Sheet metal processing lines: how to calculate productivity, availability and efficiency

Sheet metal production lines nowadays are more and more automated, with increasing number of processing modules. Knowing how to balance a production system has become a strategic skill for the production manager in order to optimize the line and increase the productivity.

Production systems consist of a series of machines, each one performing one part of the process. In sheet metal processing lines, for example, a system can include uncoiling, punching, laser cutting, forming, roll forming, welding and packaging.
To calculate the productivity and efficiency of a given production system, it is essential to understand the performance of each machine/module of the line, and how these modules are connected.

This guide illustrates a simple methodology to calculate productivity, availability and efficiency of complex production systems, given the main parameters of each module.

Defining the line and the processing modules

From now on I will define a line as a series of processing modules, each one characterized by the parameter “cycle time” or productivity P: expressed in seconds per part, is the amount of time the module is engaged to complete its process, including loading, processing and unloading time.
Another parameter that characterizes a module is the availability A, defined by this formula:

A = (Mean Time Between Failures)/((Mean Time Between Failures) + (Mean Time To Repair))
Each module is defined by the previous two parameters, and between each module we can have a buffer (parallel processing) or not (serial processing).

The previous parameter will be used to estimate, together with other considerations, the line efficiency E. Expressed as a percentage, this is the expected productivity over an extended period of time, including the preventive maintenance and setup time. For example, a line with

۸۵% efficiency means that it will be active in production 85% of the time.

Calculating the Productivity of the line

When we know the Productivity of each module, we can calculate the Productivity of the line in three different cases.

Simultaneous processing

In the first case, the modules have buffers inbetween, so each module carries on its operation on simultaneously on different parts down the line stream.
The Productivity P will be in this case the maximum value of the Productivities P of each module. This module is the bottleneck of the system.

P = MAX (P1, P2, P3…, Pn)

For example, in a processing line for venetian blinds, we identify three modules:

Roll forming and punching, P1 = 10 seconds per part
Module for head pin positioning, P2 = 5 seconds
Module for hooks insertion and loop tape assembly, P3 = 8 second
The Productivity of the complete line will be, in this case 10 seconds per part.

Serial processing

In the second case, the modules are tightly connected and work without a buffer, i.e. in serial processing.
The productivity P will be in this case the sum of the Productivities P of each module.

P = P1 + P2 + P3 + … + Pn

Some lower productivity lines for venetian blinds have this kind of operation.
With the same example of the previous venetian blind line, the productivity becomes:

P = P1 + P2 + P3 = 10s + 5s + 8s = 23 seconds – a 130% increase in the cycle time.

It is clear that adding buffers can lead to a significant increase of the productivity, and of the availability of the system as well. In large plants, the buffers can be very large and if one of the modules has a function problem, they sometimes have the possibility to divert the production flow to a second backup module.

Serial + Simultaneous processing

In the third case, some modules are positioned in simultaneous processing and others in serial processing. In this case, the serial modules will be seen as a new module with Productivity P equal to the sum of the two productivities.

For example, if the line has:

A first module with performance P6 = 8 seconds, followed by a buffer
The following modules with P7 = 7 seconds and P8 = 12 seconds positioned in serial processing configuration.
The productivity of the line will result in:

P = MAX (P6, (P7+P8)) = MAX (8s, (7s + 12s)

P = MAX (8s, 19s) = 19 seconds

Calculating the Availability

Each module, as any machine, is characterized by an availability that can be expressed in percentage. Availability is defined as:

A = (Mean Time Between Failures)/((Mean Time Between Failures) + (Mean Time To Repair))
Also written as:

In production lines, the availability of each module has a direct influence on the availability of the complete line. A conservative calculation for the line availability is the following.

A = A1 * A2 * A3 * … * An
Consider three modules with different availabilities:

A1 = 99% = 0,99
A2 = 99,9% = 0,999
A3 = 98,5% = 0,985
A = 0,99 * 0,999 * 0,985 = 0,974 = 97,4%

I consider that the same calculation is valid for serial or simultaneous configuration, since a malfunction in one of the modules, stops the complete line in both cases.

Defining the Efficiency

The calculated productivity indicates the cycle time per part in continuous production. The line, however, can be non productive for a number of reasons:

  • raw material change – for example a coil change
  • change of tooling or configuration – for example at the end of one production batch
  • for preventive maintenance

These times depend on the machine design, of course, but also on the organization of the production, number of material changes per week or day (for example in case of frequent color changes) and on the technicians’ skills.

I call these times as Setup Times or ST and they have to be either measured or estimated. Since efficiency is defined as expected productivity over an extended period of time, I suggest estimating the ST value in the production of a large enough batch of N parts – for example the quantity that is expected to be produced in one week.

Efficiency E can be calculated conservatively as follows:

E = N * P / (N * P + ST) * A

I use the availability value to take into account any stop caused by the modules.

For example, if we have:

  • N = 10000 parts
  • P = 12 seconds per part
  • ST = 7 hours
  • A = 97,4%

E = 120000 / (120000 + 25200) * 0,974 = 0,805 = 80,5%

The production manager can use this Efficiency value – knowing it is an estimation – to calculate the line Gross Productivity GP and simplify his calculations.

GP = P / E

In the previous example, with P = 12 seconds and E = 80,5%:

GP = 12 / 0,805 = 14,9 seconds per part

This means that, even if the machine produces one part every 12 seconds, we have to consider 14,9 seconds to take into account the setup times and the availability of the system.

In one week, with 144000 seconds totally available, the line will be able to produce:

N = 144000s / 14,9s = 9660 parts



The calculations have been presented in a conservative way, but two additional factors should be considered.

  1. If the machine or system relies to an operator feeding or discharging the line, the productivity will have to consider the efficiency of the operator.
  2. We assumed the line producing 100% good parts: if the line is less efficient, the percentage of scrap will reduce the calculated efficiency of the line.


The formulas I proposed, represent a simple methodology that can be applied to a number of sheet metal working systemspunching machines, laser cutting systems, FMS, roll forming machines and packaging systems.
In the article I pointed out how the Efficiency depends also on the manufacturer’s organization. In fact, larger batches reduce the impact of Setup Times ST in the calculation. However, in today’s competitive markets, sheet metal manufacturers need to be able to react quickly to customers’ requests: this turns out in smaller batches, increased setup time and reduced efficiency.
Even in this case, improving the efficiency is possible with a careful organization of the production and, of course, with the use of modern and flexible lines with lower setup times.

Dallan – C.E.O

Waterjet, oxycut, plasma or laser, which cutting technology should I use?


There is significant competition in the market between different cutting technologies, whether they are intended for sheet metal, tubes or profiles. There are those that use methods of mechanical cutting by abrasion, such as waterjet and punch machines, and others that prefer thermal methods, such as oxycut, plasma or laser.


However, with recent breakthroughs in the laser world of fiber cutting technology, there is technological competition taking place between high definition plasma, CO2 laser, and the aforementioned fiber laser.

Which is the most economical? The most accurate? For what kind of thickness? How about material? In this post we will explain the characteristics of each, so that we are best able to choose the one that best suits our needs.


This is an interesting technology for all those materials that might be affected by heat when performing cold cutting, such as plastics, coatings or cement panels. To increase the power of the cut, an abrasive material may be used that is suitable for working with steel measuring greater than 300 mm. It can be very useful in this manner for hard materials such as ceramics, stone or glass.


Although laser has gained popularity over punching machines for certain types of cuts, there is still a place for it due to the fact that the cost of the machine is much lower, as well as its speed and its ability to perform form tool and tapping operations that are not possible with laser technology.


This technology is the most suitable for carbon steel of greater thicknesses (75mm). However, it is not effective for stainless steel and aluminum. It offers a high degree of portability, since it does not require a special electrical connection, and initial investment is low.


High-definition plasma is close to laser in quality for greater thicknesses, but with a lower purchase cost. It is the most suitable from 5mm, and is practically unbeatable from 30mm, where the laser is not able to reach, with the capacity to reach up to 90mm in thickness in carbon steel, and 160mm in stainless steel. Without a doubt, it is a good option for bevel cutting. It can be used with ferrous and non-ferrous, as well as oxidized, painted, or grid materials.

CO2 Laser

Generally speaking, the laser offers a more precise cutting capability. This is especially the case with lesser thicknesses and when machining small holes. CO2 is suitable for thicknesses between 5mm and 30mm.

Fiber Laser

Fiber laser is proving itself to be a technology that offers the speed and quality of traditional CO2 laser cutting, but for thicknesses less than 5 mm. In addition, it is more economical and efficient in terms of energy usage. As a result, investment, maintenance and operation costs are lower. In addition, the gradual decrease in the price of the machine has been significantly reducing differentiating factors in comparison to plasma. Due to this, an increasing number of manufacturers have begun to embark on the adventure of marketing and manufacturing this type of technology. This technique also offers better performance with reflective materials, including copper and brass. In short, the fiber laser is becoming a leading technology, with an added ecological advantage.

So then, what can we do when we are carrying out production in thickness ranges where several technologies might be suitable? How should our software systems be configured in order to obtain the best performance in these situations? The first thing we must do is to have several machining options depending on the technology used. The same part will require a specific type of machining that ensures the best use of resources, depending on the technology of the machine where it will be processed, thus achieving the desired cutting quality.

There will be times when a part can only be executed using one of the technologies. Therefore, we will require a system that uses advanced logic to determine the specific manufacturing route. This logic considers factors such as the material, the thickness, the desired quality, or the diameters of the internal holes, analyzes the part that we want to manufacture, including both its physical and geometric properties, and deduces which is the most suitable machine to produce it.

Once the machine has been selected, we may encounter overload situations that prevent production moving forward. Software that features load management systems and allocation to work queues would have the capacity to choose a second machining type or a second compatible technology to process the part with another machine that is in a better situation and that allows manufacturing in time. It may even allow for work to be subcontracted, in the event that there is no excess capacity. That is, it will avoid idle periods and will make manufacturing more efficient.

As we can see, the cutting specialization and the use of different cutting technologies for each particular case also involves having CAD/CAM software that is able to address the use and combination of these machines within a single system. In addition, it must include the possibility of assigning and managing the ideal machine, combining both technology and the workload situation. It should also always allow us to manufacture with the quality that is needed, in the most economical manner possible, and respecting delivery times.

Digital Transformation, Cad/Cam,Lantek


What Is The Best Way To Cut Steel Plate

Oxy-fuel, Plasma, Laser, or Waterjet

There are many ways to cut mild steel plate, some of which are suited for automation some are not. Some are suited for thinner plate, some for thicker. Some are fast, some are slow. Some are low-cost, some expensive. And some are accurate, some are not. This article takes a quick look at the four primary methods used on CNC shape cutting machines, compares each processes strengths and weaknesses, and then gives a few criteria that can be used to decide which process is best for your application.

Oxy-Fuel Cutting

Oxy-fuel torch cutting, or flame cutting, is by far the oldest cutting process that can be used on mild steel. It is generally viewed as a simple process, and the equipment and consumables are relatively inexpensive. An oxy-fuel torch can cut through very thick plate, limited primarily by the amount of oxygen that can be delivered. It is not unheard of to cut through 914mm, or even 1220mm of steel using an oxy-fuel torch. However, when it comes to shape cutting from steel plate, the vast majority of work is done on 300mm plate and thinner.

When adjusted properly, an oxy-fuel torch delivers a smooth, square cut surface. There is little slag on the bottom edge, and the top edge is only slightly rounded from the preheat flames. This surface is ideally suited for many applications without further treatment.

Oxy-fuel cutting is ideal for plates thicker than 1 inch, but can be used all the way down to about 6mm thick plate, with some difficulty. It is a relatively slow process, topping out around 510mm per minute on 1 inch material. Another great thing about oxy-fuel cutting is that you can easily cut with multiple torches at once, multiplying your productivity.

Plasma Cutting

Plasma arc cutting is a great process for cutting mild steel plate, offering much higher speeds than oxy-fuel cutting, but sacrificing some edge quality. That is where plasma is tricky. Edge quality has a sweet spot that, depending on cutting current, generally ranges from about 6mm up to 38mm inches. Overall edge squareness starts to suffer when the plate gets really thin, or really thick (outside of the range I just mentioned), even though the edge smoothness and dross performance may still be quite good.

Plasma equipment can be pricy when compared to an oxy-fuel torch, since a complete system requires a power supply, water cooler (on systems over about 100 Amps), a gas control, torch leads, interconnecting hoses & cables, and the torch itself. But the increased productivity of plasma vs. oxy-fuel will pay for the cost of the system in no time.

You can plasma cut with multiple torches at once, but the additional cost factor usually limits this to two torches. However, some customers do opt for as many as three or four plasma systems on one machine, but those are usually high-end manufacturers who cut a high volume of the same parts to support a production line.

Laser Cutting

The laser cutting process is suitable for cutting mild steel from gauge thickness up to about 38mm. Beyond the 1 inch barrier, everything has to be just right to make it work reliably, including the material (laser grade steel), gas purity, nozzle condition, and beam quality.

Laser is not a very fast process, because on mild steel it is basically just a burning process that uses the extreme heat of a focused laser beam instead of a preheat flame. Therefore, the speed is limited by the speed of the chemical reaction between Iron and Oxygen. Laser is, however, a very accurate process. It creates a very narrow kerf width, and therefore can cut very precise contours and accurate small holes. Edge quality is usually very, very good, with extremely small serrations and lag lines, very square edges, and little to no dross.

The other great thing about the laser process is the reliability. The consumable life is very long, and machine automation very good, so that many laser cutting operations can be done “lights-out”. Imagine, loading a 10’ x 40’ plate of 12mm steel on the table, pressing the “Start” button, then going home for the evening. When you come back in the morning, you could have hundreds of parts cut and ready to unload.

Due to the complexity of the beam delivery, CO2 lasers do not lend themselves to cutting with multiple heads on the same machine. However, with fiber lasers, cutting with multiple heads is possible.

Waterjet Cutting

Waterjet cutting also does a very nice job of cutting mild steel, giving a smooth and extremely accurate cut. Waterjet cutting accuracy can exceed that of laser cutting, because the edge smoothness can be better, and there is no heat distortion. Also, waterjet is not limited in thickness the way laser and plasma cutting are. The practical limit on waterjet cutting is around 6 to 8 inches, due to the length of time to cut that thickness, and the tendency of the water stream to diverge.

The drawback to waterjet cutting is the cost of operation. Up front equipment costs are usually a little higher than plasma, due to the high cost of an intensifier pump, but not as high as laser. But the cost-per-hour to run waterjet is much higher, primarily due to the cost of the garnet abrasive that goes into the cut.

Waterjet cutting also lends itself to cutting with multiple heads, and this can even be done with a single intensifier pump. But each additional cutting head requires additional water flow that either requires a larger pump or a smaller orifice.

Decision Criteria

So how do you make the best decision on which process to use?

۱٫ Start with Thickness:

  • Thinner than 0.080” use laser.
  • Thinner than 0.125 use plasma or laser.
  • Thinner than 0.250 use waterjet, plasma, or laser.
  • Over 8” use oxy-fuel.
  • Over 2” use oxy-fuel or waterjet.
  • Over 1.25” use plasma, oxy-fuel, or waterjet.

۲٫ Consider the Accuracy and Edge Quality requirement:

  • Can you accept the edge quality of plasma? Most fabrications from steel plate can be welded just fine using a plasma cut.
  • Can you accept the Heat Affect Zone of oxy-fuel, plasma, or laser? If not, use waterjet.

۳٫ Consider which is more important: Productivity or Cost?

  • If production rate is most important, steer clear of waterjet.
  • If low initial investment and low operating cost are most important, look to oxy-fuel.


Tolerance for Secondary Operations

  • Can you tolerate occasional dross on the bottom of the plate? If not, use waterjet or laser.
  • Do secondary operations require perfectly round holes? If so, use waterjet or laser.

Multiple Tools

Do the parts lend themselves to being cut with 2 torches, 4 torches, or more? Then oxy-fuel is going to out-pace plasma or laser. Cutting with multiple plasma torches is possible, but gets expensive when you consider the initial investment for all that equipment. With waterjet, multiple waterjet cutting nozzles can be run with a single intensifier pump, if you buy a pump with a high enough flow rate to support multiple heads. Laser cutting has traditionally been limited to a single cutting head, although fiber laser opens the opportunity for multiple head simultaneous cutting.

The Monkey Wrench

Another consideration that throws a monkey-wrench into any calculation is the idea of multi-process cutting – using two of these cutting processes on the same part. The processes that are most logically combined are waterjet and plasma, or waterjet and oxy-fuel. With the new fiber laser technology, it is now possible to combine laser and plasma or laser and oxy-fuel. The advantage of multi-process cutting is the ability to use the slower, more accurate process for some contours, but then switch to the faster and cheaper process for other contours. The result is producing parts with the accuracy they need, but for far lower cost than if you used the high accuracy process to cut the entire part.


The overlap of thickness range and capabilities of these four processes makes it hard to choose which one to use on any particular mild-steel part. So fabricators or steel service centers who need the ability to cut a wide range of materials will often wind up with machines equipped with two or more cutting processes. Some times the only way to figure out which process is optimal for a specific part is to try it several different ways, and see which one works best.

How to quickly calculate the hourly cost and rate of machines and sheet metal processing lines

I am often asked what is the operating cost for a sheet metal processing line, and in this article I will provide a method for calculating it.

We will see that, especially for new lines such as roll forming lines, punching machine and laser cutting, the payback and the number of working hours of the machine play the most significant role, and that the payback is a decision that the sheet metal manufacturer has to take.

Other times, my clients ask me how much they should charge for the machine per hour, and at the end of the article we will see that this question has a little different answer: in this case the entrepreneur has to decide how much of the overhead costs are connected to the machine operation, how much is the gross margin he wants to have and what is the hourly rate generally applied in the market.

Calculating the hourly cost of a machine

The hourly cost of a machine is the sum of the following six factors, expressed in Hourly Cost (HC)

Let’s analyze each one of these factors.

۱٫ Investment Hourly Cost

To calculate the Investment Hourly Cost, we start from the value of the investment and divide it by the number of years in which we want the machine to be paid back.

In accounting, the depreciation for a machine is generally 5 years but some companies want the payback to be completed within three years.

The obtained value has to be divided by the number of hours of expected operation of the line.

(Investment HC) = (Investment Value) / (Payback period) / (Estimated Hours of operation)

For example, an investment worth 500.000 Euro, with a Payback period of three years working 3000 hours per year will give a hourly cost of the investment of 55,5 Euro per hour.

If the machine is leased, alernatively it is possible to calculate the Investment HC by dividing the annual cost of the leasing by the number of hours of expected operation.

(Investment HC) = (Annual cost of Leasing) / (Estimated Hours of operation)

۲٫ Electricity HC

Electricity Hourly Cost is calculated from the machine power consumption.

Power consumption is not the installed power that reads on the machine label, since that is a safety value that considers all machine utilities working simultaneously, which rarely happens. Power consumption can be measured by any electrician over a period of time with a specific instrument, and is sometimes 50% of the installed power (on servo electric punching lines, it can be even 15-20% of the installed power).

(Electricity HC) = (Machine power consumption in kW) * (Cost of electricity in [Euro/kWh])

For example, a machine with power consumption of 20kW gives an Electricity HC of about 3 Euro per working hour.

New servo electric technologies are reducing considerably the power consumption: for example one modern servo electric coil fed punching machine (see picture below) has a power consumption of less than 12kW, compared to over 30kW of an hydraulic punching machine with similar characteristics.

۳٫ Labor HC

This is the labor cost that is directly involved to assist the machine. In some cases one operator can assist more than one machine, and this cost has to take into account the percentage of his/her time per each machine.

(Labor HC) = (Operator HC) * (% of time for machine assistance)

For example, if an operator has a cost of 25 Euro per hour and assists the machine 35% of its time, the Labor HC is 8,8 Euro per hour. In more automated machines, the percentage is lower than for machines with low or no automation.

۴٫ Maintenance HC

To calculate this cost, we can divide the maintenance yearly costs by the number of estimated operating hours of the machine. The cost of the maintenance can be derived from the maintenance costs of similar machines in the workshop, or it can be estimated as a percentage of the investment value.

(Maintenance HC) = (Maintenance Yearly cost) / (Estimated Hours of operation)

For example, a machine with 6.000 Euro Yearly maintenance costs with 3000 Hours of estimated operating hours, has a Maintenance HC of 2 Euro per hour.

۵٫ Consumables HC

Consumables are, for example, the cost of wear parts such as punches and dies, filters, lubricants, or the assist gas for laser cutting machines or lines that include welding.

These costs can be derived from historical values of similar machines, or calculated and they are a direct function of the number of operating hours of the line.

In the following example, we will consider a Consumables HC of 8 Euro.

۶٫ Occupied Area Hourly Cost

For sake of completeness, we can add the hourly cost of the area occupied by the machine. I suggest considering the yearly cost for renting a similar area and divide it by the number of Estimated Hours of operation in the year.

(Occupied Area HC) = (Cost of rented area per year) / ( Estimated Hours of operation)

In the following example, we will consider this cost as zero.

Total Hourly Cost

In the previous example, the Total Hourly Cost results in 77,3 Euro. This cost covers the machine or line operating costs and as we have seen it already involved the decision on the payback period.

The Investment HC for new lines is usually the most important factor of the sum. For machines that have completed their payback or depreciation period, this factors can be considered zero; usually a higher value has to be calculated for the Maintenance HC.


When calculating the cost of a production for a customer, the HC is used in this formula:

(Total production cost) = (number of parts) * (raw material cost per one part) + (HC) * [(Cycle time per part in hours) * (number of parts) + (Setup time in hours)] + (cost of tooling) + (cost of machine programming)

We observe the following:

The Hourly cost multiplied by the number of parts and cycle time, is a variable cost that depends on the total number of produced parts.

The time for the setup of the machine can be multiplied by HC as well, since the machine is standing in this time. This can be considered a fixed cost. As we will see in one of the next articles, it is possible to consider the setup time by using the parameter Efficiency for the system.

If the production requires the manufacturing of a tooling that is production-specific, this is also considered a fixed cost, just like the cost of the machine programming.

Deciding the hourly price for the sheet metal working machine

The previous calculations give us a framework for the pricing of our machine, per hour of operation.

Knowing the machine hourly cost, the entrepreneur has now to add two more factors: the repartition of the overhead costs, and the gross margin he wants to get from the machine operation.

Repartition of overhead costs

Overhead costs are the company structural costs such as commercial costs, investments, maintenance, heating, administration and service costs that are not directly connected with the production. There is not a fixed rule for the repartition of these costs, but I suggest this formula:

(Overhead cost repartition HC) = (Overhead costs) / (Total production area in square meters) * (Machine occupied area in square meters) / (Estimated Hours of operation)

In this way, a machine occupying a smaller surface on the shop floor will “absorb” less overhead costs than the larger machines.

Note: in the Machine Hourly cost, we already included the hourly cost of the investment of the machine – either as leasing cost or depreciation – and the power consumption of the machine. These costs are generally included in the Overhead costs: for the sake of accuracy, I suggest to deduct the yearly cost of the Investment and the yearly estimated power consumption of the machine from the (Overhead costs) in the above formula. By doing so, we obtain a less conservative calculation.


We know that the cost is a calculation, while price is a decision. In fact, knowing the operating costs is an essential step to a correct pricing, and also for the evaluation of a new investment.

To calculate the price, we now need to add the margin that we want to have on the worked hour, in percentage. Here is the formula:

(Hourly price) = ((Machine HC) + (Overhead cost repartition HC)) / (100 – Margin%) * 100

For example, we had found that our system had a HC of 77,3 Euros per hour. If the Overhead cost repartition is 12 Euro per hour and we want to have a margin of 15%, the final hourly price results in:

(Hourly price) = (77,3 + 12) / (100-15) * 100 = 105 Euro per Hour.

The sheet metal manufacturer should also be informed on the pricing that is generally applied in the market for the same machine type, and consider this in his final decision.


In this article I have shared a simple method for the calculation of the machine hourly cost, which can be valid for a number of sheet metal working machines and applied even outside the sheet metal industry.

All the calculations imply some evaluations and strategic decisions that the sheet metal manufacturer has to take, so it is quite common to see two companies applying different hourly prices, based on their different policies on payback time or structural cost repartition.

In any case, in order to take a thoughtful and effective decision on the pricing, the entrepreneur has to be aware also of the price per hour applied in the market by other manufacturers in his area.

Andrea Dallan – C.E.O.