Heavy metals
Metal fabrication: heat, scrap, and the job cost
Heavy metals work loses margin in the heat, the remnant, and the scrap that nobody counted before the job was invoiced. The certificate is in a file. The work order is on the floor. The cost is in a spreadsheet that still has the theoretical drop.
Plate, structural, and machine shops, service centers, and job shops that must name a heat all share that split. It is the make-to-order cousin of furniture job costing: the estimate and the job are describing different metal.
Keep the heat with the job
- Receive the heat with the certificate. Grade, heat, lot, and the mill certificate are tied to the metal, so the floor is not starting a different heat because the schedule says the job is late.
- Separate a free remnant from metal already promised. Both jobs cannot be planned on the same pounds.
- Follow cutting, forming, finish, labor, and outside processing on the work order while the job is open.
- Count good parts and scrap before the invoice, and price the next release from that drop. Scrap above the estimate is yield loss measured in pounds.
A shipment that can name the heats or lots that were used is the metals version of genealogy. The search should not start when the customer asks.
MFGMAX Heavy Metals keeps the heat, the certificate, the work order, the scrap, and the job cost together so the margin is known before the job ships. Accounting can stay in QuickBooks. This does not replace a required material test, a weld procedure, or an environmental permit.
Questions plants ask
What should be tied to metal when it is received?
Grade, heat, lot, and the mill certificate. A job that is waiting on a certified lot should not start on a different heat because the certificate is still in email.
Why do fab estimates miss on scrap?
The estimate used a theoretical drop from a different thickness. Scrap is weighed after the job ships. Good parts and scrap have to be counted before the job is invoiced, and the next job priced from that result.
Does job costing replace a material test or a weld procedure?
No. This does not replace a required material test, a weld procedure, or an environmental permit. It keeps the heat, the certificate, the work order, the scrap, and the job cost together.
| After the invoice | On the work order | |
|---|---|---|
| Certificate | In a file or an email | Tied to the heat that was received |
| Remnant | Looks free, already promised | Free metal is separate from metal on a job |
| Scrap | Weighed after the job ships | Counted before the job is invoiced |