George Keremedjiev George Keremedjiev

Sensor Return-on-Investment 101

September 1, 2012

Since I launched this column in 1984, there has been a generational change in the leadership of many metalforming companies. With that in mind, please allow me to discuss in this column the fundamental logic behind investing in sensor technology, with an emphasis on return on investment (ROI).

A die crash can range from a minor repair issue to a complete shutdown of a customer’s facility. Both are unacceptable, as repair and downtime costs affect bottom-line profits—in a directly and painfully manner. This not only includes costs incurred for die repair and premature sharpening, but also the costs associated with creating a potentially large number of parts that require manual sorting; the possibility of press damage; and the idled secondary operations awaiting parts.

What are the costs of applying good sensor technology in a typical large die, 4 to 6 ft. long (you can scale this example to your respective dies)? The number of sensors depends on the areas that can be potential sources of die damage. In our example, we will specify sensors to monitor strip feed (two sensors), slugging (one stripper with four sensors), cam return (two cams, one sensor each) and part exit (two out with one sensor per part), for a total of 10 sensors. Given the various quantity discounts that the sensor companies offer and the complexity of the sensor chosen, we’ll expect to spend $30 for a basic inductive proximity sensor, and as much as $150 for a sophisticated photoelectric sensor.

For our example, we’ll estimate sensor costs of $800. Add to that the labor required to install the sensors (which already exists within your toolroom, including a sensor-applications specialist on staff and working at a test bench). We’ll estimate these labor costs at $1000 for the die, for a total investment of $1800 to protect the die from crashing.

Who should pay for this? You, the stamper, should, for you readily and mindlessly shell out money for die repairs, not your customer. Die crashes and part-quality issues due to die malfunctions are the wholly owned responsibility of the stamping company, which assumes complete responsibility for the costs of running the die—including the costs of oil, air and electrical energy.

The actual die-build cost may range from almost nothing for a takeover die to $100,000 or more for a brand new tool. If similar dies running in your shop have had a history of crashes, excessive wear or of making bad parts, it would not be difficult to calculate the costs of a die crash. One shop I work with, prior to installing a sensor program, routinely spent approximately $4000 per die crash to rebuild cracked die sections. It enjoys an ROI (for an $1800 investment in sensing technology) by preventing just one crash.

Ah, but here lies the rub...Often I encounter accounting/financial personnel in our metalforming community who, while brilliant in their respective fields, for the most part are severely inexperienced with dies and stamping processes. They often ask: “Can you prove that the die would have crashed without the sensors?”

The best and firmest to convince these folks that sensors will yield a timely ROI is to develop a spreadsheet detailing the actual costs incurred due to die repairs that could have been avoided by a sound sensor program. This spreadsheet must include labor costs for die repair, the cost of the steel and what was spent on external services—tool coatings, for example. Also, the spreadsheet should detail the costs associated with:

• Press downtime due to each crash, in $/min.;

• Overtime, as toolmakers and pressroom personnel scurry about getting the die up and running; and

• Express shipments of parts, as well as sorting and reworking.

Armed with such a spreadsheet, convincing others in your stamping plant as to the cost-effectiveness of investing in a serious sensor program becomes low-hanging fruit. MF

Interested in sensors? Learn more at FABTECH’s Conference. George Keremedjiev will be presenting Basic Through Advanced In-Die Sensor Applications on Monday, November 12 from 10:30 a.m. to12:30 p.m. For more information, visit or contact Marianne Sichi at 216/901-8800.
Industry-Related Terms: Cam, Die, Scale, Stripper
View Glossary of Metalforming Terms

Technologies: Sensing/Electronics/IOT


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