The machining budget, as in any other industrial sector, requires a good understanding of the needs of the project and adapting the budget according to a series of variables that must be assessed. It is important not to forget that a poorly calculated budget can lead to an inflated profit that is not real and does not correspond to good productivity, or a loss that may be greater or lesser, and which ends up weighing down the company’s profits.
Consequently, the machining estimate must be very detailed and properly broken down, which will benefit both the customer, who will see a professional estimate and will generate greater confidence, and the company, which will be able to clearly delimit the scope of the work and each stage of the process with the allocation of the margin it deems appropriate.
Breakdown of items in a machining quotation
The process of budgeting should be based on a standardised methodology that allows this task to be carried out consistently and productively.
To do this, we must first define which items we are going to include in the budget:
Determining the amount of material that we are going to need is essential to be able to assign the cost to this item. In addition, it is advisable to have a fixed price with our usual supplier, so that we do not run the risk of a rise in the price of the raw material.
Type of machining
Each machining process may require different operations. Each part must be valued separately. Depending on the type of machining that is going to be required, it is possible that the part will be more complex and consequently we will have to apply a higher price.
Directly derived from the previous point, we can establish which machining operations are going to be necessary. And each operation will have a determined price. We are referring to turning operations, drilling, welding, threading, etc.
Manufacturing 20 parts is not the same as manufacturing 20,000 of the same type. The greater the volume of machined parts of one type to be made, the lower the chargeable unit cost of machine set-up for each part, as the fixed costs are spread over a larger volume.
Some machined parts require a final process to give the desired finish, such as polishing, zinc plating, galvanising, etc. The application of a finish increases the price and must be taken into account when preparing the quotation.
Tighter delivery times imply an urgency that may alter a production schedule. In these cases, if we have to give a priority to a shorter lead time, we have to add a surcharge.
Now you know how a machining budget should be. If we take all these aspects into account when making it, we will be able to adjust the prices correctly and be competitive in the market. At Talleres MAF we are specialists in machining in Barcelona, and in a personalised way. If you need the best, contact our team and we will be happy to help you. We are waiting for you!