Read The Fabricator’s article featuring PEP’s advanced automation and intelligence!
Read The Fabricator’s article featuring PEP’s advanced automation and intelligence!
Fabrication shops running a laser, plasma or waterjet cutter rely on nesting software to convert raw material into finished parts. However, how do you know whether your nesting software KPIs and manufacturing metrics are delivering results? Without clear KPIs, it’s easy to assume that things are running well until rising material costs or growing scrap piles tell a different story.
Tracking the right CAM software performance KPIs gives fabrication managers a clear, objective picture of how their nesting software is performing. These metrics connect daily cutting operations to the shop’s financial health. They are essential for making informed decisions about upgrades and process changes.
These seven fabrication efficiency metrics provide a comprehensive view of your operation. They cover material efficiency, time and throughput, and quality by moving from material waste through operational measures to true cost per part. Understanding these KPIs can turn invisible losses into recoverable profit.
Sheet utilization captures the percentage of each sheet that becomes usable parts. Material is typically the single largest variable cost in a cutting operation, which means even small gains in sheet utilization can have an outsized financial impact. A modest improvement in utilization, compounded across hundreds or thousands of sheets per year, can lead to meaningful savings in annual material spend.
Utilization targets vary by job complexity. Mixed-part nests with irregular geometries may leave more waste than jobs with uniform, rectangular parts.
Scrap rate is the share of raw material that ends up as waste. Industry benchmarking data shows median scrap rates around 5% of cost of goods sold. For a shop spending $1 million per year on raw material, that is $50,000 of lost revenue. A poorly nested shop could be losing two to three times that.
The formula for scrap rate is:
Common line cutting addresses this by allowing adjacent parts to share a single cut line, reducing kerf waste and increasing utilization by a meaningful amount.
Machine utilization rate tracking measures the percentage of scheduled time a machine actively cuts versus sitting idle. Overall equipment effectiveness (OEE) refines this by capturing three dimensions:
To calculate OEE, use:
While world-class facilities achieve around 85%, a below-average OEE could be under 40%. That gap represents massive reserve capacity that most shops do not realize they have. Better nesting supports all three dimensions.
Production lead time tracks elapsed time from job receipt to finished parts, while parts per hour measures throughput rate during cutting. Manual nesting consumes 20 minutes or more per sheet. On a 10-sheet job, that is more than three hours before the machine starts.
Automated nesting systems generate optimized nests in under one minute, dropping setup from three hours to under 10 minutes. The result? Faster delivery windows, more machine starts per shift and the ability to quote shorter lead times competitively.
Every hour a skilled engineer spends manually placing parts is an hour not spent on quoting or complex jobs that require human judgment. High programmer hours per job represent a misallocation of expertise.
Automated nesting can yield material utilization of up to 90%, enabling one programmer to handle the throughput previously handled by several. Those freed engineers become available for higher-value work. Automation handles routine nesting while experienced engineers focus on jobs that genuinely benefit from human judgment.
First-pass accuracy (FPA) is the percentage of parts produced correctly on the first attempt, with no rework or scrap.
Industry benchmarks show a median FPA at 95%. Parts that fail inspection consume additional machine time, material and labor, making this one of the most cost-sensitive KPIs in any fabrication operation.
Quality issues often originate in the nesting stage. Improper lead-in placement, incorrect cut sequencing that causes thermal distortion, or insufficient spacing between parts can all cause parts to fail inspection.
Nesting software that automatically assigns lead-ins based on geometry and maintains proper inter-part clearances helps drive first pass rates upward.
True cost per part is the fully loaded cost to produce a single good part, including programming labor and overhead. It is calculated as:
This is the KPI that ties everything together. Nesting software affects material waste, cycle time and labor hours through optimized pierce counts and cut paths. The National Institute of Standards and Technology (NIST) manufacturing cost guide provides a breakdown of how each of these inputs contributes to total production cost. Tracking true cost per part over time makes it possible to see clearly whether a software upgrade or process change is delivering real financial value.
The best nesting software investments deliver measurable payback. For example, Freightliner realized $1.5 million in first-year savings after upgrading its nesting software, driven primarily by material and cutting-time improvements.
While not every shop will see seven-figure returns, modest operations can measure nesting software ROI using this framework:
Before improving anything, establish where you stand. Pull data on scrap rate, machine uptime, programming time and FPA for the last 30 to 60 days:
PEP Technology has over 100 years of combined experience helping fabricators measure, optimize and automate their nesting operations.
Our automatic nesting software extracts work orders, inventory and CAD drawings to create ready-to-cut nests within minutes. Features like smart quoting, smart tabbing, head raise optimization, common line cutting and heat dissipation management deliver the highest output in the shortest time, improving cutting throughput by 25% to 30%.
We are brand-agnostic, supporting over 700 post processors and integrating with SolidWorks and Inventor. When you need support, our team responds within a couple of hours or less — and our technicians are experts in the machines we run, not just software specialists.
Contact us today to discuss your current KPIs and see how our solutions deliver measurable ROI.
