Could You Benefit from an NRE Cost Analysis?

NRE cost analysis

Have you ever wondered why first runs and prototypes are so expensive? 

The simple answer is that precision machine shops factor the upfront costs of tooling, setup, and quality assurance into the estimate, which can make the price per part seem exorbitantly high. 

At Ricaurte Precision, we offer the option of a non-recurring engineering (NRE) cost to help customers understand exactly what they’re paying for and save them time and money in the long run. 

What Is an NRE Cost Analysis?

An NRE (Non-recurring Engineering) cost analysis provides a complete financial breakdown of the one-off setup, programming, tooling and quality documentation expenses required to manufacture first runs and prototypes. It gives customers a clearer picture of the actual price per part, separate from the cost of preparing to machine the part for the first time. 

Without an NRE cost analysis, these initial set-up fees are baked into, and distributed across, the price of each part. When a precision machine shop conducts a complete NRE cost analysis, they separate the costs associated with manufacturing the first run from the ongoing cost of manufacturing the part.

What Factors into NRE Costs?

A typical NRE cost analysis considers these factors:

  • Planning. A certain degree of planning is required whenever a shop makes a part for the first time. During the planning phase, a shop reviews the documentation provided by the customer, programs their machines, and determines the optimal approach to machining the part. They also conduct a dedicated Design for Manufacturability (DFM) review to identify potential manufacturing challenges. 
  • Tooling and machining. The NRE cost includes the expenses associated with identifying and testing the right tooling, determining the optimal speeds and feeds, setting up machines with the proper tools, and designing and machining any necessary fixtures. 
  • Quality. If a first article inspection (FAI) is required, the shop works with the quality assurance team to create a suitable first article piece and determine the acceptable quality limit (AQL). 

Each element of a Non-recurring Engineering cost analysis is necessary to ensure our customers’ parts are machined correctly the first time—which ultimately saves time and money. 

If a customer doesn’t request an NRE cost analysis, we’ll still consider all of these factors. However, pricing out the NRE cost gives us dedicated time to think critically about each aspect of machining a part and create a more accurate price instead of estimating the NRE cost and building it into the price per CNC machined part in the first batch. 

How Does an NRE Cost Analysis Benefit Customers?

For customers looking to build a long-term relationship with a precision machine shop or who will ultimately need to order parts in bulk, requesting an NRE cost analysis is highly beneficial. 

When we formulate an NRE cost, we’re meticulous about selecting the right tools, machines, and processes, in addition to manufacturing fixtures that may be required to efficiently machine the parts moving forward. With the upfront work captured and documented, we can commit to faster lead times and lower costs for future runs.

Requesting an NRE cost analysis also allows us to analyze the part design in greater detail and provide DFM recommendations to optimize cost and lead time. 

At Ricaurte Precision, we pride ourselves on the quality of our relationships. We seek to be true partners capable of fulfilling customers’ long-term needs. Customers tell us that they appreciate the pricing transparency we provide and ultimately gain a clearer understanding of how their parts are being priced.

Are you interested in an NRE cost analysis for your next CNC machined part? Request a quote today, and we’ll be happy to provide you with one. 

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