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Tooling Cost

Tooling Cost
Discussing Production Tooling Concept With Customer

Before a customer can seriously consider a large expenditure for capital equipment or tooling, it is very important that there be a thorough understanding of in-house labor costs. The higher the labor costs, the quicker the ROI or "pay-back" of a labor saving piece of equipment or tooling. Labor costs typically start with the actual wage paid to the employee, then add in all plant and administrative overhead and benefit costs. The resulting number is often called "fully loaded" labor rate. Labor rate "multipliers" often range from 1.5 times the wage paid to 2.5 times the wage paid, depending on the overhead and benefit schedule. A smaller shop that pays it's employees an average of $15/hour with no benefits might have a fully loaded labor cost of $22.50/hour ($15 x 1.5). A larger shop that pays $25/hour and provides it's employees with health care benefits could have a fully loaded labor cost of $62.50/hour ($25 x 2.5).

During the "heyday" of the U.S. Aerospace Industry, "Journeyman Tool Builder" was a well respected and highly sought after job classification. It took a minimum of five (5) years apprenticing with experienced tool builders, before a new employee was allowed to lay out and run a job unsupervised. A lot has changed since then and a lot has not. CAD software can easily generate intricate surfaces which are quickly cut on CNC machines. The DETAILS and FEATURES which allow these surfaces to be indexed together and assembled efficiently in a shop environment are a bit more difficult. Few shops now have dedicated tooling staff. This means that engineers and shop personnel are pulled on and off of tooling projects as programs come and go. Expensive lessons are learned the hard way and then forgotten over and over again.

LOST TIME, SCRAP AND REWORK tend to get buried in overhead. They can easily put you out of business, if you don't keep track of every hour.

Southbrook Technologies have the manufacturing expertise to help save our customers some of these painful and expensive lessons.

Southbrook Technologies, Inc.
110 Celestial Way
Alpharetta Georgia 30004
(770) 403-0914

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Updated Tue Jan 26, 2016 5:29pm EST