What is machine utilisation?
Machine utilisation (utilization in the US, also called utilisation rate) is the share of a machine's available hours that it spends actually cutting. Most laser shops overestimate it, and because the hourly rate is divided by cutting hours, an optimistic figure makes every price too low.
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What does machine utilisation mean in fabrication?
Machine utilisation = productive cutting hours ÷ available hours, as a percentage.
Available hours are the hours the shop is open and staffed to run the machine. Productive hours are the hours it spends cutting parts that get paid for. Everything else is lost time:
- loading and unloading sheets, and sorting parts
- programming, setup and first-off checks
- waiting for work, material or an operator
- maintenance, breakdowns and nozzle changes
- re-cutting scrapped parts
How is machine utilisation used?
Utilisation sets the number of hours the hourly rate is divided by. Tempus Tools' hourly rate guide gives the example of a shop running 8 hours a day, with 2,000 hours a year available. At 60% utilisation the machine cuts for 1,200 of them. A rate built on 2,000 hours is 40% too low.
Shops also track utilisation to decide whether they need a second shift, automation or another machine, and to measure the effect of changes such as faster sheet handling.
Why does machine utilisation matter?
It's easy to overestimate. According to the hourly rate guide, shops plan on 60% and achieve 40 to 50%. Each lost hour still carries its share of rent, finance and wages, so a rate built on the planned figure doesn't cover the year's costs. The overheads that go unrecovered are what accountants call under-absorption (see absorption costing).
Faster machines can lower utilisation. A fibre laser that cuts a sheet in a few minutes spends a bigger share of each hour waiting for the next sheet.
Sheet handling and utilisation
Sheet changes are the biggest loss on thin-sheet work. The hourly rate guide puts a sheet change at 2 minutes with a vacuum lifter and 10 minutes by forklift. If a sheet cuts in 10 minutes, the vacuum lifter keeps the machine cutting 83% of the time, while forklift changes leave it idle half the time.
Shuttle tables, which let the operator load one bed while the machine cuts on the other, and automated load and unload systems exist mainly to close that gap.
Machine utilisation and quoting
Quotes are priced on the hourly rate, so build the rate on measured utilisation, taken from the controller's hours or job records, not the plan. Recheck it when the work mix changes: a run of thin-sheet jobs lowers utilisation even when the shop is flat out. Then apply that rate on every quote.
Further reading: Laser cutting hourly rate: what should be included?
Related terms
Build your rate on real cutting hours
Our hourly rate calculator asks for your operating hours and machine efficiency, then works out a rate that covers your costs at the utilisation you actually achieve.
FAQs
How do you calculate machine utilisation?
Divide the hours the machine spends cutting by the hours it's available, then multiply by 100. A machine available for 2,000 hours a year that cuts for 1,000 of them is at 50%. Take cutting hours from the controller's records or job times, not estimates.
What is a realistic machine utilisation for a laser?
Tempus Tools' hourly rate guide finds that shops plan on 60% and achieve 40 to 50%. Thin-sheet work with manual loading sits at the lower end, because sheet changes take up a large share of each hour.
How does utilisation affect the hourly rate?
The hourly rate divides a year's costs by the hours the machine cuts. Lower utilisation means fewer hours to spread those costs over, so the rate has to rise. A rate built on 60% when the machine achieves 45% won't cover the year's costs.
How can a laser shop improve machine utilisation?
Cut sheet change time with a vacuum lifter, shuttle table or automated loading, program jobs while the machine runs, keep material and work queued ahead of the laser, and schedule maintenance outside cutting hours. Faster quoting helps too, because a machine with no confirmed work isn't cutting.