Producing a ½" Ø, 3" L, square, carbide endmill in-house costs $203,523 in this example.
Going back to our ½ inch diameter 3 inch long square endmill that we outsourced, let’s see how in-house tool grinding compares to outsourcing.
- The blank would cost about $9 dollars and I’m using the same regrind limit of 4 times, the same duty cycle (the tool cuts for 2 hours), same duty day etc.
- Let’s take the tool grinder running cost of $46.42 that we calculated in the previous sheets.
- I’m also using a 5 minute setup time, 5 minute regrind time, and 5 minutes to manufacture. By the way – I’m also figuring small tool batches.
You only have to grind your first set of tools up front, because you can regrind as you go, so your up-front cost is only a few hundred dollars. And the annual cost is about $200,000. Remember that when we outsourced tools in this same example it would have cost us over $57,000 initially, for our up-front costs, and over $800,000 annually to regrind withy outsourcing.
Producing a ½" Ø, 3" L, square, carbide endmill in-house costs $50,881 in this example.
Here are the numbers with that second example, in which the tool cuts for 4 hours and you have only 20 spindles instead of 40. You still cut your annual costs to a quarter of the outsourcing costs and the CNC tool grinder still makes good sense.
Initial cost to cover production in this case is about $100. Recurring cost are the number of tools reground (up to limit) plus new tools, or $50,881. Compared to $14,700 for the initial cost and the $206,000 for the outsourcing costs for this tool example we did previously, that’s quite a savings.
Again, I have spreadsheets that allow me to change these numbers to match your individual situation, so let us know if this is something you’re interested in.