Pre-calculation of labour cost in a steel furniture factory
Pre-calculation of labour cost in a steel furniture factory
(OP)
I was recently hired as a production engineer for a factory which design and produce office and shop furniture, mainly made of steel.
There is per today no procedures for calculation of direct cost in the production. One of my duties will be to create and implement a system for calculation of the cost of each component in the production. By breaking down each finnished product to simple componets. I will then try to see how much each operation (such as welding, drilling, bending, shearing etc.)will cost for each component.
My question is: Is there any standard system for calculating the cost of operations such as cost per mm TIG welding on a given type of profile? If there is, does this standards differ between industrial work and fine finnish?
Can anyone give me a tip or atleast give me an idea about litterature about the subject?
There is per today no procedures for calculation of direct cost in the production. One of my duties will be to create and implement a system for calculation of the cost of each component in the production. By breaking down each finnished product to simple componets. I will then try to see how much each operation (such as welding, drilling, bending, shearing etc.)will cost for each component.
My question is: Is there any standard system for calculating the cost of operations such as cost per mm TIG welding on a given type of profile? If there is, does this standards differ between industrial work and fine finnish?
Can anyone give me a tip or atleast give me an idea about litterature about the subject?





RE: Pre-calculation of labour cost in a steel furniture factory
Hopefully this helps you.. good luck.
RE: Pre-calculation of labour cost in a steel furniture factory
An integrated computer system is the next logical step. All of the Bills of Materials and Routes could be entered and the system would calculate costs, capacities, manning requirements etc.
The system used at my company is SAP which can be very labour intensive to set up (or expensive if skills not available). However, I'm sure other more specifically targetted software is available for your needs.
RE: Pre-calculation of labour cost in a steel furniture factory
I built such a system for our company to use for costing proposed products since many new items use the same processes and equipment as the old.
An advantage of doing this is that it also gives a very good feel for bottleneck locations within your plant. You will likely find several years worth of improvement projects so grab the stop watch and get your data.
The costing process we assembled used workstudy data and statistics to develop time standards and identify critical determinant factors such as part weight, number of components and process. It allows us to compare cnc punching to shear/punch operations before material is cut or even purchased.
By adding new data to the data base as it is available, the system continues to evolve and improve.
RE: Pre-calculation of labour cost in a steel furniture factory
RE: Pre-calculation of labour cost in a steel furniture factory
One place you will need to check is which items your company expenses and which are applied in BOMs. For example, our company expenses welding gas but direct costs welding rod used in oxy-acetylene welding. In a brazing operation, we expense both gas and rod.
Check with your accounting department to find out which materials are handled which way.
For some processes, it makes sense to expense (Ahh, poetry in engineering! Don'cha just love it!). In other words, don't spend a lot of time figuring costs on points that may not apply in the first place.
Griffy
RE: Pre-calculation of labour cost in a steel furniture factory
Once in place you can institute shop floor data collection to collect labor time by cell and compare this to the estimated labor from the ERP system. Adjust when variances are repeatable.
Mark Corker
www.seradex.com
RE: Pre-calculation of labour cost in a steel furniture factory
Logically you should start studing the operation time using one of the time study methods eg. Direct Observatio, MTM MOSt depends on nature of operatioon , but If it's all about welding I would recommend you start "Work Sampling " Procedure , and creat your own Pre-Determine data sheet.
You should breakdown the operation into small / measurable elements , then define standard paramethers such as length of welding , type of melting metal ,...
then commit to work sampling wich would be direct time measurement,
once it's finished,the statistical methods will pop in,
Payam