Submitted to: Dr. R. C. Creese

Transcription

1 Submitted to: Dr. R. C. Creese Date: 11/17/08 By: Team Leaders Dayakar Devaru Senthil Kumar Sundaramoorthy Team Members Radhika kamlapurkar Ryan James Nave Naveen Kumar Bogum

2 TABLE OF CONTENTS 1.0 ABSTRACT INTRODUCTION TO SEER-DFM SOFTWARE PROBLEM DEFINITION METHODOLOGY IMPORTANT INPUT PARAMETERS RESULTS FOR FIRST ESTIMATE FOR INITIAL PRODUCTION OF 10,000 UNITS GRAPHS AND CHARTS SENSITIVITY ANALYSIS RESULT SUMMARY APPENDIX

3 1.0 ABSTRACT The aim of this project is to use the SEER software to estimate the cost of Blender. This project involves developing a cost estimate for a blender by breaking down it into its major assemblies and subassemblies or individual components and developing an estimate for the average manufacturing cost of these components using factors like the weight or the volume of the parts, the material used, the manufacturing process involved, the production experience of the manufacturer, labor and overhead rates or purchase cost incase the item is not manufactured inhouse. The values for parameters like material yield, operator experience, machine parameters, tool cost, tool amortization etc can be either entered manually if known or default values can be used from the software. The adopted method breaks down the blender into its main assemblies and components and then determines their weights and volumes. The collected weights and volume data were used as inputs to the SEER software to develop the estimate. The blender was divided into Jar Assembly Components and Base Assembly Components before entering into SEER to take care of the assembly costs. Further the details of all the assemblies and components were entered under each assembly. Once the data entry is done, the software gives a basic as well as a detailed estimate of the cost of the blender and all of its assemblies and components. Other information like risk analysis, cost analysis, production cost, labor cost were also generated by the software for individual assemblies and components. The lot sizes were varied from 1,000 to 1,000,000 to see the effect of the production lot size over the cost. The cost to manufacture a blender for the production lot of 10,000 using labor cost of China was $

4 2.0 Introduction to SEER-DFM Software The SEER approach to design for manufacturability is to analyze cost, time to produce, other baseline factors associated with product manufacture, as well as other life cycle concerns. By modeling the many materials and processes used in production, SEER-DFM allows one to fine tune manufacturing options for nearly any product resulting in lower costs and increased efficiency, more engineering flexibility. SEER-DFM supports both high level evaluation and detailed analysis making it well suited to diverse needs. One can use the software at every stage of the product cycle, right from the design to manufacturing. It also provides an immediate feedback for tasks like strategic planning where quick feedback is desired. The SEER software allows the end user to conduct the analysis within ten process types. Machining Fabrication Electrical assembly Assembly Molding/casting/forging/powdered metallurgy PC board Finish and heat treat Composites Additional items Purchased part. With the above ten options, any part that can be transformed from design concept to real product can be estimated for its cost beforehand by the SEER-DFM software. The model gives total process time, vendor costs, labor and material costs. 3

5 3.0 Problem Definition The project was to use SEER-DFM software to estimate the price of a commercial product. The team selected blender as the product to evaluate the price using this software. The aim of the study is to get a cost near a market price using a 100% mark-up. The purchase price for this blender (GE 14-Speed Blender, Black) displayed in Figure 1 was $29.88 (Reference: Walmart.com) Figure: 1.0 Blender 4

6 4.0 Methodology The estimate involved classifying the components in to the ones that will be manufactured in-house and the others that will be purchased as finished parts to be used in the assembly. A step by step approach was adopted which includes: i) Preparing a WBS (Work Breakdown Structure). The main components of the blender were disassembled and two subassemblies were made. The subassemblies are illustrated in Figure 2: BLENDER Jar Assembly Base Assembly Blade Jar Mount Cutter Base Glass Jar Ingredient Cap Jar Lid Main PCB Switch Board PCB Base Push Button Switch Board Base Cover Motor Electrical Cable Figure: 2.0 Work Break down Structure and Disassembled Blender 5

7 ii) Each component/assembly was weighed. Measurement was done on regular shaped components to find out the volume. For irregular shaped components, the volume was obtained by measuring the equivalent volume of water that was displaced when that component was completely dipped in water filled to the brim in a container. Pictures of the procedure used are shown in Figure 3 and 4. Figure 3.0: Jar Mount being dipped inside the water filled container Figure 4.0: Blade Assembly being dipped inside the measuring Jar 6

8 Table: 1.0 Component -Volume and Weight measurements Components Volume (Cu. In) Weight (lbs) Volume (ml) Jar Assembly Components Blade Jar Mount Cutter Base Glass Jar Ingredient Cap Jar Lid Base Assembly Components Main PCB Switch Board PCB Base Push Button Switch Board Base Cover Motor Electric Cable Total iii) Once the major components were weighed and their volume was estimated the data was fed into the SEER-DFM software. The various components were set in the Work Elements section of the model as displayed below. The Work Elements section is work region within the window frame, which allows the user to describe the structure of the hardware or the Estimating Breakdown Structure. Two Rollup levels were used for the estimating breakdown structure. Parameters for the components were entered on the right side window. A lot size of 10,000 was used for the initial cost estimation. Other parameters were entered by reading help menu and common sense. 7

9 Figure: 5.0 Module Hierarchies 8

10 The Blender has a total weight and volume of 7.23 lb. and cubic inches respectively. The display below illustrates the Input form for the main item i.e. Blender. Since, it is the main system assembly; we need to plug in production quantity only. The parameters related to manufacturing are entered in the respective parts of the sub assembly. Figure: 6.0 Production Quantities iv) The last step is to fill in the relevant data for the individual components, which is explained below, with illustrations. 9

11 5.0 Important input parameters Tooling Amortization Quantity This parameter specifies the production quantity over which tooling should be amortized. If the current production lot is less than this parameter then tooling costs will be amortized only partially over the current run. If this parameter is not entered, then tooling costs are fully assigned for the production lot. For this project, the default Tooling Amortization Quantity was selected so that the software itself does it automatically. Hourly labor rate Two labor rates have been used for this project. One is the Chinese Labor Rate and one the American Labor Rate. Chinese Labor rate is taken as $2.25 for Direct Hourly Labor Rate and Setup Hourly Labor Rate. An Hourly Labor Rate of $2.5 was used for Design and Fabrication of Tools for Chinese production. American Labor rate was taken as $50 for Direct Hourly Labor Rate and Setup Hourly Labor Rate. An Hourly Labor Rate of $50 was used for Design and Fabrication of Tools for American production. These rates include overheads and were based on web sources. Production Experience This parameter relates to the producer s experience at completing the type of work as planned. A manufacturing concern with low production experience will necessarily increase the production costs. A facility with highly skilled workforce will increase the labor cost per unit, but will reduce the overall production costs. The blender was divided into two subassemblies namely, Jar Assembly Components and Base Assembly Components to consider the assembly costs. 10

12 Components: The first element of the Jar Assembly Components was identified as the Jar Assembly operation. The parts going for this assembly are 1. Blade 2. Jar Mount 3. Cutter Base 4. Glass Jar This assembly was a simple mechanical assembly involving only 2 fasteners. The other two parts under Jar Assembly Components namely Ingredient Cap and Jar Lid are not assembled but are given directly to the customer. The input form is shown in the figure. Figure: 7.0 Jar Assembly Descriptions 11

13 The second element of the Jar Assembly Components was identified as the Blade. The total weight and volume were lb. and cubic inches. The blade is one of the critical elements of the blender. The blade can be produced by using progressive dies (stamping), which has a stroke rate of 160 strokes per minute (default likely value). Production experience is high because of the critical stamping operation. Stainless Steel was considered to be the best material for the blades. The input form and blade assembly are shown in Figure 8. Figure: 8.0 Blade Fabrication Description and Blade Assembly Photograph 12

14 The third element of the Jar Assembly Components was identified as the Jar Mount. The total weight and volume were lb. and cubic inches. The Jar Mount gives the support for the Jar and makes sure that the Jar stays in one place during operation. The Jar Mount can be produced using Injection Molding, which has a capacity of producing 50 to 200 injections per hour (default value). ABS is supposed to be the best material for this component. The input form and the Jar Mount are shown in Figure 9. Figure: 9.0 Jar Mount Description and Photograph of Jar Mount 13

15 The fourth element of the Jar Assembly Components was identified as the Cutter Base. The total weight and volume were lb. and cubic inches. The Cutter Base gives the support for the Cutter and houses the cog wheel that transfers motion to the cutter. The Cutter Base can be produced using Injection Molding, which has a capacity of producing 50 to 200 injections per hour (default value). Acetal is supposed to be the best material for this component. The input form and Cutter Base are shown in Figure 10. Figure: 10.0 Cutter Base Descriptions and Photograph of Cutter Base 14

16 The fifth element of the Jar Assembly Components was identified as the Glass Jar. The total weight and volume were lb. and cubic inches. The glass jar being a special part which cannot be made in-house is purchased from outside market. The market price of the glass jar was estimated to be 2.5 dollars. Other manufacturing parameters do not apply to the purchased parts. The input form and Glass Jar are shown in Figure 11. Figure: 11.0 Glass Jar Product Description and Photograph 15

17 The sixth element of the Jar Assembly Components was identified as the Ingredient Cap. The total weight and volume were lb. and cubic inches. The Ingredient Cap gives easy access to the jar. The Ingredient Cap was produced using Injection Molding, which has a capacity of producing 130 injections per hour (default value). Acrylic was considered to be the best material for this component since this component needs to be transparent. The input form and Ingredient Cap are shown in Figure 12. Figure: 12.0 Ingredient Cap Description and Photograph 16

18 The seventh element of the Jar Assembly Components was identified as the Jar Lid. The total weight and volume were lb. and cubic inches. The Jar Lid has to be flexible since it is used to close and open the jar frequently. The Jar Lid was produced using Injection Molding, which has a capacity of producing 50 to 200 injections per hour (default value). PVC is supposed to be the best material for this component since this component needs to be flexible. The input form and Jar Lid are shown in Figure 13. Figure: 13.0 Jar Lid Description and Photograph 17

19 The first element of the Base Assembly Components was identified as the Base Assembly operation. The parts going for this assembly were: 1. Main PCB 2. Switch Board PCB 3. Base 4. Push Button Switch Board 5. Base Cover 6. Motor 7. Electrical Cable This assembly was a regular mechanical assembly involving 10 fasteners. Four fasteners were used to attach Switch Board PCB to Push Button Switch Board. Two fasteners were used to attach Push Button Switch Board to the base. Four fasteners were used to attach base to the base cover. The input form is shown in Figure 14. Figure: 14.0 Base Assembly Descriptions 18

20 The second element of the Base Assembly Components was identified as the Main PCB. The total weight and volume were lb. and 4.5 cubic inches. The board material of the PCB was glass epoxy. There were 27 surface mounted discrete items (Resistors, Capacitors, LED s etc.,) on this PCB. It was assumed that insertion of all the parts and soldering of them was done using automation. The input form and Main PCB are shown in Figure 15. Figure: 15.0 Main PCB Description and Photograph 19

21 The third element of the Base Assembly Components was identified as the Switch Board PCB. The total weight and volume were lb. and cubic inches. The board material of the PCB was glass epoxy. There were 29 surface mounted discrete items (Resistors, Capacitors, LED s etc.,) and 12 pushbuttons on this PCB. It was assumed that insertion of all the parts and soldering of them was done using automation. The input form and Switch Board PCB are shown in Figure 16. Figure: 16.0 Switch Board PCB Description and Photograph 20

22 The fourth element of the Base Assembly Components was identified as the Base. The total weight and volume were lb. and cubic inches. The Base houses the motor, PCBs, controls and electrical chord. The Base was produced using Injection Molding, which has a capacity of producing 50 to 200 injections per hour (default value). ABS was considered to be the best material for this component. The input form and the Base are shown in Figure 17. Figure: 17.0 Base Description and Photograph 21

23 The fifth element of the Base Assembly Components was identified as the Push Button Switch Board. The total weight and volume were lb. and cubic inches. The tooling complexity of the Push Button Switch Board was considered to be Nominal to High since it was not a continuous part and had lot of projections. The Push Button Switch Board was produced using Injection Molding, which had a capacity of producing 50 to 200 injections per hour (default value). ABS was considered to be the best material for this component. The input form and Push Button Switch Board are shown in Figure 18. Figure: 18.0 Push Button Switch Board Description and Photograph 22

24 The sixth element of the Base Assembly Components was identified as the Base Cover. The total weight and volume were lb. and cubic inches. The Base Cover was produced using Injection Molding, which had a capacity of producing 50 to 200 injections per hour (default value). ABS was considered to be the best material for this component. The input form and Base Cover are shown in Figure 19. Figure: 19.0 Base Cover Description and Photograph 23

25 The seventh element of the Base Assembly Components was identified as the Electrical Assembly operation. The parts going for this assembly are 1. Main PCB 2. Switch Board PCB 3. Motor 4. Electrical Cable This assembly was a regular electrical assembly involving 2 wire strands in the cable with a total cable length of around 12 inches used to connect the above mentioned parts to one another. Six wires were hand soldered for this assembly. The input form is shown in Figure 20. Figure: 20.0 Electrical Assembly Description 24

26 The eighth element of the Base Assembly Components was identified as the Electrical Motor. The total weight and volume were lb. and cubic inches. The electrical motor being a special part which cannot be made in-house was purchased from outside market. The market price of the motor was estimated to be 4 dollars. Other manufacturing parameters do not apply to the purchased parts. The input form and motor are shown in Figure 21. Figure: 21.0 Motor Description and Photograph 25

27 The ninth element of the Base Assembly Components was identified as the Electrical Cable. The total weight and volume were lb. and 1.25 cubic inches. Since electrical cable was a standard item it was decided to purchase it from outside market. The market price of the electrical cable was estimated to be 0.25 dollars. Other manufacturing parameters do not apply to the purchased parts. The input form and Electrical Cable are shown in Figure 22. Figure: 22.0 Electrical Cable Description and Photograph 26

28 6.0 Results for First Estimate for Initial Production of 10,000 units The cost estimate obtained for the initial model showed that the system cost per Blender comes out to be $ It represents the cost of designing, developing and manufacturing the blender in lots of 10,000 units. From the manufacturer it goes to the distributor, then to the retailer and finally to the customer. An overall markup of 100% can be considered to be appropriate. Average cost of blender (averaged over the various production ranges) was $ If we compare it with the recent prices of similar blender, the lowest quote was $29.88 (Reference: See APPENDIX). After the markup we were within the range of the market price for comparable blenders. This difference is acceptable and this indicates that the SEER-DFM software can be used accurately to estimate the cost of commercial products. Figure: 23.0 Detailed Analysis 27

29 The Basic Cost Estimate s of the components are given below: Figure: 24.0 Estimated cost of the Jar Assembly (Per 10,000 units) Figure: 25.0 Estimated cost of the Blade (Per 10,000 units) 28

30 Figure: 26.0 Estimated cost of the Jar Mount (Per 10,000 units) Figure: 27.0 Estimated cost of the Cutter Base (Per 10,000 units) 29

31 Figure: 28.0 Purchased costs per 10,000 units of the Glass Jar (Per 10,000 units) Figure: 29.0 Estimated costs of the Ingredient Cap (Per 10,000 units) 30

32 Figure: 30.0 Estimated cost of the Jar Lid (per 10,000 units) Figure: 31.0 Estimated cost of the Base Assembly (per 10,000 units) 31

33 Figure: 32.0 Estimated cost of the Main PCB (per 10,000 units) Figure: 33.0 Estimated cost of the Switch Board PCB (per 10,000 units) 32

34 Figure: 34.0 Estimated cost of the Base (per 10,000 units) Figure: 35.0 Estimated cost of the Push Button Board (per 10,000 units) 33

35 Figure: 36.0 Estimated cost of the Base Cover (per 10,000 units) Figure: 37.0 Estimated cost of the Electrical Assembly (per 10,000 units) 34

36 Figure: 38.0 Purchased costs per 10,000 units of the Motor (Per 10,000 units) Figure: 39.0 Purchased costs per 10,000 units of the Electric Cable (Per 10,000 units) 35

37 Table 2.0 shows the summary of the labor, material and tooling costs for each component. Table 2.0: Summary of the Labor, Material and Tooling Costs for each Component Component Labor Material Tooling Purchased Cost Cost Cost Cost Total Cost Jar Assembly Blade Jar Mount Cutter Base Glass Jar Ingredient Cap Jar Lid Base Assembly Main PCB Switch Board PCB Base Push Button Board Base Cover Electrical Assembly Motor Electrical Cable Total

38 7.0 Graphs and charts Cost Allocation Chart The SEER-DFM software gives the cost allocation graph for the whole system i.e. blender assembly in our case. Figure 40 shows the cost allocation graph for Blender. Blender Cost Allocation: Labor % Material % Tooling % Figure: 40.0 Cost Allocation Chart 37

39 Probability based Risk Charts The chart depicts the probability of change in price of the individual component. Figure 41 shows the probability risk analysis for the Blade for a production quantity of 10,000 units. It can be seen that for a probability value of 1%, everything goes right as opposed to the 99% probability where nothing is assured to be right. A probability value of say 20% means that there is a 80% chance of exceeding the corresponding cost value. Probability plots for each component can be obtained by running the SEER-DFM software. Figure: 41.0 Risk Chart 38

40 Cost Sensitivity Chart Figure: 42.0 Cost Sensitivity Chart Based on the production experience the cost for the individual component varies. As can be seen for the Blade from Figure 42, the cost varies as follows: Blade Range Lowest Likely Mean Highest Cost in Dollars

41 Component Cost Distribution: Figure 43 gives the contribution of the individual components to the total cost of the Blender. From the chart we can see that the most expensive item, having the lions share is the Switch Board PCB (26% of the total cost). The least expensive item is the Blade contributing 1% to the total cost of the Blender. Component Cost Distribution Cost ($) Jar Assembly Blade Jar Mount Cutter Base Glass Jar(P) Ingredient Cap Jar Lid Base Assembly Main PCB Switch Board PCB Components Figure: 43.0 Component Cost Distribution Base Push Button Switch Board Base Cover Electrical Assembly Motor(P) Electric Cable(P) 8.0 Sensitivity Analysis It is a procedure to determine the sensitivity of the outcomes of an alternative to changes in its parameters. If a small change in a parameter results in relatively large changes in the outcomes, the outcomes are said to be sensitive to that parameter. This may mean that the parameter has to be determined very accurately or that the alternative has to be redesigned for low sensitivity. In this context we conducted an analysis, which included changing the production quantity and find out its effects on the unit price of the blender. 40

42 USING CHINESE LABOR COST: (i) Setting production quantity to 1000 the basic results are: As can be seen from the above result (for 1000 units of production), the unit cost increases from $19.80 to $ (ii) Setting production quantity to 10,000: 41

43 (iii) For the production quantity of 100,000: (iv) Basic Estimate for 1,000,000 units: 42

44 USING USA LABOR COST: (i) Basic Estimate for 1000 units: (ii) Setting production quantity to 10,000: 43

45 (iii) For the production quantity of 100,000: (iv) Basic Estimate for 1,000,000 units: 44

46 9.0 Result Summary The changes in unit cost of the blender in both China and USA by changing the production quantity are summarized below. Table: 3.0 Result Summary Production Quantity Cost/unit USA CHINA 1,000 $ $ ,000 $77.15 $ ,000 $67.89 $ ,000,000 $66.01 $16.73 Sensitivity Analysis Cost ($) , ,000 1,000,000 Production Units China USA Figure: 44.0 Sensitivity graph It can be seen from Figure 44 that as the number of units of production is increased, the unit cost decreases in the case of both CHINA and USA. This is primarily because of the reason that as the production quantity increases the allocation of over head costs, manufacturing costs, production costs and direct material / labor costs are distributed over a large quantity. Also from the graph it is shown that producing the blender in CHINA will be more economical than producing it in the US. 45

47 Component Cost Distribution Table for CHINA for different lot quantities: Table: 4.0-A Component Cost Distribution (CHINA) CHINA Cost Distribution Production Units Components 1,000 10, ,000 1,000,000 Jar Assembly Blade Jar Mount Cutter Base Glass Jar(P) Ingredient Cap Jar Lid Base Assembly Main PCB Switch Board PCB Base Push Button Switch Board Base Cover Electrical Assembly Motor(P) Electric Cable(P) TOTAL (P) Purchased Part 46

48 Component Cost Distribution Table for USA for different lot quantities: Table: 4.0-B Component Cost Distribution (USA) USA Cost Distribution Production Units Components 1,000 10, ,000 1,000,000 Jar Assembly Blade Jar Mount Cutter Base Glass Jar(P) Ingredient Cap Jar Lid Base Assembly Main PCB Switch Board PCB Base Push Button Switch Board Base Cover Electrical Assembly Motor(P) Electric Cable(P) TOTAL (P) Purchased Part The result summary above depicts individual component cost for different units of production. It can be seen that, the cost for Blade does not change much. It observes a constant value for the production units 10,000 to 1,000,

49 Total Cost (vs) Production Quantity Graphs: Total Cost vs Production Quantity Cost($) Production Quantity Figure: 45.0 Unit costs Vs. Production Quantities (CHINA) Total Cost vs Production Quantity Cost($) Production Quantity Figure: 46.0 Unit costs Vs. Production Quantities (USA) 48

50 APPENDIX 49

51 50