Job shop estimating is not the most complex job in the job shop, but it does have a lot of little details which should be dealt with during the estimating process. Inspection is a category of the cycle time which is not normally considered during the quoting process. I mentioned earlier that the following formula which is normally used for machine time quoting which is for sheet metal, machine manufacturing, assembly and pretty much any other process.
Cycle Time Per Piece
(Handling Time / Quantity Manufactured Per Handling Time) + Run Time)
One piece of information that is missing from this formula is how to handle inspection time. Inspection time can be included on the estimate in a variety of ways.
1. Inspection time could be included in the run time because the employee may be able to actually inspect the parts being manufactured as the machine is running. In the machining and sheet metal type of machinery this would work for lasers, turning machines, mills and lathes. These machines usually do not require 100% dedication of the employee as they watch the part being processed by the machine.
2. Inspection time could be included as part of G&A overhead. There could be a basic markup that is added to the quote to handle inspection time.
3. Inspection time can be a separate operation. In this situation while the inspection operation is being performed it does not allow more parts to be produced until the inspection operation is complete. An example in the sheet metal and machining organization would be first articles. First article inspections are required before the production run could be started. This ensures that the parts are made accurately.
4. Inspection can also be done during the actual production run for SPC.
Estimating software for industries such as metal quoting, machine shop quoting, sheet metal quoting, stamping need to be able to handle these different situations. If these different situations. If these scenarios are handled by your estimating software you will be able to manage any time of quote that requires inspection.
My next blog will give the formula that can be used to handle these four situations.
MIE QuoteIt handles this complex cycle time calculation by allowing the creation of user defined formulas. Download the free trial of the software at the following url.
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