Profitability analysis for CNC machine shops

The problem

CNC estimates depend on cycle-time and setup assumptions that are rarely checked against reality. When a part runs on a different machine, needs extra setups, or prove-out takes longer than planned, the overrun lands in labor and burden and repeats on the next order.

What to measure

Per job: labor, setup, and burden variance against estimate, plus estimated vs actual hours when exported. Across jobs: which machines and part families carry most of the erosion.

How MarginGuard helps

Upload your job-cost export (with machine or work center if available). MarginGuard ranks erosion by part family and machine and shows whether labor, setup, or burden drove it.

Next step: sign up, load the demo, or compare plans.

How to get started

1. Step 1
   Export with machine/work center

   Include hours if your ERP exports them.

2. Step 2
   Upload

   Columns map automatically for common ERPs.

3. Step 3
   Review by machine and part family

   Fix standards where misses repeat.

What CNC shops usually find

Short-run setups underquoted, jobs routed to a higher-rate machine than estimated, first-article and prove-out time missing from quotes, and tooling or material costs rising between quote and run.

Hours vs dollars

If your ERP exports estimated and actual hours alongside dollars, compare both. Hours over estimate with dollars on target usually means a cheaper machine or operator absorbed the time. Dollars over with hours on target points at the rate: the job ran on a higher-burden machine, or the burden rate itself changed. Separating the two tells you whether to fix the cycle-time standard or the routing and rate assumptions.

Burden follows labor

Most CNC shops apply burden per labor or machine hour, so a labor overrun drags burden with it. In the example below, $300 of labor overrun brought $200 of burden overrun. Fix the hours driver and the burden variance shrinks with it; don't chase the burden line separately unless rates changed.