{"product_id":"directed-energy-deposition-kpi-metrics","title":"What Are The 5 KPIs For Directed Energy Deposition Manufacturing Business?","description":"\u003cdiv class=\"container_new_design\"\u003e\n\u003cdiv class=\"text-section text-1_new_design\"\u003e\n\u003cdiv class=\"line_top\"\u003e\u003c\/div\u003e\n\u003ch2\u003eKPI Metrics for Directed Energy Deposition Manufacturing\u003c\/h2\u003e\n\u003cp\u003eDirected Energy Deposition Manufacturing (DED) is capital-intensive, so tracking efficiency and profitability is non-negotiable Focus on 7 core metrics, starting with Gross Margin, which should target \u003cstrong\u003e80% or higher\u003c\/strong\u003e given the high value-add service model We analyze capacity utilization, which must exceed \u003cstrong\u003e60%\u003c\/strong\u003e quickly, and cash flow metrics like the \u003cstrong\u003e27-month\u003c\/strong\u003e payback period This guide details how to calculate key performance indicators (KPIs), including Unit Contribution Margin and Machine Uptime, and suggests a monthly review cadence for financial metrics and daily checks for operational KPIs in 2026\n\u003c\/p\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"image-section image-1_new_design\" id=\"main_article_image\"\u003e\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003e\n\u003cspan style=\"color: #6067F2;\"\u003e7 KPIs to Track for \u003c\/span\u003eDirected Energy Deposition Manufacturing\u003c\/h2\u003e\u003cbr\u003e\n\u003ctable id=\"dwnld_tbl_id\"\u003e\n\u003ctr\u003e\n\u003cth\u003e#\u003c\/th\u003e\n\u003cth\u003eKPI Name\u003c\/th\u003e\n\u003cth\u003eMetric Type\u003c\/th\u003e\n\u003cth\u003eTarget \/ Benchmark\u003c\/th\u003e\n\u003cth\u003eReview Frequency\u003c\/th\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e1\u003c\/td\u003e\n\u003ctd\u003eAverage Revenue Per Project (ARPP)\u003c\/td\u003e\n\u003ctd\u003eRevenue Quality\u003c\/td\u003e\n\u003ctd\u003eTarget $15,000 for standard residential retaining walls; watch for scope creep driving it over $20,000.\u003c\/td\u003e\n\u003ctd\u003eMonthly\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e2\u003c\/td\u003e\n\u003ctd\u003eGross Margin Percentage\u003c\/td\u003e\n\u003ctd\u003eProduction Efficiency\u003c\/td\u003e\n\u003ctd\u003eMaintain 35% minimum; this covers high mobilization and labor costs.\u003c\/td\u003e\n\u003ctd\u003eWeekly\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e3\u003c\/td\u003e\n\u003ctd\u003ePump \u0026amp; Crew Utilization Rate\u003c\/td\u003e\n\u003ctd\u003eAsset Efficiency\u003c\/td\u003e\n\u003ctd\u003eAim for 75% of scheduled crew hours actively spraying or finishing; track idle time closely.\u003c\/td\u003e\n\u003ctd\u003eDaily\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e4\u003c\/td\u003e\n\u003ctd\u003eFirst Time Quality Pass Rate\u003c\/td\u003e\n\u003ctd\u003eRework Cost Control\u003c\/td\u003e\n\u003ctd\u003eKeep Non-Conformance Rate below 3% on initial NDT (Non-Destructive Testing) inspection.\u003c\/td\u003e\n\u003ctd\u003ePer Project Closeout\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e5\u003c\/td\u003e\n\u003ctd\u003eMaterial Cost Per Square Foot Installed\u003c\/td\u003e\n\u003ctd\u003eCost Control\u003c\/td\u003e\n\u003ctd\u003eKeep total material spend (mix, fibers, accelerators) under $12.00\/SqFt.\u003c\/td\u003e\n\u003ctd\u003eQuarterly\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e6\u003c\/td\u003e\n\u003ctd\u003eEBITDA Margin\u003c\/td\u003e\n\u003ctd\u003eOperating Profitability\u003c\/td\u003e\n\u003ctd\u003eTarget 18% margin; this must absorb equipment depreciation and overhead.\u003c\/td\u003e\n\u003ctd\u003eMonthly\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e7\u003c\/td\u003e\n\u003ctd\u003eEquipment CapEx Payback Period\u003c\/td\u003e\n\u003ctd\u003eInvestment Recovery\u003c\/td\u003e\n\u003ctd\u003eRecover cost of a new high-capacity pump truck ($450,000) within 18 months.\u003c\/td\u003e\n\u003ctd\u003eQuarterly\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003c\/table\u003e\n\u003cdiv class=\"dwnld_btn_div\"\u003e\u003cbutton id=\"dwnld_btn_id\" class=\"dwnld_btn_clss\"\u003eDownload Table in XLSX\u003c\/button\u003e\u003c\/div\u003e\u003cbr\u003e\u003cbr\u003e\u003cbr\u003e\u003ch2\u003e\u003cspan style=\"color: #126CFF;\"\u003eAre we targeting the right high-value market segments for scalable revenue growth?\n\u003c\/span\u003e\u003c\/h2\u003e\n\u003cp\u003eThe \u003cstrong\u003e$3,066 million\u003c\/strong\u003e revenue forecast for 2026 looks defintely dependent on the Turbine Blade Repair segment ($15M), so we must confirm if scaling the lower-AOV Custom Aerospace Bracket volume from 80 to 750 units by 2030 is actually profitable enough to cover the capacity expansion required.\u003c\/p\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eRevenue Mix Reliance\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003e2026 revenue projection hits \u003cstrong\u003e$3,066 million\u003c\/strong\u003e.\u003c\/li\u003e\n\u003cli\u003eTurbine Blade Repair accounts for \u003cstrong\u003e$15 million\u003c\/strong\u003e of that total.\u003c\/li\u003e\n\u003cli\u003eThe Custom Aerospace Bracket has a \u003cstrong\u003e$42k\u003c\/strong\u003e average price point.\u003c\/li\u003e\n\u003cli\u003eVolume must jump from \u003cstrong\u003e80 units\u003c\/strong\u003e to \u003cstrong\u003e750 units\u003c\/strong\u003e by 2030.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eCapacity Justification\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eThis represents an \u003cstrong\u003e8.3x volume increase\u003c\/strong\u003e for brackets.\u003c\/li\u003e\n\u003cli\u003eCheck the true cost-to-serve for these lower-margin parts.\u003c\/li\u003e\n\u003cli\u003eCapacity investment must be justified by the bracket's net margin.\u003c\/li\u003e\n\u003cli\u003eReviewing the full strategy helps, like in \u003ca href=\"\/blogs\/write-business-plan\/directed-energy-deposition\"\u003eHow To Write A Business Plan For Directed Energy Deposition Manufacturing?\u003c\/a\u003e\n\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003e\u003cspan style=\"color: #126CFF;\"\u003eWhat is the true unit economics after accounting for specialized labor and overhead?\n\u003c\/span\u003e\u003c\/h2\u003e\n\u003cp\u003eBefore scaling Directed Energy Deposition Manufacturing volume, you must calculate the Unit Contribution Margin for every service line, like Oil Drill Bit Cladding, ensuring the Gross Margin stays above \u003cstrong\u003e80%\u003c\/strong\u003e to cover fixed burdens. Honestly, this margin level is defintely necessary because your total fixed commitments approach $1.4 million annually.\u003c\/p\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eCovering Fixed Overhead\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eAnnual fixed overhead sits at \u003cstrong\u003e$606,000\u003c\/strong\u003e.\u003c\/li\u003e\n\u003cli\u003eProjected 2026 specialized wages total \u003cstrong\u003e$793,000\u003c\/strong\u003e.\u003c\/li\u003e\n\u003cli\u003eGross Margin must stay above \u003cstrong\u003e80%\u003c\/strong\u003e to absorb these costs.\u003c\/li\u003e\n\u003cli\u003ePositive contribution per job is required before scaling.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eUnit Contribution Margin Focus\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eUCM shows profit per job before overhead hits.\u003c\/li\u003e\n\u003cli\u003eCalculate UCM for Oil Drill Bit Cladding first.\u003c\/li\u003e\n\u003cli\u003eThis analysis dictates pricing for DED services.\u003c\/li\u003e\n\u003cli\u003eReview \u003ca href=\"\/blogs\/operating-costs\/directed-energy-deposition\"\u003eWhat Are Directed Energy Deposition Manufacturing Operating Costs?\u003c\/a\u003e\n\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\u003cbr\u003e\n\u003ch2\u003e\u003cspan style=\"color: #126CFF;\"\u003eAre we maximizing the expensive machine capacity and minimizing rework costs?\n\u003c\/span\u003e\u003c\/h2\u003e\n\u003cp\u003eYour immediate financial focus for Directed Energy Deposition Manufacturing must be driving machine utilization above the break-even threshold to absorb the \u003cstrong\u003e$12 million\u003c\/strong\u003e CapEx, while aggressively cutting variable costs like powder waste and NDT checks.\u003c\/p\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eMaximize Machine Time\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eSince the DED system alone costs \u003cstrong\u003e$12 million\u003c\/strong\u003e, you must track Machine Utilization Rate (MUR) daily; understanding how to structure this investment is key, so review \u003ca href=\"\/blogs\/write-business-plan\/directed-energy-deposition\"\u003eHow To Write A Business Plan For Directed Energy Deposition Manufacturing?\u003c\/a\u003e before proceeding. You defintely need high throughput to cover that fixed cost.\u003c\/li\u003e\n\u003cli\u003eLow utilization means you are paying interest and depreciation on idle assets. If you run two shifts instead of one, you effectively halve the fixed cost burden per part produced.\u003c\/li\u003e\n\u003cli\u003eTarget MUR: Aim for \u003cstrong\u003e85%\u003c\/strong\u003e utilization minimum.\u003c\/li\u003e\n\u003cli\u003eTrack daily output volume against capacity.\u003c\/li\u003e\n\u003cli\u003eSchedule preventative maintenance tightly to avoid unplanned downtime.\u003c\/li\u003e\n\u003cli\u003eFocus on order density per service area.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eSlash Rework Expenses\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eRework is a hidden killer when material costs are high for this service. Titanium Powder costs \u003cstrong\u003e$450\u003c\/strong\u003e per Turbine Blade Repair unit.\u003c\/li\u003e\n\u003cli\u003eEvery failed repair that requires scrapping the powder and starting over is a direct hit to margin. You need to optimize the DED process parameters to reduce scrap rates below \u003cstrong\u003e5%\u003c\/strong\u003e.\u003c\/li\u003e\n\u003cli\u003eAudit NDT labor hours per repair job.\u003c\/li\u003e\n\u003cli\u003eCalculate the true cost of wasted powder per failure event.\u003c\/li\u003e\n\u003cli\u003eReview process controls for first-time-right builds.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003e\u003cspan style=\"color: #126CFF;\"\u003eHow quickly can we achieve positive cash flow and pay back initial investments?\n\u003c\/span\u003e\u003c\/h2\u003e\n\u003cp\u003eDirected Energy Deposition Manufacturing hits operational breakeven quickly, but the full payback period for the initial investment stretches to \u003cstrong\u003e27 months\u003c\/strong\u003e, despite a very high projected Internal Rate of Return; understanding the launch mechanics, like those detailed in \u003ca href=\"\/blogs\/how-to-open\/directed-energy-deposition\"\u003eHow To Launch Directed Energy Deposition Manufacturing Business?\u003c\/a\u003e, is key to managing that initial capital requirement, which is defintely substantial.\u003c\/p\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eShort-Term Operational Health\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eOperational breakeven is projected for \u003cstrong\u003eFebruary 2026\u003c\/strong\u003e.\u003c\/li\u003e\n\u003cli\u003eThat's only \u003cstrong\u003e2 months\u003c\/strong\u003e from the start date.\u003c\/li\u003e\n\u003cli\u003eThe cash trough hits \u003cstrong\u003e-$787,000\u003c\/strong\u003e in \u003cstrong\u003eJune 2026\u003c\/strong\u003e.\u003c\/li\u003e\n\u003cli\u003eMonitor that cash position closely during that period.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eInvestment Recovery Timeline\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eThe Months to Payback metric shows \u003cstrong\u003e27 months\u003c\/strong\u003e needed.\u003c\/li\u003e\n\u003cli\u003eThe Internal Rate of Return (IRR) is a massive \u003cstrong\u003e686%\u003c\/strong\u003e.\u003c\/li\u003e\n\u003cli\u003eThis IRR confirms the investment is highly viable long-term.\u003c\/li\u003e\n\u003cli\u003eFocus on managing the initial \u003cstrong\u003e$787k\u003c\/strong\u003e cash gap first.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\u003cbr\u003e\u003cdiv class=\"card_smpl\"\u003e\n\n\u003cdiv class=\"double_border\"\u003e\n\n\u003cdiv class=\"card_smpl_header\"\u003e\n\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-plus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\n\u003ch3\u003eKey Takeaways\u003c\/h3\u003e\n\n\u003c\/div\u003e\n\n\u003cul class=\"lst_crct_blog\"\u003e\n\n\u003cli\u003eAchieving a Gross Margin target above 80% is non-negotiable for DED operations to successfully absorb high fixed overheads and specialized labor costs.\u003c\/li\u003e\n\n\u003cli\u003eMaximizing Machine Utilization Rate, aiming for a minimum of 60% quickly, is essential to generate sufficient revenue flow against the significant initial $12 million system CapEx.\u003c\/li\u003e\n\n\u003cli\u003eWhile breakeven may occur in two months, rigorously tracking the 27-month Months to Payback period is the primary indicator for validating the overall $23 million investment viability.\u003c\/li\u003e\n\n\u003cli\u003eTo protect high margins, operational KPIs like First Pass Yield (FPY) must exceed 95% to minimize costly rework associated with expensive materials like Titanium Powder.\u003c\/li\u003e\n\n\u003c\/ul\u003e\n\n\u003c\/div\u003e\n\n\u003c\/div\u003e\u003cbr\u003e\u003cbr\u003e\n\u003ch2\u003eKPI 1\n: \u003cspan style=\"color: #126CFF;\"\u003eAverage Selling Price (ASP) by Product Line\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDefinition\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eAverage Selling Price (ASP) shows the typical price you get for one unit sold across a specific product line. It's how you measure revenue quality, not just volume. You must track this monthly to see if your pricing strategy is holding up against market pressure.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-plus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eAdvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003ePinpoints pricing power strength per product line.\u003c\/li\u003e\n\u003cli\u003eHighlights revenue mix shifts immediately.\u003c\/li\u003e\n\u003cli\u003eGuides discounting strategy effectiveness review.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-minus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDisadvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eHides volume changes affecting total sales.\u003c\/li\u003e\n\u003cli\u003eCan be skewed by one-off large contracts.\u003c\/li\u003e\n\u003cli\u003eDoesn't account for service revenue bundled in.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eIndustry Benchmarks\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eFor specialized, high-precision manufacturing like Directed Energy Deposition, ASPs vary wildly based on material complexity and certification. A benchmark isn't universal; instead, compare your current ASP against your own historical trend. If your ASP drops significantly without a planned price reduction, it means you're losing pricing leverage in the market.\u003c\/p\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-rocket-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Improve\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eTie pricing to material input cost escalation quarterly.\u003c\/li\u003e\n\u003cli\u003eBundle high-margin repair services with new builds.\u003c\/li\u003e\n\u003cli\u003eImplement tiered pricing based on required lead time.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Calculate\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eYou calculate ASP by dividing the total money earned from a specific product line by how many units you actually shipped for that line. This must be done monthly to keep tabs on pricing power.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003eTotal Revenue for Product Line \/ Total Units Produced for Product Line\u003c\/div\u003e\n\u003cbr\u003e\n\u003cbr\u003e\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-how-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eExample of Calculation\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eYou need to watch the Custom Aerospace Bracket ASP closely. If total revenue for that line was $8.4 million on 2,000 units in 2026, the ASP was $4,200. If by 2030, you sell 5,000 units for $19 million, the ASP has dropped to $3,800. This drop signals you must defend your pricing or justify the volume increase with lower-cost production methods.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e$19,000,000 \/ 5,000 Units = $3,800 ASP\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eTips and Trics\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eReview ASP by product line every 30 days, not quarterly.\u003c\/li\u003e\n\u003cli\u003eFlag any line where ASP drops more than 2% month-over-month.\u003c\/li\u003e\n\u003cli\u003eEnsure ASP calculation excludes non-recurring engineering fees.\u003c\/li\u003e\n\u003cli\u003eUse the \u003cstrong\u003e$22,000\u003c\/strong\u003e Marine Propeller Hub ASP as your high-water mark reference.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\u003cbr\u003e \u003ch2\u003eKPI 2\n: \u003cspan style=\"color: #126CFF;\"\u003eGross Margin Percentage\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDefinition\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eGross Margin Percentage shows the revenue left after paying for the direct costs of making or fixing a part. It tells you your production efficiency. For this advanced manufacturing service, hitting a target above \u003cstrong\u003e80%\u003c\/strong\u003e is absolutely necessary to cover the high fixed costs associated with the Directed Energy Deposition (DED) machinery.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-plus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eAdvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eShows true production efficiency per unit.\u003c\/li\u003e\n\u003cli\u003eHelps cover high fixed overhead costs.\u003c\/li\u003e\n\u003cli\u003eAllows quick spotting of material cost increases.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-minus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDisadvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eIgnores overhead like rent and salaries.\u003c\/li\u003e\n\u003cli\u003eCan mask poor machine utilization rates.\u003c\/li\u003e\n\u003cli\u003eDoesn't reflect final operating profitability (EBITDA).\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eIndustry Benchmarks\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eFor specialized, high-value manufacturing like DED, margins must be high because the fixed asset base (the DED systems) is expensive. While general manufacturing might aim for 30-50%, this service must target \u003cstrong\u003eover 80%\u003c\/strong\u003e. This high floor ensures enough contribution flows down to cover the substantial fixed costs before reaching the \u003cstrong\u003e30%\u003c\/strong\u003e EBITDA margin goal.\u003c\/p\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-rocket-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Improve\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eNegotiate better pricing for raw metal powders.\u003c\/li\u003e\n\u003cli\u003eReduce waste by improving First Pass Yield (FPY).\u003c\/li\u003e\n\u003cli\u003eOptimize shielding gas usage rates weekly.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Calculate\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eYou calculate this by taking your revenue, subtracting the direct costs (COGS), and dividing that result by the revenue.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\n(Revenue - COGS) \/ Revenue\n\u003c\/div\u003e\n\u003cbr\u003e\n\u003cbr\u003e\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-how-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eExample of Calculation\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eSay a repaired component sells for $50,000 (Revenue) and the direct costs-materials, labor, and specific software licensing (which is \u003cstrong\u003e0.8%\u003c\/strong\u003e of revenue in 2026)-total $8,000 (COGS). This is a good scenario, but you must watch costs like Inert Shielding Gas, which can be high, like the projected \u003cstrong\u003e$8,500\u003c\/strong\u003e for a specific part (TBR).\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\n($50,000 - $8,000) \/ $50,000 = \u003cstrong\u003e84%\u003c\/strong\u003e Gross Margin\n\u003c\/div\u003e\n\u003cp\u003eThis \u003cstrong\u003e84%\u003c\/strong\u003e margin is strong, but if material costs creep up, even a small increase can push you below the \u003cstrong\u003e80%\u003c\/strong\u003e threshold needed to support operations.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eTips and Trics\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eTrack material cost creep every single week.\u003c\/li\u003e\n\u003cli\u003eLink labor costs directly to machine operating hours.\u003c\/li\u003e\n\u003cli\u003eEnsure COGS allocation correctly captures software fees.\u003c\/li\u003e\n\u003cli\u003eIf margin drops below \u003cstrong\u003e80%\u003c\/strong\u003e, halt new job acceptance defintely.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003eKPI 3\n: \u003cspan style=\"color: #126CFF;\"\u003eMachine Utilization Rate\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDefinition\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eMachine Utilization Rate tells you how effectively you are using your Directed Energy Deposition (DED) systems. It's a key measure of operational efficiency because these machines represent a huge chunk of your \u003cstrong\u003e$23 million\u003c\/strong\u003e capital expenditure. You must aim for a minimum of \u003cstrong\u003e60%\u003c\/strong\u003e utilization in Year 1, pushing toward \u003cstrong\u003e80%\u003c\/strong\u003e as volume scales from 455 units in 2026 to 2,555 units by 2030.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-plus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eAdvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eMaximizes return on expensive fixed assets immediately.\u003c\/li\u003e\n\u003cli\u003eSupports revenue growth without immediate new CapEx spending.\u003c\/li\u003e\n\u003cli\u003eShows capacity headroom before needing to buy more DED units.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-minus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDisadvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eChasing high utilization can pressure quality checks (FPY).\u003c\/li\u003e\n\u003cli\u003eIt hides scheduling inefficiencies if setup time isn't tracked.\u003c\/li\u003e\n\u003cli\u003eFocusing only on hours logged ignores value-added repair vs. new build.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eIndustry Benchmarks\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eFor specialized, high-precision additive manufacturing equipment, utilization targets are aggressive because the asset cost is so high. If you're running below \u003cstrong\u003e50%\u003c\/strong\u003e consistently, you're leaving money on the table, defintely. Hitting \u003cstrong\u003e60%\u003c\/strong\u003e in Year 1 is good, but best-in-class shops in aerospace support often maintain utilization above \u003cstrong\u003e75%\u003c\/strong\u003e once processes stabilize.\u003c\/p\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-rocket-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Improve\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eStandardize machine setup procedures to cut non-production time.\u003c\/li\u003e\n\u003cli\u003eSchedule maintenance during known low-demand windows only.\u003c\/li\u003e\n\u003cli\u003eBundle smaller repair jobs to maximize continuous run time.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Calculate\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eYou calculate this by dividing the time the DED system was actively processing material by the total time it was available to run. This metric is crucial for managing your fixed overhead costs against actual output. We need to see this rate climb as volume increases.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003eActual Operating Hours \/ Total Available Hours\u003c\/div\u003e\n\u003cbr\u003e\n\u003cbr\u003e\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-how-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eExample of Calculation\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eSay you ran your machine for \u003cstrong\u003e360 hours\u003c\/strong\u003e last month, and you scheduled it to be available \u003cstrong\u003e600 hours\u003c\/strong\u003e (24\/7 operation for 25 days). This gives you exactly the \u003cstrong\u003e60%\u003c\/strong\u003e target needed for Year 1 performance.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e360 Hours \/ 600 Hours\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eTips and Trics\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eTrack setup time as a separate metric from operating hours.\u003c\/li\u003e\n\u003cli\u003eIf utilization drops below \u003cstrong\u003e55%\u003c\/strong\u003e, flag scheduling immediately.\u003c\/li\u003e\n\u003cli\u003eEnsure your \u003cstrong\u003e80%\u003c\/strong\u003e target aligns with the 2,555 unit volume projection.\u003c\/li\u003e\n\u003cli\u003eDon't let high utilization mask low First Pass Yield results.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003eKPI 4\n: \u003cspan style=\"color: #126CFF;\"\u003eFirst Pass Yield (FPY)\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDefinition\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eFirst Pass Yield (FPY) tells you how often you make a part right the first time, before needing fixes. For Kinetic Forge, this measures the quality of your Directed Energy Deposition (DED) process right after Non-Destructive Testing (NDT) inspection. Hitting a high FPY means you aren't wasting expensive metal powder or high-cost labor on components that fail inspection immediately.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-plus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eAdvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eDirectly cuts material waste from scrapped parts.\u003c\/li\u003e\n\u003cli\u003eReduces expensive labor hours spent on rework loops.\u003c\/li\u003e\n\u003cli\u003eProvides early warning on process drift before large batches fail.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-minus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDisadvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eDoesn't measure long-term component reliability post-deployment.\u003c\/li\u003e\n\u003cli\u003eCan mask issues if NDT inspection standards are too loose.\u003c\/li\u003e\n\u003cli\u003eFocusing only on FPY might slow down initial setup runs needed for process optimization.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eIndustry Benchmarks\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eFor precision metal fabrication, a good FPY is usually above \u003cstrong\u003e90%\u003c\/strong\u003e. Since Kinetic Forge deals with mission-critical aerospace and defense components, your target of \u003cstrong\u003e95%+\u003c\/strong\u003e is appropriate. Falling below \u003cstrong\u003e90%\u003c\/strong\u003e means your rework costs will eat into that high \u003cstrong\u003e80%\u003c\/strong\u003e Gross Margin target quickly.\u003c\/p\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-rocket-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Improve\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eTighten tolerances on initial machine calibration checks.\u003c\/li\u003e\n\u003cli\u003eImplement automated monitoring for Inert Shielding Gas consistency.\u003c\/li\u003e\n\u003cli\u003eMandate root cause analysis for every unit failing NDT inspection.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Calculate\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eYou calculate FPY by dividing the number of units that pass quality checks the first time by the total number of units you started in that production run. This metric directly shows the efficiency of your DED process before rework labor is applied.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nFPY = Units Passing Quality Check (NDT Inspection) First Time \/ Total Units Started\n\u003c\/div\u003e\n\u003cbr\u003e\n\u003cbr\u003e\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-how-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eExample of Calculation\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eSay you run a batch of \u003cstrong\u003e100\u003c\/strong\u003e high-value components, like the Marine Propeller Hubs, through the DED machine. If \u003cstrong\u003e96\u003c\/strong\u003e of those units pass the NDT inspection immediately without needing any repair or adjustment, your FPY is 96%. If only \u003cstrong\u003e90\u003c\/strong\u003e pass, you wasted time and material on \u003cstrong\u003e10\u003c\/strong\u003e units that require costly rework.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e\nFPY = 96 Units Passing \/ 100 Units Started = \u003cstrong\u003e0.96 or 96%\u003c\/strong\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eTips and Trics\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eTrack FPY separately for repair vs. new builds.\u003c\/li\u003e\n\u003cli\u003eTie rework labor costs directly to low FPY performance.\u003c\/li\u003e\n\u003cli\u003eEnsure NDT inspection protocols are standardized across all shifts.\u003c\/li\u003e\n\u003cli\u003eReview FPY weekly; don't wait for monthly margin reviews, defintely look at it daily at first.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003eKPI 5\n: \u003cspan style=\"color: #126CFF;\"\u003eTotal COGS per Unit\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDefinition\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eTotal Cost of Goods Sold (COGS) per Unit shows the complete, all-in cost required to produce or repair a single component. This metric is crucial because it directly impacts your Gross Margin Percentage, which you need above \u003cstrong\u003e80%\u003c\/strong\u003e to cover high fixed costs. You need to know this number to price competitively while staying profitable.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-plus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eAdvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eIdentifies waste in material usage or labor time per job.\u003c\/li\u003e\n\u003cli\u003eAllows precise tracking of specific overhead like \u003cstrong\u003eInert Shielding Gas\u003c\/strong\u003e.\u003c\/li\u003e\n\u003cli\u003eEnsures pricing covers all production expenses, supporting the \u003cstrong\u003e\u0026gt;80%\u003c\/strong\u003e gross margin target.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-minus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eDisadvantages\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eThe \u003cstrong\u003eRevenue-Based COGS Allocation\u003c\/strong\u003e component can obscure true variable costs.\u003c\/li\u003e\n\u003cli\u003eIt doesn't reflect machine efficiency; low utilization inflates this cost without showing up here.\u003c\/li\u003e\n\u003cli\u003eIt relies heavily on accurate labor tracking, which is hard in custom repair jobs.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eIndustry Benchmarks\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eFor precision additive manufacturing serving defense and aerospace, material costs often dominate. While benchmarks vary wildly, successful firms aim to keep the total COGS per unit below \u003cstrong\u003e20%\u003c\/strong\u003e of the Average Selling Price (ASP) to maintain high gross margins. If your ASP for a component drops, like the Custom Aerospace Bracket falling from $4,200, your COGS must shrink proportionally.\u003c\/p\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/files\/fml_20_fml-20-blog-rocket-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Improve\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eReview gas consumption quarterly; specifically target the \u003cstrong\u003e$8500\u003c\/strong\u003e cost associated with Inert Shielding Gas for TBR jobs.\u003c\/li\u003e\n\u003cli\u003eNegotiate the \u003cstrong\u003e08%\u003c\/strong\u003e Software Licensing allocation, perhaps locking in better rates before 2026.\u003c\/li\u003e\n\u003cli\u003eBoost First Pass Yield (FPY) above \u003cstrong\u003e95%\u003c\/strong\u003e to cut down on wasted material and labor hours spent on failed builds.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/files\/fml_20_fml-20-blog-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eHow To Calculate\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eYou calculate this by summing up the direct costs of materials and labor for one unit, then adding the portion of overhead costs that scale with revenue. You must monitor this calculation quarterly to catch creeping expenses before they erode profitability.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e(Unit Material + Unit Labor + Revenue-Based COGS Allocation) \/ Unit Volume\u003c\/div\u003e\n\u003cbr\u003e\n\u003cbr\u003e\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/files\/fml_20_fml-20-blog-how-calc-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eExample of Calculation\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eSay you produce one standard repair unit. The raw material cost was $15,000, and the direct labor applied was $5,000. Furthermore, the revenue-based allocation (including software fees) for that specific job came to $2,000. Since this is a single unit, the volume is 1.\u003c\/p\u003e\n\u003cdiv class=\"card_smpl_formula\"\u003e($15,000 Material + $5,000 Labor + $2,000 Allocation) \/ 1 Unit = $22,000 Total COGS per Unit\u003c\/div\u003e\n\u003cp\u003eThis $22,000 figure is your true production cost before considering fixed overhead like rent or depreciation.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\u003ch3\u003eTips and Trics\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class\u003e\u003c\/ul\u003e\n\u003c\/div\u003e","brand":"FinancialModelsLab","offers":[{"title":"Default Title","offer_id":49303699489011,"sku":"directed-energy-deposition-kpi-metrics","price":0.0,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0522\/6191\/2762\/files\/directed-energy-deposition-kpi-metrics.webp?v=1782680979","url":"https:\/\/financialmodelslab.com\/products\/directed-energy-deposition-kpi-metrics","provider":"Financial Models Lab","version":"1.0","type":"link"}