Monday, May 13, 2013

Mass production, tooling, strategies and budgeting.

This blog could be titled, How to get it wrong.

I'll start with the story, then I'll point out the failings.

A few weeks ago I made a new heater for my solidoodle 3d printer, I was quite happy with the results, despite having broken a drill bit in my heater block, I got around that, and I decided that was my fault, I clearly wasn't drilling the hole straight, it was a small drill bit, and they often break anyway...

When I bought the aluminium bar to make the hot end I had decided that I would probably want to make something else anyway, so I got a 2 meter length.

After making that first hot end I decided that I was going to make and sell a whole load.
I had enough aluminium bar, I had bought a hundred heaters at the start of the project, (knowing that I could sell the heater elements on their own!)

So I started cutting up that long bar of aluminium into 100 small pieces.
by about the 3rd piece I gave up and went to ebay and bought a small hobby band saw. -this worked great for cutting the aluminium, right up until the blade broke -though this had come with the saw, (which only cost £30), and had made 99 cuts, -failing on the last)

After this I got my set square and scribe and marked out where I needed to drill holes on all 100 blocks that I had cut. then I centre punched them. -this is time consuming, that was 600 holes that I marked!

After this was done I decided that I'd start drilling, rather than drilling by hand I decided that I'd use my fathers pillar drill, a Draper tool, I dutifully loaded the drill bit into the chuck, and set about drilling holes, I started by drilling 2.5mm hole through all of the holes I'd marked, a lot of the holes needed to be 2.5mm, others would benefit from a pilot hole being drilled anyway.

However I found that on the point where the hole for holing the thermistor met the hole for the screw securing the thermistor, the drill bit would catch and break. this was the same problem I'd had with the hand drill, but now I was getting this with a machine drill, one that was square, level and had no lateral forces, clearly there was a problem with the way that the cut was being made, swarf from the hole was catching and causing the bits to break at an alarming rate.

Eventually I managed to get a few holes drilled carefully that did meet, (afterwards I bought some 2.5mm end mills that I would use in the drill to make these holes meet more successfully!

At the end of the time I had set aside that day I had 11 pieces half made, I had the holes for the thermistor set-up drilled successfully, and the long hole through the block pilot drilled. at this point I'd been at it around two hours, and decided that was enough... -and besides the drill had gotten quite warm and I thought it could use a rest!

One morning the following week I decided that I'd continue my project. however within ten minutes of starting the drill the motor had caught fire.

In the end I took the pieces home and finished the first batch with a hand drill.

I tapped them and installed the heater elements.

As it's a new month I've been paid and gotten some more money to spend on this project I've now ordered the thermistors, wire and heat shrink to finish these heaters up.

So... let's look at where I went wrong.
First, I'm hoping to sell these for around £12 - £14, this is in line with what others have sold for on Ebay.

the heaters were £130 + £15 import VAT for 100
Aluminium bar was £10
Thermistors are£70 for 100
heat shrink is £5 for the 6m of 1mm heat shrink I need
and £3 for the 5m of 3mm heat shrink I need.
wire is around £2 for 10 meters, (and I need 200meters) so £40
the grub screws cost around £15

So a quick sum up looks like I'm nearly £250 in the hole with materials.

Postage on each item is expected to be around £1. (so that's another £100)
Ebay will take ~£2 per item, (£200)
and pay pal will also want their 10% (£1.40 per item, times 100 = £140)

so that'll be around £700 of costs.
I'm hoping to sell these for a total of £1400

but here's where the problem starts....

now take roughly 25% of that away in taxation and national insurance that I'll need to declare. that's £175, leaving £525

Trying to do this cheaply has meant that I broke around £5 of drill bits whilst trying to make the blocks, and that £10 saw blade for the band saw.
(leaving £510)
I'd busted my dads pillar drill, because it's a hobby tool, not an industrial tool, it's meant to spend about 30 seconds being on, then have ten minutes to cool down, now spend nearly three hours in constant use, so that it over heats, and breaks down the insulation, (and then catches fire)
a complete replacement is around £300, second hand maybe £150, or a new motor will be around £100
My "profit" is now a pretty shabby £400...
then I spend a couple of hours cutting up the aluminium bar, a few more hours in front of the drill, a couple of hours sourcing materials, I'll conservatively spend probably 15 minutes per item with listing on ebay, talking to buyers, packaging and going to the post office to actually post the things.
(that's 1500 minutes, or about 30 more hours). I spend around an hour designing the thing in the first place.

Based on the initial ten I have that's 6 hours of machining and making,
So that 100 will be about 60 hours of machining, plus 30 hours of listing and posting.

So that £400 I've got remaining will need to pay for about 100 hours work. about 2/3rds minimum wage.

in other words.
I started out thinking, cool, the parts for this will make me loads of money, I'll spend about £2.50 on an item that I can sell for £14.

using hobby tools has increased costs due to breakages.
Using hobby tools has meant that I can't work for more than an hour at a time without significant machine downtime to cool off, increasing the amount of time take to produce parts.
Funding this venture myself has meant that I've had to wait until pay day to get more funding. - I could have taken this to a kikstart project, but them I'd have 100 angry customers breathing down my neck saying that my lack of planning or prep wasn't their fault, and where is their money etc.

The long and the short of it is:
before you decide that you want to give up your day job and live the dream of running a tech startup. do your sums first. be realistic.
I was wishfully thinking that I might get around £700 for what would be an easy day stood at a band saw and a drill. -actually I was thinking I could use an ordinary hack saw to do this work!

What I though would be around £100 per hour I'll retired a millionaire next week, has actually resulted in being a drain on time and resources. Maybe with a few thousand pounds of investment for industrial tooling I'd do better -but I doubt that also!

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