Buy Vs Cost Matrix 1

[rc0213]

I have to create a buy vs make analysis on a simple frame mount.

So, it is basically two parts.

1) (1) Frame mount plate
2) (3) Gussets

The steps taken to make the part:

1) Laser cut parts
2) Break frame mount plate
3) Weld gussets to frame mount plate

The frame mount plate as weld laser marks, so the welder knows where to place the gusset, so we don't need any fixture or do any measuring.

One of my degrees is in Industrial Engineering, so I understand the concept and the basics of how to do it.

What I have questions on are:

1) What is the hourly overhead cost that you charge? This includes labor, insurance, administration, etc.
2) What is the average cost for stainless steel sheet per pound that you are using?
3) What is the average welding speed you use?

If there are other factors I am missing, please let me know and the specific number you use, if possible. Sorry, if I am long winded. But, I wanted to explain as clearly as I can. If you have any suggestions, references, YouTube, etc. you think would be helpful, please let me know.

I appreciate any help on creating a detailed buy vs make analysis chart.

 

[IRstuff]

Numbers are often proprietary, and EXTREMELY company-dependent, i.e., Company A might have a radically different internal cost structure compared to Company B. If your company has never done this sort of work before, you have additional costs in learning curve and attrition of materials and parts. If your company has done this sort of work, then your company has numbers already

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[EdStainless]

You have about a 1/4 the information listed that you need.
Where I have worked we had a general OH that was plantwide and a department OH that applied to a specific department or operation.
You have a material specification? ASTM spec, gage, surface finish and so on. Are you buying in coil and uncoiling and flattening or are you buying cut sheet? How much at a time will you buy? A few simple inquires to local distributors will give you this. They will likely quote a base price and a surcharge, the base will be dependent on quantity, the surcharge is non-negotiable.
When you laser cut what is your standard machine rate? This usually includes wear and tear on the machine, operator costs, consumables (gases and power) and so on.
Then you will have some material yield factor to account for, this could be a significant expense.
And then the forming.
Are you using filler for the welds? You will need that consumption and cost, and there is yield there as well.
The welding costs are sometimes bundled (labor, OH, gases and power) or sometimes take as two seperate groups of costs.
Weld speed is just one component of what your part throughput will be. You will need a way to estimate the time for positioning parts and then placing in rack (or whatever).
You need to find some internal documents that give some of this information, in most companies there are standard rules for doing this.

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[mfgenggear]

rc0213

I agree with IRstuff, & ED, Accountants will set the requirements for cost estimating formula, there can be a basic rate per hour for estimating, or each department can have
different rates per hour for estimating.
basic estimating discuss with your supervisor and accounting.
usually it will be time and material , labor will have a calculated shop rate.

here are some tips but can change due to the companies own methods.
estimate the amount of raw stock required, and leave enough stock for roughing, then obtain quotes for the cost of material
divide the cost of material by the quantity required. to obtain cost per part.
obtain all outside processing quotes, cost per part.
do a write up of the steps to manufacture the parts, then apply time in labor, setup and run times.
the total setup times are then calculated and divided by the quantity of parts. total cost per part.
then add up the total runtimes to make one part. then will be multiply by the shop rate.
I would suggest a excel spread sheet, using formulas, because the cost can change due to the quantity
of lot runs of parts.
due to inflation the cost of material will vary and may have a long lead to obtain.
this is a very simple method, and a experience will have a big factor with the correct set up and runs,
work with your lead man for obtaining correct setup and run times. this will make the estimate more accurate.
work with accounting to obtain correct shop rates, and with your suppliers for their charges.
also remember tooling supplies will be expended, cost of welding material, any tools required to hold the gussets in place,
there will be weld prep materials required, eg: cleaning solutions, acetone, solvent, scotch bright, files,
these expendable cost have to be added in.

 

[CWB1]

This should be a question for a purchasing commodity manager and manufacturing lead/engineer to jointly resolve, not design engineering. The purchasing folks should be able to easily speak to the cost of manufacturing internally vs outsourcing and the manufacturing folks on the subject of schedules and internal factors. Sometimes cost is irrelevant bc your internal shop is running at max capacity and cant take on more work or close to laying off and needing work. Some parts also may have critical quality requirements and thus need to be manufactured in-house. In any case, ask, dont dictate.