Maximizing Saw Sharpening Profitability
Diamond wheels are an amazing product when it comes to grinding. While they are an expensive investment initially, the production capability of these wheels is unmatched. In the case study below of a saw grinding service, we will discuss how implementing diamond wheels into your grinding process will increase your productivity as well as profits!
|Saw Sharpening Charge||Diamond Wheel Cost|
In this hypothetical scenario, we will look at a saw grinding business working 220 days per year with an average production rate of 60 saw blades per day per worker. In a typical work year, one individual can manufacture 13,200 blades. The revenue generated from one worker alone equals $264,000. The average diamond wheel lasts five days, so 220 working days / 5 yields 44 wheels needed per year. 44 x $200 = $8,800 per year on blades.
Our customer is looking to save 15% per diamond wheel. If we reduce the cost of each wheel by 15%, the final price per wheel becomes $170. Using the same formula, 44 x $170 = $7,480.Savings per year is $1,320! Sounds great right?
Another customer looks to save money by having a wheel made in a harder bond so it lasts longer. If you have a wheel that lasts 30% longer, the total wheel life would be 6.5 days instead of 5. 220 working days / 6.5 = 34 wheels needed per year. 10 fewer wheels used per year, saves you $2,000. While these savings may seem outstanding, there is a downside, the wheel becomes less productive due to its hardness. So the actual revenue from service ($20 per blade) may decline due to less productivity.
The real savings can be found when you have a wheel that can manufacture more blades per day. For example, we create a wheel that can grind an additional 10 blades per day.
The 60 blades per individual now become 70. An additional 10 blades serviced per day, generates an extra $200 a day in revenue. 70 x 220 working days = 15,400 blades serviced per year. Comparing that to the first scenario of 60 blades per day we see the profits growing quickly.
|13,200 blades per year||15,400 per year|
|$264,000||$308,000 (increased revenue of $44,000)|
Due to the wheel being made so it increases productivity, the wheel life decreases by half. What used to be 44 wheels now becomes 88 wheels. The additional 44 wheels x $200 = $8,800 in wheels. After you have deducted this additional cost from the new revenue, the final result is you net $35,200 if we make the wheel more aggressive.
If you would like to speak to us about improving the performance you get from your wheels, give us a call. We have engineers on staff that will take the information you provide and design a custom diamond or CBN wheel for your application.
Our aim is to make you more profitable.
Eagle Superabrasives, Inc.
High-Performance Diamond Wheels