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The Anatomy of Product Cost Estimating to Support Product Development: By: Gordon M. Lewis, Principal DaTuM 3D, Inc., Watertown, MA The anatomy of product cost estimating has two major components: science and art. The science component requires understanding and using the many fine computer tools and reams of research data to support a vast selection of manufacturing processes. Material selection as it relates to the chosen manufacturing process, is also an integral component of the science aspect of cost estimating and has a profound impact on the final analysis. The art component of cost estimating requires the understanding of the integral steps of the chosen manufacturing process to be employed. (e.g., if the engineer is designing the part to be fabricated as a sheet metal part, what steps need to be followed to produce this design?) Since the trend today is to outsource much of the fabrication processes, the result is many engineers have not had the opportunity to spend much time in the fabrication environment. Therefore they have not developed an understanding of the work flow in the sheet metal shop and have a difficult time developing a credible cost estimate. The engineering group should drive industrial accepted standards for things like proper tap size holes and clearance for hardware as part of the design effort. Tools like the “Engineer’s Quick Reference Calculator” should be used by all members of the design team. If non-standard holes are not called out in the design it will have an impact on the final cost of the part. (e.g., recently our group reviewed a machined Titanium alloy part for a purchasing organization at a large company. The drawing called out for many small deep drilled holes to be machined into the part. Due to the tolerance call outs, all of the holes were non-standard drill sizes. Therefore, the machining vendor had to ream all of the holes as secondary operations which resulted in a high reject rate and an increased cost of over 300%.)
Figure #1, Engineering hardware selector Tools like the Engineering Hardware Selector should be used by all members of the product development team to insure standard design practices are use throughout the design effort. One of the desired effectives of performing early cost estimating is to aid the designer in developing a cost effective design. Recently I was asked to review the design of an optical system under development. This system was very sensitive to thermo expansion. The designer developed a one piece cage design (see figure #2) using INVAR 36 Alloy material. This design would have required machining a solid round block of INVAR 9 ½” long by 8” in diameter which would have resulted in machining about 94% of the INVAR 36 material away. The cost for a piece of INVAR this size would have been over $3,400 and the time to rough and finish machine would have been greater than twelve hours. Additionally, INVAR 36 is difficult to machine, which would result in a high cost for tooling.
Figure #2 By doing an early cost estimation of this part we were able to review the overall part requirements with the engineers. Once they understood the cost drivers in the design, we were able to influence a change which reduced the amount of INVAR 36 material used and dynamically reduce the machining time. This resulted into greater than a 75% cost reduction (see figure #3).
Figure #3, Strut, re-design for wire EDM process Tools like the “Boothroyd Dewhurst Concurrently Costing” software are a great aid in developing cost estimates. This tool was developed to be used as a cost compression tool during the early stages of design to point out high cost manufacturing features, thus encouraging the designers to simplify their designs. Using additional cost models along with the Concurrent Costing tool, an experienced cost engineer will be able to achieve a reasonably accurate cost analysis which can be used to support the business decisions of the corporation. Appendix #1 is an example of a cost model developed to cost out an assembly which required Furnace Brazing. Books like the “AM Cost Estimator” by Phillip Ostwald are a great help in developing these specialized cost models. The cost engineer must use great care in understanding the workflow for the part being analyzed. It is best to create a worksheet (see appendix #2; Product Information sketch Worksheet) before using the Concurrent Costing software. This worksheet can be invaluable later if you have to review a previous analysis. Important issues to consider when preparing the worksheet: the life volumes and the most likely batch sizes. The internet is a great resource for getting accurate material costs for the commodity estimate. Websites like Plastics Technology www.ptonline.com , MatWeb (www.matweb.com) and the London Metals Exchange (www.lme.co.uk) are a great help to get material properties and cost. Information needed for Cost Analysis:
The Cost Engineer should start by sketching the part and reviewing it for the features which drive the fabrication cost. This sketch will help organize the important features and allow for review of the cost analysis in the future. This should be the first priority after reviewing the CAD files. The cost engineer should be able to view the past database with the native CAD tool or a viewing tool like “SolidView” from Solid Concept. The cost engineer should review the part for producibility. Any high cost features should be reviewed with the design engineer to see if they could be eliminated or improved. For example: if the dimensions of a hole called out on a part to be machined is not the standard drill hole dimension it will require special tooling or reaming to meet the hole call out. This will increase the cost by 200 to 500% and therefore should be brought to the attention of the design engineer. Once the DFA and DFM analysis have been completed the results should be plugged into the “DFMA Cost Analysis Worksheet”(see appendix #3). This form is used in conjunction with both the Design for Manual Assembly and the Concurrent Costing tool and provides a format for organizing all of the other factors which influence the overall cost of the product. This worksheet is built on an Excel format, by plugging in the time in seconds derived from the DFMA analysis in the line for Assembly, and the total cost of materials developed from the Concurrent Costing analysis. Then add reasonable time for test, System QA and Pack and you have completed a robust Cost Estimate. Appendix: #1, Building a Furnace Brazing Cost Model This includes the time to apply paste flux to parts and
assemble them.
Appendix: #2, Product Information Sketch Worksheet Program Name: __________________
Product Information
Sketch Worksheet Appendix #3DFMA Cost Analysis Worksheet Assembly Name: Push Button Valve Cover Assembly with Touch Sensor
Assumptions: Index of Reference Materials:
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