How custom injection molders calculate machine rates seems to be a bit of a mystery. Some may have a standard machine rate for every machine regardless of size, while others have a rate per ton of press size. Injection molders will account for things like overhead, maintenance, and labor rates in different ways. Interestingly, a quoted piece price between two molders often ends up competitive but with very different machine rates.
The bottom line is there is no right and wrong way to calculate a machine rate. To the end consumer, it doesn’t matter unless you are trying to compare the details of prices from two molders. Instead of offering up another opinion on this, I think it’s more important for end-user to know what goes into running injection molding equipment and producing injection molded parts. More specifically, what is driving costs up and down for different jobs.
Here is a list of items that may or may not be included in a machine rate.
- Electricity
- Water treatment
- Water circulation usage and maintenance
- Depreciation
- Interest
- Maintenance / Downtime
- Support Equipment and Maintenance
- Robotics
- Air consumption
- Overhead
Give or take a few items in this list, most custom molders will incur these expenses and may account for them in different ways. A machine rate may or may not include maintenance to support equipment like water pumps and temperature controllers. These items may show through in other aspects of the cost build. For example, a machine rate only covering direct cost related to that machine may seem low, and gross profit may seem high, but this all balances over time.
It’s also important to understand what type of molding is taking place. The machine rate for a clean-room operation is going to be much higher than that of a standard operation. Certain specialty molding operations like two-shot molds will have a higher rate as well. A molder that has not invested in technology may need to account for higher labor costs, a higher scrap rate, or more labor time for inspections and quality control. These may be partly calculated into a machine rate or separated as direct labor costs.
When looking at the final price of a part, the other consideration related to machine rate is the cycle time. For custom molders, it can be difficult to predict what a cycle time will be. For simple parts with common materials, thin wall sections, and lower dimensional tolerances, it can be easier to estimate. However, larger parts with thick wall sections that require a high level of dimensional stability, it can be more difficult. Experience and some software can get close.
Other factors will affect machine rate are set-up times and order quantities. Injection molders will need to plan for a certain amount of time for tool changing, heating time, color/material changes, and so on. In low volume applications, set-up costs can become more significant to piece price (possibly more than the machine time itself). Again, some molders may charge individually for this or factor this into the machine rate as a standard downtime.
As you can see, the machine rate is a bit of a messy topic in the industry. There is no right and wrong way to calculate or charge for machine time. The important point for buyers is understanding what could be included in the machine rate and how different types of parts affect it. Comparing one machine rate to another is not so simple, but to the end-user it’s not of much value. It’s more important to understand your part and work with your molder to understand the variables and get the price possible.
