Divide the total batch cost by the number of parts that turned out well to arrive at the laser cutting machine cost per part. Indicate whether the material is included in the cost. A $5 processing charge paid to another company for example cannot be compared with a $5 processing charge for in-house processing plus the cost of the sheet.
Even if you’re buying cheap, remember that cheap machines cost you in fuel, wear & tear and downtime. Before you order, work out the cost of the parts you sell in the volumes you intend to deliver.
What Goes into Laser Cutting Machine Cost per Part?
Equipment and Installation Cost
A good point to start is with the installed cost of the fiber laser cutting system. Make sure that the price quoted includes the laser, cutting head, CNC, chiller, extraction, safety enclosure, cutting software and training as well as freight, import duties, connection to electricity and gas supply equipment such as compressors, bottles and regulators.
For production costing spread the equipment depreciation over the realistic output, do not add the loan principal repayment to the depreciation. The cash payback uses the initial investment and subsequent cash expenses.
Energy, Assist Gas and Consumables
Measure the power consumption of the entire system including the cooling and extraction unit. Calculate the purchased assist gas based on consumption multiplied by local prices. Low-oxidation stainless steel and aluminum edges are processed with nitrogen while carbon steel is processed with oxygen. Compressed air is an option and is restricted by the surface finish.
For self-generated nitrogen or compressed air, include equipment allocation, electricity, drying, filtration and maintenance. Count that electricity once. Protective windows, nozzles, ceramic rings and filters also need a replacement allowance based on actual use.
Pierce Time and Cutting Quality
Counting holes in a bracket with small holes will take considerably more time than a rectangular cut of the same outer dimensions. Record the number of pierces, cutting time, rapid time and total cycle time for the sheet. Setting a straight-line speed will not capture much of this.
Dross or a cutting edge that needs grinding can negate any gain in speed. Check the power, speed, focus, gas pressure and nozzle together. Read the 5 Schlüsselfaserlaserschneidparameter zur Verbesserung der Geschwindigkeit und der Schneidqualität guide to see how the 5 parameters interact to affect speed and cutting quality.
Labor, Finishing and Material Yield
Track loading, setup, sorting, inspection, and final touches just prior to bending or welding. If an operator runs multiple machines, time should be recorded against the actual time spent on each order.
Nesting utilization is typically expressed as a fraction of the total sheet area that was planned to become parts. Processing yield is typically expressed as a fraction of the number of produced parts that were acceptable. These should be kept as separate measures. Total batch spending has already been counted, so use acceptable parts as the denominator for scrap loss, and do not add back the same loss again.
How to Calculate Laser Cutting Machine ROI
Monthly Cost Calculation
Processing cost per acceptable part = Monthly processing cost / Acceptable parts produced.
Material cost = (Processing cost + Allocated sheet purchase cost – Actual scrap recovery income) / Acceptable parts produced.
Order mixed products by material, machine time and labor instead of equal part numbers. Include the material that you have purchased for a product, the unused skeletons are part of this input already.
Worked Example of In-House Cutting
Illustrative example: assume 1,000 acceptable parts each month and outsourced processing at $5 per part. Both routes exclude material and meet the same finishing requirements, with no transport cost difference. These are assumed figures, not a VIP test, quotation or return guarantee.
Assume full paid for the equipment and installation cost of $60,000. Use straight-line depreciation over 60 months with a zero residual value. This is before tax and does not include financing charges. It is based on average production with no additional sales.
| Cost Item | USD per Month | Calculation Basis |
| System electricity | 180 | Allocated system kWh × local rate |
| Purchased assist gas | 420 | Gas used × purchase price |
| Verbrauchsgüter | 180 | Replacements assigned to the order |
| Variable labor | 420 | Order hours × labor rate |
| Required finishing | 300 | Same acceptance standard as outsourcing |
| Fixed cash expenses | 1,000 | Maintenance 300; software 100; space 200; fixed labor 400 |
| Operating cash total | 2,500 | Variable 1,500 + fixed 1,000 |
| Depreciation | 1,000 | 60,000 ÷ 60 months |
| Processing cost total | 3,500 | Cash expenses + depreciation; excludes material |
Processing cost of $3,500 divided by 1,000 acceptable parts equals $3.50 per part. The total processing cost including material would equal ($3,500 + $2,000 or allocated sheet purchase + $100 in scrap recovery) / 1,000 or $5.40. Compare to the cost of an outsourced product of similar material.
Compare with the Existing Process
Monthly net cash savings = Avoidable outsourced spending – Added in-house operating cash expenses.
In this example, we assume the cost of the outsourcing is $5,000 per month and that the in-house solution costs $2,500 in cash. So, we have a savings of $2,500 per month. Simple payback would be $60,000 / $2,500 = 24 months. Depreciation is excluded from operating cash expenses because the equipment was paid for upfront.
Annual simple accounting ROI is based on the annual profit after depreciation of ($5,000 − $3,500) × 12 ÷ $60,000 = 30%. Annual cash savings of $30,000 or 50% of the investment for the year represent a different set of numbers.
Import costs, utilities connection costs and additional working capital required outside of the $60,000 investment should be included in the investment costs. Do not count new sales unless there are orders and downstream capacity to support them. For an existing plasma cutting machine, CO2 laser cutting machine, punching machine or mechanical cutting machine, only list the costs that will be removed by the change.
Check What Lower Output Does
However, variable cash cost per acceptable part is assumed to remain at $1.50. The results will change with volume while fixed cash expense is $1,000/month and depreciation is $1,000/month.
| Acceptable Parts per Month | Processing Cost per Part | Cash Savings / Payback |
| 500 | $5.50 | $750 per month / 80 months |
| 1,000 | $3.50 | $2,500 per month / 24 months |
| 1,500 | $2.83 | $4,250 per month / about 14.1 months |
This analysis relies on a number of orders and capacity being available. The 80-months result in excess of the assumed 60-month depreciation of equipment needs to be scrutinized for later maintenance costs. The absence of zero or even negative cash savings precludes a simple finite payback. Track cumulative monthly cash flow during ramp-up.
A Specific Example of the VIP Laser Cutting Machine
Flexible Exchange Worktable and Machine Utilization
Die Sieg Industrie VIP Laserschneidemaschine is an exchange worktable machine with an enclosed structure using a precise cutting head and servo motion on a sheet metal work machine. Check the cost advantage on your specific jobs.
Time spent preparing the next sheet can be added to the cutting time to avoid waiting time. Unloading, sorting and table changeover times must also be measured. These tasks are only counted once in the total elapsed cycle time, i.e. the time needed by the slowest task.
Choosing Power and Machine Configuration
Do Not Select a Machine by Wattage Alone
Compare the suggested configurations with your current material grades, thicknesses, sheet sizes and drawings. Frequent thick-plate orders may need more power, but a thin-sheet workload could benefit from easier handling. Verify the proposed configuration and test results before awarding the savings.
Consider the Complete Production Flow
Don’t budget for extra sales allowing parts to wait for welding, assembling, etc. Before you decide to buy the Sheet Metal Fabrication Line Guide find out the capacity of your press brake for bending, welding, etc. Parts waiting beside your press brake do not create any extra sales.
Why Machine Testing Matters before Purchase
Test with Representative Parts
Record test using production drawings. Record test date, machine used, material grade, thickness, gas, nozzle, focus, number of pierces, acceptance criteria and limits. Time complete processing time including handling time and any abnormal waits. Count acceptable parts and record total finishing time.
Common ROI Mistakes to Avoid
Do not treat your demo speed as your daily production output. While downtime reduces your acceptable part count, your fixed cost per part already goes up. So don’t add same downtime allocation as cash expenses to that. Extra repair bills are cash expenses. Treat lost orders separately.
Read about how we can install, train and maintain your punching machine at our Victory Industry services. Fill in the Kontaktseite with your DXF or DWG drawings, desired material, desired plate thickness, desired monthly amount, desired plate edges and local prices for electricity and gas. We will come up with a configuration and send you an offer including the costs.
Schlussfolgerung
Negotiate a timed run to check for parts before signing an order. Fill in the costs with local prices to see how it will work in the lower volume month. It has to work when your output is down, not just when all your tables are busy.
FAQs
Does Cost per Part Include Raw Material?
Stated only. The processing cost does not include cost of sheet. Total part cost = allocated material cost – actual scrap recovery income.
How Do I Calculate Laser Cutter Payback?
Divide initial net cash investment by monthly net cash savings. This gives an example of 24 months based on output remaining constant and the costs stated.
Is Compressed Air Always Cheaper than Nitrogen?
No. Compressor power, drying time, filters, maintenance and equipment cost are all to be included. Compare edge finish quality to finishing time on identical parts.
How Does Low Machine Utilization Affect Unit Cost?
Even fewer acceptable parts share the fixed costs at 500 parts. The processing cost for example parts now is $5.50, more than the $5 charged for outsourced parts.