How do you know if an investment in laser welding is profitable?
In this article we look at how to develop a business case together with a customer who is interested in laser welding. Although every project and company is unique, there is something that we and our customers need to do and be familiar with in order to offer the right kind of laser welding solution.
What needs and challenges can laser welding help solve?
There are a number of problems, challenges, and considerations that usually form the basis for a company choosing to invest in laser welding. These primarily include the following:
- The customer needs to increase its production capacity.
- The customer has problems with product quality – the fault rate is too high.
- The products require a lot of post-processing.
- Cost issues – can something in the production process be done more efficiently?
- Problems with materials and/or the manufacturing process – the customer cannot use traditional technology due to e.g. demanding joints or thin material.
In most cases, the customer first looks at the situation from a productivity perspective – can costs be lowered and/or capacity increased?
Since many have not used laser technology before and therefore are not at all aware of how lasers can benefit their production, we always go through the basics of how the technology works and inform the customer of its potential and how it would help their business.
What determines which laser welding equipment is best?
Close co-operation between the laser equipment developer and the company that will use it is required to find out whether a change of equipment and/or manufacturing method could solve the customer’s problems. First and foremost, we need to look at the production process and products in detail in order to make an initial assessment of the conditions for using lasers. Then we and the customer always need to sit down and consider the different variables in the customer’s production process:
- Operation times: How long are the welding and hardening times using the customer’s current methods? Together with the customer, we can estimate the corresponding times using laser welding.
- Cost of time – machinery and staff costs.
- Repair/reject costs – if the fault rate is 4%, how much does it cost to repair or discard four out of every hundred products?
- Post-processing times – how much time and money does the customer currently spend on things like grinding, polishing, and straightening?
- Cost of consumables – if the customer currently uses traditional welding methods using wire, this won’t be required with laser welding. What does the customer save by investing in and using laser welding compared with the method and materials it uses currently? How quickly should the customer’s laser station pay for itself?
In addition, the corresponding parameters for laser welding are included, and the customer can see the results of the calculations in a simple Excel sheet. The customer needs to know its current welding times and production costs so that Permanova can use this data to produce a relevant and accurate business case showing the gains to be made from investing in laser equipment.
The laser welding process is tested and assured by way of a feasibility study
A feasibility study is carried out following discussions with the customer and once it is clear that laser welding could be a better alternative to the method currently used by the customer. Permanova then carries out lab tests over two or three days to ensure that the process works technically, to demonstrate the differences between using laser welding and traditional welding methods, and to obtain approximate process parameters – how quickly a certain product can be welded, at what power, and so on. In connection with this, Permanova often produces some units or prototypes that the customer can use for its own evaluation or to show its own customers.
Once we have looked at the above parameters, we produce a business case that the customer can use to base its decision on. If the customer chooses to switch from traditional welding to laser welding, it can wait and start production when the laser welding equipment is installed or, in some cases, produce smaller volumes until then. Sometimes during the feasibility study phase, products will be produced that the customer wants to launch, demonstrate, sell cheaply, or give away to its own customers and business contacts. Pending the installation of the new system, Permanova can produce these in smaller quantities.
It is important to include the cost of quality deficiencies in calculations
The cost that customers tend to find most difficult to calculate is that of quality deficiencies. The easiest way to understand this is to look at how many products are discarded on an annual basis and how much material and production time are spent on them. In addition, there is the cost of customer complaints and the like. However, the quality deficiency costs that need to be known are generally those found in the customer’s own factory.
If you’re interested in finding out more about what laser welding could do for your business, please contact me on firstname.lastname@example.org. On our inspiration pages on our website, you will find many more articles about our work and what we can offer, as well as our very informative laser school.