How to Calculate Cost Per Hole for Aerospace

Every machining cycle, tool change, and scrapped part adds up. In aerospace manufacturing, where precision is paramount, one of the most critical yet frequently overlooked metrics is the cost per hole (CPH). This number reveals the true efficiency of your drilling operations, and understanding it is the first step toward dramatically improving your bottom line.

This guide will explore how to calculate cost per hole, explain the vital role of tooling strategies, and provide a clear roadmap for reducing costs while simultaneously boosting quality and throughput.

A Deeper Look at Cost Per Hole

At its simplest, the cost per hole formula is straightforward:

Cost Savings = Number of times the line has prevented shutting down × Production cost per minute

Instead of only looking at total production costs divided by holes drilled, it’s often actionable to focus on how many shutdowns your operation avoids—and what that means in dollars saved. By tracking the number of avoided shutdowns and multiplying by your actual production cost per minute, you’ll get a clearer, more compelling picture of your cost savings potential.

The real value, however, comes from understanding what "Total Production Cost" truly includes. It’s much more than just the purchase price of a drill.

Calculations must account for every expense tied to a drilling operation. These costs can be broken down into:

• Tooling Costs: The initial purchase price of the drill, plus any expenses for preparation, coatings, or resharpening.
• Machine Time Costs: The hourly operational cost of your CNC machine, including power, maintenance, and depreciation.
• Labor Costs: Wages for the operators, programmers, and quality control personnel involved in the operation.
• Scrap & Rework Costs: The material and time lost on parts that are scrapped due to out-of-spec holes.
• Downtime Costs: Production time lost due to scheduled tool changes and unexpected tool failures. In high-volume production, this can be the most significant cost of all.

The Hidden Costs: How Tooling Impacts Your Bottom Line

A cheap drill can quickly become the most expensive item in your shop if it underperforms. Let's examine how specific tooling factors directly influence your cost per hole.

Tool Life and Durability

Tool life is the number of holes a single tool can produce before it wears out, fails, or can no longer meet quality specifications. A longer tool life directly reduces the cost per hole by spreading the tool's purchase price across more holes.

For example, a standard carbide drill costing $175 might produce 25,000 holes. This results in a cost per hole of $0.007. In contrast, a high-performance tool like the West Ohio Tool EDGEX4® might cost $1,000 but can produce 1,000,000 holes. This drops the cost per hole to just $0.001—an 86% saving on tooling cost alone.

Cycle Time

Cycle time is the total time required to drill one hole. Sub-optimal tooling can force you to run slower feeds and speeds to avoid tool wear or part damage. This directly increases the machine time cost for every hole you produce. Optimized tooling, designed for specific materials, allows for more aggressive machining, shortening cycle times and increasing throughput.

Operating Downtime

This is a massive, often underestimated cost. Consider a scenario where a tool change takes 10 minutes. If a standard tool needs to be changed every 25,000 holes, reaching 1,000,000 holes requires 40 tool changes. That’s 400 minutes of lost production time. A tool that lasts for 1,000,000 holes eliminates those 39 extra downtimes. For a manufacturer where production downtime costs thousands per minute, this translates into millions of dollars in operational savings over the life of the tool.

Calculating and Reducing Your Cost Per Hole: A 5-Step Guide

Shifting from a "tool price" mindset to a "cost per hole" strategy requires a data-driven approach. Follow these steps to benchmark your current operations and identify opportunities for improvement.

1. Gather Baseline Data

You can't manage what you don't measure. Start by collecting precise data on your current drilling operation. You’ll need:

• Total cost of the drill (including any regrinds).
• Number of holes produced per tool before failure or change-out.
• Cycle time per hole.
• Machine's hourly operating cost.
• Labor cost per hour.
• Time required for a tool change.
• Scrap and rework rates associated with the operation.

2. Calculate Current Cost per Hole

With your data, you can build a more detailed formula:

(Tool Cost / Holes per Tool) + (Cycle Time x (Machine Hour Rate + Labor Hour Rate)) + (Scrap Rate x Cost per Scrapped Part) = Cost Per Hole

This calculation gives you a clear and honest benchmark of your current production efficiency.

3. Identify Weak Points

Analyze your results. Where are the highest costs coming from?

• High Tool Consumption? A short tool life may indicate that the tool material or geometry is not suited for the application.
• Long Cycle Times? You might be using a general-purpose tool where a specialized one could run faster.
• Excessive Downtime? Frequent tool changes are a clear sign that a more durable tooling solution is needed.
• Too Many Tool Changeouts or Operations? Streamline production by combining tasks into fewer tools. Custom solutions can reduce the number of tools needed, cutting acquisition costs, resharpening expenses, and machining time.

We recently helped a client reduce their tooling package from 23 tools to just 8. This saved them thousands in tooling costs and significantly reduced production cycle times.

4. Evaluate High-Performance Tooling Alternatives

Armed with your data, engage with a tooling specialist to discuss solutions tailored to your specific challenges. This could involve:

• Custom Geometry: A tool designed specifically for your part's features and material can dramatically improve performance.
• Advanced Materials: Polycrystalline Diamond (PCD) tools like the EDGEX4® offer exceptional wear resistance, leading to massive increases in tool life—sometimes by 40x, 100x, or even more.
• Resharpening Programs: Partnering with a supplier that offers expert regrinding services can further extend the life of your premium tools.
• Reverse Engineering to Streamline Operations: By reverse engineering from your part prints, we can combine operations into fewer tools. For instance, one client reduced their tooling inventory by 65%, cutting machining time and downtime while saving on acquisition and resharpening costs.

5. Run a Trial. Measure the Impact.

Test the proposed solution under real-world production conditions.

Imagine your current drill costs $250 and produces 5,400 holes, for a cost per hole of $0.046. A new EDGEX4® drill might cost $1,750 but extends tool life 100-fold to 540,000 holes. Your new cost per hole plummets to $0.003 (a 93% saving). The results reveal dramatic savings - justifying the investment in superior tooling.

Make the Case to Senior Management

Adopting a cost per hole strategy requires a shift from short-term expenses to long-term return on investment (ROI). When presenting this to leadership, focus on the big picture:

• Frame tooling as a strategic asset, not a consumable. The right tool is an investment that unlocks efficiency, quality, and throughput.
• Present clear data. Show the before-and-after cost per hole calculations. Translate longer tool life and reduced downtime into tangible dollar savings and increased production capacity.
• Highlight the risk reduction. Emphasize how consistent, reliable tooling minimizes costly downtime and delays, which is critical for meeting aerospace delivery schedules.