Where's the ROI?

There’s a lot of hidden, and not so hidden, downtime associated with day-to-day metal fabrication.  Stop what you’re doing and take a look out on the shop floor. Is that laser waiting to be loaded, to have parts removed, for the operator to come back from a break or waiting for the next program or nest?

If that laser machine isn’t cutting then you’re losing revenue. In this business it’s all about beam-on time; and automation keeps that machine cutting. Automating a stand-alone laser with even a simple, entry-level load / unload system can increase a CO2 or Fiber laser’s productivity by at least 25%.  Most machines are now Factory 4.0 compliant and machine monitoring is a large portion of that initiative.  Monitoring machine cutting efficiency and breaking it down by day, week, month and even shift is a great way to assess your automation needs as well as your overall productivity.

And that’s just the beginning. The results are increased exponentially when a fully automated “lights out” operation is implemented leveraging automated nesting and scheduling software, material storage towers and river systems for tracking and storing different material types and thickness. In this scenario, high-volume fabricators have the ability for unattended overnight or weekend runs.  So in the morning there are 40 thousand, 60 thousand pounds of cut parts stacked up. The fabricator can bring in temporary workers to break out parts, allowing the skilled labor to concentrate on more complex tasks.

Automation goes a long way toward addressing the dilemma of every shop owner or production manager; finding and keeping skilled employees and achieving the largest rate of return on their efforts. Automation allows shops to reallocate human resources away from menial tasks to more productive duties thereby increasing the total production dollars generated per employee and per operation.

Preventing Slab Buildup

There are several companies that offer a motorized tool for removing slag build up from slats.  Some have moderate success in preventing slag build up by spraying the slats with a solution that is very similar to anti-spatter for welding.  However, the best, long term solution is to use copper slats.  While the upfront investment is significant, after 4 to 5 years, when it is time to replace them, you receive a good portion of your money back for the copper scrap. 

Another cost saving tip is to make sure that you develop slats that are double-sided so that when the top side becomes too worn, the slat can simply be flipped over.  The reason why the overall height of the slats is so important is because this affects how high the material sits inside of the laser.  When the slats become too short, the laser will experience height sensor alarms when processing thin gauge material because the Z-axis travel is close to exceeding the soft-limits of the machine’s parameters.

Laser Cutting: No Tipping

During the cutting process the laser head is traversing to its next cut often very fast and close to the material surface. If a piece of material has tipped up and is protruding above the surface area, a collision is likely to occur. In most instances, damage to the laser head is both considerable and costly.

Although tip-ups aren’t exclusive to steel and aluminum, it’s important to be aware of the damage they can do to a machine. Be especially vigilant when cutting thin metals as this is when tipping is most common.  Fortunately, however, most crashes are avoidable. With a preview of the nest, the operator can often times recognize where there is potential for an issue in order to pay extra attention when the machine is cutting in that area. This can include slowing the cutting process slightly. A few seconds lost in cutting speed is better than hours lost replacing a laser head.

In addition to reducing the cutting speed, part tip-ups can be combatted by implementing micro tabbing. Most laser programming software today offers an auto tabbing feature where one or more small tabs (typically about 0.020 in.) are placed in the profile of the part to secure the part to the sheet skeleton. Once the entire nest is complete and the skeleton is off-loaded, the parts can be easily released from the skeleton. With good quality, flat material and parts that are large enough to lay on two or three of the table grates, the need to tab parts is usually unnecessary. When in doubt, micro-tabbing is a smart approach to avoid laser head crashes, especially when lasers are automated and operating in a lights out environment.

Choose the Right Tool for the Job

Although lasers are versatile, there are instances when waterjet or plasma is a better option. Lasers are negatively affected by a number of factors including material thickness and quality, alloy type, heat conductivity, metallurgy, and even part geometry. Waterjet is better in some cases simply because it does not emit the high temperatures associated with lasers. Conversely, plasma or oxy-fuel is a better choice for thick parts where edge quality and taper are less important.

Today, many OEMs are introducing higher power lasers to help address thick cutting issues. For example, Mitsubishi now offers their fiber lasers in 4, 6 and 8-kW iterations with patented ZOOM head cutting technology. The ZOOM head is capable of manipulating not just the focal length, but also the SHAPE of the mode. In essence, the ZOOM head can transform the Beam Product Parameter (mode) from looking like a TEM00 mode on a CO2 laser to looking like a CO2 TEM01 mode.  The results are smaller, conical shaped mode for fast thin material cutting and doughnut shaped mode for better edge quality in thicker plate cutting. It’s like having the best of both worlds. 

With various power levels and technologies available, it’s key during the due diligence phase of a new fiber laser purchase to research and understand the differences and features of the cutting head when considering resonator wattage. When choosing a fiber machine, a cutting head capable of manipulating the beam product parameter is ideal.

Metal fabrication estimating & Cad Cam prediction for 2019

Brad Stropes
As manufacturing industry veteran, Brad Stropes has worked with manufacturers, large and small, throughout North America to help improve fabrication efficiency, productivity, and profitability. He rose through the ranks of a manufacturing software organization before accepting his current role of COO for SecturaSOFT, LLC. « Less

MCADCafe Industry Predictions for 2019 – SecturaSOFT

January 18th, 2019 by Brad Stropes

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In 2017 and 2018 the biggest innovation I had seen was by far the amount of fiber lasers entering the industry.  In years past there was skepticism in our industry that fiber lasers wouldn’t take the place of C02.  However, this was proven wrong in these past few years.   Because of the speed of these new lasers; loading and unloading is now where sunk operational cost reside.

In 2019 and beyond, organizations will begin to utilize more automated load/unload solutions for parts and movement of parts throughout their facility.  It will be our job as software engineers to develop intelligent cost factors and solutions to guide such a transition.  When laser speed isn’t an issue, the speed of which parts move throughout the organization will be where shops start increasing profitability.  I believe the CAD/CAM and intelligent estimating solutions will need to develop intelligent cost calculations and route cost calculations to give clarity to the movement these parts.

Related posts:

Dictate Profitability with SecturaSOFT

Intelligent web/cloud-based quoting replaces guesswork and inaccurate data with the most accurate variables. Leveraging known variables such as up-to-the-minute material costs, labor rates, machine run-time, finishing operations and related information allows winning quotes can be generated in a matter of minutes. Additionally, the flexibility of such systems allows each company to customize quoting per its unique standards or requirements monitored and adjusted by management.

Some tried-and-true methods are worth hanging on to. But fabricators who continue to rely on manual (or Excel-based) quoting methods are quickly losing ground to those who are leveraging automated quoting tools.  Replacing dated information or best guesses with known variables is a competitive advantage for those with the ability to quickly pull such details together. 

Every manufacturing operation costs money. Capturing expenses allows actual numbers to be generated.  Known costs can then be marked-up to the competitive situation. Once run-times, operators needed and processing time is known, material costs can be added. Doing this accurately requires applying real part geometry against materials. Employing interactive tech tables to achieve accurate run times from cutting machines, or even welding, can save hundreds of man-hours each year.  Leveraging known pricing, run-time, and other production variables, web-based quoting allows us to dictate profitability – not hope for it.

Brunswick Steel: Democratizing Quoting and Winning Business

The lights are always on at this Winnipeg-based service center where equipment, technology and a skilled labor force are focused on meeting the high expectations and tight delivery schedules of a growing customer-base. With oxyfuel, hi-definition plasma, CO2 and fiber laser cutting capabilities (complete with automated material tower) Brunswick’s state-of-the-art manufacturing facility operates around the clock seven days a week.  And while automation was clearly being leveraged throughout the shop floor, the same could not be said of the company’s sales and estimating departments where manual quoting remained the norm.

“In our case job estimating relied almost solely on Excel spreadsheets,” explained Brunswick Steel Sales Manager, Dallas McInnes. “Our quoting process was complex, manually intensive and required a certain level of experience and expertise.  Consequently quotes were not being created in a timely or consistent manner.” 

For Brunswick Steel and a growing number of others throughout the industry, the answer to generating fast, winning and profitable quotes came in the form of a software program called SecturaFAB from SecturaSOFT.  Developed especially for the meatal fabrication industry, SecturaFAB accelerates quoting speed and accuracy by replacing unknown time and cost variables with up-to-the-minute information. Brunswick began using the quoting tool in 2017 and the results were immediate.

Automating Quoting

Automating, simplifying and standardizing the quoting process allows companies to reallocate resources as needed to aid the sales process. This might mean taking advantage of downtime of an employee from a different department to create quotes.  Brunswick Steel is doing just this by routinely tapping its entire sales and administrative staff to prepare quotes.

“Automation is the key,” said McInnes.  “In the past quoting was limited to a select few individuals; but SecturaFAB opens processing quotes up due to the software’s relative ease of use. Those with minimal experience may not have the true feel for factoring in all time and costs related to labor, material handling and other aspects of the job. Automated quoting allows us to confidently bid on more jobs while being assured of quote accuracy. Simply put, SecturaFAB takes a highly skilled task and reduces it to a task that others can confidently take on.”   

Brunswick began using SecturaFAB with four users.  Today, because of the software’s success, the company is extending use of the software throughout its sales staff. The results are a measurable increase in quote volume and accuracy. “At Brunswick we pride ourselves on exceeding the expectations of our customers,” concluded McInnes. “The automation and accuracy of SecturaFAB helps us to grow our business while remaining responsive to our customers.”

Setting the Production Pace with Automation

Machines are programmed to perform tasks.  They don’t take bathroom breaks, stop for lunch, or check their Facebook, Instagram, and Snapchat profiles.  In a manually-driven shop, the laser finishes the job and sits idle waiting for workers to off-load cut parts, install new sheets of material, and initiate the cutting process.

At any given time there may be five to ten thousand pounds of raw materials and finished goods on the off-load cart or pallets waiting to be taken to a secondary operation. Even the fastest worker cannot keep pace with a fiber laser.  Consequently the machine can only work as fast as the worker allows; and every minute that a laser isn’t cutting is lost revenue. 

What’s the answer? Automation. When the machine is free to load, cut, unload at its own pace productivity increases exponentially. But don’t stop there… automation also applies to the quoting process. Contact us to see just how more effective and efficient your quoting process can be.

Laser Cutting: Assist Gas

In many instances, the laser's ability to cut can be further improved by selecting the proper assist gas. Oxygen assist gas serves two purposes: to assist in combustion, and to blow the debris or molten metal away from the kerf.  Nitrogen is an inert gas and it serves to discharge the molten metal away from the kerf.  When cutting with Nitrogen the energy from the laser is the only tool used in the thermal process of melting/cutting the material.  In addition to Nitrogen and Oxygen there are certain applications where Air, Argon and a blended mixture of N2 and O2 can achieve greater speeds and improved edge quality while simultaneously eliminating dross/slag. All things being equal… generally speaking compressed air produces faster cuts than nitrogen in mild steel, stainless steel, and aluminum. Significantly higher gains of 20% - 40% can be realized by blending N2 and O2.

Laser Head Crashing: No Tipping

During the cutting process the laser head is traversing to its next cut often very fast and close to the material surface. If a piece of material has tipped and is protruding above the surface area a collision is likely to occur. In most instances damage to the laser head is both considerable and costly.  Be especially vigilant when cutting thin metals as this is when tipping is most common. Fortunately most crashes are avoidable.  With a preview of the nest the operator can sometimes recognize where there is potential for an issue and make sure to pay extra attention when the machine is cutting in that area.  At the same time consider slowing the process slightly. A few seconds lost in cutting speed is better than hours lost replacing a laser head.

The best way to combat part tip-ups is by micro-tabbing.  Most laser programming software today offers an auto tabbing feature where one or more small tabs (typically about .020”) are placed in the profile of the part to secure the part to the sheet skeleton.  Once the entire nest is complete and the skeleton is off-loaded the parts are broken out of the skeleton.  If you have purchased good quality, flat material and the parts are large enough to lay on two or three of the table grates then the need to tab parts is usually unnecessary.  Suffice it to say, when in doubt tab; especially if your lasers are automated and operating in a “lights out” environment.

Laser Cutting Painted Materials

The next time you’re wandering the aisles in stores like Sears, Lowes, or the Home Depot take a close look at those stainless steel kitchen appliances. Chances are what you’re looking at is a faux stainless steel surface.  Pre-painted materials cost much less than true stainless steel making the finished product available to homeowners on a budget at an attractive price point. They carry names such as monochromatic stainless steel, black stainless steel, clean steel and finger print resistant stainless steel; just to name a few examples.  For these and other reasons, painted materials are growing in popularity.  OK so what are the challenges associated with laser processing these types of materials?

Pre-painted material generally comes in a thickness of anywhere from 18-24 gauge and is a common material in the home appliance, industrial refrigeration, and similar industries.  Those hoping to do business in this realm should certainly become familiar with the dos and don’ts of laser cutting material coated with paint.  While such materials may sometimes come with a PVC film, my experience is that the coating is often insufficiently tacky to adhere to the painted surface.  The likely result is instability during laser processing with, again, bubbling and/or melting likely to occur. To further compound the situation, painted material coated with film is generally a lesser grade and not conducive to pre-melting. It is therefore recommended to have your steel supplier provide laser-quality film. You may also elect to peel the film off then begin cutting taking care not to damage the painted surface.

I’ve found fiber lasers to be the best choice when processing painted materials. However it’s important to keep in mind that cutting such material at a rate that is too fast or too hot will likely create a burn mark on the surface of the material near the edge. Some lighter colors are more susceptible to showing burn marks than others and typically very light colors, especially bright white are not candidates for Fiber lasers. It is also possible that some colors may not cut at all due to how the wavelength of a fiber optic laser reacts to those colors.  It is always recommended to take the time to experiment and dial-in the optimum cutting condition before beginning a long run of laser cut parts.

Laser Cutting Coated Stainless Steel

When preparing to laser cut coated stainless steel, it’s first important to select the proper assist gas; and nitrogen is the best choice.  Being an inert gas, nitrogen does not produce a chemical reaction thus making it the safest and most reliable choice. Avoid cutting with oxygen as it lacks the predictability of nitrogen. There are too many instances of oxygen catching fire to the PVC and melting the coating to the metal.  

Generally speaking coated stainless steel is slightly easier to cut with a fiber rather than a CO2 laser, there’s really not much difference if both are set up properly. What is important, however, is the piercing conditions. When the incorrect pierce sub-routine is selected the finished part results can be poor and inconsistent.

Turning the assist gas on too fast / too high can cause bubbles which in turn will affect the height sensing of the laser head and throw the laser cutting off. Consequently, it’s vital to get pierce sub routines correct. Be sure to take the time to communicate with the machine manufacturer and run some cutting tests in order to get the optimum settings.  It is recommended that you set up a cutting condition library for PVC coated materials. This is a one-time step that’s well worth the effort. Do it once and you’re finished; from that point on it’s an automatic function.

Still some laser operators try to shortcut the process and pre-melt the coating. In doing this the laser head is generally positioned anywhere from 0.100” to 0.600” above the material and used to melt the coating prior to initiating a pierce point. While it’s true that most lasers come with this pre-melt functionality, its recommended to avoid this practice. Pre-melting introduces an opportunity for excessive melting and creates a mess generating dust and debris which is bad for a fiber laser.  Take the time to set the machine up properly and make sure that you utilize a quality coating specifically made for laser applications and there’s no need for employing this risky tactic.

Sometimes you may get a bad sheet or batch of metal from the customer or supplier where the PVC coating is not tacky/sticky enough. As mentioned earlier, this may cause the coating to lift or bubble when cutting.  In this instance you can peel the PVC off of the material prior to cutting. This might also be a last resort if you struggle with piercing or pre-melt.  Again, this isn’t recommended as it introduces an opportunity for damaging the metal. However, if you choose to do this and were able to navigate cutting without damaging the surface, be sure to prepare the cut surface prior to any secondary operations. There is a special tape that can be placed on the stainless steel or on your press brake punches and dies, in lieu of coating which protects the material from scratching or marring during bending and other secondary operations. 

 

Laser Processing Coated Materials

Often materials arrive from the supplier or customer with a surface protective coating. Although not always true, this is generally the case for expensive metals, those intended for a special purpose, or applications where aesthetics is critical. Examples may include a stainless steel appliance, a part designated for a medical or aerospace application, a decorative art piece, and so on. The material may be coated with a variety of finishes including paint, polyvinyl chloride (PVC), Nitto, Laser Film, and so on. 

What poses a challenge is that, in order to reduce the likelihood of scratches or other damage, these finishes are intended to remain on the materials during processing and shipping. It is therefore important to learn how to effectively laser cut coated materials while keeping the protective surface intact. While these finishes certainly do a good job in protecting the material from scratching, they can pose some significant cutting challenges. The objective is to produce quality cuts without removing, scratching, melting or otherwise damaging the coating.

Today laser quality PVC and similar coating is readily available; but this wasn’t always the case. In the past these coatings often lacked the required consistency.  If PVC coating is not tacky or sticky it may bubble and melt during processing. This causes it to stick to the metal and must be ground off. This introduces a real possibility for scratching or burning thus defeating the intended purpose of the coating.

Are you Under-Investing in your Shop?

Far and away, the biggest obstacle for fabricators is winning business and being sure that job will be profitable. In sales and profitability, the top shops deliver 45% better results than all others. This is all due to their ability to quote much quicker, win more contracts, set standards and decrease estimating to delivery time. 

Keeping your pipeline filled by decreasing estimating time is the biggest key to get parts to your machines. Too many continue to rely on manually-driven methods such as Excel, spreadsheets, or the experience of their most senior salesperson.  Automated quoting technology is available, affordable, and should be leveraged.

Developed especially for fabricators, SecturaSoft is the industry’s leading quoting software.

Go here to request a demo or learn more!

The Fabricator Quoting and Estimating Sheet Metal Job Shops

https://www.thefabricator.com/article/lasercutting/first-responders-look-to-pick-up-speed

“This speeds up the quoting process a lot,” said Almanza.

It also changes the requirements for the quoting role at the company. In the past NPL filled sales positions with employees with 10 to 15 years of shop floor experience. Today it can generate reliable quotes with less experienced employees.

“Filling sales positions isn’t a problem,” Almanza said. “We’re more concerned with finding operators and other skilled laborers than salespeople. Our quoting software makes sales quick and simple. We now have the flexibility to reallocate resources from the shop floor or front office to help sell when needed.”

SecturaSoft is a new company on the market.

“They customized the software for our needs,” Almanza said. “For instance, not every company wants a complete breakdown of every service included in a quote, but we want to make sure the customer understands precisely how their payment breaks out and how part order volume can affect that cost. They helped us sort through all of that.”

Hey Fabricators... What's limiting your profitability?

As seen in Shop Floor Lasers Magazine

You’re chugging along OK; keeping your head above the water… but if you’re like a lot of fabricators, manufacturers, or metal service centers you’re likely leaving money on the table… maybe a lot of it. No business is entirely leak-proof; a few extra hours of machine time here, some excessive scrap, a couple of lost bids – it all adds up. 

I spoke with industry veterans Scott Lindley (US National Sales Manager, Alpha Lazer) and Brad Stropes (COO, SecturaSOFT) to gain their perspective on where companies like yours may be able to plug the leaks and maximize profitability.  Here is part 1 of that interview...

What are the typical areas where you see the biggest room for improvement in a fabrication business? The low hanging fruit that bumps you in the head as you travel around from shop to shop?

Lindley: On the fab side it’s essentially old equipment, outdated processes, or outsourcing. I visit many shops where they’re using an old plasma table, punch turret or CO2 laser, believing it’s a more efficient or cost-effective process since it’s paid for. The reality is often that the old equipment is holding them back. Fiber laser technology for instance is now far more efficient than CO2 lasers. The previous notion that punch turrets are more efficient than lasers is no longer true. Routers used to be the best way to cut aluminum for boats, considering plasma tables and CO2 lasers couldn’t provide the cut quality. Fiber lasers are now an extremely good option for cutting aluminum, providing 3, 4, up to 7 times the cutting speed, with significantly tighter part spacing, and no hassle of tabbing parts in or worrying about the vacuum table. And the maintenance and energy cost of old machinery can easily eat any savings gained by having the machine paid for.

I often see companies that have purchased new equipment though and completely ignored the upstream and downstream processes. It doesn’t do much good to buy a more efficient machine that can cut parts 3 times as fast if you can’t keep up with the machine. Software plays a huge role in process improvement, allowing you to feed the machine more efficiently.  And then of course outsourcing is another big one. A shop outsourcing $400,000 a year for profile cutting is likely paying about $115,000 for someone else to cut their parts, and often having issues meeting production schedules, quality standards and paying extra to ship parts and materials.    

There are a number of fixed costs in running a fabrication business - labor, insurance, capital improvements, inventory, taxes, and more.  But when it comes to technology, would you say that the problem is generally under or over investing?

Stropes: From my perspective, the biggest obstacle for fabricators is winning business and being sure that job will be profitable. In sales and profitability, the top shops deliver 45% better results than all others. This is all due to their ability to quote much quicker, win more contracts, set standards and decrease estimating to delivery time.  Keeping your pipeline filled by decreasing estimating time is the biggest key to get parts to your machines. Too many continue to rely on manually-driven methods such as Excel, spreadsheets, or the experience of their most senior salesperson.  Automated quoting technology is available, affordable, and should be leveraged.

Scott, would you agree?

Lindley: Today’s modern fab shops, job shops and metal service centers incorporate a wide variety of machinery and software. But not every fabricator needs the most expensive and sophisticated systems. For some, less is more and careful consideration should be given before making a substantial equipment investment.  For example, today the gap has been closed between fiber lasers in terms of machine quality, cutting speed and part quality. What remains significant, however, is the cost and support. Unnecessarily overpaying for fabrication machinery adds years to recoup one’s investment. The most important thing though is to ensure that no matter what you do invest, you don’t get nailed after the fact by extraneous support costs, held hostage by the machine manufacture for replacement parts at a huge markup, or hit with long delays in getting support.

Scott, can you expand on what you mentioned about costs associated with machinery?

Lindley: Once you buy a machine, your costs are locked in. The machine will cut parts at a fixed speed, consume a given amount of electricity, need maintenance, and require set secondary processes. So, if you’re looking for ways to squeeze a bit more profitability from your company, look at these old machines. Imagine saving 50% on electricity or cutting your maintenance costs by two thirds. What if you no longer needed use micro joints to hold parts in place, and your operator didn’t need grind off the tabs? Imagine if you could cut twice as many parts in half the time, with less equipment running more efficiently? It sounds crazy, but it’s not unrealistic.

A growing number of fabricators are replacing multiple machines on the shop floor with a single fiber laser.  Because of their functionality and versatility, today’s fiber lasers are replacing CO2 lasers, plasma tables, routers, and punch machines. Consider the savings realized by consolidating the costs of running multiple machines and multiple shifts.  In a recent benchmark study I did for a local manufacturer running 5 punch turrets, two shifts, I looked at 3 days of production on 1 machine, cut from 77 sheets of anodized aluminum. I was able to nest all 2012 parts onto 62 sheets and cut the 48 hours of production parts in 5 hours. The fiber laser provided a 20% material savings and a 90% labor savings. Those numbers are hard to ignore.

 

Sheet Metal Estimating Quote- Section 179 Deduction

Section 179 at a Glance for 2018

2018 Deduction Limit = $1,000,000 (one million dollars)

2018 Spending Cap on equipment purchases = $2,500,000

Bonus Depreciation: 100% for 2018

The above is an overall, “birds-eye” view of the Section 179 Deduction for 2018. For more details on limits and qualifying equipment, as well as Section 179 Qualified Financing, please read this entire website carefully. We will also make sure to update this page if the limits change.

Here is an updated example of Section 179 at work during the 2018 tax year.

 

What is the Section 179 Deduction

Most people think the Section 179 deduction is some mysterious or complicated tax code. It really isn’t, as you will see below.

Essentially, Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment and/or software purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income. It’s an incentive created by the U.S. government to encourage businesses to buy equipment and invest in themselves.

Several years ago, Section 179 was often referred to as the “SUV Tax Loophole” or the “Hummer Deduction” because many businesses have used this tax code to write-off the purchase of qualifying vehicles at the time (like SUV’s and Hummers). But that particular benefit of Section 179 has been severely reduced in recent years (see ‘Vehicles & Section 179‘ for current limits on business vehicles.)

However, despite the SUV deduction lessened, Section 179 is more beneficial to small businesses than ever. Today, Section 179 is one of the few government incentives available to small businesses, and has been included in many of the recent Stimulus Acts and Congressional Tax Bills. Although large businesses also benefit from Section 179 or Bonus Depreciation, the original target of this legislation was much needed tax relief for small businesses – and millions of small businesses are actually taking action and getting real benefits.

Here’s How Section 179 works:

In years past, when your business bought qualifying equipment, it typically wrote it off a little at a time through depreciation. In other words, if your company spends $50,000 on a machine, it gets to write off (say) $10,000 a year for five years (these numbers are only meant to give you an example).

Now, while it’s true that this is better than no write-off at all, most business owners would really prefer to write off the entire equipment purchase price for the year they buy it.

And that’s exactly what Section 179 does – it allows your business to write off the entire purchase price of qualifying equipment for the current tax year.

This has made a big difference for many companies (and the economy in general.) Businesses have used Section 179 to purchase needed equipment right now, instead of waiting. For most small businesses, the entire cost of qualifying equipment can be written-off on the 2018 tax return (up to $1,000,000).

Limits of Section 179

Section 179 does come with limits – there are caps to the total amount written off ($1,000,000 for 2018), and limits to the total amount of the equipment purchased ($2,500,000 in 2018). The deduction begins to phase out on a dollar-for-dollar basis after $2,500,000 is spent by a given business (thus, the entire deduction goes away once $3,500,000 in purchases is reached), so this makes it a true small and medium-sized business deduction.

Who Qualifies for Section 179?

All businesses that purchase, finance, and/or lease new or used business equipment during tax year 2018 should qualify for the Section 179 Deduction (assuming they spend less than $3,500,000).

Most tangible goods used by American businesses, including “off-the-shelf” software and business-use vehicles (restrictions apply) qualify for the Section 179 Deduction.

For basic guidelines on what property is covered under the Section 179 tax code, please refer to this list of qualifying equipment. Also, to qualify for the Section 179 Deduction, the equipment and/or software purchased or financed must be placed into service between January 1, 2018 and December 31, 2018.

What’s the difference between Section 179 and Bonus Depreciation?

Bonus depreciation is offered some years, and some years it isn’t. Right now in 2018, it’s being offered at 100%.

The most important difference is both new and used equipment qualify for the Section 179 Deduction (as long as the used equipment is “new to you”), while Bonus Depreciation has only covered new equipment only until the most recent tax law passed. In a switch from recent years, the bonus depreciation now includes used equipment.

Bonus Depreciation is useful to very large businesses spending more than the Section 179 Spending Cap (currently $2,500,000) on new capital equipment. Also, businesses with a net loss are still qualified to deduct some of the cost of new equipment and carry-forward the loss.

When applying these provisions, Section 179 is generally taken first, followed by Bonus Depreciation – unless the business had no taxable profit, because the unprofitable business is allowed to carry the loss forward to future years.

Section 179’s “More Than 50 Percent Business-Use” Requirement

The equipment, vehicle(s), and/or software must be used for business purposes more than 50% of the time to qualify for the Section 179 Deduction. Simply multiply the cost of the equipment, vehicle(s), and/or software by the percentage of business-use to arrive at the monetary amount eligible for Section 179.

Democratized Quoting

From the most recent material costs to machine run time, operator costs, secondary operations, shipping, and related expenses, there’s a wealth of information readily available to today’s fabricator. Intelligent quoting software turns that information into winning bids and maximum profits.

Such software automates and standardizes the process to allowing anyone to generate fast and accurate quotes; and the best thing is that these easy-to-use quoting tools are available at a price point that is within reach of any steel service center or fabricator.

Cloud-Based Quoting

In a relatively short time the Internet has evolved into a viable production tool.  Tapping into today’s web-based tools allows savvy fabricators to make business and manufacturing transactions part of a daily routine.  So why not leverage this technology to create winning quotes?

Internet or cloud-based quoting offers a number of advantages. 

  • Simplified:  The dashboard contains fields that, once populated, launch behind the scene calculations (rates, material costs, machine run-time, secondary operations needed and associated costs, etc.).  This eliminates the need to be a seasoned veteran in order to create a quote.
  • Accessible: Web-based quoting is accessible by virtually anyone at any place.  From laptops to tablets and cellphones, quotes can be generated on any device. 
  • Fast & Accurate:  By eliminating multiple manual touch points a paperless web-based quoting greatly simplifies and speeds the process.  In a world where the fastest quote often wins, bids that have traditionally taken an hour or more to produce can be generated in five minutes or less. 
  • Consistency: Your custom dashboard provides a common template for all who create quotes.  Tapping into actual costs uniformly ensures that all quotes, regardless of the experience of the salesman, are consistent and profitable.
  • Affordability:  Maintainability is a key advantage as updates are performed at a single location rather than multiple sources.  Cloud-based quoting is available as an affordable subscription service.

 

 

Tapping into Data

As Computer-Aided Design (CAD) models became more intelligent they allowed quoting to become more accurate. Quoting software taps into embedded data associated with the part and rolls that information into the quoting process.  This approach allowed fabricators and metal service centers to know exactly how the job should be nested to maximize material use. This in turn helped determine exactly how much of a given material is needed to complete the job. 

Today we’ve taken things a leap farther. Leveraging up-to-the-minute material costs, labor rates, machine run-time, post-cutting operations, and other information instantly plugs known variables into the equation.  As a result winning quotes can be generated in a matter of minutes. At the same time the integrated process examines inventory to determine is ample stock is available to complete the job. Accurate material pricing can be accessed to calculate costs for any additional material that will need to be purchased.  Furthermore, sophisticated quoting software even allows work orders to be combined to fully utilize material and production run-time and costs.

Go here to see a demonstration; or learn more about SecturaSOFT's fabrication solutions!