It’s true. When our customers quote waterjet work, there are different types of quotes that work better for different jobs. You might think that there is a significant difference in quoting needs between those of our customers who are job shops versus those who conduct in-house cutting, but that is not the case; both have similar job quoting needs for either internal or external customers.
In recent focus groups, Brian Kent (Global Shapecutting Product Manager) and I have had the privilege of talking frankly and in detail with our customers. One of the many things we learned was that our shop owners and programmers have two types of quotes they create each week: the quick quote and the detailed quote. The quick quote is, well, quick – where they hope to be accurate to about 10 percent. With the detailed quote, the stakes are higher. These quotes are done for large dollar projects, recurring projects, or a first-time project for a new, important customer.
Just a quick disclaimer before we dig too deep: this article is written for someone considering a waterjet machine, not the experienced waterjet user. The intent is to paint a high level picture of what shops consider when quoting a job on their waterjet. I apologize for the US dollars and units used in this post, but to keep up with the exchange rate conversions here would add more confusion than clarity. Therefore, everything below is in US dollars and units.
What do shops charge per hour for abrasive waterjet cutting?
For a shop running a common 50 hp, 4 x 2 meter abrasive waterjet, the average operating cost is $75 to $100 per hour; operating cost in this example includes labor, overhead, and depreciation. On average, these shops charge between $125 to $150 per hour. This rate is the best average I can give you for the going rate for work in the US.
Running more than one shift, or having one operator run more than one waterjet can greatly reduce total cost. Some shops I know won’t take work for under $250 – all depends on your shop costs, location, clientele, the loyalty of your customers, quality and on-time reputation, and the type of work your doing. A precision titanium job or an ornate artistic medallion for a lobby will usually afford the opportunity for greater profit than rough cutting mild steel for a weldment. It’s not always the cost per hour that sets your quoted price, your quoted price can also be impacted by the value of your work and the competitive environment as well.
What’s in a waterjet quote?
Here is a basic list of the things that a shop might choose to consider when quoting a waterjet job.
Machine operating cost: Includes garnet abrasive, pump spares and consumables (high pressure seals, check valves, etc.), electric power, cutting head consumables (jewel orifice, mixing tube, etc.). Estimate around $15 to $45 per hour, depending the size of the pump, number of heads, pressure, abrasive flow rate, and other factors. Most commonly this is about $28 per hour.
Utilities: This is your power, water and air. Estimate around $2 to $6 per hour.
Labor: This includes the cost of quoting the job, programming the job, the operator, fringe and overhead. Estimate around $25 to $35 per hour for the operator with fringe, $25 to $55 an hour for the programmer/estimator.
Depreciation: This is the cost of the machine. Often people will use a 5 year or a 7 year depreciation, or their lease payment. Estimate $15 to $50 per hour, depending on the number of years and the cost of the equipment, number of shifts, jet on-time percentage, etc. It can vary a lot, but it is important to calculate it. The machine isn’t free. If you want an average number, use $30 per hour. People will often throw in factory overhead, like floor space and management, on top of this number.
Part handling: This is the rinse, air gun dry, packaging, marking, crating, and secondary operations.
Shipping: Sometimes this is paid by the customer, but be sure to take it into account if it is not.
The simple waterjet quote
My customers all have software that helps them make a quote. However, to enter the pattern into the software on an office computer and have the software calculate the cost data to give you a cost per part and cycle time takes effort and time. We find that shops often make quick budgetary quotes. How do they handle these? Many of my customers use an old fashioned lookup table that they create themselves. For their particular machine the table lists cost per linear inch for common material, thickness, high quality and rough cutting. That’s it. The cost includes everything – machine operating cost, overhead, operator, depreciation, etc. They ask for approximate linear inches on the job, apply their number, add in any extra costs like special packaging, raw material and shipping, attach a profit percentage, and they’re done. Of course, an experienced estimator would adjust the number based on similar jobs in the past, but the quick budgetary quote should take just minutes to prepare.
The detailed waterjet quote
Then there are the bigger jobs; the ones that demands careful quoting. Here, the estimator needs to first get an accurate cycle time. On any cutting job the hardest number to get is not the material cost, the overhead, or the cost per hour of the machine (depreciation). These numbers are fixed. The hardest number to get, and the one the estimator really pays attention to, is the machine operating cost to cut that part. As I mentioned briefly above, my customers have software that came with the machine that will approximate the cycle time for any pattern, taking into account all rapid traverse moves between cut paths, time to start the jet, stop the jet, and corner velocity changes. When the software has been loaded with accurate costs for abrasive, utilities, spare parts, pump costs, the number that spits out will be good to use not only for cycle time, but also machine operating cost to cut the part. Now the estimator adds the rest. Here is a general list of the things an estimator might consider to quote a job.
- Cost for the waterjet to cut the part (comes out of the software after inputting the pattern, and includes abrasive, utilities, spare parts, water treatment, etc.).
- Programming cost (sometimes customers break this out separately).
- Setup cost (might take 15 minutes to set the job up on the machine – usually not that big of a deal unless the part is extremely precise or heavy, in which case this could take longer).
- Material cost (sometimes material is provided by the customer).
- Operator cost to run parts (if operator is running more than one machine, the entire operator charge may not apply).
- Material handling/packaging (getting the parts off the machine, rinsed, air dried, marked, and packaged for shipment — hopefully there are no secondary operations, but if there are then you’d have to add them here, such as tapping, bending, chamfers, painting, whatever).
- Machine cost, overhead, and floor space (often a 5 or 7 year depreciation expense for the machine plus overhead).
- Crating (perhaps a wood pallet with banding and protective wrap).
- Freight (sometimes freight is paid by the customer).
Waterjets can cut almost anything – metals, composites, stone, glass, gasket, foam, ceramic, plastic, etc. – and so you might find the quick quote very valuable to see if you’re in the ballpark or not. A shop new to waterjet should not use the quick quote technique for the first month or so until you get comfortable with the total costs of running your waterjet and get a few jobs under your belt.
I realized this article isn’t very detailed. Frankly, I’ve written it for someone without a waterjet. It’s intended to simply paint a picture of what to consider. Hope it was detailed enough to be of value.
Let me know what you think in the comments below, thanks for reading.