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to remain competitive in the global marketplace. However with around 80% of a typical company's manufacturing costs being fixed, how is this achieved? According to Paul Williams, product manager at Sandvik Coromant UK, manufacturing companies need to take a close look at tooling efficiency as Dave Tudor reports.

Statistics taken from a recent issue of ‘The Economist' reveals that UK manufacturing output fell 14.5% during 2008/9 but has grown 4.9% from the beginning of 2010 to present day. In performance terms this is the strongest year on year growth since 1994. UK manufacturing represents approximately 50% of export values and the UK is still the sixth largest manufacturer in the world despite the recent economic downturn.

Mr Williams is uncompromising in the belief that to become more profitable in a global marketplace, UK companies need to keep costs to a minimum and increase productivity. We have four buoyant industries in aerospace, oil and gas, medical and automotive but the problem is that because UK manufacturing tends to be centred around small batch sizes and high complexity, this doesn't lend itself well to manufacturing efficiency.

Our challenge with small batch production is therefore minimising downtime through quick changeovers of components and tools. As a general rule the UK tends to manufacture high value products which have similarly high overheads in terms of equipment, material costs and operator skill levels so the only way to recoup this expenditure is through maximising throughput. Part of this, he advocates, is optimising the economic tool life of a cutting tool.

It's important to make product right first time with no scrap and this means that companies need to adopt qualified tooling and data. Taking manufacturing risks could prove to be very costly in the long run.

Challenging times

So what is the definition of productivity? Well quite simply it's more or the same output for the same or less input with the ultimate aim of reducing the total cost per part manufactured. In the UK, achieving optimum levels of productivity is challenging because around 80% of a typical company's costs are fixed. Labour costs account for around 31% of the total costs; non-consumable equipment such as machine tools and inspection equipment takes up approximately 27% and the remaining 22% is swallowed up by site and overhead expenditure.

Before any manufacturing actually takes place therefore, a company will have 80% of its costs fixed. Doesn't leave much room for manoeuvre does it and once manufacturing does commence variable costs on consumables like tooling and materials will also increase. As more parts are made, variable costs will rise.

“Whether a company is based in India, China, Germany or the UK, the costs associated with the purchase of machine tools, cutting tools, consumables and raw materials are roughly the same,” Mr Williams explains. “But where low cost manufacturing countries have a clear advantage is through labour costs and facilities which when combined, take 40% straight off the bottom line when compared to manufacturing in the UK for example.

“Tooling is one area where a proportion of this can be recovered,” he continues. “Typically, through research with our own customers, we find that companies typically spend around 3% of their total manufacturing costs on tooling and it's common for customers to become preoccupied with reducing this figure. However, whilst tooling, consumables and raw material costs are important and should certainly be monitored – it's productivity and the reduction of the cost per part that should be the focus rather than just cutting tooling budgets which could ultimately be false economy.”

Many happy returns

As an example, consider a company spending £10,000 to make 1,000 parts. The cost per part therefore is £10. Of this cost, £8 is fixed through machinery, labour and facility expenditures. Based on the 3% tooling figure, 30p will be spent on tooling and £1.70 on materials. Variable costs therefore account for 20% of the total cost of the part.

“Many of our competitors will offer lower priced tooling and of course that should be considered,” Mr Williams concedes. “Providing throughput and quality are not affected then paying 33% less for tooling will in our estimation save 10p on the cost per part reducing our example to £9.90.

“Additionally, tooling companies may introduce new products that claim to provide up to 50% more tool life and again this should be considered because this could result in a further 1% (10p) saving in cost per part. But tooling companies such as Sandvik Coromant that offer a 20% increase in Metal Removal Rates (MRR) – and therefore throughput – are where the greatest cost savings can be realised. It may cost a company more for the tool in the first instance but ultimately it will provide a greater return and a potential cost per part saving of 15%. This has to be a positive selling point for UK companies in the global marketplace.”

Of course reducing cycle times is all about increasing MRR but this isn't simply about running the machine faster because this will incur more tool wear. As Mr Williams explains, the economic tool life is a major consideration when looking at ways of increasing productivity and throughput.

“It's a balance,” he explains. “We've formulated a set of top level data that we present to customers that references economic tool life and as you might expect, it varies depending on the industry a company operates in, overheads and the material being cut. For explanation purposes, our calculations are based on the cost per edge of a four edged CNMG 12 size insert, at list price less 30% discount (£1.33 per edge) and a two minute insert change time carrying out a roughing turning operation.

“In the automotive industry for example with a machine hourly rate of £40 machining a carbon steel component, we've calculated the economic tool life to be 15 minutes. But in the typical industries the UK operates in – oil and gas, medical, aerospace – where hourly rates can be typically £60-£100 per hour and components are manufactured from materials such as stainless steel, cobalt chrome, titanium and nickel-based alloys, economic tool life is reduced to 5-7 minutes.

“Essentially, what this means is that if the tool is being used for longer than 5-7 minutes in these applications, any savings being made on pushing the cutting tool for longer periods will ultimately be lost in productivity and throughput terms.”

Securing the future

To further drive home the point, Mr Williams cites a recent example where he had to machine a 3m long Inconel shaft for an oil and gas application. “During the rough turning operation we had a ‘tool stop' every 350mm and brought in a new tool,” he affirms. “We could have tried to use the existing tool for longer but economically the process would have suffered.”

Mr Williams emphasises that the above data refers only to rough turning and not finishing or milling operations. “Finishing is all about the final quality of the part and will involve additional processes such as measurement and inspection,” he says. “Roughing on the other hand is more focused on economic tool life and getting optimum Material Removal Rates.”

He concludes: “At Sandvik Coromant, all our efforts go into making our customers more productive through the tooling and support we provide but this really needs to embraced by the whole length and breadth of UK manufacturing.

“Increasing productivity by optimising throughput will drive down the cost per part and create more wealth for UK manufacturing through actually being able to compete with low cost manufacturing nations. Ultimately this is essential for the security of all our futures.”

Sandvik Coromant
www.sandvik.coromant.com/uk