Estimating labor is a critical job to accurately cost a part. Cycle time includes both handling time and run time.
One of the most difficult aspects of estimating is figuring out what the cycle time may be for a process. There are many factors which affect the cycle time which are not fixed including skill level of the person running the machine, reliability of the machine, maintenance of the machine, inspection of the parts being run, the quality of the material and others. In future discussions we will go over these different aspects of estimating but right now we are discussing at the high level, what is cycle time?
Cycle time is defined as the handling time + run time.
Handling time is the time spent as the operator loads and unloads the part being manufactured from the machine.
Run time is the time the operator spends at the machine running the part or the time the machine is running by itself, i.e. a cnc machine. Some operations require the operator to be present during the running of the part and others do not.
The basic formula for estimating an operations cost is
Cycle Time Per Piece
(Handling Time + Run Time)
Total Estimating Operation Time
Setup Time + Cycle Time
(Staging Time + Setup Time + Transit Time + Tear Down Time) + (Handling Time * Run Time) * Quantity To Be Produced
Estimating your cycle times is a critical area for any manufacturer to be profitable. Cost estimating MIE Solutions provides software to help you do this calculations as efficiently as possible through their MRP/ERP systems quoting package.
When there are dependencies between operations, delays in handling, transportation, transmission or thinking time, etc. between operation steps we refer to this as lag time.
I talked previously about job cost estimating setup time. The four areas that were spoken about where staging time, setup time, transit time and tear down time. Each one of these 4 processes actually would add costs to an estimate. Lag time does not add costs to an actual estimate under most circumstances.
When there are dependencies between operations, delays in handling, transportation, transmission or thinking time, etc. between operation steps we refer to this as lag time. Lag time does not usually add costs to a operation step because there is no activity actually being performed except for taking up space on the manufacturing shop floor. If there were large lag times you may consider putting a dollar value on the floor space but this may be overkill during the quoting and estimating process.
On the other hand lag time is a critical factor during scheduling of a job shop. This lag time is critical in ERP/MRP systems in order to properly handle dependencies between operation steps. The objective is to minimize the time a job is sitting idle with no work being performed. Reducing cycle time by decreasing the queue time between manufacturing steps is a basic principle of lean manufacturing to reduce work in process inventory.
Quoting and Estimating is not an area where lag time is usually considered because there are direct costs that could be attributed. As prepare your estimate keep in mind lag time because it will be used in scheduling the job shop.
MIE Solutions products including MIE QuoteIt and MIE Trak both can help a job shops quoting and estimating process more accurate.
Discussion of the different components of setup time during a manufacturing operation.
In order to begin a detailed look into quoting and estimating I’m going to start by giving some definitions.
Setup time is the time it takes to make the first accepted piece which includes bringing all the tools, jigs and fixtures, setup those jigs and fixtures for a particular batch quantity. Operation run time or cycle time, is the time spent to complete each unit through the machine.
Setup time can be simple or complex and it really depends on the process being performed. Setup time is usually independent of the actual run time because once a machine is setup it can be continually run without setting the machine up a second time. Setup time can actually be broken down into a few categories.
The time required to gather materials, dies or any other equipment required to get the machine running. Staging can potentially be performed during the running of another job through the machine because it may not actually require the machine to be available. A simple definition is time spent on a machine or process prior to a manufacturing run.
The time required to bring this production batch quantity to an actionable state.
Transit time is the time to move a particular batch quantity to another step in the process.
Tear Down Time
The time required to remove all the equipment that was required to be setup on the machine making it ready for the next process. A job may continue to the next operation during the tear down time because this time does not affect the actual job, only the machine. A simple definition is the time to take down a machine or process after a manufacturing run.
Quoting and ERP packages should provide the capability for these setup time variations in order to allow your estimating , costing and even scheduling to be as accurate as possible.
Welcome to the MIE Solutions blog about Job Shop Quoting and Estimating
This is the beginning of a blog for all job shop estimators to provide information and feedback about how to estimate job shop jobs in the made to order job shop environments.
A little background of myself.
As a child in Junior High School I found a passion for the early computer systems, which would drive much of his future work. I created and sold his first computer program, Arrow Data Systems, which was an early CAD/CAM system for the Apple 2e Computer. In the late 1980’s after seeing my father (a sheet metal manufacturer) come home many nights estimating, I saw an opportunity to optimize his effort through computer technology. Shortly thereafter the FabriTRAK Production Control package was developed. The Quote It! estimating package was developed out of the FabriTRAK system to become one of the leading sheet metal estimating packages in the world.
I have been to and consulted 100’s of companies in the best way to use computer software technology to streamline and make the process of quoting more accurate.
I’m looking for feedback as we discuss the estimation process in order for all readers to improve their estimating, which in turn, improves your win rate and profitability.
When an RFQ or RFP is received you begin the process of estimating. You can estimate and quote the job using paper and pencil, a spreadsheet or estimating software. In this very competitive market I suggest using estimating software in order to be most competitive and I will discuss and hopefully get feedback on ways the software should work to best satisfy the made to order manufacturer.