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    MIE Solutions Blog

Estimating is more than Setup and Run Time Part 1

Posted by Dave Ferguson on Jul 19, 2010 11:27:47 PM

Many estimators put a lot of time into figuring out how to estimate setup time.  Setup time is a key component when doing estimates for basic operations like shearing, forming, laser, punch presss or any other operation which requires a setup process before a production run.  Many estimators still think in $'s versus time which was the simple way to quote prior to computers becoming wide spread.  Setup time should be calculated as a time component and not a dollar component.  One of the biggest reasons for this is time would only change if a machine became more automated versus $'s could change based on labor rate changing, overhead rate changing, electricity prices rising, etc.  Setup time can be as simple as the following ideas from the simple to complex.

Setup Time In Hours

Setup Time In Minutes

Setup Time In Seconds

Setup time can be defined as the time it takes a machine to be setup prior to the running of the job.  The formula actually gets a bit more complex if you are quoting based on multiple machines being run.

For example

10 identical machines.   Each machine by itself takes 30 minutes to setup and each machine could produce 10 parts per hour.

If you are quoting 10 parts to be fabricated you would only want to setup a single machine because a single machine can handle all the parts most efficiently.  If you are quoting 25 parts, you can either run all the parts on 1 machine and therefore 1 setup time.  This is ok but you must also think of how long the parts will take to run.  In this situation the total time would be 3 hours and 30 minutes.   You can also setup 3 machines concurrently and the 25 parts would be completed in 1 Hour and 30 minutes.  There are trade-offs to the decisions and no exact answer is right in all situations.

As you do your estimates make sure you think of the number of machines a job may be manufactured on simultaneously or you may be leaving a lot of dollars on the table.

MIE QuoteIt from MIE Solutions offers free quoting software for step by step quoting.  The quoting software is very user friendly and offers customization of operations, materials, formulas and even table lookups.   Please visit our website and take a tour of the free quoting software instead of the old method of quoting in excel.


Topics: accurate job costs, company, cost estimating, cost estimating software, erp, Estimating, estimators, job cost estimating software, job costing, job shop, pricing, quoteit, quoting, run time, setup, setup time, shop rate calculation

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