The Cost of Custom Aluminum Extrusions: 5 Key Factors

Ordering a custom aluminum extrusion can often be the right choice when there is nothing in regular inventory that meets your needs.

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Whether you need a specific profile, an unusual alloy, or a particular surface finish, knowing more about how much custom aluminum extrusions cost can help you better predict expenses and manage your project’s budget.

In this article, we cover some of the common factors that impact the cost of custom extrusions so that you can better prepare for how these products will impact your budget.

#1 Die and Tooling Costs

For custom profiles, new dies have to be tailor-made from scratch. For the manufacturers that need to recoup the costs for these special dies, this means raising the overall price of your order.

Compounding this even more, particularly complex geometries for the new die design will take more time and labor to produce, further increasing the cost to produce and the lead time for the final product.

How Much are Die and Tooling Costs?

Tool costs for extrusion dies that are used in normal architectural and industrial applications can range from $400 to $1,000. Tool costs for large parts to be made on 2,000-4,000 ton presses could be as high as $2,000.

Sometimes our manufacturers refund tool costs if a stipulated amount is purchased within 2 years. Most manufacturers do not charge for replacement tools after their useful life if orders continue.

Normal tool turnaround time is 3-4 weeks and production follows within a week of sample approval.

Which Factors Increase Complexity and Die Cost?

• The Circumscribing Circle Diameter (CCD): This refers to the smallest circle that encloses the entire cross-section of the extrusion. Designs with CCDs between 1 and 10 inches are less expensive than those over 10 inches. Additionally, presses capable of utilizing dies with very large CCDs are rare, limiting the number of manufacturers capable of doing this work and driving up the price further.
• Die Symmetry: Symmetrical extrusion profiles are easier to manufacture, making them more cost-effective to produce than complex profiles. A symmetrical die allows for a uniform flow when the material passes through it, distributing the load evenly and preventing die fractures.
• The Joining Method: Sometimes, if a profile requires a complex die, it makes sense to make two or more simple extrusion profiles with adequate joining mechanisms than to extrude the larger, more complicated profile in one go. Joining methods such as nut tracks, snap fits, interlocking, and T-slots are very common.

For more detail on these and other important design considerations, check out our helpful Aluminum Extrusion Design Guide as well as our article on Aluminum Extrusion Dies.

#2 Current Aluminum Cost

As you might expect, the current cost of the base material used for your product will have a direct impact on the final cost of the order. The price of raw aluminum is affected by many factors, such as global demand, industry trends, and electricity costs. The base price of aluminum can be estimated through exchanges like the LME Aluminum valuation.

Since the cost of aluminum has fluctuated substantially in recent years, sometimes it makes sense to pay for a large amount of metal all at once to lock in a rate, particularly when you have ongoing production needs with a manufacturer.

In these cases, the extruder buys a considerable amount of the metal in advance and uses it for your production needs over time. By doing this, the extrusion costs can be made more predictable for you.

It’s also important to keep in mind that different aluminum grades may have different costs and that a manufacturer likely won’t be stocked up on many of the unusual aluminum alloys that are sometimes requested in custom orders. This can increase the price for obtaining special stock.

How Much Does Aluminum Cost?

The cost of aluminum is the biggest wild card in the whole equation of extrusion cost. It has varied anywhere from $1,500 to $3,500 per metric ton in recent years.

Material costs can be affected by political events in different parts of the world. For example, Ukraine and Russia are key aluminum producers, and the war between them affects prices. Also, China is a big smelter of Aluminium, and recent environmental restrictions impact their operations.

#3 Labor and Production Costs

Of the different factors listed in this article, the cost of manufacturing labor is often one of the easiest to predict when evaluating the cost for custom aluminum extrusions. Relatively stable and based on regional conditions and regulations, this information is typically easy to find. While manufacturing abroad can incur an increase in shipping costs, these are typically offset by larger production volumes as we’ll discuss later on.

Additional production expenses that can impact overall costs include operating overhead, equipment purchases, maintenance, utilities, and more. While they may be somewhat harder to determine, they are similarly impacted by the conditions in the region where the manufacturing takes place.

At Gabrian International, most of our aluminum extrusion production takes place in India, which has relatively low labor costs compared to the US or Europe.

#4 Surface Finishing and Secondary Operations

Surface finishing, as well as other secondary operations, can be performed on extrusions after concluding the extrusion procedure. These processes can be done to improve appearance, enhance protection, or to achieve special physical or mechanical characteristics needed for the product’s intended application.

Machining

When it comes to physical alterations, CNC machining can be used to create holes and shapes that cannot be achieved by extrusion alone. Bending extrusions is another common practice for creating physical alterations when a straight profile is not suitable for the intended application.

Temper Treatments

Temper treatments are the most common secondary operations used for changing the mechanical properties of extruded aluminum products. Temper treatments can be used to alter the strength, formability, hardness, and other physical attributes of extrusions. Normally, there is no extra charge for different tempers, though, as long as volumes are high enough.

Surface Finishes

Finally, surface finishes can be applied which affect only the aluminum’s surface. Aluminum extrusions naturally have a very smooth finish after normal processing, so they rarely require sanding, but sandblasting can be used to roughen up the surface if required, especially in preparation for other surface treatments like coatings.

Coatings and other types of surface finishes add a layer of material to the extruded aluminum for protection, improved appearance, or both. For example, powder coatings create a very durable and hard finish in a wide assortment of custom colors. Anodizing, on the other hand, is an electrochemical process that thickens the naturally-occurring oxide layer in aluminum to provide an appealing and corrosion-resistant surface. (Related: Should You Anodize or Powder Coat?)

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If you want to learn more about these and other surface-finishing processes for aluminum extrusions, you can read our article on Types of Finishes for Aluminum Extrusions.

While adding any secondary operations to your product order will inevitably increase cost, you can save money by selecting a manufacturer with vertically integrated capabilities. Facilities that combine extrusion, fabrication, and finishing services will minimize the burden of logistical management and reduce the final cost for your order when compared with completing coordinated operations between multiple different vendors.

How Much Does Surface Finishing Cost?

Costs for anodizing and powder coating vary from $1,200 to $1,400 per metric ton depending on the profiles. Alodine finishing is a little less expensive at about $800 per metric ton. There are special finishes such as wood-look finishing that are significantly more expensive and the cost generally depends on surface profiles.

How Much Does Fabrication Cost?

Prices vary based on the complexity and kinds of machines required. Simple drilling operations can be in the range of $200-$300 per metric ton. For more complex operations, there will be tooling costs involved as well as machining time.

#5 Production Volumes

As with many other manufactured items, buying custom aluminum extrusions in bulk can lead to lower costs per unit produced.

This is true in part because, when custom orders are being produced, the basic die and tooling costs will often be very similar between a small and large order. If the manufacturer needs to recoup this expense for a small number of parts, the cost to produce each part is higher and is passed on to the buyer. However, as the production volume increases, the cost-per-unit will go down.

Bonus Factor: Logistics Costs

The COVID pandemic has put into perspective how much the low cost of commodities can be impacted by transportation logistics. For example, shipping disruptions have caused major fluctuations in the cost of containers shipped from India since the start of the pandemic. Around the world, the rising costs for containers and shipping ultimately impact the final price tag facing consumers, and these costs can change overnight.

Additionally, local duties and tariffs on imported products, such as the United States’ anti-dumping duty, can raise the cost of bringing products from abroad to your market. These extra fees may be harder to foresee or determine, but looking into whether they could impact your business can help you make adjustments that ensure your project remains profitable.

Despite these concerns, the shorter lead times in Asia compared to North America, as well as the lower production costs, are still worth it for many customers around the world.

How Much Does International Shipping Cost?

The cost of international shipping has varied widely in recent years. Shipping a 40-foot container from Asia to North America has ranged anywhere from $8,000 to as high as $20,000. The costs have been driven by political uncertainty as well as the economic and trade climate. Recently the pandemic has had a significant impact on container availability and the Russia-Ukraine war has added more uncertainty impacting cost and availability.

Optimizing the Cost of Custom Aluminum Extrusions

Ultimately, the total price tag for manufacturing custom aluminum extrusions comes down to a combination of many factors. Some of these factors are predictable, like production volumes and labor costs, while others can be harder to foresee, like shipping costs and the market price of aluminum stock.

Gabrian’s Aluminum Extrusion Guide can help you to optimize the design of your extrusions so you can minimize production costs. If you need additional insights, our aluminum extrusion experts can help you decide the best combination of alloy, surface finish, and temper treatment needed to achieve your project’s goals at a cost you can manage.

Take advantage of our custom aluminum extrusion capabilities for your next manufacturing project to get a rapid turnaround for high-quality extrusions that fit within your budget.

In any supplier evaluation, whether for a new or current vendor, it’s important to gauge the company’s production capacity, performance, risk, quality, and environmental impact. However, gauging these factors by itself will get you nowhere without an organized approach to the evaluation and a larger framework to make the assessment information work for you.  

In this guide, we’ll be going over some of the most crucial factors in conducting supplier evaluations, as well as how to ensure evaluations are successful. First, however, we’ll be diving into why supplier assessments are important and how to set up a larger vendor evaluation system to ensure you can get the fullest benefit from your evaluation data.

Why Conduct a Supplier Assessment?

A strong supply chain is the backbone of a successful business. Regardless of your industry, close working relationships with your suppliers will streamline production timelines, minimize operating costs, and guarantee the quality of your products.

Most companies regularly evaluate their suppliers’ performance in search of inefficiencies or possibilities for further growth to buttress the supply chain and reinforce relationships with suppliers. These supplier evaluations are holistic assessments grounded in verifiable quantitative metrics and meaningful qualitative observations.

By examining a supplier’s capacities, technological resources, delivery strategies, and general business practices, you can ensure that your partners share your priorities, and can then adjust their operations to your company’s competitive benefit. In the process, you can significantly reduce your own risks, improve visibility at every stage of operations, and create greater value for your products and services.

Putting a Vendor Evaluation System in Place

Supplier performance evaluation should be a regular part of your company’s procurement activities, not just a procedure reserved for vetting new vendors. A strong supplier assessment system will regularly evaluate suppliers, using categories and rankings within those categories to determine where strong and weak supply areas are. Even for companies that are only limited in the number of suppliers they can use, evaluations help to distinguish which of the suppliers should be prioritized, as well as to map out potential risk areas. The end goal of the system is to track the consistency of vendor performance in a way that’s incorporated into the purchasing process.

Vendor performance should include clear KPIs and metrics slated toward company priorities, including red flag metrics to show when a supplier fails to meet standards. Procurers should rate suppliers each time they are used, with deadlines for when they submit the feedback after a purchase. The feedback should also be reviewed regularly by the person or group classifying vendors. It can be easier to adopt a number evaluation system when procurers rate supplier performance, as the final scores can be used to easily rank companies.

These ratings and indicators shouldn’t just exist internally either. It’s important to agree on them with your vendors so that they’re aware of expectations and can provide feedback about them. Including a system of recognition and reward for improvements can also help to clarify expectations for them and motivate improvements. Common mistakes in vendor evaluation systems include inconsistent use of agreed-upon KPIs and metrics, not giving regular feedback to suppliers on their performance, ignoring supplier feedback in discussions and determining metrics, and using confusing metrics and KPIs.

What to Assess in a Supplier Evaluation

Vendor evaluation is largely founded on data. Therefore, this should be a carefully structured process, centered on quantifiable performance indicators such as delivery times, production costs, and inventory levels. A standardized set of supplier evaluation criteria provides a necessary frame of reference with which you can assess a supplier’s abilities and compare it with those of competitors.

Before evaluating a current or potential supplier, however, a company must set clear expectations for the relationship between them. At the outset, you should clearly articulate your goals so that the supplier fully understands the obligations involved and can adjust operations accordingly if needed.

While supplier evaluation can be based on a number of factors, there are several considerations that every company should address, regardless of the specific industry. Some of these elements include:

1. Production Capacity
   All supplier evaluations should thoroughly appraise the supplier’s abilities and limitations. A supplier that cannot scale production in response to your production cycles will not fare well in any review.
2. Quality
   While it can be difficult to quantify the quality of a product, this should always be a central component of a supplier evaluation. ISO BS/EN ISO 9001:2000 certification remains the industry standard here, which indicates that the supplier excels in management responsibility, resource management, product realization, and measurement, analysis, and improvement.
3. Performance
   Your company should ask as many questions as needed to determine whether a supplier can handle your typical functions. Previous experiences with similar companies, relevant recent projects, and possible advances on current products or processes are all valid subjects for discussion.
4. Risk
   Every business invariably confronts some risks, but its suppliers should actively work to minimize them throughout the supply chain. Reviewing performance metrics such as overall delays, average response time, and corrective actions can help you develop a reliable quantitative assessment of the risks posed by a particular supplier.
5. Environmental Impact
   Sustainability is an essential element of a successful business for both financial and ethical reasons. An evaluation should cover a supplier’s waste management strategies, waste reduction practices, and material procurement procedures, as well as efforts to achieve energy efficiency and any protocols employed when handling harmful materials.

How to Ensure a Successful Supplier Evaluation

While many companies can easily identify the criteria needed for a supplier evaluation, it can be a challenge to follow the practices needed to guarantee its success. The following guidelines can help your company retain its focus throughout your evaluation.

• Outline a schedule. Clearly defining needed tasks and establishing deadlines for them ensures that everybody understands their responsibilities and will work to complete them correctly and promptly.
• Provide your suppliers with a concise yet detailed questionnaire at the beginning of the process. The questionnaire should request both factual and subjective responses, should only solicit necessary information, and should not contain any questions that the respondent cannot answer.
• Visit your supplier’s facilities. A personal visit to your supplier can confirm the data gained from the questionnaire while offering insights into intangible aspects of the supplier’s operations, such as workplace culture. This also offers an opportunity to review the supplier’s quality control strategies, the current state of equipment, and the workforce’s technical competence.
• Ensure that the right staff members are participating in the evaluation. If you need to evaluate the performance of a Level 1 supplier, for example, the chief financial or revenue officer should probably be involved, as well as senior members of the procurement department.
• Be courteous to your supplier. A strong working relationship with your supplier can only heighten productivity. Don’t hesitate to congratulate strong performers, and provide less successful suppliers with a warning and some guidance so that they can attempt to resolve the issue before you end your partnership.

The Value of Smart Supplier Evaluations

Supplier evaluations serve as an invaluable tool for your business. By conducting them regularly, your company can gain greater insight into operations, proactively identify opportunities for growth, lower risks, streamline production timelines, eliminate unnecessary expenses, and bolster the performance of your suppliers. These competitive benefits cannot be overstated.

Although it should, of course, be comprehensive, supplier evaluation doesn’t need to be difficult. By following the appropriate protocols within a larger framework, it can be a simple process for companies and suppliers alike, allowing both to better understand their strengths and shortcomings, and encouraging both to work together to build a stronger, more prosperous partnership.

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