Thread: A Table Saw Observation

Originally Posted by rrich

AT the AWFS Fair (Convention) In Las Vegas I made a very interesting observation. (Association of Woodworking and Furniture Suppliers)

In a discussion with a magazine editor we both agreed, the show has changed. Over the last several events the orientation has shifted toward the larger production shops. If I employed 100 or so people, I could have dropped a couple million before lunch and I got off to a slow start because I stood in line to get a badge. The manufacturers that support the small shops with just a few employees were absent. (No General International, DeWalt, Delta, Jet, Powermatic, etc.)

The two manufacturers that are oriented toward small shops that were present were SawStop and SuperMax.

perhaps the message is that General International, DeWalt, Delta, Jet, Powermatic, etc have abandoned the small commercial shops to SawStop.

and are concentrating on the home shop market.

I think the message is exhibiting at trade shows is quite expensive so you only attend those that bring the buyers you need. I wouldn't assume that this means this one only attracts larger commercial shops, the nature of the industry means even smaller operators are looking to more automation. Australian firm Multicam are exhibiting cnc routers there, and they will tell you that cnc is viable for just 2-3 kitchens a week. I don't know if Thermwood is exhibiting the Cut Center cnc, but it is the kind of tool that attracts smaller shops who wants to maintain competitiveness in the face of larger operators.

SCM have recently updated their website, table/panel saws are listed under joinery machines which is a bit less pointed than the "classic machines" they were previously called. But the message for commercial shops is clear, automation means efficiency but the tools we once used are being replaced.

Interesting. Very interesting.

I wont lurch into my usual economic dance (because everyone hates it).... but it does show that the big guys still have access to cheap debt and the small guys are being squeezed to death.

Here, I know of three local shops that have closed this month. Squeezed out of existence.

Richmond68, What do you mean that CNC is viable for just 2-3 kitchens per week?

It means the cost of the cnc machines and software is now low enough that along with the labour cost savings, the volume of work required where it becomes viable is now to that level. They don't just replace a panel saw, they can also replace other machines like line borers and the labour required to operate them. There's less error and wastage because nesting software optimises the cutting layout. They can label every part which simplifies installation. It all adds up.

As for the "CNC" debate:

I don't remember which company but a machine that was making the frames for cabinet doors had a big sign next to it.
"This is Bob. He can make 200 doors a day at $2.35 an hour. How many doors can your Bob make?"

The machine started with 2½ inch wide stock of the appropriate length. A profile was machined, then the ends were trimmed at 45° with mortise and tenons.

Yeah, way to go, Bob.

Oh, play with the math $2.35 an hour. I came up with lease payments of $70,000 over three years.

Originally Posted by rrich

As for the "CNC" debate:

I don't remember which company but a machine that was making the frames for cabinet doors had a big sign next to it.
"This is Bob. He can make 200 doors a day at $2.35 an hour. How many doors can your Bob make?"

The machine started with 2½ inch wide stock of the appropriate length. A profile was machined, then the ends were trimmed at 45° with mortise and tenons.

Yeah, way to go, Bob.

Oh, play with the math $2.35 an hour. I came up with lease payments of $70,000 over three years.

I get $23.50 per day for a 10 hour day. or about $135 per week (assuming Saturdays are shorter than week days.) Which works out at $6750 per year.

They might be running multiple shifts per day and/or weekends as well. Unless you know how long they actually work, trying to do the math is meaningless

EDIT: Having been involved in the purchase of a CNC router, I can tell you that $7k per year does not sound realistic

Originally Posted by ian

I get $23.50 per day for a 10 hour day. or about $135 per week (assuming Saturdays are shorter than week days.) Which works out at $6750 per year.

I assumed, 24 hours per day and 31 days per month. Remember figures don't lie but liars can figure. How else could they get Bob's hourly rate down to $2.35.

I assumed the worst and then added $10,000 for interest on the lease over 3 years.

Jacks once tried to sell me a Felder CNC thats like $110,000 + GST.

Its ludicrous amount of money for a hobbyist.

Its an investment decision, if I had room and out of a job then I might buy one and an edge bander to start my business in kitchen making.

Originally Posted by rrich

As for the "CNC" debate:

I don't remember which company but a machine that was making the frames for cabinet doors had a big sign next to it.
"This is Bob. He can make 200 doors a day at $2.35 an hour. How many doors can your Bob make

The big boys are well past that level. Look at Wren Kitchens in the UK. Fabritec make 4 million cabinets a year. A door every 10 seconds. The stuff at the trade shows is below the level they operate at. https://youtu.be/mTxJaeNJc5U

I subscribe to the AWISA magazine (produced here) and they regularly feature these stupendous-Uber fabrication companies and their robotic assemblies.

Originally Posted by richmond68

The big boys are well past that level. Look at Wren Kitchens in the UK. Fabritec make 4 million cabinets a year. A door every 10 seconds. The stuff at the trade shows is below the level they operate at. https://youtu.be/mTxJaeNJc5U

which was why I was working on a single shift, 10 hour day.
Multiple shifts is a whole other level of operation and staffing. at 200 doors per day -- say one every 3 minutes -- I doubt if Bob could keep up with a 2 or 3 shift operation.


question for Rich
was there any mention of Bob's duty cycle?

Originally Posted by rrich

I assumed, 24 hours per day and 31 days per month. Remember figures don't lie but liars can figure. How else could they get Bob's hourly rate down to $2.35.

I assumed the worst and then added $10,000 for interest on the lease over 3 years.

5 years at $6,600 per year is $33,000 (I'm rounding for convenience), works out at $28,000 for the machine plus $5,000 for the finance. Which given current interest rates seems the right order of magnitude.


but as you say, liars (=salesmen) can figure

In 1994 I travelled to Europe to see possible Laser engraving machinery at a trade fair in Germany. And also at a manufacturing plant in Austria. To fully understand costs associated with any machine one has to consider total costs of all ancillary equipment, something not one vendor in Dusseldorf knew much if anything about; neither did the manufacturer in Austria. This is nothing to do with wood working, but is valid to this conversation, I believe.

In 1996 we eventually contracted out for a machine from the USA, with Canadian ancillary equipment (air pumps/compressors/filtration systems etc.). Software came from the Netherlands, which, while a significant cost increase, almost immeasurably increased production capabilities compared to our direct competitors who in later years purchased almost identical equipment but without the software from the Netherlands.

Our machine arrived in April 1997 accompanied with staff from the USA to install the unit. In fact we suspected the arrival of USA people was to ensure their reputation remained intact as this installation was the first outside the USA and one of only two units with this software.

Essentially, this machine with all of the software and ancillary equipment, cost us the equivalent of a median priced suburban Melbourne house at the time; a not insignificant outlay. Fortunately, it turned out to be possibly the best business decision we made.

The true running costs took us close to 18 months to work out, no one really knew what the true running costs were before we undertook an analysis of total filtration, total electricity costs (had a Watt meter exclusively for the machine) as well as computer costs. Not to mention man total hours required. Where we made some unexpected gains, was in material costs, efficiency of material use, which were demonstrably better than we were informed it would be and what we guestimated.

The most surprising thing was to learn the tax gains (if any) to be made by borrowing money to purchase the equipment. In effect, there are no real differences between the various ways you raise monies and tax savings. You either pay the tax upfront, at the end, or somewhere else along the way. The amount is essentially the same amount of tax. That said, one often can make use of tax measures that allow depreciation at greater rates than the norm, but this is another story.

Real savings can be made in how you raise the monies for equipment. The cheapest way is to use your own money, which is what we did; it was a massive financial hit at the time, but paid dividends in spades over the years.