practical fast charger manufacturing

8/8/2019 Practical Fast Charger Manufacturing

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Practical Fast Charger Manufacturing

Prepared by CAU Fast Charging System Team

August 2009


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TableofContents

Fast

Battery

Charger

Manufacturing

Management..

Turnkeyproductionmanagement Turnkeyproductdevelopment Componentssupply. Printedcircuitboardproduction Circuitboardassembly. Solderpastestencil. Producingplasticmoulding Metalenclosure. Cableassembly..

3

34

56

68

8

910

1011

1112

1214

14

InstructiontoCostEstimation.. 15 17

EstimateorProposalPlan,andTimeDuration.. 18

ProposalorEstimateMilestonesandSchedulePlan.... 18 20

FinalPriceNegotiation.......................................................................... 21

ProductRequirementsCheckingList... 21 23

OutliningtheManufacturingSequencesandProcesses.... 23 24

TheManufacturing

Operation

Process

Chart.

24

25

EquipmentandToolingRequirements 25 26

DeterminationofFacilityRequirements... 26

PricingtheBillofMaterial.. 26 27

EstimatingStandardPurchasedParts.. 27 28

DeterminingRawMaterialandBulkItemQuantities 28

EstimatingMaterialforTooling 29 30

LongLeadandHighDollarItems. 30 31

Subcontract(OEM)EstimatingandPricing.. 31 32

DirectLabourEstimatingTechniques.. 32 34


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CastingandFoundryOperations. 34

MechanicalAssembly.

34

35

ElectronicsAssembly.. 35

FinishingandPlating 35

InspectionandTesting 35 36

ManufacturingSupportLabourRequirements. 36 38

ToolingIssues 38 39

IndustrialEngineering. 39 40

Supervision.. 40

ProductionPlanningandControl. 40

CostStructureoftheFinal ManufacturingEstimate. 40 42


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FastBatteryChargerManufacturingManagement

The fast battery charging system enable a more environmentallyfriendly, energy and cost efficient

means of recharging electric airplane, forklifts and other mobile material handling equipment.

Eliminating the need for petroleumbased fuels commonly used in material handling vehicles, the

chargingstationisacleansystemthatemitsnoharmfulemissions;thetechnologiesarealsowellsuited

foralternativefueltransportationapplications,includingpluginhybridandelectricvehiclemarketsand

infrastructures. Unlike conventional charging methods that require changing batteries after they are

depleted,thefastchargingstationcanrechargebatteriesatopportunetimes,eliminatingtheneedfor

vehicleoperatorstoremovethemfromthefleetortruckduringbreaksandshiftchanges,resulting in

enhanceddriversafety,productivityandenergyandbatterycostsavings.

ElectricScooterFastchargingStation

Intoday'smarketplacesourcingparts&servicesfromoverseasarenolongertacticaloptionsthatcan

helpfirmstojustsavecosts;suchactivitiesareastrategicnecessityforanycompanythatcaresaboutits

longtermcompetitivenesswithintheindustry.Themanufacturingcandivideinfollowingsection:

Turnkeyproductionmanagement:Thecompanyengineeringteamhastodesignfromtheinitialstages

uptothemassproduction,assistingineverystepofproductdevelopmentcycle.Suchsupportcanbein

the form of: suggestions for component selection, sourcing alternative or replacement components,

assistance inPCBdesign, identificationofcriticalcomponents,schedulingoforders,rapidprototyping,

masterproductionplanning, logisticalplanning,upon finalising thecircuitdesign,abillof materials is

created. Usingthisbillofmaterials,components&parts aresourcedthroughournetworkofreliable

andcosteffectivemanufacturers&suppliers,worldwide.


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The management team should provide company with a rapidprototyping service. Upon approval of

theinitialprototypes(oranynumberofrequiredrevisions),aproductionmasterplanissetoutwhere

the product is prepared for massproduction. Through strict QC and QA systems, the highest quality

levelsaremaintained.Testandinspectionreportscanbesuppliedasrequired.

FastchargingStationOEMComponentsManufactureFacility


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Turnkey product development: The design team can take a client's idea and transform it into an

electronicproductstateofartfastcharger,fromconcepttoproduction.Aspartofthisprocess,the

services include electronics hardware design, software development, mechanical design, and

manufacturing.Thedesignteamcan turnmarkets idea intoa tangibleelectronicproduct thatwillbe

manufacturedandsoldexclusivelybacktothecompany.

Hardware Microprocessors and microcontrollers up to 32 bit including Microchip and Motorola

processors.

FPGAdesignandsimulation. Communicationperipheraldesign. Highpowerswitched modepowersupplies. TheproductsincludingfullACAcompliance. AllproductsaredesignedtopassEMCcompliancefirsttime. PCBlayoutusingCAD

Software PCsoftwareusingC++. Specialistsinapplicationcodetocommunicatewithhardwareperipherals. Allfirmwareisflowchartedatthebeginningandupdatedduringdevelopment. Flowchartingisdoneusingappropriatecommercialsoftware

Firmware Candassemblerfirmwareformostmicrocontrollers. Useincircuitemulatorsanddebuggerstooptimisetimetomarket. Canwritecodeforanyprocessor,from8bitto32bit. CodewrittenformanyapplicationsincludingTCP/IP,USBandmodemproducts. Allfirmwareisflowchartedatthebeginningandupdatedduringdevelopment. Flowchartingisdoneusingappropriatecommercialsoftware.

Mechanical Mechanicalandindustrialdesign. Plasticandmetalenclosuredesignfornewproducts. Accesstolowcostplasticandmetalcasestooledandtoolless.

Documentation Schematicdiagramsandwiringdiagrams. Softwareandfirmwaresourcecodesrichwithcommentstomakeunderstandingofthe

codeaseasyaspossible.

Manufacturingproceduresoutlininghowtheproductshouldbemanufactured. Testproceduresforendoflineandfieldtesting. MaterialsprocurementandBillsofMaterials(BOM). Designmanualsexplainingtheelectronichardwareandtechnicalaspectsoftheproduct. Software manuals with flowcharts explaining how the software and firmware is

structuredandhowitflows.


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Mechanicaldrawingsshowingallaspectsoftheproductsstructure. Servicemanualstofacilitatefieldandbacktobaserepair.

CAUEngineersTeam

Components supply: CAUprocurecomponentsrequested fromusby our fastchargermanufacturing

clients.All that is required is a BOMor listof componentsalongwith their specifications.Our highly

qualifiedelectrical

and

electronics

engineers

are

able

to

source

the

required

components

through

our

largenetworkofoffshoremanufacturers,worldwide.


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FastChargerStationMainController

Majorityofthecomponentssourcedforourclientsarecontainedwithinthefollowingcategories:

Semiconductors Optoelectronics(LEDs,LCDs) CrystalOscillators&Resonators Connectors(Alltypes) Acousticcomponents Transformers AC/DCPowerSupplies&PowerCords Relays Potentiometers Passivecomponents Keypads,Membranes,Polydome&MetaldomeKeypads,ConductiveRubberPads Lowcostplasticandmetalenclosures lowcostplasticandmetalfastchargingstationframes


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Allthatisrequiredarespecificationsandquantityrequirementstoenablethecomponentsourcingteam

begin theirtaskandprovideour fastchargermanufacturingclientswitha costeffectivesolution. Key

Benefitsasfollowing:

Significantcostsavings Shortenedleadtimes Highlyskilledsourcingengineers Detailedtechnicalunderstandingofyourneeds Quickresponse Negotiationsarecarriedoutonyourbehalf Directlyimprovingyourbottomline

Printedcircuitboardproduction:APrintedCircuitBoard(PCB)isthemostcriticalandusuallyoneofthe

moreexpensivecomponentswithinanelectroniccircuitassembly.CAUonlydealwiththemostreliable

PCBmanufacturersinChinathathaveprovedthemselvesovertime.Weareabletosourcehighquality

andcomplexPCBsfromsingletomultilayer. CAUwilltransferthemajorityofthecostsavingstoour

clients and at the same time ensure the quality of the PCBs. It is only through strong business

relationshipswith ourmanufacturers and a low cost business model that we are able to offer these

services.CAUsPCBsourcingserviceshelpourfastchargermanufacturingclientsachievethefollowing

businessgoals:

Reducecosts Increasereliabilityintheirproducts Shortenproductdevelopmentcycle GaindirectaccesstothemostreliablePCBmanufacturersinChina


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PCBmanufacturersinChina

Circuitboardassembly: CAUsoutsourcingservicesprovideourclientsthemeanstomanufacturetheir

products cost effectively by offering the ability to operate with a very low variable cost structure,

eliminatingalloverheads. Thisserviceincludesfullsupplychainmanagement,assembly,finaltest,and

shipping either to our clients facility or directly to the end user.Through outsourcing of electronics

circuitassembly

we

are

able

to

bring

about

significant

cost

savings

to

our

fast

charger

manufacturing

clients.UsingourelectronicscircuitassemblyserviceallowsourclientstotakeadvantageofCAU'sother

services,including:

PrintedCircuitBoardsSourcing SolderPasteStencilsSourcing CompleteBOManalysis(Electroniccomponentsourcing) Prototypecircuitassembly Productioncircuitassembly

CAUstechnicalcapabilities:

Surfacemount&Throughholeassembly FinepitchBGAassemblywithXrayinspection RFtestingfacilities


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CustomisedTestJigs Incircuittest (ICT), Functional testing, Temperature controlled burnin test and automatic

opticalinspection

(AOI)

services.

ICprogramming,MACaddressprogramming,productserializingandlabellingservices Handlingofalllogisticsrequirements

Solderpastestencil: CAUisabletosupplyhighqualityframedlasercutsolderpastestencilsmadeto

theclient'sspecificationsatverycompetitiveprices. Oursolderpastestencilsaresourceddirectlyfrom

reliableChinesemanufacturerswhohavebeeninthisbusinessforover20+yearsandtheyknowexactly

what is needed to get thejob done right first time. Our OEM manufacturers have a vast amount of

experienceinthisfieldandsupportthesolderpastestencilrequirementsofmajorassemblyhousesin

China.

SolderPasteStencilFactory

Electroformedand lasercutelectropolished stencils produce thebestprinting characteristicsamong

stenciltypes.Stencilaperturedesignisacrucialstepinoptimizingtheprintprocess.Thefollowingarea

few general recommendations that should be considered when designing and ordering solder paste

stencils:

Discrete components A 1020% reduction of stencil aperture has significantly reduced oreliminated the occurrence of midchip solder beads. The home plate design is a common

methodforachievingthisreduction.


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FinepitchcomponentsAsurfaceareareductionisrecommendedforaperturesof20milpitchandfiner.Thisreductionwillhelpminimizesolderballingandbridgingthatcanleadtoelectrical

shorts.Theamountofreductionnecessaryisprocessdependent(515%iscommon).

Aspectratioforadequatereleaseofsolderpastefromstencilapertures,aminimumaspectratioof1.5 isrequired.Theaspectratioisdefinedasthewidthoftheaperturedividedbythe

thicknessofthestencil.

CAUstechnologycapabilities:

FramedSMTStencilsare100%lasercut Materialused:Electropolishedstainlesssteel Standardstencilthickness:0.15mm(0.006") Otherthicknessesavailableonrequestorbetter Minimumcutwidth:0.05mm(0.002inches)orbetter TypicalFramesize:650x750mmorcustomizesizes Wemakeallaperturemodificationsnecessary Aperturetolerance:+/9um(0.0003")orbetter Allowanceforfiduciallydata Allowanceforpanellizeddata Suitable applications: All component pitches down to 0.4mm (0.016) and all discrete

componentsdownto0201s

Producingplasticmoulding: In order to provide our fastchargermanufacturing clients witha highly

competitivequoteis3Dmodelfilesofmanufacturingpartsalongwithkeydesignguidelines. Producing

Plasticmouldedpartscanbeacostlyexercisethroughlocalsuppliers.Usingourplasticmouldingservice

weareabletoprovideyouwithhighqualityplasticmouldedpartsatonlyafractionofthecostthatyour

companywouldnormallyhavetoincur.

CAUwillprocessallofthe informationandsource the mostsuitablemanufacturerformanufacturing

partsinAsiaandhandleallofthecommunicationscreatingavirtuallinkfromyourcompanytoreliable

manufacturersinChina.Andthebenefitsasfollow:

Significantcostsavingsonmouldtooling&unitcosts Highqualitymouldingservices Technicaldesigninputfromexperiencedmanufacturers


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Canproduceaslittleas100pcs/batch(Oncethetoolingiscomplete)

PlasticInjectionMouldingFactory

Metalenclosure: CAUaimtoofferyouthewidestrangeofservicesbasedaroundtheLaserprocessas

the heart of our business to enable our fast charger manufacturing clients to produce a quality

engineered fast chargerproduct, in the shortest time possible. Our flexible approach allows you the

latitude of manufacturing the way that suits manufacturing best, offering manufacturing clients the

choiceofthemostefficientsolutionforclientsownneedsandpreferredwayofworking.


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Lasercuttingmachinecontrolpanel

CAUs solution for product design helps all product manufacturers facilitate design innovation,

accelerate new product launches, and optimize cost in an ever increasing demand on competitive

pricingforfastchargingstationproducts.ExpressLaseroffersabroadsetoftoolsacrossallphasesof

productdevelopmentfromideationtomanufactureofthedesign.ExpressLaserprovidesawiderange

of 3D mechanical modelling services. In mechanical modelling, we provide specialized services in

conceptualproductdesign,developmentandfabricationworks.Ourmodellingservicespecializesinthe

3Dvisualization

from

free

hand

sketches

and

CAD

drawings.

Fastchargingstationmetalenclosurecomponents


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CAUsfabricationandassemblyservicesincludebutarenotlimitedto:

Welding SpotWelding NutInsertionincludingClinchandRivnuts

Cable assembly: The labour intensive nature of cable assemblies means that the cost savings made

through outsourcing such assemblies to China and rest of Asia regionare significant. CAU is able to

source&supplyindustrystandardorcustommadecableassemblyandharnessesatverycompetitive

pricesdirectfromthemanufacturers.Oursourceshavethehighestqualitystandardsandouraimisto

meet our clients' specific requirements through the most suitable, reliable and cost effective

manufacturer. The range of cable assemblies that we can supply includes the following industry

standardtypes:

CoaxialRForMicrowavewithSMA/SMB/MCX/MCCard/IPEXConnectors MonitorSCSI,PS2,RGB,VGA,DVI,A/V,USB,IEEE1394LAN, DigitalOptical IDC/Flatribbon HighvoltageAC/DCPower

Ofcourse,as well as any customisedassemblies thatour clientsmay require.TheCAUs service Key

Benefits:

Significantcostsaving Highqualitycableassemblies ShortLeadtimes CustomizedAssemblies


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InstructiontoCostEstimation

To maximize the benefits of the product line approach to an organization, several issues related to

productcreationmustbeconsideredduringthecostestimateoftheproductionplan:

Whatisthemostefficientorganizationofthecoreassetsforproductbuilding? How can coreasset creation be coordinated to support consistent and effective product

developmentinaproductline?

Whatinformationaboutthecoreassetswouldbemosthelpfultotheproductdevelopers?

What

variation

mechanisms

do

the

core

assets

provide?

Howcantheproductdevelopersefficientlyutilizethevariabilitymechanismsinthecoreassets? Howmuch flexibility should theproductdevelopers have in modifying thecore assets of the

productline?

Wherecanhelpbefoundwhenspecificproblemsariseduringintegrationofassets? Howcanthespecificproductrequirementsbeusedtoestimatecostandschedule?

The fastbatterychargingsystemmanufacturingcostestimate is thekey inneworfollowonbusiness

acquisitionand

the

continued

growth

of

the

company.

It

must

be

built

around

asound,

well

thought

out

manufacturingplan. Itmustaddress the cost of facilities,equipment, tooling, materials,and support

labour,as wellasdirect labour toactually fabricateandassemble the product.Theestimatemustbe

responsive to customer delivery requirements and production rates, and reflect manufacturing a

productofthedesiredqualityandreliability.Thecostestimateisapredictionofwhattheproductwill

cost tomanufactureatsome futurepoint in time. Estimating isnot anexactscience,yetagoodcost

estimatewillcomeveryclosetoactualcostsincurred.Theaccuracyofanycostestimatedependson:

1. Thetimeallocatedforthepreparationoftheestimate


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2. Theknowledgeandskilloftheestimator3. Thedepthandcompletenessofpreproductionplanning4. Theamountofproductdescriptioninformationavailable5. Theaccuracyofthematerialestimate

The higher the percentage of labour cost in the estimate, the greater is theneed forprecise labour

standards. If engineered standards or estimated standardsare notavailable, the estimator must use

historicaldataandhisorherownjudgment,experience,andknowledgetodevelopthelabourestimate.

Producing the fast charging station, the material and subcontract costs can be as much as 70% of

product cost. This means that these costs must be examined very carefully at the time the

manufacturing cost estimate is prepared. For best results, direct quotes should be obtained from

suppliersand

subcontractors.

Time

constraints

in

completing

the

cost

estimate

may

not

allow

sufficient

time to solicit thesequotes, forcing the use ofhistorical cost data for thesameor similar parts and

materials,factoredforinflationandanticipatedcostgrowth.

Once the basicestimates of labourhoursandmaterialdollarshavebeenput together, thejudgment

exercisedindeterminingtheinitialcostsandtherateofimprovementtoachievetheeventualcostwill

haveamajoreffectonthefinalaccuracyoftheestimate.Animportantpartoftheestimatorsjobisto

prevent illadvisedmanagementdecisionsby makingcertain thatthemethodology, assumptions,and

groundrulesareunderstood.Managementmustlookbeyondtheestimateandconsiderabiggerpicture

thanthecostestimatesathand,butshouldunderstandtherisksassociatedwitharbitrarychangestoa

wellprepared

manufacturing

cost

estimate.

When prime cost is added to manufacturing overhead, we obtain factory cost, or cost of goods

manufactured. Total product cost, then, is the sum of selling expense, general and administrative

expense,developmentcost,andfactorycostcontingencies.Theadditionofprofityieldsthepricetothe

customer.Theproblemsencounteredindevelopingasoundmanufacturingcostestimatecanbemany;

however,theycanusuallybecategorizedintothefollowingsevencategories:

1. Inadequatedataonwhichtodevelopthecostestimate2. Inadequatestaffandtimetopreparetheestimate3. Poorestimatorselection4. Carelessestimating5. Optimisticestimating6. Inadequatepreproductionplanning7. Managementinertia


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Theabovesevenproblemcategoriesarenot listed inorderof importance.Anyoneorseveralcanbe

criticalto thedevelopment ofasound manufacturingcostestimate, dependingonthe circumstances

and the situation thatprevails at the time.The cost estimatormay beamanufacturingengineer,an

industrialengineer,oramanufacturingtechnicalspecialistwithheavyexperienceinthemanufacturing

technology inwhichheorshe ispreparingcostestimates.Costestimating ishighlydemandingwork,

often requiring extended overtime and short deadlines. It requires the ability to quickly formulate a

preproductionplan,andtovisualizeworkflows,equipment,andtooling.Alabourestimatethatcomes

close toactually incurred costs must then beacceptedby management.Not only must thisbe done

underconsiderablepressure,butitmusthandlelastminutechangestotherequirementstheestimate

wasbuilton,aswellasmanagementdirectedchanges.

Thecostofpreparingtheestimatemustbebornebythecompanywhetheritresultsinnewbusinessor

not.Mostnewcontractsformanufacturedproductsareawardedbasedonlowestcost,bestdelivery,

andquality

of

the

product,

not

necessarily

in

that

order.

Management

must

decide

the

win

probability

onanyestimatefornewbusiness,andfromthatdecidetheefforttobeexpendedinpreparingthecost

estimate.Itmayevendecidenottosubmitabid.Managementshouldprepareabidstrategyandplan

that includesreviewsatcriticalstagesinthepreparationofthecostestimate.Thereareseveralgood

reasonsforthis:

1. Basic errors or omissions can be found and corrected before the estimate goes beyond thepreliminarystage,whenchangeswouldbecostlyandtimeconsuming.

2. Thepreliminaryestimatemaybesufficienttosatisfytherequirements,andearlymanagementreview

ensures

that

no

further

cost

estimating

effort

will

be

authorized

beyond

the

preliminary

stage.

3. Managementreviewbringsthebestmindsandtalentavailableinthecompanytobearonthemanufacturingcostestimate,servingasacheckontheestimateanditsassumptions.

Constraintsoftimeandcostoftenleavenoopportunitytoexploreandverifymanyofthepremisesand

the assumptions used in preparing the estimate. In spite of this, cost estimates for manufactured

productsare prepared everyday thataccurately reflect manufacturingcosts for theproduct andare

truly competitive in bringing in new business for the company. The steps required to prepare a

manufacturingcostestimatethat isbothaccurateandcompetitiveareexplained.Thecostestimating

datain

practical

form

are

also

provided

to

help

in

preparing

estimates.

Themajorityof manufacturingcostestimating involvesjoborderproduction inthemetalworkingand

alliedindustriesinAustraliaandtherestoftheWesternworld.Castings,forgings,formedandmachined

parts, and assemblies are produced by thousands of small and mediumsized firms to exacting

specificationswithinthelimitsoftheestimatedcost.Solicitationsareusuallyfirmfixedprice,which

meansthatifthecostestimateisinerroronthelowside,thedifferenceisabsorbedbythecompany.A

highestimatemaymeanextraprofitforthecompany,oritmaymeanthatthecontractisawardedto

anotherfirmwhosepricewasmoreinlinewithwhattheitemshouldcost.


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EstimateorProposalPlan,andTimeDuration

Itseemsthatthere israrelysufficienttimetopreparethemanufacturingcostestimate.Thecustomer

wantsaresponsewithindaysorevenhoursafterrequestingpriceanddelivery,andmanagementmust

havetimetoreviewandapprovethecostestimate.Thisoftencreatesasituationrequiringlonghoursof

overtime and much pressure on the estimating team. Temptation is strong to provide expedient

answers and estimates that cannot be supported when analysed in depth by management and

supervision.

Akeydecisionofhowmuchtimeandmoneytoinvestinpreparationofthemanufacturingcostestimate

is required, since this investment may not result inwinning the new business. A cost estimate for a

manufacturedproductcanbeusedforanumberofreasonsotherthantoestablishthebidpriceofa

productforquotation.Theseinclude:

1. Toverifyquotationssubmittedbyvendors2. To determine whether a proposed product or item can be manufactured and marketed

profitably

3. Toprovidethebasisforamakeorbuydecision4. Todeterminethemosteconomicalmethods,processes,tools,ormaterialsforamanufactured

product

5. Asanaidinevaluatingdesignalternatives6. Todeterminewhethertobid

Preparationofthecostestimatewillalsoaidinthedeterminationofresourcestobefinallyexpendedin

its preparation. One criterion used to determine the resources to be expended in cost estimate

preparation is the value of the new business acquisition. Management may review a preliminary

estimate and decide that no further time or effort shouldbe expended. The preliminary estimate is

deemedsufficienttosatisfytherequirements.

ProposalorEstimateMilestonesandSchedulePlan

Keyeventsinpreparationoftheestimateshouldbelisted,andatimespanassignedforaccomplishment.

Keymilestonesformostcostestimatesofamanufacturedproductinclude:

1. Availabilityofengineeringdrawingsandspecifications2. Completionoftheengineeringpartslistandthemanufacturingbillofmaterial3. Preparationofthemakeorbuyplan


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4. Completionofthelistingofneededshopequipmentandfacilities 5. Completionofthepreproductionplanning6. Preparationofthelistingofneededshopequipmentandfacilities7. Preparationofthetoollist8. Identificationoflongleadprocurementitems9. Completionofmaterialandsubcontractpricing10.Completionofmanufacturinglabourestimate,includingsupportlabour11.Completionofthetotalmanufacturingcostestimate12.Scheduledestimatechecks,reviews,andapprovals13.Finalpricingandcosting14.Submissiontotheprospectivecustomer

CAUsFastChargingStationStructure

An essential managementcontrol of the costestimating function is the identificationand analysis of

previousestimatecostdeviationsversusactualcosts.Recordsofthesedeviationsshouldbemaintained


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and plotted to determine trends and to pinpoint areas of weakness in the cost estimating function.

Theremaybemanyreasonsforcostestimatesthataretoohigh,toolow,orsimplyunrealistic.Oneof

the first areas to examine is arbitrary cuts or reductions made by management, or unrealistic

contingency factors applied toanotherwise soundcost estimatewhich results in others winning the

award.Otherreasonsthatestimatesaretoohighinclude:

1. Beingdeliberatelyhightodiscouragebusinessthecompanydoesnotwant2. The tendency tobeoverlycautious withnewproducts,processes, technologies,etc. that the

estimatorisnotfamiliarwithordoesnotunderstand

3. Preproductionplanningthatcallsformoreprocessingstepsormoresophisticatedtoolingthanisactuallyrequired

4. Poormaterialpricingpractices,suchasfailingtoconsiderpricebreaksonquantitypurchasesofmaterial

5. Overestimating labour costs by assuming higherthannormal startup costs, a shallowerlearning curve slope than would actually be incurred, or by using loose labour standards in

buildingtheestimate

High estimates sometimes result in greater profits than anticipated,but may also lose business that

could have beenprofitable.Other problems caused byhigh estimates are loss of customer goodwill,

greaterinvestmentofresourcesincostestimatingbecausemoreestimatesmustbeprocessedtobooka

smaller

volume

of

work,

and

eventually

being

priced

out

of

the

market.

Some

of

the

more

significant

reasonsforlowcostestimatesinclude:

1. Incomplete or incorrect product design information, or a new design that grows after theestimate, in partscount, in complexity,and indesignchanges thatoccurafter theproduction

cyclehasstarted

2. Higher labour costs than anticipated, possibly due to delays that resulted in productionstoppages,higherthananticipatedreworkduetodesignortoolingproblems,orpoorplanning

inthepreproductionphase

3.

Higher

material

costs

than

anticipated,

due

to

such

factors

as

unplanned

material

price

increases,designchangesthatcausematerialrequirementstochange,andhigherthanplanned

scrapandlinelosses

Whenthecostestimateforamanufacturedproductistransmittedtothepotentialcustomer,itshould

alwaysbebywrittenquoteorotherformalmeansoftransmittal.Thepriceanddeliverymaybegiven

verbally,butshouldalwaysbefollowedwiththeconfirmingwrittenquote.Theformalquotationshould

list and explain all assumptions and contingencies, and for how long a time the price given in the

quotationisvalid.


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FinalPriceNegotiation

Inmost instances,thepriceanddeliveryquotedare eitheracceptedby the customer,or thework is

donebysomeoneelse.Thereisnofinalpricenegotiation.Ontheotherhand,thelargerthejobintotal

dollarprice,andthelongertheproductionrun,themorelikelytherewillbeanegotiationprice.Insuch

negotiations,profitmarginsandcontingenciesmaybereducedinordertoobtainthejob.Theestimated

costtoactuallydotheworkshouldneverbepartofthenegotiatingprocess.

Thenegotiatingprocessisbeyondthescopeofthischapter,butitrequiresthebesttalentthecompany

hasinmanagementandincostestimating.Theymusthavesufficientlydetailedknowledgeofthecost

estimateandhowitwasprepared,beabletoansweranyquestions,andfaceuptoanychallengethatis

presented.Asuccessfulnegotiationshouldresultinacontractawardveryclosetothepriceanddelivery

presented before the negotiations began. Additional negotiations may occur after contract award

shouldthere

be

achange

in

work

scope,

such

as

accelerated

delivery,

or

an

increase

in

number

of

units

tobeproduced.

ProductRequirementsCheckingList

Themanufacturingcostestimatemustbeginwithamanufacturingplan.Thethoroughnessandaccuracy

ofthisplandeterminestoalargemeasurehowgoodtheestimatewillbe.Thecostestimatormustbe

abletoconceptaworkablemanufacturingplanforanyproductthefirmmanufactures.Suchaplanmust

begin with an understanding of the product requirements. As the cost estimator goes through the

drawing package to do the preproduction planning, or what we know as the manufacturing plan,

producibility

problems

may

be

apparent.

In

such

cases,

the

problem

should

be

noted,

and

if

time

permits, a cost trade study should be initiated. This is to determine if the desired change would

generatesufficientsavingstooffsetthecostofmakingthechange.Producibilitychangesthattakeplace

after thedrawingsare releasedmaynot beasattractiveas theyappear initially, after the impact on

schedule,tooling,retrofit,andthecosttochangetheengineeringareallconsidered.

A checklist for reviewing producibility of an electronics product or assembly represents the kind of

questionsthecostestimatorshouldbeaskingasheorshegoesthroughthedrawingpackage:

1. Doesthedimensioningfacilitatemanufacturing,andarethetolerancesrealistic?2. Isallmarkingandstencillingdefinedandvisible?3. Areassemblynotescompleteanddefinitive?4. Isinternalwiringcritical?Ifso,isthelocationofthewiringspecified?5. Aretestpointsandadjustmentsaccessible?6. Is harness development required? If so, can the harness be fabricated outside the unit, and

installedlaterasasubassembly? Doesthewirerunlistcontainwirelengthinformation?


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7. Doesthedesignlenditselftomechanizedorautomatedassemblytechniques?8. Doesthedesignavoidtheneedforselectattestcomponentmatching?9. Are component parts accessible for assembly? Can all assembly and wiring be done without

restriction?

10.Canrequiredtestingbeperformedwithoutdisassemblingtheunit?11. Ifwirewrapisused,doesthedesignfacilitateautomaticassembly?12.Arestandardconnectorsandassemblyhardwareused?13. Ifelectronicscircuitassembliesareinstalledaspartoftheassembly,aretheydesignedtoplugin,

ormusttheybewiredin?

14.Aretheremechanicalloadssuchthatprintedcircuitepoxyglassboardsareincompression?15.Hasconsiderationbeengiventousingprintedcircuitflexcable,ormouldedribbonwirecabling

insteadofhardwiringoftheassembly?

Asaminimum, thecostestimatorshouldreview the drawingsofafabricatedproducttoensure that

they:

1. Are dimensionedand have datumsurfaces thatare compatible withacceptedmachining andfabricationpractices

2. Have sufficient stock allowances on castings, forgings, and stampings to provide for anymismatchordistortionthatmayresultfromheattreating

3. Havemaximumallowabletolerancesonnonfunctionalfeaturesandcharacteristics4. Haverealistictolerancesonfunctionalcharacteristics5. Haveadequateprovisionforclampingandlocating6. Providesufficientclearanceandaccessfortheassemblyofallcomponentparts7. Call out standard parts and materials, which canbe processedand assembled usinggeneral

purposemachines,equipment,andtools

Theestimatormustnextprepareamanufacturingbillofmaterialfromthepartslist,andthemakeor

buyplanthathasbeenestablished.Nexttheestimatorproceedstoconceptthestepsandsequencesof

manufactureforeachpart,subassembly,andassemblytobemadeinhouse.Then,foreachstepinthe

process,heorshedeterminesthemachines,equipment,andtoolsthatwillbeneeded.Finally,heorshe

determinessetupandruntimesforeachsteporsequenceinthemanufacturingprocess.


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Purchased parts and materials, as well as subcontracted items, can account for as much as 70% of

manufacturedproductcost.Itisthereforeimportantthattheinitialmakeorbuyanalysisbemadebya

qualified costestimatingprofessionalbasedonknowledgeoftheplantcapabilitytomanufactureornot

tomanufacturetheitemsonthebillofmaterial.Forexample,ifthecompanyisprimarilyanassembly

house,thenallfabricatedandmachinedmetalpartswouldbeclassifiedasmustbuyitems,inaddition

to hardwareandbulk material items suchaspaintsandsolvents.Only those itemsthatcanbe either

made or bought will require a detailed analysis from cost and shop load standpoints. In larger

companies, a formal makeorbuy committee with key people from all of the functions is chartered,

chairedbythesenioroperationsormanufacturingexecutive.Thiscommitteethenmakesfinalmakeor

buydeterminationsbasedonrecommendationsfromalldisciplinesconcerned.

MustBuy Items: Obvious buy items based on shop capability to perform the process ofmanufactureare the easiestdecisions tomake. However, management may decide tocreate

theprocess

or

capability

in

house

to

have

adegree

of

control

not

possible

when

the

work

is

placedoutside. Iftherequirementexistsforonlyashorttime,thismayunnecessarilycommit

companyresourcestoaprocesscapabilitythatwouldstandidlemuchofthetime.

MustMakeItems:Thereareusuallyanumberoffabrication,assembly,andtestingoperationsonanymanufacturedproductthatarecriticaltoitsmanufactureandperformanceinthefield.

Thesearetheoperationsandprocessesthatmustbedoneinhousetoensureproductintegrity

and control. Such operations usually include product final assembly and test, and fabrication

andassemblyofclosetoleranceormatingparts,amongothers.

ItemsThatCanBeEitherMakeorBuy:These items aretheonesrequiring investigationandanalysispriortothedecisiontomakeorbuy.Usuallydecisionsonthesepartsandassemblies

arebasedoncost,promiseddeliveries,andshopcapacityorload.Costtradestudiesaremade,

quotesareobtainedfromvariouspotentialoutsidesources,andthefinalmakeorbuydecision

ismadeeitherbyseniormanagementorthemakeorbuycommittee.

OutliningtheManufacturingSequencesandProcesses

The operationprocesschart is the bestway to clearly visualize allof the steps in themanufacturing

process. This chartdepictsgraphicallythepoints intheprocesswhere materialsarebrought into the

process, andthesequencesofallmanufacturing, inspection, andtestoperations.This chartmayalso

containsuchdetailandinformationasthestandardtimeforeachoperation,productionequipmentand

toolingrequiredforeachoperation,andapplicableprocessspecifications.


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FastChargingStationAssemblyLine

Withthecompletedoperationprocesschart,theentireprocessofmanufacturecanbevisualized.The

processcanthenbereviewedandanalysedforoptimumsequencing,alternativemethodsoffabrication,

assembly inspection and test, and most efficient methods of production. Equipment and tooling

requirementsat

each

step

in

the

flow

can

be

readily

envisioned

and

recorded.

TheManufacturingOperationProcessChart

Allstepsshouldbelistedinpropersequenceforeachpartorcomponent,workingverticallyfromtopto

bottom.Themajorassemblyorcomponentisalwaysshownatthefarright,andallothercomponents

areallottedspacetotheleftofthismaincomponentorassembly.Thepresentationissimilartothatofa

mechanized assembly line, with parts and material, and subassemblies fed into the top assembly in

proper sequence and at the correct point in the process. The operation and inspection descriptions

shouldbebrief,utilizingshopterminologysuchasdrill,tap,ream,weld,assembly,solder,andtest.

Timevalues,whenassignedtoeachoperation,shouldbebrokendownintosetupandruntimes.Other

usefuloramplifyinginformation,suchasproductionmachinesandequipmentused,toolsrequired,and

specialprocessprovisions for each operation, completes the operationprocess chart. Thecompleted

operationprocesscharthighlightsmaterial,operations, inspections, tests, and time.The visualization

process needed to construct the operation process chart is fairly straightforward. The primary

requirement, besides knowledge of the principles of chart construction, is a working proficiency or

knowledge of the various processes involved and the ability to read and correctly interpret the

requirements of the engineering drawings. The process of visualizing the steps of the product


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manufacture,andconstructionoftheoperationprocesschart,definesthemanufacturingplanforcost

estimating.

Equipmentand

Tooling

Requirements

Capital and other production equipment costs to support the production of a new manufactured

productoftencanbequitehigh.Thisisespeciallytruewhennocomparableequipmentexistswithinthe

company. Many times the cost of new equipment to manufacture a new product, or to continue

manufacturinganexistingproductlineandremaincompetitive,issuchthatitcannotbewrittenoffover

thelifeofasingleorevenseveralproductlines.Insuchcases,managementmaychoosetoinvestinthe

newequipmentwiththeknowledgethatsomeriskmaybeinvolved,oritmaydecidetosubcontractthe

worktooutsidesources.

Toolingspreparation

Tooling requirements are identified concurrently with the machine and other production equipment

requirements.Workingfromtheestablishedtoolingphilosophy,thecostestimatorcandeterminethe

toolingapproachtotake.Heorshemustknowwhethertoplanthejobaroundminimalshopaidtype

tooling,orafullhardtoolingtypeapproach,orevenanotoolingapproach,byfabricatingonsetup.Itis

essential

that

this

tooling

philosophy

or

approach

be

fully

defined

at

the

outset.

Once

the

tooling

philosophyhasbeendetermined, toolsrequiredateachstep in theprocessaredefinedand listed.A

drillingoperation,forexample,mayrequireadrilljigandaholdingjigorfixture,whereasanassembly

operationmayrequireweldfixtures,holding fixtures,and/orbrazing fixtures.A carefulpartprintand

assemblyprintanalysisisrequired,withspecialattentiongiventothemanufacturingsteporoperation,

part or assembly shape and geometry, and peak planned production rate. In planning tooling

requirements,thecostestimatorshouldkeepinmindthattoolsfallintooneofseveralcategories:


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Specialpurpose tooling: Tooling peculiar to the product it makes. This usually requires tooldesign,followedbyspecialfabrication.Itisgoodforthelifeofthelifeoftheproductionrunonly.

Itcanbeconsideredaonetime,nonrecurringchargetotheproduct,orcanbeproratedover

theproductsdelivered.

Generalpurposetools:Toolsthatcanbeusedintheproductionofmanydifferentproducts.Nospecial design is required. This kind of tooling is commercially available and is much less

expensive than specialpurpose tooling. Some examples would include small hand tools, tool

balancers, and standard assembly and motion economy devices. They may sometimes be

charged to the product being estimated, but more often are considered part of the

manufacturingoverheadandneednotbeaddedtotheproductcost.

Expendable tools: These tooling items are actually consumed over the life of the job orproduction

run.

They

are

usually

considered

part

of

manufacturing

overhead,

and

are

not

chargedtotheparticularjob.

DeterminationofFacilityRequirements

Theoperationprocesschart,whichdescribesthemanufacturingprocessusedtobuildtheproduct,also

definesthelayoutofthefactorytosupportproductmanufacturing.Theamountoffloorspacerequired

is a function of the size of machines and of the equipment in the manufacturing process, the area

requiredtoworkandservicethemachinesandequipment,andthenumberofunitsofproductinflow

andinprocessattheplannedpeakproductionrate.

Once floor space requirements have been determined, the next step is to identify special facility

requirements. These may include clean rooms; requirements for hoods, vents, and other similar

openings in therooforalongoutsidewalls;specialpowerrequirements;and requirements forsound

andnoiseprotection.

The operationprocesschartdetermines product flow and howdedicated areas would be laid out. If

timepermits,anoverallblock layoutplanandmostofthedetailedarea layoutsshouldbedeveloped.

Theprimarypurposeofthisistoidentifytomanagementtheimpactonproductionfacilitiesshouldthe

newjobbewon.Nomanufacturingplanshouldbeconsideredcompleteuntilthishasbeendone.

Insummary,

the

manufacturing

plan

is

the

baseline

for

the

manufacturing

cost

estimate.

Identification

of theprocess, thesequencesofmanufacture, themachines,thetools,and the facilitiesneeded lead

logically to the next steps in the cost estimate: the estimate of the setup and run times for each

manufacturingoperation,costofmaterial,etc.

PricingtheBillofMaterial

Inthemajorityofcostestimatesformanufacturedproducts,thecostofpurchasedparts,rawmaterials,

commodity items,and items thatare subcontractedconstitute thebiggestpart of thecost estimate,


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oftenconstituting 75%of the total costof theproduct.The importanceofaccuratelypricing thebuy

items onthebillof materialcannotbe emphasized stronglyenough.Thematerialestimatororbuyer

mustthoroughlyunderstandthepotentialpitfallsthatcommonlyoccurinestimatingmaterialcosts:

1. Inadequateproductspecificationsmayresultinpricesformaterialatanincorrectqualitylevel.2. Incorrectdeliveryrequirementsmayforcetheuseofmoreexpensivesubstitutes,orproduction

changesthatrequiremoresetups,orthatcauseproductiondelays.

3. Incompleteproductspecificationsmayresultinmaterialestimatesthatdonotcovertheactualmaterial costs involved in the final engineering design or product quality or reliability

requirements.

4. Material price levels may change upward and exceed the estimated material costs. This is aparticularly

acute

problem

when

estimating

material

costs

for

products

with

long

manufacturing

leadtimesorfordeliveryatafuturetime.

5. Material price breaks may be anticipated and planned but not realized, because of deliveryschedulechangesorrevisionstoinventorypolicy.

FastChargingStation(10KW35KW)MetalEnclosures

The purchasing function is the primary support to the manufacturing cost estimator in determining

material costs. For best results, direct quotes from vendors and subcontractors should be obtained.

Wheretime

to

prepare

the

estimate

is

limited,

purchasing

must

use

cost

history

for

commonly

used

purchased parts and material. If historical cost data is used, it must be factored for inflation and

anticipatedcostgrowth.

EstimatingStandardPurchasedParts

Includedinthecategoryofstandardpurchasedpartsareitemssuchascommonhardwareandfasteners,

electronic components, certain types of bearings, gears, pulleys, belts, chain drives, electric motors,

electricalconnectors,wire,cable,clutches,batteries,powersupplies,switches,relays,andsimilaritems.


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Theseitemscanbepurchasedbyorderingfromcatalogueorcommercialspecificationspublishedbythe

manufacturer,andareusuallyavailablefromstockinventory.Theyaresometimespricedfromstandard

price lists provided by the manufacturer, with discounts or price breaks for quantity buys. In many

instances such standard parts are available from local sources of supply such as distributors or

manufacturersagentsorrepresentatives.

DeterminingRawMaterialandBulkItemQuantities

Theestimatoranalyseseachitemtodeterminetheamountofrawmaterialthatmustbepurchasedto

manufacturetherequirednumberofunits.Theamountofrawmaterialforagivenpiecepartusually

comesfromdeterminingtheweightofrawstockusedperpiece.Apartthatismachinedwouldinclude

the finished dimensions of the part plus the amount of stock removed by machining. The overall

dimensionsofsuch a piece ofstockwould be determined and the volume calculated. The volume is

multipliedby

the

density

of

the

material

(weight

per

unit

volume)

to

obtain

the

weight.

A

piece

that

is

irregularinshapeisdividedintosimplecomponents,andthevolumesofthecomponentsarecalculated

andaddedtogethertogivetotalvolume.

Thetotalvolumeismultipliedbythedensityofthematerialtoobtaintheweight.Thematerialcostis

thenobtainedbymultiplyingtheweightbythepriceperpoundofthematerial.Inthecaseofasheet

metalstampingfabricatedfromaluminiumsheetstock,theprocedurewouldbeasfollows:

1. Weightofsheet=gaugexwidthxlengthxdensity2. Numberofpiecespersheet=lengthofsheetlengthofmultiple3. Weightperpiece=weightofsheetpiecespersheet4. Piecepartmaterialcost=piecepartweightxaluminiumprice/kg.

Whenestimatingbarstock,thelengthofthepiece,plusfacingandcutoffstock,shouldbemultiplied by

theweightorpriceperinchofthestockdiameter.Scrap,buttends,chips,etc.thatislostinprocessing

mustbeconsidered intheestimate.These lossesvaryfrom3%to10%dependingonthejob,current

shop practices, and the material itself. Bulk items such as spooled core solder can also be easily

estimated by determining the weight of solder used for each solderjoint, then multiplying by the

numberofsolderjointstoarriveatthetotalweightofsolderusedperassembly.Whenthisnumberis

multipliedby

the

total

number

of

assemblies,

the

total

weight

of

solder

needed

is

determined.


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20KW45KWFastChargingStationEnclosure

EstimatingMaterialforTooling

Thecostofmaterialfortoolingisasignificantpartofthetotalnonrecurringcostforanynewprogram.

Toolingmaterialrequirementsaretakenfromthebillofmaterialorpartslistingonthetooldrawing,or

areestimatedfromthetoolingconceptsenvisionedbythemanufacturingcostestimator.Includedare

suchitemsastoolsteel,drillbushings,quickreleaseclamps,holddownbuttons,andsimilar itemsfor

thefabricationofspecialdesigntooling.Toolingmaterialalsoincludesstandardperishabletooling,such

asdrillbits,cutters,endmills,punches,reamers,broaches,andothersimilaritemsthatareconsumed

overthe

life

of

the

program.

Ifpossible,thesematerialsshouldbe calculatedexactlyfromtooldrawingsandperishabletoolusage

experience. If such documentation or tool history is not available, then tooling material costs on

previouslybuiltsimilartoolsshouldbeused,andperishabletoolusageestimatedfromexperienceon

earlierjobsorprogramsthathadsimilarrequirements.Itshouldbementionedthatthecostofspecial

designtoolingcanbeheld toaminimumbyusing inexpensivetooling materialssuchaswood,sheet

metal,andaluminiuminsteadofexpensivetoolsteelstofabricatemanytoolssuchasholdingfixtures,


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assemblyjigs,andmotioneconomydevices.Also,many timesa standard, offtheshelftoolorfixture

withminormodificationwilldothesamejobasaspecialdesigntool,atafractionofthecost.

3KW5KWOnboardCharger

Tooling material may often be purchased directly by the tool design or manufacturing engineering

organizationwithoutgoingthroughthepurchasing,receiving,andreceivinginspection groups,andasa

resultwouldnotcarrythenormalmaterialoverheadorburden.

LongLead

and

High

Dollar

Items

Oneofthemostimportanttasksinthepreparationofanycostestimateforamanufacturedproductis

the identification of the longlead and highdollar material items. This information is basic to the

developmentoftheproductionstartupscheduleandwillbeakeyfactor indeterminingwhetherthe

requesteddeliveryschedulecanbemet.Thematerialitemsthatarethehighdollaritemsinthecostof

product materialare theonesthatneed tobeworkedby thebuyerandmaterialestimator toobtain

firm quotes,and if possible,competitive quotes. How well this is done will have a major bearing on

whetheracompetitiveandwinningcostproposalisfinallysubmitted.

Iftimepermits,qualifiedbackupsourcesofsupplyshouldbelocatedforeachandeverylongleaditem

onthebillofmaterial.Thisensuresthatthefailureofanylongleadsuppliertomeetdeliveryofanitem

ofacceptablequalitywillnotshutdowntheproductionline.Thereisacertainamountofriskinanycost

proposal or estimate. Risk that the work will cost more than the estimated cost, risk that promised

deliveries will not be met, and risk ofnotgetting theworkatallbecause it wasawarded toa lower

bidder,oronewhopromisedabetterdeliveryschedule,arethemajorrisks inanycostestimatefora

manufacturedproduct.Anythingthatcanbedonetodevelopawinning, lowriskcostestimateshould

beaprimeconsideration.Any itemwith adelivery promiseof4monthsor longercanbeconsidered


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longlead.Itismoredifficulttodefinehighdollaritems,excepttosaythatanysingleitemonthebillof

materialthatcostssignificantlymorethantheothersishighdollar.

15KW25KWWallMountFastChargerFrame

Subcontract(OEM)EstimatingandPricing

Therecanbemanyreasonsforsubcontractingpartofthemanufactureofaproduct,rangingfromthe

useofthespecialexpertiseofthesubcontractortosignificantcostsavings,usuallyinlabour,byusinga

subcontractor.Whateverthereason,everyconsiderationmustbetakentoensurethatthecontractor

willperformaspromisedatareasonablecost.

With a subcontract, theoutside source isdoingmore thanprovidingmaterial.He or she is providing

material

and

a

portion

of

the

work

to

be

performed

on

the

manufactured

product.

He

or

she

may

provide a major subassembly, an operating part of the total system, or a specialized manufacturing

processnotavailable inhouse.Thesubcontractormustprovideadetailedcostestimateforhisorher

productandservices,whichbecomepartofthetotalmaterialestimateforthemanufacturedproduct.

Thiscostestimatewilldetailthesubcontractorsstartupcosts,includingsuchthingsasspecialtooling

andtestequipment,leadtimesrequired,manufacturinglabour,material,burden,andprofit.Hisorher

deliveryscheduleshouldtieindirectlywithyourproductionschedule,withdeliveriesfeedingintoyour

productionatthepointneededintheprocess.


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OutdoorFastChargingStationOnsiteInstallation

Managementandcontrolofsubcontractorsismaintainedbyformalreportingrequirements,visitstothe

subcontractors facility, telephonereports, andstatusreview meetings.Suchtechniquesprovidereal

timecommunicationsanddata flowto provideeffectivemeans ofassessing subcontractstatus,early

detection of problems, and initiation of any needed corrective action. The cost of providing this

informationshouldbeincludedinthesubcontractorscostestimate.

DirectLabourEstimatingTechniques

Cost

estimating

for

manufacturing

can

be

done

using

any

one

or

a

combination

of

three

generalmethods. The first method uses cost history and statistical methods. This technique, when properly

applied,andwheretherequireddataexists,canbeareliablemethodofpreparingthelabourestimate.

The problem with this method is that such data includes delays, shop inefficiencies, and time lost

through a variety of reasons. Its use is recommended where standards do not exist, for budgetary

quotes,andasacheckagainstestimatesdevelopedusingothermethods.

Thesecondmethod,usingsimilaritywithotherproducts,assemblies,andparts,and/orusingestimator

experience,canbequitesatisfactorywhennopreviousproductionexperienceexists,whentheproduct


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hasneverbeeninproductionbefore,orwhenthedesignisnewandmaystillbeintheconceptstage.

Theaccuracyofsuchestimatesvariesdirectlywiththeknowledgeandexperienceoftheestimatorand

thetimeallocatedforpreparationoftheestimate.Thecompletenessoftheproductdefinitionalsoplays

alargepartindeterminingtheaccuracyoftheestimate.

Thethirdmethodisbyusingstandardtimedata.Inthismethod,allofthepossibleelementsofworkare

measured,assignedastandard time,andclassified inacatalogue.Whenaspecificoperation is tobe

estimated,thenecessarystandardtimevaluesareaddedtogethertodeterminethetotaltime.There

can be little doubt that the use of standard time data is the most accurate and reliable method of

estimating manufacturing labour. The use of standard time data promotes consistency among cost

estimators,andrequireslittleinthewayofestimatorexperiencewiththeworkbeingestimated.

Standard timedata is a compilationofall theelements thatareused forperforminga givenclass of

workwith

normal

elemental

time

values

for

each

element.

Without

making

actual

time

studies,

the

data

areusedasabasis fordetermining timestandardsonworksimilarto thatfrom whichthedatawere

determined. Its use in manufacturing costestimating offers certainadvantagesover other estimating

methods.Theseadvantagesinclude:

1. It is farmoreaccuratethananyotherestimatingmethod. It is basedonworkcontent,ratherthanhowmuchworkistobedoneandhowlongitwilltaketodo.

2. Itiseasiertojustify,becauseaseriesofindividualelementsandoperationsaddinguptoagivennumberofhoursiseasiertojustifythanoneoveralljudgmentofagivennumberofhours.

3. Standard data promotes consistency between estimates and cost estimators. Standard data,however,willshowwherethereisalegitimatedifferencebetweensimilarequipment.

4. Estimatorexperiencewiththeoperation isnotarequirementwhenusingstandarddata.Suchexperienceandknowledge,however,isextremelyhelpful.

5. Standarddatacoupledwith learningcurvescanbeusedtoestimatemanufacturing labourforanyproductionquantity.Thecostestimatorcanuseexperiencetobuildanestimateinthe5to

50unitsrange,butfindsitdifficulttoestimatethesameproductat1000units.Standarddata

pluslearningcurveswillcovertheentirequantityspectrum.

The

majority

of

cost

estimates

for

manufactured

products

in

the

developed

countries

today

are

preparedbyexperiencedcostestimatorsusingtheirprofessionaljudgment.Theirexperience,basedon

detailedknowledgeoftheirproduct,shopprocesses,andmethods,isperhapsthemostimportantsingle

requirementforacorrectestimate.Newproductsareestimatedmuchthesameway,byacomparison

ofsimilarproductswiththenewproductbeingestimated.Inmanysmallshopstheestimatingmaybe

donebytheshopforemanoreventheownerofthebusiness.Thereisnoattempttousedatafromtime

standards,oranyoftheother,moresophisticatedmethods,toprepareestimatesfornewbusiness.


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Suchtechniques,ifsuccessful,maybeallthatarerequired.Theshopmaybesmall,theproductmaybe

producedinjoborderquantities,ortheprocessmaybehighlyspecializedandverypredictable.Insuch

casesthereisnoneedforabetterestimatingapproach.Asthefirmgrowslargerandthecostestimating

isdonebymorethanoneperson,consistencyamongestimatorsmaybecomeaproblem.Astheproduct

line becomes more diversified or the volume of production work grows, estimatingjudgment and

experienceexercisedbyoneortwoknowledgeableindividualsmaynotdothejob.

The ideal cost estimating situation is the experienced cost estimator using standard time data to

developandvalidatethecostestimate,andprofessionaljudgmentandshopknowledgetodetermine

whetherthecostestimateisreasonableandattainable.Thefinalquestionsarewhethereverything is

included,andwhethertheestimatecanbesoldtomanagementandsupportedinnegotiationswiththe

customer.

Castingand

Foundry

Operations

The cost of manufacturing sand castings consists of material, foundry tooling, moulding costs, core

makingcosts,grindingcosts,cleaningandfinishcleaningcosts,heattreatingoragingcosts,inspection,

and foundry overhead or burden costs. The most important factors in the cost of producinga sand

castinginclude:

1. Thecostofcastingmetalandweightofmetalpouredpermould2. Themeltingcost3. Themethodofmoulding(afunctionofthenumberofcastingsproduced)4. Thetypeofpatternused(alsodependentonnumberofcastingsproduced)5. Theweightofthecasting6. Thenumberofcastingspermould7. Thenumberofcorespercastingandpercorebox8. Thecorematerialandweight9. Thecoremakingmethod10.Thenumberofrisersused11.Thetypeandamountoffinishingrequired

MechanicalAssembly

Modern weldingprocessesprovidea means ofjoining andassemblingmanydifferent typesof metal

parts.Mostmetalscanbeweldediftherightequipmentandprocessesareselected.Availablewelding


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processesrangefromgasorelectricarcfusionweldingtospotandseamresistanceweldingtoelectron

beam welding. Methods of applying the processes also vary widely. Work piece thickness and

compositionusuallydeterminethetypeofweldingprocessthatcanbeused.

ElectronicsAssembly

Theelectronicsassemblyworkisverylabourintensive,andstandardtimesforcostestimatingandother

usesshouldbe based on soundengineeringworkmeasurement if atall possible. The standard times

thatfollowmeetthiscriterion,although,asbefore,standardsshouldreflectoperationsinyourplantor

facility.Industrystandardtimessuchasthesecanoftenbetightened upthroughmoreefficientmethods,

tooling,and/orautomation.

FinishingandPlating

There are numerous finishing operations, ranging from mechanical buffing and polishing to

sophisticated metal chemical processes for passivation and surface protection. Buffing is a form of

surface finishing inwhichvery littlematerial isremoved.Thesole purpose istoproducea surface of

high lustreand anattractive finish. Abrasives such as aluminiumoxide, emery, ferrous oxide, rouge,

pumice, and lime are applied to the rotating face of a buffing wheel. A composition containing the

abrasive is pressed with the workagainst the faceof the buffing wheel. The abrasive is replenished

periodically.

InspectionandTesting

Inspection labour is normally estimated as a percentage of total manufacturing labour. These

percentagescanrangefrom5%toahighof14%,dependingontherequirements;thecriticalityofthe

part,product,orassembly;andmuchmore.Ofteninspection isperformedbytheproductionworkforce,

and time is allowed for this in the standard and the cost estimate. A safe rule of thumb, where no

previous actual data may exist, is to use 7% of fabrication labour and 5% of assembly labour for

inspection.

Test time is a function of the testing performed, the degree of test automation, whether

troubleshootingisrequired,whethertestdataisrequiredandmustberecorded,whetherthetestingis

destructiveornondestructive,whetheritismechanicalorelectrical,andahostofotherconsiderations.

Testlabourcanbemeasuredbystandardizingtheoperation,applyingelementaltimestandards,adding

timestudyallowances,andaddingatimefactorfortroubleshootingandsubsequentretesting.Someof

the electronicstesting industryaverage timedata isprovidedas follows forcost estimating (Thetime

durationwillfillinbythelocalestimator):

Testsetupandmakeready/teardowntimes:

Pickupandlayasideunit:xmin.


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Removeandreassemblecovers:xmin. Hookupandunhookalligatorclip:xmin. Hookupanddisconnectplugorjack:xmin. Assembletestadapter/fixture:xmin.

Testequipmentadjustments:

Toggleorrotaryswitch:xmin. AdjustVariance:xmin. Knobfrequencyadjustment:xmin. Scopeadjustmentforphasing,etc.:xmin. Observescopeandanalysepattern:xmin.

Unitundertestadjustments:

Circuitcheckwithprobe/voltmeter:xmin./point Circuitcheckwithcurrent:xmin./point

Adjust

trim

pots:

x

min.

Troubleshooting and retest will vary greatly depending on the maturity of the product design, the

qualityoftheassembledunitand itscomponentparts,andmore.Thiscanrangefrom15%to50%of

normaltesttime.Thepercentageusedmustbelefttotheprofessionaljudgmentandknowledgeofthe

costestimator.

ManufacturingSupportLabourRequirements

Manufacturingsupportlabourisamajorcostdriverinanycostestimateforamanufacturedproduct.It

includes the cost of the key functions needed to plan and tool for production of the item to be

manufactured.

Support

labour

includes

manufacturing

engineering,

tool

design

and

build,

industrial

engineering,supervision,andproductionplanningandcontrol.Insomecases,thecostofsupportlabour

may be equal to or greater than the costof the factory direct labour. In other cases,manufacturing

supportlabourmaybetreatedasanindirectcostandincludedinfactoryoverhead.Thisisthecasein

manyfirmsthatdo100%oftheirbusinessinthecommercialornondefenseareas.

Theamountofsupportlabourrequiredonanyjobisafunctionofthematurityoftheproductdesign,

the technology or technologies involved, and the size of the company or program involved. In the

aerospaceanddefenceindustries,supportlabourrequirementsaredrivenbygovernmentrequirements


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fordocumentation, reports, and a host of other requirements that would not otherwise beneeded.

Manufacturing support labour may be estimated by first determining the tasks that must be

accomplished,thetimeavailabletoaccomplishthetasks,andthelevelofsupportrequired.

Supportlabourcostsareseparatedintorecurringandnonrecurring,dependingonwhetherthesupport

providedisaonetimecostneededtoplanandstartupproductionoracontinuingservicetoproduction

over the life of thejob. The design and fabrication of tools are nonrecurring support costs, but the

maintenanceandrepairofthesametoolsarerecurringcosts.

Manufacturingengineeringincludesthefollowingactivitiesandservices:

1. Selectionanddesignofmanufacturingprocesses2. Determinationofsequencesandmethodsforproductfabrication,assembly,andtesting3. Selectionanddesignofproductionequipment4. Selectionanddesignoftoolsandtestequipment5. Layoutoffactorybuildings,machines,equipment,materials,andstoragefacilities6. Determinationofstandardtimesformanufacturingoperations7. Selectionanddesignofmanufacturingsystemsandcomputeraidedmanufacturingtechniques8. Manufacturingcostestimating,costanalysis,andcosttradestudies9. Manufacturingresearchanddevelopment10.Review of product designs and specifications to ensure manufacturing producibility (or

participationinconcurrentengineeringdesignteam)

11.Management,coordination,andcontrolofmanufacturingoperationsTheprimaryrecurringandnonrecurringtaskstobeperformedbymanufacturingengineeringmustbe

identified,thestaffinglevelsmustbeestimatedforeachtask,andthentheseestimatesmustbeman

loadedandtimephasedtodeterminetheestimatedmanufacturingengineeringlabourhours.

Manufacturingengineeringsupportduringdevelopmentisforthereviewofproductdesignasitevolves

throughthevariousphasesfromconcepttodesign layout,andtoensureproducibility in itsfinalform

when released to manufacturing. Manufacturing engineers also plan the building of any engineering

modelsorpreproductionunitsthataretobefabricatedbythemanufacturingshops.Atthesametime,

the manufacturing engineers work on and develop the preproduction planning that is implemented

aftertheproductisreleasedtoproduction.


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Thismanufacturingengineeringeffortduringtheproductdesignanddevelopmentphasehasbeenoften

overlooked in the past. It should be estimated and funded as part of the engineering development

programforanynewproduct.Asindicatedearlier,thebestwaytoestimatethiseffortistodetermine

the task requirement and the staffing that is required to perform the task. The total manufacturing

engineeringhoursarethestaffingleveltimesthenumberofweeksormonthsneededtocompletethe

project.

Preproduction planning starts with the production plan prepared as the basis for the estimate, and

modifyingitandaddingdetailstoupdateitastheactualrequirementsofthejobbegintodevelop.This

includes selecting and designing the process of manufacture; planning the sequences of fabrication,

assembly, and test; selecting equipment and facilities needed; determining tooling requirements,

methods,andfactorylayout;andanythingelseneededtodecidehowtheproductwillbemanufactured.

Thepreproductionplanningeffortshouldbeginduringtheproductdevelopmentphase,andthemethod

ofestimating

this

effort

is

the

same

as

for

development,

by

man

loading.

ToolingIssues

Tooling can be a significantelement ofcost in theproduction ofa manufactured product. Tooling is

primarilyafrontend,nonrecurringcost.Thetoolingphilosophyestablishedbymanagementduringthe

earlyphasesof the proposal or cost estimate will largely determine what the tooling should cost. A

heavy upfront tooling investment may ensure a lowcost product in production. A minimal tooling

effortmaystillbethemostcosteffectiveapproach,dependingonthecircumstancesandthelengthof

the production run. Certain types of manufacturing, such as investment casting and ordinary sand

casting,are

by

their

very

nature

tooling

dependent,

and

as

such

will

always

request

alarge

up

front

investmentintooling.Otherprocessesmaynotrequireaheavytoolingeffort,butwithoutaneffective,

upfronttoolinginvestment,cannotbeproducedeffectivelyinproduction.Thelengthoftheproduction

runcanbeabigdeterminantinhowmuchtoolingiseconomicallyjustified.

Unfortunately,mostcompaniesspendfarmoreontoolingthanisreallynecessary.Althoughthetooling

requiredmayappearobviousorapparent,anothermethodmayexist,orperhapsshopaidtoolingcan

beimprovisedtoavoidthisapparentexpense.Toolingcosts,andhenceproductcosts,canbekeptas

low as possible by utilizing standard tools and tooling components wheneverpossible, and by using

inexpensivetoolingmaterials.

ToolDesign:Thedesignof specialpurpose tools is estimatedbydetermininghowmanytoolsaretobedesigned,thensubdividingthisnumberintotoolsthatarehighlycomplex,toolsthat

are of intermediate level of complexity and detail, and those that are the most simple and

straightforward.Averagetimevaluesforeachofthethreecategoriesare:

Highlycomplex:24.0to40.0hr./tool Intermediate:16.0to24.0hr./tool


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Simpledesign:8.0to16.0hr./toolIfa lowcostorminimaltoolingapproach istobeused,oronethatutilizes littleornoformal

tooldesign

documentation,

then

the

cost

estimator

should

figure

2.0

to

4.0

hr./tool

to

prepare

a

concept sketch ordiagram toaid the toolmaker in building the tool. The time includes shop

followup and liaison while the tool is under construction to clarify any details not clearly

depictedonthetooldrawing,andforthecorrectionofanyerrorsordesignoversights.

ToolFabrication:Toolfabricationincludestheconstructionandtryoutofthetool.Thetoolbuildhoursalmostalwaysexceeddesignhoursbyanorderof3to1.Coremakingtoolsmakeupmost

ofthecoreestimateinfoundrywork.Apatternissetinthemouldingsand,andsandispacked

aroundittoproducetheimpressionintowhichthehotmetalispouredtoproducecastingsofa

desiredshape.Patternplatesseparatethetwohalvesofapatternduringmoulding,andflasks

arethe

containers

for

the

moulding

sand.

Flask

size,

method

of

construction,

and

construction

materialareallkeycostdriversinfoundrytooling.

Tools to be fabricated for most manufacturing operations other than foundry, investment

casting,diecasting,etc.areestimatedonanindividualtoolbasis.Thatis,thecostofeverytool

is estimated individually. As indicated earlier, a good rule of thumb for the estimate of

fabricationcostistousethreetimesthedesignestimate.Toolfabricationcostalsoincludestool

tryoutandanysubsequenttoolmodificationsthatmayberequiredasaresult.

Tooldesignandtoolfabricationcostsarenonrecurringsupportcostsinthetotalmanufacturing

costestimate.Theyareconcernedonlywithspecialpurposetoolingpeculiartoagivenproduct,

butdonotincludestandardtooling,orperishabletoolssuchasdrills.

Tool Maintenance: Another element of manufacturing cost that is often overlooked by theestimator is the costof tooling maintenance.This isa recurring elementof costand includes

everythingfromtheinitialtoolsetupandcleanup,ifthejobhasbeeninproductionbeforeand

toolingexists,torepair,lubrication,painting,andotherroutinemaintenanceonoperatingtools

used in production. This can be a major cost element if the production tooling includes

automatic,specialdesignmachinesandtheirtools.Italsoincludesthecostoftoolpreservation,

and preparationfor storageafter thejob iscomplete.Toolmaintenance, ifadirectcharge, is

estimatedasapercentageofthetotalfactorydirectlabour.Itusuallyrangesfrom3%to5%of

factorylabour,

depending

on

the

degree

of

mechanization

or

automation

of

the

process.

IndustrialEngineering

Industrial engineering for manufacturing includes work measurement, standards setting, and

maintenance, along with methods improvement, operations analysis, and cost analysis. In many

companiesthisisanindirectfunctionthatisincludedinplantoverhead.Ifthisfunctionistreatedasa

directcharge,thecostestimatorshouldhandle itbymanloadingtheindustrialengineeringpersonnel

workingon thejob being estimated, and calculate manhours by multiplying thestaffing by the time


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periodduringwhichtheserviceswillbeperformedandconvertingthistohours.Industrialengineering

supportisarecurringcost.Inmanyinstancesindustrialengineeringservicesareprovidedaspartofthe

manufacturingengineeringeffort.

Supervision

Firstlinemanufacturing supervision isoftenadirectcharge incompanies that produce manufactured

products,especiallyindefence/aerospaceindustries.Assuch,itisarecurringcosttothejoborprogram,

and should beestimatedasapercentageof the total factory labour hourson thejob. Unlessbetter

information is available in your company, 10% of factory labour is the recommended norm for

estimatingsupervisioncosts.

ProductionPlanningandControl

Productionplanningandcontrolincludesmanufacturingscheduling,materialordering,materialcontrol,

material kitting, and issue to manufacturing, shop floor control, manufacturing status reporting and

expediting,toolcontrol,materialhandlingandmovement,workorderrelease,packaging,andshipping.

Even with todays sophisticated MRP software programs, the input and output is by people. The

effectivenessofthisfunctioniscriticaltothesuccessofmanufacturingoperations.Withoutaneffective

productionplanningandcontrolsystem,manufacturingbecomesadisjointed,uncoordinatedgroupof

activities. In ajob order machine shop, for example, the scheduling and loading of the machines is

criticaltomeetingpromiseddeliveryonalljobs.

Productionplanningandcontrollabour isoftenestimatedasaflatpercentageoftotalfactory labour.

This percentage can range from 7% to as much as 15%, depending on the functions and degree of

control exercised over manufacturing and production operations. It is also possible to estimate

productionplanningandcontrol labourdirectlyby listingthefunctions,manloadingthestaffing,and

thentimephasingtoarriveattotalhours.

CostStructureoftheFinalManufacturingEstimate

Inordertoarriveatthefinalsellingpriceofthemanufacturedproduct,costsbeyondfactorycostsand

profitmarginsmustbedetermined.Primecostplusmanufacturingoverheadyieldsfactorycost,orcost

of goods manufactured. Total product cost is obtained by adding selling expense, general and

administrativeexpense,

engineering

or

development

costs,

and

contingencies

to

the

factory

cost.

Several methods of pricing a product that is manufactured have been derived from the field of

managerialeconomics.Thesepricingmethodsrangefromcomparisonofsimilarproductpricestoselling

pricebasedontotalcost,witheachproductyieldingthesamepercentagegrossprofit.Althoughmany

variationsexist, there isusually somerelationshipbetweensellingpriceand total cost.However,unit

selling price is greater than total unit cost in all successful manufacturing firms. In cost estimates

preparedforgovernmentauditafterthecontracthasbeenawarded,themaximumprofitmayregulated

bysomecountriesauthority.


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Infastchargingsystemfactorytheestimatingdepartmentsresponsibilityfortotalmanufacturingcost

ends with establishing the direct labour, tooling, equipment, facilities, and material costs. The

accountinggroupormarketingdepartmentaddswageandoverheadratesfromthevariousapplicable

cost centres, and performs the extension of the numbers to develop the final manufacturing cost

estimateandprice.

In structuring the final manufacturing cost estimate, care must be exercised in identifying those

elementsofcostthatarerecurringandthosethatarenonrecurring.Inmanyinstancesthenonrecurring

elements of cost, such as tooling, must be clearly identified to the prospective customer. Should a

productioncontractresultfromthecostestimate,thetoolsso identifiedmaybecomethepropertyof

thecustomer,tobedeliveredtothecustomeratcontractcompletion?Thismodeofoperationisfairly

standardforcontractsinvolvinggovernmentwork,andsomeofthemajorhighrateOEMcompanies.

Ifall

of

the

nonrecurring

costs

are

prorated

into

the

final

cost

of

the

manufactured

product,

and

no

ownership of tools passes to the customer, it is still vitally important that management know and

understand which costs are recurring and which are nonrecurring. Nonrecurring or onetime costs

includethefollowing:

Tooling that is specially designed and peculiar to the product but is not consumed inmanufacturingtheproduct,suchasmillingfixtures,drilljigs,andcableharnessformboards

Manufacturing engineering services to do the initial and final production planning formanufacturing theproduct (thiswould includeprocess plans,methodsheets, factory layouts,

workstationlayouts,manufacturingbillsofmaterial,assemblypartslists,routings,andmore)

Inspection plans and instructions, test procedures, test fixtures, and tooling peculiar to theproduct

Engineering and development costs incurred in the design of the product, includingmanufacturing drawings, product performance specifications, parts lists, and prototypes and

models

Recurringcostsincludeallcoststhatarecontingentonthenumberofproductionunitsbuilt,andinclude:

Labourand material to manufacture the product, including factory labour, inspection labour,and

supervision

and

test

labour,

plus

all

materials

and

parts

needed

to

build

the

product,

even

bulkandconsumableitemssuchassolvents,solder,paint,andplatingchemicals

Perishable tools consumed in building the product, including cutting tools, drill bits, millingcutters,reamers,broaches,andsimilaritems

Support labour, including manufacturing engineering, production control, engineering liaison,and other labour required to support the manufacture and assembly of the product on the

productionfloor


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Recurringandnonrecurringcostscanbeeitherdirectorindirect.Productioncontrollabour,forexample,

wouldbebothadirectchargeandarecurringcost.Perishable tools arean indirectchargebut alsoa

recurringcost.

Sellingpriceofthechargingstationtothecustomerisdeterminedbyaddingtheprimemanufacturing

costtothegeneralandadministrativeexpenseplusprofit.Thisexampleissomewhatsimplified inthat

no consideration is given to contingency factors, delivery schedule, or peak production rate

requirements,allofwhichcouldaddtothefinalsellingpriceofthechargingstation.

practical fast charger manufacturing

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