New SEER Labor Rate Calculator: A Leap Forward in “Should Cost” & “Will Cost”
I saw a demo today of our new labor rate calculator. It takes in various labor rate drivers and computes a viable labor rate.  It even evaluates the cost of equipment, electricity, floor space, insurance, etc.
This is a great step forward in the “should cost” and will cost for product manufacturing. Buying organizations can describe the problem and see what a fair labor rate for the region, country, machine, etc. Mixed currencies are supported as well.
The following is a small example of the kinds of information that can be specified In this case it is configured for manufacturing.
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page, call us at +1 310 414-3222 or click a button below to ask sales questions, sign up for our free library or schedule a demo.
Estimating the Cost of Advanced Composites Materials in Products
Its funny how we take some things for granted. For example we assumed everyone in the composites industry knew of our work in the Composites Affordability Initiative, and the advanced composites capabilities in our SEER models for cost, schedule, risk and reliability. Yet someone recently told us they nearly didn’t find us during an Internet search. SEER won at least two awards for this work, one with SAMPI as the most innovative product of the year, and another as one of the most valuable things to come out of the composites affordability initiative.
The Composites Affordability Initiative (CAI) Team was established in 1996 by the Air Force Manufacturing Technology (ManTech) Division of the Air Force Research Laboratory (AFRL). When ManTech began CAI, its charter was to bring down the costs associated with the manufacture of composite structures, considered essential to high-performance aircraft advancement. What is now called the SEER Aerostructures plug-in is used by major aerospace manufacturers around the world. Specifically, the Aerostructures Plug-in for SEER-MFG includes over 25 existing and emerging composite fabrication and assembly processes, providing a method for quickly and accurately determining and evaluating costs of alternate designs and manufacturing processes. It enables an increased number of trade studies in a shorter period of time, resulting in cost reductions by the early identification of the most affordable composite structural concepts with greater dependability than previously possible. Additionally, the Detailed Composites capability in SEER-MFG was developed in conjunction with Airbus. Part shapes can be described in detail, including build-ups and cores, materials and resins, the material cutting process, the bagging process, consumable materials, hot-ply forming, curing, and trimming. Tooling manufacture costs and inspection costs using non-destructive testing techniques are included in the model.
Many examples of major cost savings have been noted using SEER and its advanced composites capability. For example ATK saves over a person year using SEER advanced composites capability and this doesn’t count the cost savings from choosing the most affordable approaches.
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page, call us at +1 310 414-3222 or click a button below to ask sales questions, sign up for our free library or schedule a demo.
Estimating Best Practices
The following are the bullet points from Dan’s paper on estimating best practices. Â Using these best practices can increase project success dramatically.
- Decide Why You Want An Estimate
- Map Estimation Goals To Estimate Process Maturity & Develop Plan To Achieve The Maturity
- Have A Documented, Repeatable Estimation Process
- Evaluate Total Ownership Cost; Not Just Development
- Estimate A Range And Pick A Point For The Plan
- Re-estimate The Program When It Changes
- Avoid Death Marches: Programs With Unachievable Schedules Are Likely To Fail And Drain Morale
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page, call us at +1 310 414-3222 or click a button below to ask sales questions, sign up for our free library or schedule a demo.
Accounting Definitions For Setup
Thanks to Galorath’s Joe Falque for providing these definitions for setup:
Setup Accounting Definition
Expenses incurred each time a batch is produced. It consists of engineering cost of setting up the production runs or machines, paperwork cost of processing the work order, and ordering cost to provide raw materials for the batch.
Production Setup
Production setup activities support an operation’s need to manufacture a diversity of products on the same equipment. Since setups are non value added, firms should seek to minimize their impact on manufacturing capacity and flexibility. World class manufacturing calls for heavy focus on setup reduction activities to support inventory reduction, capacity debottlenecking, and manufacturing flexibility. One-time portion of a production cycle in which a specific machine, work center, or assembly line is ‘made ready’ to switch from production of the last good piece of the last lot to the first good piece of the new lot, also known as change over.
Manufacturing Definition
Setup Cost
Setup costs include the labor and material to ready a machine for production. They may include the processing of work orders or a first-article inspection. Gathering of all required equipment hand and automated, tools, work orders, materials etc. which are needed to perform the manufacturing process.
Setup Cost Calculation
Setup costs are treated as a one time occurrence and that cost is divided or amortized over the batch size to be produced during the batch cycle. Each unit of the batch carries an equal share of the set up time and materials cost which are added to each unit run time and materials to calculate a total per unit cost. This cost curve on the part cost figure is high when batches are small and rapidly decreases with increasing batch quantity.
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page, call us at +1 310 414-3222 or click a button below to ask sales questions, sign up for our free library or schedule a demo.
Coffee Maker Cost Estimation Using SEER for Manufacturing
The department of Industrial Management & Systems Engineering at West Virginia University used SEER for Manufacturing (formerly SEER-DFM) to determine the costs of an off the shelf coffee maker and identified potential cost savings by redesigning for manufacturability.  This is one of the strengths of SEER-MFG: the ability to understand costs of a design and determine ways to reduce product costs.  One group was able to reduce costs from $21.25 to $11.53.  They found that:
“SEER is an estimation and analysis application that lets you identify, evaluate and manage the complex array of cost, labor, assembly, process, part design, material and production variables that effect manufacturing operations from its most comprehensive knowledge base” and that “it is used to facilitate proactive real time cost impact assessments of commodity design alternatives in today’s global sourcing environment.”
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page, call us at +1 310 414-3222 or click a button below to ask sales questions, sign up for our free library or schedule a demo.
New Release of SEER for Manufacturing Includes Refined Machining Model
What an interesting journey SEER for Manufacturing (SEER-MFG, formerly known as SEER-DFM) has had in development. Continued adding of additional manufacturing process has led the way. And the latest release includes a completely redone machining model as well.
As major organizations continue to apply SEER-MFG to reducing costs there has been an increasing number of users who wanted the detail in the estimate to be sufficient for machine scheduling. The Galorath staff, led by Dr. Chris Rush, Keith Garland and Joe Falque, along with the excellent software developers, accomplished this and much more including updates to composites modeling and other often requested processes. Congratulations team.
And congratulations to the customers who are using SEER-MFG to continually drive down costs, both in manufacture and in parts costing and decision process.
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page, call us at +1 310 414-3222 or click a button below to ask sales questions, sign up for our free library or schedule a demo.
State Department Lifts ITAR Restrictions on SEER for Manufacturing Aerostructures Plug-in
We are pleased to have received the official notification that Galorath’s Plug-in for Aerostructures, formerly known as the Composites Affordability Initiative Plug-in, has been freed from restrictions for international sales. This means Galorath can offer SEER for Manufacturing – Aerostructures Edition to customers in any country with which the United States allows trade, as well as use by non-US citizens.
Galorath is proud to have worked with several leading American aerospace manufacturers (Boeing, Lockheed Martin, Northrop Grumman and GE Aircraft Engines) in a major cooperative effort to develop the Aerostructures plug-in. The plug-in provides a method for quickly and accurately evaluating the cost of alternate composite materials and manufacturing processes.
Northrop Grumman, for example, Â provided a case study showing how SEER-DFM (Now SEER-MFG) helped make critical decisions and save costs on the Joint Strike Fighter.
Another paper discussed how SEER-DFM provides cost savings for aircraft design.
“Galorath’s Composites Affordability Initiative (CAI) model, which is sold separately as an add-in to SEER-DFM (AKA SEER-MFG), provides the most detailed and flexible modeling environment. This model is aerospace-focused, and offers state-of-the-art composites modeling. The CAI plug-in includes Composites Operations, Cure and Trim. Each of these three is treated as a distinct work element type, providing a great level of detail and modeling flexibility. The CAI plug-in also includes non-composite models: Fitup, Drill Operations, Fasten, Paste Bond, E-Beam Assembly, 3-D Reinforcement, Sheet Metal and SPF/DB.”
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Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page, call us at +1 310 414-3222 or click a button below to ask sales questions, sign up for our free library or schedule a demo.
Estimating United Conference Papers Available On the Web
Follow this link to see some of the estimating united papers. it was a great conference, full of useful information. Talks encompassing cost estimating (cost estimation), value engineering, product design, software, and more.
And thanks again to all the speakers and attendees as well as the hospitality of the Manchester United Football (soccer) club. And the Galorath staff whose diligent efforts made this a great success. Presentations will be available for all to download for the next few months, then will be available as part of the Galorath corporate library.
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page, call us at +1 310 414-3222 or click a button below to ask sales questions, sign up for our free library or schedule a demo.
Better Products At better Margins 20 to 40% Cost Price Reduction
I was so impressed with the presentation by one of our speakers at the recent user conference that I bought a copy of his book. In his presentation(and also included on our site, galorath.com) he showed how he saved millions of euros in product costs using target costing, value analysis, and viable cost estimating and SEER.Â
It is wonderful to see forward thinkers applying SEER to save big costs as well as to estimate costs. In his presentation he substantiated savings of 20 to 40% cost price reduction (value improvement) And he does this not be grinding contractors but by working with them to provide substantial cost savings without impinging on their margins.
His book is well worth a read. The abstract follows:
“Many companies experience price pressure as a result of the global marketplace. The advance of technology creates many opportunities adding more innovative new features. Yet these opportunities also seem to drive up costs. How to end the resulting profit squeeze? Many aim for low labor cost countries as a solution.
Our approach is: Use Target Costing and Value Analysis.
Target costing sets allowable costs, derived from the value as perceived by customers, instead of price as a result of cost. Value analysis shows the way where the value of a product is, or where to reduce the cost. One of the key success factors in this approach is Cost Engineering and Cost Estimation. Another is multi disciplinary teamwork between marketers, developers, operations and suppliers.
The structured approach and open communication help achieve astonishing results, typically in the range of 20 to 40% cost price reduction or value improvement.
This book, or better Manual, describes how to apply and implement these methods in an organization, and how to involve suppliers efficiently and effectively via so called Design-in Workshops.”
 It can be purchased for 69 Euros at www.orenda.nl
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page, call us at +1 310 414-3222 or click a button below to ask sales questions, sign up for our free library or schedule a demo.
Creative Cost Efficiency Article From 2008 European SEER Users Conference
In his opening speech to the 91 delegates at last April’s conference, Galorath’s Cost Engineering Consultant and former Cost Estimating Engineer at Agusta Westland John Henson explained the ‘back to basics’ approach the company was now taking, the message being that only the application of common sense is required to make the most of its range of products for hardware and software development, manufacturing and IT systems. Addressing representatives from over 50 different companies, both current and prospective users, the conference featured speeches from several users in the field of cost engineering, including representatives from Raytheon, Airbus and BAE Systems, each giving an insight into how the software was being practically applied to current projects.
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page, call us at +1 310 414-3222 or click a button below to ask sales questions, sign up for our free library or schedule a demo.
Project Prediction Infographic
