Fabrication material savings rarely produce significant profits when compared to the productivity improvements obtained on the shop floor.
For instance, a straight or cast-free weld wire costs more to produce and purchase, but lowers the cost of use. A 26-in. – cast weld wire is frequently purchased due to an attractive price or brand loyalty, but can substantiallyadd to the cost of fabrication and welding time as the photos in this article show.
Unfortunately, purchasing a product on price alone –without understanding its true costs – can be one way to go. If a sales presentation is based on cost to purchase rather than effectiveness, then the buyer might be unknowingly adding to his fabrication expenses. Sometimes, this decision is complicated because of a strong brand name, loyalty to a brand or a convincing salesman.
The result is that welders obtain wire that makes welding difficult and costly. This is sometimes smoothed over by adding the additional cost to the next quote.
Welding wire that has a 26-in. cast with roughly a 6-ft. circumference will have at least two complete twists in a GMAW torch with a 12-ft. lead and two and a half twists in a torch with a 15-ft. lead. The wire will be pushed through the torch with additional resistance and wire distortion.
The electrical stick out for GMAW wire at 25 volts and 240 amperes is about 5/8 in. On thinner sheet metals the voltage would be in the 16-to-21 volt range and 100 to180 amperes with an electrical stick out of approximately 3/8 in.
Cast-free wire improves productivity in both applications by allowing the welder to control weld width. It also reduces weld spatter, distortion and welding time. Cast-free wire’s deflection diameter is much less than that of a 26-in.-cast weld wire as seen in the comparison video in this article.
A welding process melts a specific number of pounds of weld wire per hour. If the weld width or size or leg, whatever term you wish to use, is controlled to a specific size on the blueprint, then it’s easier to make a profit. A 26-in. cast makes the weld wider than required. This additional weld width consumes 20 to 40 percent more wire and shielding gas.
Additional weld width adds 20 to 40 percent to labor costs, distortion expense and abrasive purchases. So, the lower-cost 26-in.-cast weld wire does more to destroy your bottom line. This might mean that your quote on future business is higher than someone using cast-free welding wire.
For the sake of simplicity, let’s assume that the electrical stick-out is 5/8 in. The wire that has a 26-in. cast requires about 8 pounds of loading in the feed rolls. This contributes to additional wire scoring, flaking and twisting. The drawings in this article will further explain this expensive problem. This pressure on the feed rolls to push a 26-in.-cast weld wire will rotate at the arc by more than 3/8 in. This compromises the welder’s ability to make sound welds or even leak–proof welds. It is like hunting with a very inconsistent rifle. In welding, it leads to over-welding, adding time and costs to all of your fabrication steps.
Costs per weld
Let’s assume the price for 26-in. wire is $0.10 per pound less than cast-free weld wire. At first, upper management believes it’s a good deal. What isn’t understood is that cheaper materials don’t always mean a savings or increased productivity.
Let’s assume that the cast-free wire costs $1.00 per pound, and that the 26-in. cast wire is cheaper at $0.90 per pound. The typical deposition rate is about 5 pounds. per hour.
If we assume that 10 parts per hour are made with the cheaper wire, then purchased savings should be about $0.10 times five pounds per hour or $0.50 per hour per welder. Without further explanation this is believed to be a better way to weld. Actually, however, it’s not and turns out to be more expensive.
Cast-free welding wire might cost $0.10 or more per pound to purchase, but it reduces the fabricator’s bottom-line costs.
The reason is that welding wire with a 26-in. cast with an electrical stick-out of 5/8 in. will produce a circular movement at the tip of the wire of about 3/8 in. Trying to control this movement, the welder will be forced to over weld to make the surface acceptable. Over welding is frequently more than 50 percent of the AWS requirement. But for this article only, let’s assume that it’s just 20 percent over welded.
Assume that labor is only $10 per hour. If a deposition rate of 5 pounds per hour is typical, and the same number of parts are welded in one hour using only 4 pounds. (20 percent smaller fillet size) then the savings is 1 pound of wire.
Let’s say that we saved only 1 pound of wire, which is $1. This is more than twice the savings from the 26-in. cast cheaper wire. Why would anyone be concerned about such a small savings?
The other possible result is that the operator makes more parts per hour, increasing the pounds per hour consumed. This means that 5 pounds of wire at $1 per pound was used for an additional cost of $1 per hour with 20 percent more parts produced. We said that the labor was $10 per hour but only if we look at labor expense using the cast-free weld-wire labor and the overhead has not changed.
Therefore, incrementally, you’ve produced one more part that is a lot more than the $0.50 per hour saved using the cheaper 26-in.-cast wire. The cast-free wire is a true productivity improvement. You’re making more products with the same or less input.
Multiply this times the number of operators times the number of hours welding, and it’s easy to see that productivity is the best and only way to beat the low prices from overseas producers.
Some large corporations decide that because they buy 1 million pounds of welding wire per year, that $0.10 is worth $100,000 per year. But the purchasers fail to understand that increasing productivity by using less wire would produce a lower cost per unit that would far out-strip the $100,000 investment.
How is this achieved? The same job is completed with 10 percent less wire, 20 percent less time and labor along with reduced indirect labor due to distortion or sanding off weld spatter or a reduction in rework for leaking assemblies.
Why then do companies purchase 26-in.-cast weld wire? It’s the easy thing to do. It assumes that input product cost drives your job quotes. That would be true if all weld wires were the same. Most comply with AWS chemistry, however the unknown costs of weld wire cast, helix and surface condition is critical to lowering fabrication expense. Cast-free wire impinges accurately every time in the weld joint. It uses less wire, travels faster, has less indirect labor and improves quality.
Incremental costs
I’ll shift gears here for a simple explanation of incremental costs. If a fabricator charges $100 per hour for labor, equipment and overhead and builds parts for 500 hours per month, then income would be about 500 times 100 or $50,000 per month. Should a productivity advantage or improvement of only 10 percent be made available to the fabricator, then the work could be completed in only 450 hours. All of the bills, equipment and labor have been paid during the 450 hours. The additional 50 hours produces a significantly better margin for the fabricator because the bills have been paid. The additional 50 hours produces $100 per hour or $5,000 of income. This leverage is due to the improved productivity.
This point is frequently missed by many fabricators that are looking for a productivity home run, which is a rare improvement. When a fabricator looks at small details like weld-wire cast, helix and twists, it could hit the home run against the competition.
Here is a suggestion that has worked for a number of companies over the years. Hire a distributor to make good decisions not based on cheaper is better, but rather on productivity. If his suggestions reduce your fabrication costs, you purchase those products from him. He becomes your trusted consultant.
If a welding distributor presents a productivity approach, take the time to listen. They should know what you need and your concerns. Do you need more sales or profits, or are you concerned about quality or speed? Not every corporation has the same needs and concerns.
I worked at a large corporation, which had a quality issue. The solution was simple. Management, however, thought that it was too obvious. They continued to use a welding wire with a 26-in. cast that saved $0.07 per pound but the welds leaked. They ignored the fact that by changing to a high-speed shielding gas and a cast-free weld wire, productivity would increase by 30 percent. Testing proved that weld speeds increased, leak rates decreased from 30 percent to less than 1 percent and wire costs went up while pounds purchased per part went down and costs per part dropped. The corporation should have requested a runoff between present products and proposed products to determine not which company had the lowest price, but which one could produce more parts more effectively or at a lower cost.
As an example, a plow company was using 0.045-in. weld wire and argon/oxygen shielding gas. When the plow was driven into an 8-in. diameter pin, the failure rate was about 8 percent. The test duplicated hitting a manhole cover at 35 mile per hour.
Production was two plows per hour. After reviewing all of the parameters, changes were made to use a cast-free wire and a high-speed shielding gas. Plow failure dropped to less than 0.5 percent. They couldn’t destroy the plow without bending and distorting the plow frame. Production increased to four plows per hour and a second shift was eliminated. The additional cost for wire and gas was about $1,000 per month. Income improvement from increased output far surpassed this expense. This is productivity at work.
What is the best combination of shielding gas and weld wire worth to you? These costs are a small percentage of fabrication expense, but the productivity improvement can and has produced a 20 to 40 percent stronger bottom line.
