Case Study – Ordering a Beamline that works with NO LABOUR



If a traditional beamline costs a budget of $1m AUD this is a $1000/day finance cost.  Working the beamline 24 hours a day will increase the true cost of ownership by $75/hour or $1800/day to a total of $2800/day.

Then include the 40% labour required to layout mark and finish profiles that could not be machined coped on the beamline. 20 fitter/boilermakers need an additional 30% or 3 hours from a 10 hour day @$75/hour $4,500/day

The total cost of ownership for a cheap semi-automatic steel service centre specified beamline will be $7,300/day x 300 days $2,190,000 yearly cost of ownership so the fabrication workshop is losing money from selecting the correct machine from SMS

A fully automatic beamline specified to the SMS capability to guarantee that the  beamline works as we have with others will cost $1800/day fiance cost/

  • 20% labour to load/unload steel from stockyards and perform daily tasks before processing all the material loaded on the infeed stockyard. Depending on the type of steel this can be 4-5 hours of lights out processing with no labour
  • $360/day in labour to run the fully automatic beamline 24×6 (300 days a year without working public holidays)
  • The total cost of ownership per day is $2160 AUD or $648,000
  • Saving $1,542,000 cost from investing the incorrect semi-automatic beamline.

The other saving is most fabricator workshops prefer to work 2×10 hour shifts instead of 3×8 hour shifts.  The skill shortage for fitter/welders is difficult enough as it is without finding a night shift to recruit

The factory loads up the beamline line on Friday at 2 am with 8m of steel to process on their in feed stockyard

They leave the factory knowing the steel will be on the outfeed stockyard at 5-6 am ready for the operator to deliver to the fitters welding bench

The risk of investing in any other machine from SMS for full automation is the competitors have not invested in the appropriate R&D to offer 100% automation.  That means the beamline will stop in less than 1 hour due to the limitations in their capability that they don’t want to improve due to their price increases and their service/spare parts income decreasing.

Then the fabricator has staff waiting for steel when working on double time on Saturday

When the workshop operates the one day shift on Friday.  The boss or operator will need to stay under the alcohol limit on Friday night watching their football team as they will need to return to the workshop often to remove the trim cut that failed from the cheap design magnetic outfeed device that simply won’t work in automatic mode

That manufacture would prefer to convince, confuse or con the fabricator that their outfeed magnetic system works

They then secure a deposit and letter of credit to guarantee their income.

When the automation strategy doesn’t work and the fabricator needs to apply $300K of labour the machine tool builder doesn’t have any financial pain that the gap the fabricator wanted to close has no competitive advantage that was intended to be received.   Then the lost opportunity costs from the additional 40% skilled labour finishing off profiles that are now redundant as this can be completed on the SMS beamline in automatic mode.

The numbers used in this example are a guide and will change based on the exchange rate the machines are purchased at, finance interest rates will vary and labour rates an individual workshop applies to the operators.  We encourage clients of SMS to work in partnership to validate these numbers for their own ROI and charge our rates to the market.


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