Balancing unit cost, tool life, and productivity when choosing cutting tools

In earlier articles we’ve looked at total cost vs. tooling cost. Today, however, we still see people looking at line-item cost and ignoring the total cost to produce their components.

In manufacturing there are many things to consider before we make rash decisions on any aspect of the entire cost of a part. For instance, do you ever look at the cost of inventory you must carry? One tool may be more expensive than one you’re using; however, your tool’s life may be one third, and the amount of inventory you must carry raises your overall cost.

When looking at tool life on an inexpensive tool, look at the number of steel bodies you must have to hold multiple tools, so you don’t have to halt production to reset the tools. If you have a tool crib and a tool person who can reset the tool, what’s the cost of that person and that operation? The argument that’s always given is “We were doing that operation anyway.” I suggest that if we can, use our human capital for other tasks rather than wasting time on setting tooling because we decided to purchase an inferior product.

The most efficient way to make sure we are making money in manufacturing is to keep our machines running effectively and efficiently. To do this, effectively and efficiently may mean paying more for cutting tools and reducing our overall cost to produce the parts. Keep in mind that if you can run your machines uninterrupted for hours with no tool changes, then in most cases the additional cost is well worth the expense.

So please, look at the overall cost you incur and don’t look at just the line-item cost. I promise successful companies are now looking at the overall cost and not line-item cost. Make sure you can compete on the same scale to make you the most profitable company in your manufacturing space.

CMR Consultants