AUTOMATION TRENDS
the fl exibility to maintain planned effi ciency. Unfortunately, many of today’s suppliers are missing out on the benefi ts that an investment in advanced automation can bring because of their reliance on standard cost pricing, which locks in past performance to determine future part pricing. “Because no one relates cost to productivity, there is no incentive to increase productivity. In addition, standard cost quotation or pricing doesn’t account for overcapacity or low utilization, which are the primary contributors to establishing standard cost,” said Lenz. Lenz supplies this real-life example comparing three machining cell scenarios: an existing two-machine cell with one operator (benchmark); a proposed expansion to a three- machine cell; and a fl exible automation two-machine cell. “When the supplier isn’t able to meet the daily production demand for a customer with the two-machine cell in which one machine processes the fi rst operation and the second machine processes the second operation, the supplier requests a cost-sharing adjustment of $300,500 from the
customer to purchase a third machine. The daily demand is 10 parts per day from a family of three part numbers where the actual production is about eight parts per day. Each part has two machining operations with the fi rst operation being from 100 to 130 minutes and the second operation being 50–60 minutes. The supplier is operating the benchmark cell 25 days per month to keep up and has no overtime available for demand fl uctuation. “Modeling the three cell confi gurations using simulation
software confi rms that each of the three machine confi gura- tions could meet the monthly demand of 200 parts. Because machine hours are identical in each of the three cells, stan- dard part cost is identical in all three cells after adding stan- dard cost of $85 per machine hour. The cost sharing request is trying to be justifi ed based on capacity needs alone. “The simulation cost modeling software contains a cost model component that is used to compute an actual cost per part. The actual cost model allocates annual machine replacement cost and hourly cost of labor to determine a cost
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AdvancedManufacturing.org | March 2016
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