. Nobody taught me. Come on ... grab a hold of your future and do some "playing" at the machine ... or read for yourself. This is a truly important programming tool ... you need to know hoe to use it if you want to go anywhere.
  2. Nobody uses it. Like our scenario above ... just keeping following the crowd ... over the cliff. If I ran that shop ... the guy that comes to me and says "I think we need to change the way we think about cutter compensation" would have more of my respect than the guy who gives me the excuse "That's the way we always did it."
"I'm not stubborn ... 
it's just that doing things your way is stupid."

After having spent more than 30+ years creating ... editing ... teaching ... G code and running shops on a day-to-day basis ... cutter compensation is one of the most mis-understood and mis-used programming feature. And also the most important tool a programmer and operator and shop foreman has at his/her disposal.

If you agree ... want to learn more ... or just want some additional reading ... below is a link to one of our previous posts that dealt with this issue also :

Unfortunately CAD/CAM systems have made it o easy to program with tool tip radius ... but in the real world, on the shop floor, it can be a real detriment to productivity and efficiency. We urge any CNC programmer out there who is not using cutter compensation on the control to step up and take control of your future ... get educated on cutter compensation ... and use cutter compensation in your G code. Your future will be a lot brighter ... and profitable.

Until Next Time ... Happy Chip Making ... with G41 / G42 !!

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