by John Kaverman, Innovative Marking Systems
It is interesting that a lot of people have no idea what it really costs them to pad print an application. You have to consider capital equipment, tooling, labor, overhead, consumables, utilities, scrap, packaging, material handling and shipping.
You dont have to be an accountant to perform some cost analysis. Pretend we want to know what it costs to print 20,000 widgets in one color. The first thing you need to do is identify how many widgets you can print per hour, on average. Pad printing involves set-up, intermittent stops to clean pads, add thinner, or move material around. On average, all of these indirect activities reduce the machines efficiency by about 20%, so multiply whatever you calculate as the maximum rate by .80.
Labor Costs
For example, lets say that you determine you can print 12 parts per minute with one operator manually loading and unloading the printer. 12 parts per minute equates to 720 parts per hour.
720 x .80 = 576 parts per hour.
Now figure out how many hours it will require to print 20,000 parts at that rate:
Number of parts: 20,000 = 34.72 hours.
Parts per hour: 576
The number of hours required multiplied by your costs for one operator per hour (including overhead, i.e. taxes, insurance, vacation, etc.) tells you what your labor costs are to produce those 20,000 widgets. If your costs are $ 25.00 per hour:
34.72 hours x $ 25.00 per hour = $ 868.05.
Consumable Material Costs
The next thing you need to do is figure out how much ink youll use. If youre using a two-component ink the math is easy, because you have to throw the unused ink away when the pot-life has expired. For example, lets say your 20,000 widgets are for an automotive application that requires a two-component ink with catalyst added at a ratio of 4:1. That ink has an eight-hour pot life.
Number of hours required: 34.72 ÷ Number of pot life hours: 8 = 4.34 (5).
The calculation 4.34 represents how many “set-ups” youll need to complete the job. Since there is no such thing as a partial set-up on a printer, you have to round up to the next whole number, which is five (5).
Note: If you arent using a two component ink, you dont have to throw any ink away so youll need to figure how many parts you can print with an ink set up, then divide the total number of parts you need to produce by that number. For example, lets say you can print 5,000 parts before you have to add ink. You would then need 4 set ups to print 20,000 widgets using one-component ink.
Next you need to know the amount of ink you need to complete a set up. Ask your machine manufacturer how much ink is required for its sealed ink cup or open inkwell to operate correctly / efficiently. Youll have to know what size your ink cup is for a sealed system, and how large the cliche is for an open system.
One fact that will scare the penny-conscious is the following: In pad printing you will invariably throw more ink away at the end of the day than you actually printed on the parts during the day. Pad printing is a wet-ink transfer process. You have to have enough ink in the machine for the process to function. If you dont have enough ink you will get all sorts of process and quality related problems. The cost of resolving those problems will outweigh the cost of the ink. To use an analogy, if your new car required five quarts of oil in order to operate correctly, would you put four quarts in instead? Me neither.
All right, we have five set ups to print our 20,000 parts. Lets say the machine we are going to use has a 60mm diameter ink cup that requires 50 grams of ink to operate correctly. If your ink costs $ 55.00 per kilogram, then each gram of ink costs $ 0.055 ($ 55.00 divided by 1000 grams).
50 grams x $ 0.055 = $ 2.75 ink cost per set up.
Now figure the cost of the catalyst you have to add at 4:1. Lets say the catalyst comes in 150 ml tubes at $ 12.00 each. Each ml would cost $ 0.08 ($ 12.00 divided by 150 ml).
50 grams of ink divided by 4 (4:1 ratio) = 12.5 grams.
Pad printing inks are mixed by weight, not by volume, because colors vary by weight. Now you could weigh 150 ml of catalyst to determine exactly how much it weighs, but for this example we will say one ml weighs a gram.
12.5 grams x $ 0.08 per gram = $ 1.00 catalyst per set up.
You use the same exercise to determine thinner costs. Lets say a liter of thinner costs $ 15.00. Again, well say one ml of thinner weighs 1 gram, so each ml would cost $ 0.015 ($ 15.00 divided by 1000ml).
The amount of thinner you add is going to vary depending upon numerous factors that, for the sake of this example, we will not explain here. Suffice it to say, most ink technical data sheets will say “10-20% by weight”. So, take the average. If you have 50 grams of ink and 12.5 grams of catalyst, you have 62.5 grams to thin at 15% by weight. 15% of 62.5 = 9.375 grams.
9.375 x $ 0.015 = $ 0.14 thinner per set up.
Total all the components of the ink up:
| Ink: | $ 2.75 |
| Catalyst: | $ 1.00 |
| Thinner: | $ 0.14 |
| Total: | $ 3.89 |
Remember we had 5 set-ups? 5 x $ 3.89 = $ 19.45 ink costs to print 20,000 widgets.
Note: If you have more than one color, and all the ink cups require the same amount of ink, you need to multiply the ink cost per set up by the number of colors. For example, if you have a two-color job using two 60mm ink cups, your cost per set up would be
$ 3.89 x 2, or $ 7.78.
To determine pad costs you have to go out on faith. There is no magic number for pad life. Some pads last 200 impressions, some last 200,000. It depends on numerous factors. You have to take an average. Since this example is for an automotive job having some rather stringent quality specifications, my experience would suggest that to maintain image quality you need to change your pad every 25,000 impressions. If we have 20,000 parts to print, and our pad cost is $ 26.00 new, then we can estimate that we will consume 80% of that pads operating life printing 20,000 parts (assuming we are single printing).
$ 26.00 x .80 = $ 20.80 pad cost to print 20,000 widgets.
Note: If you are double printing you have to count each impression. 20,000 parts = 40,000 impressions. 40,000 impressions would require 1.6 pads at $ 26.00 each, so your pad cost for double printing would be $ 41.60.
Tooling Costs
Printing plates (clichés) are usually part of the tooling package you need to print a job. For 20,000 parts you could make a high-quality polymer cliché, and a spare, for a lot less than it would cost to make a steel cliché. Steel clichés can last for a million or more impressions, while high quality polymers can last for up to 100,000. Our example of a 60mm machine uses a 70 x 150 printing plate. A polymer cliché etched by the equipment manufacturer would cost about $ 53.00.
Add a film charge if the manufacturer is making the cliché. The average film charge is about $ 25.00.
If you are making the clichés in-house, you have to take the cost of the raw material and the labor involved. For example, a blank 70 x 150 cliché would cost about $ 5.75. It takes 20 to 30 minutes to make a film and cliché, so you have a half hour of labor involved. That 1/2 hour costs $ 12.50. Add the material and the labor and you get $ 18.25 per polymer cliché.
Note: If you are printing more than one color, dont forget to figure a film and cliché cost for each color.
Part nesting fixtures, or jigs, are another part of the tooling package. Costs will vary depending on the complexity of design and type of materials used to manufacture the nest. A CNC machined aluminum nesting fixture that has been anodized is going to cost more than a couple pieces of wood and some automotive body filler. For the sake of this example, I am going to say you had a real aluminum nest built, and that nest costs $ 300.00.
Utility Costs
If you are so inclined, you can even figure out how much it costs for utilities to run your equipment. If your printer is electric, all you need to do is calculate the costs of electricity to run the printer. For example, the average cost of electricity per kilowatt hour in the United States between April 2002 and April 2003 was $ 0.697. If your printer consumes an average of 165 watts per hour, an hour of operation would equal 1.65 kilowatts. 1.65 x $ 0.697 = $ 1.15.
34.72 hours x $ 1.15 per hour = $ 39.93
Note: If your printer is pneumatic, you have to also figure the cost of the compressed air. Let us look at what we have calculated so far:
| Labor | $ 868.05 |
| Ink and additives | $ 19.45 |
| Pad | $ 20.80 |
| Tooling | $ 318.25 |
| Electricity | $ 39.93 |
| Total Costs: | $ 1266.48 |
Cost per widget ($1266.48/20,000): $ 0.0633
Scrap Costs
Now that you have your piece price for the printing portion of your process, you need to figure the scrap costs before calculating your markup. Your scrap rate is impossible to estimate without knowing the specifics of the application, including the operators skill level, the operating conditions, and several other factors. Youll have to look at some empirical data to figure that out. Once you have an educated guess, roll those numbers into the 20,000 parts you have to ship. For example, if your data suggests that your scrap is 4% on similar applications, figure pricing for 20,800 pieces instead of 20,000.
Shipping Costs
Youve got to figure out how many boxes it will take to package 20,000 widgets and how much each box will cost to ship. Lets say your packaging materials (box, packing peanuts, tape) cost $ 2.00 each, and you can get 250 widgets in each box. You would need 80 boxes for a total of $ 160.00 in shipping materials.
You also have labor. If each box is packed in 5 minutes that is $ 2.08 in labor. ($ 25.00 per hour divided by 60 = $ .4167 per minute). The total cost of labor to pack 80 boxes would be $ 166.40. Finally, if youre paying the shipping costs, add that on.
The Bottom Line
To reduce costs you have to know costs. In pad printing the fastest way to reduce costs is not found in saving a couple dollars on the cost of a can of ink, a cliché or a pad. The fastest way to beat the competition in pad printing is to make quality parts faster. If I had taken the example application and printer with an optional rotary table that allows you to print and load/unload in parallel and purchased one additional nesting fixture my piece price for 20,000 parts would be $ 0.0627. While the rotary table will use a little more electricity, the job costs me essentially the same amount of money, but by adding the rotary table to the printer I save nearly 14 hours of labor.
If the job were for 200,000 parts, the piece price using a machine with a rotary table would be $ 0.036 as compared to $ 0.051 using the same machine without the rotary table. If the job were 2 million parts, the piece price using a machine with a rotary table would be $ 0.033 as compared to $ 0.047 using the same machine without a rotary table.
Unless you know the costs involved with a specific pad printing job, it is virtually impossible to price the job correctly. Utilizing these simple steps, you can feel fairly confident that you are not over or under bidding a project.
You can print out a worksheet here
John Kaverman is National Sales Manager for Innovative Marking Systems, the exlusive U.S. Distributor of TOSH (Italy) Pad Printing Equipment. Kaverman has over 16 years of screen- and pad-printing experience. For more information, contact John at john@padprinters.com.
