Fiber lasers have become a driving force in the metal fabrication industry. One of their biggest claims to fame is impressive power and fiber laser cutting speed. The technology has been rapidly evolving with more and more power, so much so that the possibilities with these machines are almost limitless. Increased power and speed leads to more parts cut per hour, which translates into higher productivity and money in your pocket. But does it really mean better profit margins for your business?
Cut More, Earn More
When you’re in the business of cutting parts, time is money. There is a fixed cost to operating a laser and your competitors are driving down the price you can charge for the job. Material costs remain the same no matter the machine. The differentiator is how long it takes you to do the job. The more time it takes, the more you pay for operator and handling costs, thereby reducing profit.
When we talk about high-power machines producing more parts per hour, what exactly does that mean? To show the influence of laser power on the number of cuts, ZQ LASER compared the 1530E model with 4kW, 8kW and 15kW resonator. The chart here shows parts cut per hour based on 8mm mild steel, 210mm by 287mm and total cut length length of 1975mm.
Going from a 4kW to an 8kW machine or an 8kW to a 15kW will more than double the parts per hour. Most drastically, the 15kW laser cuts more than four times the parts of a 4kW.
Parts Mean Profit
That opportunity to cut more parts doesn’t just mean bragging rights. The number of parts cut per hour directly translates into profit. ZQ LASER breaks down the profit in relation to the cost of production of a workpiece in the chart below, assuming the market price of a cut part is €2.
The profit amounts shown here also factor in the different operating costs per machine. Your operating costs will increase when running a higher wattage machine and we have factored in European operating costs for labour, power, etc. The 4kW fiber laser costs are calculated assuming an operating rate of €100 per hour, the costs for the 12kW machine are shown at a €132 per hour rate and the 15kW at €145 per hour.
With a 4kW laser, the cost to produce one part is $2.28, so the profit is $0.64. With the 8kW laser, you can cut double the parts per hour so the production cost goes down to $1.26 for the piece, and your profit goes up to $1.67. Let’s look at the 15kW laser. With this increased power, the cost of the same part is $0.77 and your profit more than triples, compared to the 4kW, to $2.15 per part.
Considering the number of parts you can cut per hour with each machine, you can earn $41.16 per hour cutting 64 parts with the 4kW laser. Or you can earn $595.13 per hour cutting 277 parts with the 15kW fiber laser. With these assumptions, you can increase your profits by fourteen times with the 15kW laser compared to the 4kW.
While these numbers do account for higher operating costs, what the chart doesn’t account for is the investment costs of upgrading from a 4kW to a 15kW machine. A higher-powered fiber laser can cost substantially more when purchasing new. However, while a 12kW or 15kW machine is more expensive upfront, higher productivity means faster amortization of the machine, so you can start pocketting the profit from the faster cutting speeds, sooner.
Here for the Long Run
Depending on the volume and nature of your business, your bottom line may not reap the rewards of that extra profit right away. Consider the cost of a machine upgrade in your calculations. Switching to a machine with essentially the same mechanical attributes that makes double, triple or even four times the parts is a long-term game. While you may not see these benefits over a month or even a year, there is incredible potential to boost your productivity and profits in the long run.
Your profit margins are an important metric you need to keep an eye on. Faster fiber laser cutting speed is an important factor to reduce the impact of fixed and variable costs per part. The above charts show how more power affects margins and make a compelling case for Fiber Lasers role in increasing the bottom line for fabricators.