There are always hidden costs for contracting an outside
company to manufacture a component for you. These costs may include
administrative, shipping, packaging, gauging, data exchange systems/management
(forecasts, orders, technical data) etc. Perhaps based on the students assumptions, the cost models show that a bending
operation is the most cost effective but when the total cost is calculated it
may not be. In the automotive industry there is a constant push for minimizing
the supplier base in order to reduce costs.
I also spoke with a customer/colleague regarding this issue. Gustavo Borges
works for Dana Corporation and has spent a lot of time on new technology
development and purchasing. I found this input on this issue to be very helpful
the following are some highlights of our discussion.
·
General
Rule of Thumb in automotive is that the annual cost for maintaining a supplier
is about $10,000/year.
·
Inventory
Management is 1-3% of annual component cost
·
Administrative
cost for handling a Pre Production Approval Process (PPAP) is no less than
$2,000 per submission.
·
This
does not include any bench or functional testing of the component.
·
Reducing
1 item of inventory (commonize) is worth $25,000 to
DaimlerChrysler.
·
Elimination
of an item is worth substantially more.
Gustavo wanted to emphasis that an
engineer must always ask him or herself the question "how can I justify
this idea to my customer."
We should be careful not to stifle
innovation but we must always be cost conscious.
One more great
quote-- "You must be smart to have innovation, but you must be twice as
smart to make it economical!"
Additional issues to consider with bent parts in particular
·
When
the bend is made, are the cut ends of equal length and square - or must an
additional cleanup/square up cut be taken? $$$
·
What
tolerances can be held for key assembly/weld points?
·
Is
the bending operation able to ensure that the part stays within one plane? Will
there be any additional true up operations required? $$$
·
What
is the cost of tooling, gauging, packaging, and shipping for this part. If these costs are amortized across the piece price is
this process still less expensive than cutting/welding? $$$
·
What
is the cycle time for the manufacture of a bent component versus cut and weld? -
Remember: Time=Money!
Suzanne Tkach
(ME Advisory Board Member)
Technical Sales Manager
Hirschvogel Inc
STkach@hivo.com