As with any manufacturing process, material and labor are the foundations of metal fabrication costs. But the truth is that there are many factors at play when determining pricing, and they can add up.
In previous articles, we’ve discussed the main culprits that drive up costs — how overengineering and the overuse of GD&T specifications add to a project’s bottom line. There are numerous other factors at play, however, when metal fabricators sit down to determine a cost estimate.
Engineers and procurement specialists should keep the following non-recoverable expenses in mind when issuing a request for quote (RFQ).
Jigs and fixtures are necessary tools when working with highly complex metal fabrications. They help improve accuracy for high tolerance projects and make certain processes repeatable, which is especially important when working on multiple identical pieces. At times, the design, engineering, and creation of jigs and fixtures is more complicated than the fabricated piece itself. The added labor and materials for jigs and fixtures adds costs. Proper use of jigs and fixtures, however, will reduce rework and help ensure a fabrication remains in tolerance.
Many flow-down requirements outlined in a defense industry Quality Data Package (QDP) can add significant costs to a project. If a QDP specifies that material certifications must be submitted prior to production, for example, a fabricator will need to purchase those materials ahead of time and go to the expense of obtaining certifications. There will also be added labor for tracking to ensure the materials are stored properly and earmarked for the project’s use.
Material certifications are just one category outlined in a QDP; some QDPs can be hundreds of pages long. As you can imagine, it takes a lot of time and attention to detail to compile accurate data and then submit it according to the customer’s instructions (secure portal, transferring to a disc, etc.). A metal fabricator will take this labor into account when providing a quote.
There are numerous metal fabrication finishing options, and there are times when a project may necessitate a certain finish. It’s not uncommon, however, for an expensive finish to be specified in an RFQ when a more cost-effective option may suffice.
It’s not just a matter of choosing between finishes, such as powder coating vs.a variety of wet coat paint materials. Prior to painting, for example, an iron phosphate coating is typically applied. Depending on the application, such a coating might need to be applied a second time once bondo fillers and grinding are completed to make a surface perfectly smooth according to specifications. Another example is requiring that the interior of a defense industry electrical enclosure be produced with the same higher-class aesthetic finish as the outside, even though the interior is rarely seen and wouldn’t require such a costly treatment.
Most metal fabrication companies do not have extensive in-house finishing capabilities. Anodizing, metal plating, and powder coating, in particular, are often outsourced. When requesting many of these finishes, it’s important to understand the additional costs they will incur, such as freight and packaging. It’s not uncommon for Department of Defense purchase orders to specify the use of a NADCAP-accredited supplier or those approved by a defense contractor such as Raytheon. Such accreditations limit the supplier pool and fabricators might need to ship components long distances to comply.
The need for stringent program management is crucial when coordinating such complex routing with the timing of a project. Take, for example, that a large fabrication might need to be sent hundreds of miles for blasting and be returned within 24 hours to ensure that flash rusting doesn’t occur prior to the final finish being applied. Such blasting requirements might not always be necessary, but the additional costs could be significant.
An aspect of painting or powder coating that is often overlooked is the amount and complexity of masking. Masking is the process of applying tape or other material to prevent a coating from adhering to the metal’s surface. The labor to apply masking to a fabrication has the potential to exceed the labor costs of painting, especially when tight tolerances are required.
Every manufacturer on the planet includes a percentage of their overhead costs in their proposals. This is just a normal part of doing business, but some overhead costs are not necessarily always a bad thing. For example, a metal fabrication company may invest millions in state-of-the-art machining equipment and technology to provide additional capabilities and ensure quality. The use of modern equipment provides efficiencies and accuracy on the backend and also helps to alleviate reworks and potential defects, providing more value in the long run.
Consistent and reliable project management is another way to keep overhead costs at bay. At the same time, the extensive labor required to properly manage a project is factored into each project. The job of a project management team is to deliver a product to the customer on schedule and within budget. This team should be involved in the kick-off meeting and all the way through to completion, mitigating risks and identifying potential roadblocks. They should also leverage the latest software technology and maintain high levels of communication with everyone who touches a project. Without an efficient and highly organized project management team, there will inevitably be unexpected costs that go beyond any financial implications.
Just as overengineering drives up costs, missed details that are later clarified or requested can be an issue. Incomplete information or poor drawings are a recipe for add-on costs and may require a design for manufacturability (DfM) review. Submitting drawings that need to be extensively reworked by the metal fabrication company’s own engineering team will likely come at a cost.
An often overlooked expense is the cost to get a completed fabrication from the manufacturer to its final destination. Special skids often need to be custom-made for large projects. At times, a customer might even specify what type of wood those skids need to be made from or specific bolts to be used when shipping. Other add-on items often include corner protectors, foam, crating, plastic wrap, and rubber bushings to keep a product from bouncing around too much during transit, potentially breaking a weld. Add to all that the current freight costs and fuel surcharges, and the shipping costs can escalate quickly.
For particularly complex projects, it’s not unusual for a project management team to meet with customers throughout production for routine inspections and status updates. At times, a customer might ask for additional inspections or processes. Adding source visits to the schedule or inspections that aren’t noted in the documentation often requires additional hold points on a project.
Each hold point means that the fabricator needs to halt a production process until the customer’s inspector gives the okay for a project to move forward. Another example is a request for additional measurements or inspection documents after a project is already in process. Backtracking to retrieve data can be time-consuming. Seemingly simple requests like these are compounded after the fact and can lead to considerable scope creep.
Working with an experienced metal fabrication company that specializes in complex projects and knows which questions to ask on the front end is one of the best ways to avoid unexpected costs and scope creep. Reach out to the experts at Fox Valley Metal-Tech today to talk through your next project and receive an accurate bid from the start. To help start the conversation, be sure to download our Metal Fabrication RFQ Checklist below.