Manufacturing cost of individual components

[ManifestDestiny]

Hi folks

Perhaps an odd question, but does anyone know where I can find the cost to manufacture certain components ie, raw material to finished product, specifically chasis components? Manufacturers don't tend to publish this information for obvious reasons. I thought about finding specific components at retail cost and working backwards from there taking into account markup and other costs, but this varies wildy from one oem to the other which makes that exercise fruitless.

Any suggestions?

Many thanks!

 

[GregLocock]

I've never seen such information in any publishable form. OEMs have departments that estimate costs, in my experience they aren't very good.

The trouble with working back from spares or options is that the markup is roughly 400%, small changes in that number will have a huge effect on your estimates.

Cheers

Greg Locock


New here? Try reading these, they might help FAQ731-376

http://eng-tips.com/market.cfm?

 

[MikeHalloran]

There's another factor involved in cost: volume.

Tooling up to make 10,000 car sets a day, of chassis components or of anything, costs a fortune, but has a huge impact on the part cost, once the tools are amortized.

{ Ten thousand cars per working day, by the way, times 200 working days per year, would give you 2 million cars per year, roughly. That would be a great year for any single brand, but it's not enough to support a GM or a Ford all by itself. They need multiple factories, which they already have, and they'd love to keep them all that busy. It has been done. }

Take a rough guess at say, a lower control arm.
Making exactly one requires some press tooling, not to mention the press itself.
Figure a million dollars for one transfer press, used, and one set of dies.
So that one part would cost you a million dollars.

Of course you can make a similarly functional part from tig-welded tubing and simple bent parts for a lot less, but not the same exact part you would use in a production car, and you still have tooling to pay for somehow.

What you can't do with simple parts in simple cheap tooling is have the next part fall out of the die ten seconds after the first one did, and so on for as long as you're feeding stock and power.

When you're making that production style lower control arm from coiled strip, pretty much as fast as your press can go, you're only paying for a couple of pounds of steel, a little labor, and substantial electricity to run the press, so maybe a couple of dollars per unit, as it comes out of the press. You have to wash it, maybe punch a couple extra holes in it, paint it and so on in order to make a part you can ship, but if you're making trainloads of parts every day, every operation doesn't add a lot to the cost.

I don't think brand F would mind too much if I reveal that in 1967, when I worked there, they were paying about a quarter of a dollar for a good quality shock absorber, and a very small fraction of a penny for the rolpin that holds the diff pin in place, and their computers tracked part costs to the millionth of a dollar. Those little rolpins came in big rectangular steel containers that held about half a cubic yard; buy that many at a time, of anything, and you can get a very attractive price.

One of the more boring but interesting parts of my job as a manufacturing engineer was to estimate the cost of making a given part on a drawing, in a given quantity, using the tooling we had, along with a budgetary estimate for new tooling or adaptations that would be necessary. Every few weeks we would get a new plan set to estimate. The parts might be future production stuff for our own products, or special racing parts, or it might be competitors products; we were never told which was which, until a particular plan set was released for production.

The actual cost estimators somehow back-correlated the costs we reported with each and every tiny little feature that appeared in each and every part we looked at, so they were able to infer the cost of moving an axle bearing by a millimeter, or using a larger or smaller bearing.

I'm sure there were some nonlinearities in that estimating process that showed up from time to time.

For example,

We made a dozen-ish axle assemblies for the then next generation of Econoline vans, with the offset driveshaft, by removing alignment pins, shifting big machine tool parts around with some precision, running our special parts, then restoring the tools to their original configuration, in the middle of the night, for each step in the operation of all the affected parts. Great fun.

If those machine tools had not been designed, in some cases decades earlier, with some excess capacity and rapid and reversible adaptability, the offset axles for Econolines probably would never have appeared, because it would have required some entirely new tools, the expense of which could not be justified based on the anticipated/guessed sales volume.

I agree with Greg that _nobody's_ cost estimators are very accurate, but after seeing what goes into the process, I'm amazed that they do as well as they do. Mass production is _way_ more difficult than most people imagine.

< I left to work on products with volumes of one or two a year, or less, and found that was no picnic, either; just different. >




Mike Halloran
Pembroke Pines, FL, USA

 

[GregLocock]

One thing that catches the noobs out is that the piece part cost vs volume equation has jumps in it, and there is a practical limit for some items.

For example low pressure diecast alloy wheels don't cost much more than aluminum, after you've paid for the tooling. But the tools are expensive, and have to be refurbished after 10000 wheels, which takes about 3 months. So, if you are building 10000 cars a year with those wheels, you need 5 dies, plus a spare. If you need 20000 car sets a year you need 10 dies, plus a spare. The economies of scale don't really appear, even though you've doubled the volume. If you got to the point where you can have a dedicated line to make the wheels, that is no tool changes except for wear etc, then you would see an improvement to some extent, but production lines are usually set up for quick tool changes.



Cheers

Greg Locock


New here? Try reading these, they might help FAQ731-376

http://eng-tips.com/market.cfm?

 

[GregLocock]

Yes I was a bit unfair there, they are being asked to do an impossible job, and if you are being asked to hit a BoM cost of say 15000 dollars and program managers throw hissy fits if you are responsible for a $100 blowout in that, then the accuracy required is not achievable.

The funniest cost blowout I ever saw was for an ashtray with a soft open/close function. It went into the program at $1 but by the time we were in production it was $20. Engineer responsible was promoted out of the firing line quick smart, now is chief powertrain engineer or something equally harmless.

Cheers

Greg Locock


New here? Try reading these, they might help FAQ731-376

http://eng-tips.com/market.cfm?

 

[MikeHalloran]

<tangent>
Re: Soft Open and Close

A prototype blood cell counter required that the operator insert an open topped vial of whole blood into a small socket extending forward from the machine's face, then gently push the socket into the machine, which started a cycle. ... during which a probe descended into the blood and aspirated a few microliters of blood for dilution and analysis. ... after which the probe retracted and the machine energized a solenoid, releasing the socket to slide out toward the operator under influence of a spring. They used their Chairman as the first 'untrained third party operator' to test the machine. The socket slid forward as designed, and stopped abruptly, splashing blood onto the Chairman's necktie.

The blood introduction slider had been converted to a heavily oil-damped vertical axis rotary tray by the time I arrived to work on the machine's other problems. It didn't cost $20.

</tangent>


Mike Halloran
Pembroke Pines, FL, USA

 

[CWB1]

+1 to all the above. The world of production costing is a strange and vast one that I prefer to stay out of as much as possible. Closely guesstimating cost to build prototypes isn't overly difficult but when it comes to production there are many more variables on a complex product involving supply contracts which last years or even decades, thankfully as engineers we don't usually don't need too many more things to be accountable/blamed for. OTOH, whenever I change organizations I always make a point of sitting down with the purchasing managers to understand how material, process, and other engineering choices impact pricing as this can vary significantly between companies.