CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

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CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

Rethinking tooling costs

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by Ronnie O’Byrne

Cutting tools represent only a fraction of total machining costs, so how can you gain real cost savings?

Tooling costs in 95 per cent of machine shops represent approximately 3 per cent, on average, of the total manufacturing costs.

This leads to two important questions:

1. If tooling and inserts represent only 3 per cent of the cost of part manufactured, what benefits are there in cutting tool companies providing 50 per cent improvement in tool life?

2. What advantage is there for a manufacturing business to secure a 20 per cent price reduction on tooling and inserts from a cutting tool supplier−what would that do to the bottom line?

The answer? Very little.

Everyone recognizes it is important to “test” the performance of tooling and inserts to ensure quality and performance. But the next time you find yourself with a new insert or milling tool that provides a tool life advantage to your business, your manufacturing team should redeploy the advantage into increased speeds and feeds to reduce cycle times.

Here’s why: a 50 per cent improvement in tool life will reduce the overall cost of part manufacturing by 1.5 per cent (50 per cent of 3 per cent of tooling cost).

The same applies to negotiations regarding price of tools and inserts supplied.

Let’s say tomorrow you negotiated a deal with all your suppliers to get a 20 per cent price reduction on every tool and insert supplied for the next 12 months. The net effect is that you will reduce your overall cost of manufacturing only by 0.6 per cent (20 per cent of 3 per cent tooling costs).

Any areas where you see improved tool life should be redeployed to an improved production target. The real cost savings are achieved when businesses redeploy these advantages back into production. Increasing speeds, feeds, DOC and metal removal rates to improve cycle times is where real bottom line savings can be achieved. 

When tool life improvements are achieved the target should always be linked to reducing cycle times–to the extent that that the tool life and tooling costs remain the same and the tool life advantage is used up through increased speeds and feeds to reduce cycle times.

All cutting tool suppliers understand that customers need to ensure value in the market and that we all operate in a competitive global market. But the next time an engineer or operator testing a tool tells you it is a “good grade” or has achieved 30 per cent improvement in tool life. Ask yourself, what can I do with that? SMT

Ronnie O’Byrne is general manager for Iscar Tools Inc., Oakville, ON

Iscar Tools Inc

 

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