M258 MANUFACTURING OPERATIONS SPREADSHEETS FACTORYCopy write, © Manufacturing Operations Spreadsheets by John R Andrew, 25 March 2007CREATING WEALTHA summary of important manufacturing management planning tools and controls are provided in this Excel Workbook.Wealth is created in manufacturing facillities when materials are transformed by: molding, machining, plating, and painting; followed by joining and assembling by gluing, welding, and bolting, is recorded in the company accounting books.Cash is borrowed from banks and lending groups based on the value of goods produced, in warehouses, and sold.The federal reserve prints money in response to the new wealth .

Elements of an automated manufacturing system are illustrated below.

ITEM1. Laser sensor indicates part is present.2. Bar code reader. 3. Gateway router.4. Programmable Logic Computer (PLC).5. Human-Machine-Interface (HMI).6. Direct current motor conveyor drive.7. Variable: angle / speed, controller.8. Hub to servers.9. Sever.10. Back-up Server.11. Hub to laptops.12. Laptop.13. Laptop.14. World Wide Web.15. Belt conveyor.16. Finished product.17. Packaging for shipment.18. Pick and Place Robot

AUTOMATION P1

PRODUCT MANUFACTURING PROCESSESProduct manufacturing can be classified in four categories.

Job Shop: Custom designed: Furniture, Advertising signs, Machine tools.

Batch: Robots, Earth moving machines, Conveyors.

Repetitive: Aircraft, Ships, Low profile trailers, Special purpose equipment

Continuous: Computers, Printers, Cell Phones, Automobiles, Clothing.

TYPICAL PRODUCT LIFE CYCLEThe graph, shown here, illustrates the four phases of the life cycle of a typical product in today's marketplace.

The sales volume of many products increase graduallywhen first offered for sale in the marketplace.

This is followed by a period of rapidly increasing volume.

Finally sale will peak, followed by decline.

The manufacturing facility must be flexible enough to

Introduction: Low sales volume and negative income.

Growth: Increasing sales volume and good profit levels.

Maturity: Highest sales volume and profitability.

Decline: Declining sales and lower profits.

Automation refers to manufacturing systems with computer controlled robots and machine tools operating from the input of customer orders, through the process of converting materials into finished products. Varying amounts of human activity are required for the practical implementation of automated systems. Motor power and automation has moved 75% of the work force in the United States from manufacturing and farming, into the service sector.

accommodate the changing production rate.P2

GEARBOX EXAMPLEA special purpose gearbox will be used to illustrate an application of manufacturing operations.

An outline of the planning of the manufacturing of the Bevel Gear Box below will illustrate elements common to a wide range of products.

Each part of the Bevel Gearbox assembly is given an item number.Each part will have a drawing specifying: dimensions, tolerances, material, surface finish, and paint or powder coat.

P3

BEVEL GEARBOX BILL OF MATERIALS (B.O.M.)

The parts numbered in the bevel gearbox assembly drawing above are listed anddescribed in the Bill Of Materials (B.O.M.)seen here.

In addition to the assembly drawing a dimensioned detail drawing must be made of each part. This is true of parts madein-house and out-sourced. Drawings ofpurchased parts must be copied and inserted into the final assembly drawingto ensure that all parts fit and function together.

DETAIL PART DRAWINGS

ITEM QTY DESCRIPTION MATERIAL1 2 SHAFT 1.000” DIA 304 STAINLESS STEEL2 4 BALL BEARING SKF 25.403 2 BEVEL GEAR 25 TEETH, 20 DEG. 10 PITCH 4 2 INTERNAL RETAINING RING MC 25-A-5635 2 OIL SEAL OS-100-56 2 END CAP #M00118657 2 BEARING HOUSING 2024 ALUMINUM8 18 MACHINE SCREW CH-25-1509 2 GEARBOX SCH 40 STAINLESS STEEL PIPE 10 2 COLLAR C-104011 2 RETAINER 303 SS12 2 SQUARE KEY 303 33

P4MANUFACTURING PLANT

A proposed layout of the manufacturing and assembly factory area of the Bevel Gearbox is illustrated below.

1. Raw materials and outsourced parts are delivered to a loading dock at the bottomof the diagram.

2. Incoming raw materials are inspected and tagged for quality and accounting purposes.

3. Materials are transformed during the stages of manufacturing.

4. The Chop Saw rough cuts incoming round rods and tubes into predeterminedlengths, approximately 0.050 inches oversize..5. The Turning Cell reduces the diameter of the portions of round rods for the bearings.

6. The Mill Cell cuts parts accurately to lengths specified on the part drawings.

7. Tubular components are welded togetherin the Weld Cell.

8. Pallet loads of parts are moved from cell tocell by a fork lift truck.

9. Three Assembly Cells progressively put all

the Bevel Gearbox parts together.

10. The finished product is packaged for shipment to: warehouse, distributors, ordirectly to customers. P5

ASSEMBLY CELL

The plan view of a state-of-the-art manual assembly cell is shown above. Incomming parts on trays are assembled and placed on pallets on the conveyor. Below see empty trays moving away by gravity on the rollers of the upper conveyor. Pick and place robots with vibrating bowl feeders could replace the assembler but the initial cost of automating the assembly cell would have to be justified. P6

STANDARD TIMES FOR MANUEL ASSEMBLY Reach 0 in. 10 in. 20 in. 30 inGet Object 0.50 0.75 1.00

Use these standard times (seconds) to estimate Grasp 0.50manual assembly cell cycle times. Move 0.50 0.75 1.00

Place 0.75P7

The time to place a part (0.75 seconds) above assumes power clamping and power screw driving.

InputItem Number Reach(in) Get Grasp Move Place

1 20 0.75 0.50 0.75 0.752 10 0.50 0.50 0.50 0.753 30 1.00 0.50 1.00 0.758 20 0.75 0.50 0.75 0.75

10 20 0.75 0.50 0.75 0.7511 20 0.75 0.50 0.75 0.75

Calculations Totals: 4.50 3.00 4.50 4.50

Total Cycle Time, CT = (Get+Grasp+Move+Place)CT = 16.50 secondsCT = 0.275 minutes

The completed sub-assembly is shown here.

P8

Sub-assembly #3 is inseted into thegearbox casing in the illustration.

Final assembly of the gearbox unit is shown inthe above drawing.

P9ESTIMATING MACHINING CYCLE TIMEClick on the Mastercam web page link:

Machine Cell Cycle Time

Mastercam Software, shown here,and other CNC programs, enable

http://www.mastercam.com/print.aspx?file=/products/Mill/Default.aspx

Experience the Power of Mastercam X2 Mill Mastercam is the most commonly used CAM software worldwide* and remains the program of choice among CNC programmers. Mastercam X2 is the next generation of our popular program, delivering the most comprehensive milling package with a simplified, customizable interface, more power, and even faster, robust toolpath calculations.* Source: CIMdata, Inc.

What Mastercam X2 Mill Delivers:Powerful Part ModelingMastercam’s streamlined CAD engine makes design work easier than ever before. Each piece of geometry you create is “live”, letting you quickly modify it until it’s exactly what you want. And with traditional functions consolidated into a few simple clicks, Mastercam simplifies the creation of even the most complex parts. Fast creation of a wide range of NURBS and parametric surfaces, including powerful “fence” and “net” surfaces. Associative dimensions update as you change your model. Extensive editing tools, including powerful new surface extension.

the operator to estimate the timeto perform machining operations.Total machine cell cycle time is obtained by adding blank deliverytime to the machine tool and finished part conveying time to the maching time above.

P10

What Mastercam X2 Mill Delivers:Powerful Part ModelingMastercam’s streamlined CAD engine makes design work easier than ever before. Each piece of geometry you create is “live”, letting you quickly modify it until it’s exactly what you want. And with traditional functions consolidated into a few simple clicks, Mastercam simplifies the creation of even the most complex parts. Fast creation of a wide range of NURBS and parametric surfaces, including powerful “fence” and “net” surfaces. Associative dimensions update as you change your model. Extensive editing tools, including powerful new surface extension.

Built-in data translators for IGES, Parasolid®, SAT (ACIS solids), AutoCAD® (DXF, DWG, and Inventor TM files), SolidWorks®, Solid Edge®, STEP, EPS, CADL, STL, VDA, and ASCII. Direct translators for CATIA®, Pro/E®, and more are also available. Special no-charge Mastercam Direct add-ons put Mastercam in your SolidWorks, Solid Edge, or AutoCAD Inventor toolbars.

Powerful RoughingFast efficient bulk material removal is essential to efficient NC programming. Mastercam gives you a variety of techniques to rough all your parts. Rough cut multiple surfaces, solid models, or a combination of both. Rough cut with constant Z contours or pockets. Constant Z rough rest milling (remachining) identifies and machines areas that need to be machined with a smaller tool. Automatic facing and critical depth recognition ensure that flat surfaces between Z cuts won't be left with too much stock during rough machining. Automatically align all your roughing plunge points, making it easier to pre-drill those spots for production machining

Versatile Finishing Mastercam's suite of finishing tools lets you choose the best method for a specific project. Finish machine multiple surfaces, solid models, or a combination of both. New unlimited Pencil Finishing machines the part in logical segments. Parallel finishing delivers robust toolpaths for a wide variety of projects. 3D project machining creates a consistent, smooth finish while following the natural curves of multiple surfaces or solids.

P11

Versatile Finishing Mastercam's suite of finishing tools lets you choose the best method for a specific project. Finish machine multiple surfaces, solid models, or a combination of both. New unlimited Pencil Finishing machines the part in logical segments. Parallel finishing delivers robust toolpaths for a wide variety of projects. 3D project machining creates a consistent, smooth finish while following the natural curves of multiple surfaces or solids.

MANUFACTURING OPERATIONS SPREADSHEETS MONEY

3. Make adjustments to calculated values using, "Goal Seek".

4. When using Excel's Goal Seek, unprotect the spreadsheet by selecting:Drop down menu: Tools > Protection > Unprotect Sheet > OK

5. Restore spreadsheet protection with:Drop down menu: Tools > Protection > Protect Sheet > OK

BREAK-EVEN ANALYSIS

AVERAGE FIXED MONTHLY COSTS Input Labor Cost, LC = $20,000

Materials Cost, MC = $6,000Buildings Cost, BC = $5,000

Machines and Tools Cost, TC = $4,000Power and Utilities, UC = $2,000

Sales and Administration, SM = $3,000Miscellaneous fixed costs, MF = $2,000

Depreciation, DC = $1,000Units Sold Monthly , USM = 4,000Selling Price per Unit, SP = $31 $ per unit

Variable Cost per Unit, VC = 60% % of unit price

1. Type initial, "Input" values.

2. "Calculations" will be made by Excel automatically.

The graph above illustrates the relationship between cost, income, profit, and loss. The number of units that must be sold to break even occurs at the intersection point of income and operating cost.

Break Even Quantity, Q = Fixed Cost per Month / (Unit Sell Price - Variable cost per Unit) Q = FC / ( SP( 1 - VC))

P-1

CalculationsMonthly Fixed Cost, FC = LC+MC+BC+TC+UC+SM+MF+DC

FC = $43,000Sales volume to break-even, BE = FC / (SP * (1 - VC ))

BE = 3,505 units

The results above are graphed below by Excel's, "Chart Wizard".

Units Sold Monthly , USM = 0 3,505 7,011Series1, Total Revenue, SP x USM = $0 $107,500 $215,000

Series2, Total Cost, FC + (VC x SP x USM) = $43,000 $107,500 $172,000

CAPITAL INVESTMENT Input

Equipment cost, EC = $30,000Annual Income from equipment, AI = $12,000

Average annual operating cost, OC = $2,000Useful life, UL = 3 yrs

Estimated salvage value end of UL, SV = $6,000Tax rate, TR = 42%

Calculations

Before tax cash inflow, BTC = AI - OCBTC = $10,000

Depreciation (straight-line), D = (EC - SV) / ULD = $8,000 $ / yr

Taxable cash inflow, TC = BTC - DTC = $2,000

Taxes, T = TR x TCT = $840

After tax annual cash inflow, TC = BTC - T

0 3505.43477931057 7010.86955862113$0

$50,000

$100,000

$150,000

$200,000

$250,000

Break Even Analysis

Row 62 Row 63

Number of Units Sold

Rev

enue

& C

ost

TC = $9,160P-2

DEPRECIATION

Straight-line depreciation calculations: Input Equipment cost, EC = $3,200,000

Useful life, UL = 15 yrsSalvage value at end of UL, SV = $500,000

CalculationsDepreciation (straight-line), D = (EC - SV) / UL

D = $180,000 $ / yr

PAYBACK

higher sales volume or prices or from lower labor, material, and other operating costs.

Input Equipment cost, EC = $27,000

Salvage value at end of UL, SV = $3,000Operating Advantage=annual savings, OA = $11,000 per yr

Taxes, T = $3,000

CalculationsPayback in years, PB = (EC - SV ) / (OA - T)

PB = 3.00 yrs

PRESENT VALUE

The time value of money is often specified in terms of, "Present Value".

outgoing flows (expenses) over a given time.

Input Future sum of money, F = $25,000

Number of years, Y = 2 yrsDiscount interest rate, i = 10%

CalculationsPresent Value, PV = F / (1 + i)^Y

PV = $20,661

Present Value of Equipment Sold at the End of Useful LifeInput

Salvage value at end of UL, SV = $9,000

Operating Advantage (OA) is the increase in cash flows, before depreciation, due to

Present Value, (PV), is the difference between incoming cash flows (revenue) and

Discount interest rate, ( i ) is the interest you would pay a bank if you borrowed the money.

Useful life, UL = 10 yrsDiscount interest rate, i = 12%

P-3Calculations

Present Value, PV = F / (1 + i)^YPV = $2,898

EQUIVALENT ANNUAL COST (EAQ)

The equivalent annual cost method is useful for comparing capital investmentswith different economic lives. Cost amounts are discounted or compounded at specified interest rates so as to convert them all into annuity amounts.

Project Discounted Cost, PDC = Capital Recovery + Operating Cost - Salvage

Discounted Amount or Present Value, PV = F / (1 + i)^Y

Equivalent Annual Cost, EAQ = PDC x [ (i x (1 + i)^Y / ( (1 + i)^Y - 1)

F = Future Amounti = Interest

Y = Number of Years

Example: Capital Equipment Investment-1Input

Capital Equipment Investment, EI = $40,000Useful life, Y = 5 yrs

Salvage value at end of UL, SV = $10,0001st Year Operating and Maintenance, OM = $5,000Annual Operating and Maintenance, AOM = $1,000

My Cost of Capital Interest, i = 14%Calculations Discounted

Capital Recovery, CR = EI x 1.000 ValueCR = $40,000 $40,000

Present Value of Operating Costs = OM + AOM Year F / (1 + i)^YYear 1 = $5,000 1 $4,386Year 2 = $6,000 2 $4,617Year 3 = $7,000 3 $4,725Year 4 = $8,000 4 $4,737Year 5 = $9,000 5 $4,674

OC = $23,139Present Value of Salvaged Equipment, SE = SV / (1 + i)^Y

SE = $5,194Project Discounted Cost, PDC = CR + OC - SE

$57,945Equivalent Annual Cost (EAQ)The EAQ is the Annual Annuity Amount given the Present Value (PV).

The increase in Capital over a time period is called compounding.The decrease in the future value of Capital is called discounting.

Equivalent Annual Cost, EAQ = PDC x [ ( i x (1 + i)^Y / ( (1 + i)^Y - 1) ]EAQ = $16,878 per yr

P-4

Example: Capital Equipment Investment-2Input

Capital Equipment Investment, EI = $45,000Useful life, Y = 6 yrs

Salvage value at end of UL, SV = $8,000Annual Operating and Maintenance, OM = $6,000

My Cost of Capital Interest, i = 14%

Calculations DiscountedCapital Recovery, CR = EI x 1.000 Value

CR = $45,000 $45,000

Present Value of Operating Costs, OC = OM x [ ( (1 + i)^Y - 1) / ( i x (1 + i)^Y ] OC = $23,332

Present Value of Salvaged Equipment, SE = SV / (1 + i)^YSE = $3,645

Project Discounted Cost, PDC = CR + OC - SEPDC = $64,687

Equivalent Annual Cost, EAQ = PDC x [ ( i x (1 + I )^Y / ( (1 + i)^Y - 1) ]EAQ = $16,635

COMPARE PROJECT 1 WITH 2

Equipment Investment-1 = $16,878Equipment Investment-2 = $16,635

The best capital equipment investment choice can now be made by comparing the Equivalent Annual Costs (EAQ) shown here.

INFLATION

The present value of future cash flows is reduced by inflation.Input

Return on investment, Ri = 10%Inflation, In = 3%

CalculationsActual return on investment, ARI = Ri - In

ARI = 7%

P-5

Pick-and-Place Robot Assembly Cell Economics

Manual Assembly Cell InputManual Cycle Time, MT = 0.50 mins

Shift Operating Time, ST = 7.50 hrsManual Assembly Cost per Unit, MC = $30.00

Sell Price per Unit, MC = $40.00 Calculations

Units Assembled per Shift, UA = 60 x ST / MTUA = 900 Units/Shift

Gross Profit Daily Profit, DP = (SP - MC) x UADP = $9,000

Robot Machine Cell InputRobot Cycle Time, RT = 0.50 mins

Shift Operating Time, ST = 7.00 hrsManual Assembly Cost per Unit, MC = $20.00 (Same as Manual) Manual Assembly Cost per Unit, MC =

Sell Price per Unit, MC = $38.00 (Same as Manual)Calculations

Units Assembled per Shift, UA = 60 x ST / MTUA = 840 Units/Shift

Gross Profit Daily Profit, DP = (SP - MC) x UADP = $15,120

Payback Calculation InputAcceptable Payback Time in Days, PD = 365 Business Days

CalculationsRobot Revenue Increase in PD Days, RR = PD x DP

RR = $5,518,800

Note: The manual and automated assembly cells have the same operating cost.

required for your project Using Excel's "Goal Seek".Adjust the above Robot Revenue Increase Input values as

P-6

Robot Cycle Time, RT = 0.40 minsShift Operating Time, ST = 7.50 hrs

Manual Assembly Cost per Unit, MC = $30.00 (Same as Manual)Sell Price per Unit, MC = $40.00 (Same as Manual)

MANUFACTURING OPERATIONS SPREADSHEETS MFG Plan

PLANNING A MANUFACTURING FACILITY

Developing a plan for manufacturing product X will include the following steps.Product X can be any of the following: Exercise Machine, Gearbox, Wheelbarrow, Automobile Parts, Aircraft Parts, etc.:

1. Choose product, "X" to manufacture and evaluate its: usefulness, quality, and performance.

2. Make a patent search at, www.uspto.gov to see if the chosen product is patented.

3. If so consider the effect of paying royalties to the inventor.

4. If not patented, consider applying for a patent.

5. Find the cost and performance of competing products.

6. List the beneficial features, usefulness, and advantages of product X compared with competing products.

7. Study the share value history of companies that are manufacturing similar products.

8. Have a 3-dimensional solid model drawing made of product X.

9. Rotate the solid model to different view points and study the outward appearance for esthetic value.

10. If product X has moving parts, put them in motion in the solid computer model before buildinga prototype to save product testing and development time.

11. Observe cross section views of the solid model to see all internal parts.

12. Have working drawings made of each part specifying: dimensions, tolerances on each dimension, material, surface finish, paint or powder-coat.

13. Email some of the part drawings to at least 3 machine shops requestingprice and delivery for one or more prototypes.

14. Email the remaining part drawings to 3 machine shops not included in the previous step.

15. The objective is to avoid competitors from obtaining your proprietary product information.

16. Plan an assembly line for product X.

17. Divide the complete product assembly into subassemblies.

18. Make a flow diagram showing each stage of the assembly.

19. Make a scale drawing of the assembly line showing each assembly cell with

pallets and trays of incoming parts and outgoing subassemblies.P1

PLANNING A MANUFACTURING FACILITY continued

20. Using the, "Standard times for manual assembly" given in the table under, the tab,"Factory" tabulate the times required for each assembly cell. Adjust the number of partsassembled in each cell until maximum effeciency is achieved.

21. Use CNC software to estimate the cycle times of all machine cells.

22. Explore automating as many assembly cells as is profitable.

23. Evaluate in-house manufacture VS outsourcing parts and subassemblies.

24. Make a scale drawing of the: milling, turning, drilling, welding, painting and inspection cells showing conveyors, pallets, and trays of incoming parts and outgoing finished parts.

25. Add a materials receiving dock, warehouse, and office area to the assembly line scale drawing.

26. Add a maintenance and repair shop area.

27. Provide aisle ways for fork-lift trucks in this manufacturing facility scale drawing.

28. Email dimensioned drawings of the above proposed manufacturing facility to at least 3 commercial steel building construction companies requesting price and erectingtime schedules for their nearest standard building sizes.

29. Obtain prices of equipment required for the manufacturing facility including: machine tools, assembly equipment, forklift trucks, maintenance equipment, and office desks, chairs, computers, and office supplies.

30. List all personnel required to operate this manufacturing facility.

31. List estimated expenses including: salaries, benefits, materials, electrical power, utilities, mortgage on buildings, property taxes.

32. Obtain quotes for product X liability insurance.

33. Make a 5 year business plan showing monthly net income and expenses.

34. Form a corporation.

35. Interview potential partners and employees.

36. Present the 5 year business plan to commercial banks and risk capitalassociations requesting monies to finance the continuous operation of themanufacturing facility.

ESTIMATING PRODUCTION FACTORSKey factors in formulating a business planto manufacture product X are outlined below.

P2PROBLEM: Average monthly production values include:

Labor Input Production Units per Hour, UH = 6 Units/hr

Gross Profit % before taxes, GP = 30 %First Shift time span, 1S = 8 hrs/day

Second Shift time span, 2S = 8 hrs/dayThird Shift time span, 3S = 0 hrs/day

Number of first shift Employees, 1E = 12Number of first shift Employees, 2E = 9Number of first shift Employees, 3E = 0

Average Hourly Wage Shift 1, 1W = $20.00Average Hourly Benefits Shift 1, 1B = $22.00

Average Hourly Wage Shift 2, 2W = $22.00Average Hourly Benefits Shift 2, 2B = $22.00

Average Hourly Wage Shift 3, 3W = $22.00Average Hourly Benefits Shift 3, 3B = $22.00

Business Days per Week, DW = 5 days/wkBusiness Weeks per Year, WY = 50 wks/yrBusiness Hours per week, HW = 40

MaterialsOutsourced Parts, OP = 40000

Raw Materials for Manufacture, RM = 30000Miscellaneous and Contingency, MC = 10000

Factory Mortgage on Buildings and Land, MB = 4500

Manufacturing Equipment Payments, ME = 2000Power & Utilities, PU = 5500

Office Equipment and Supplies, OE = 500

Labor Expenses CalculationsAverage Business Hours per Month, HM = (1S+2S+3S)xDWx52 / 12

HM = 346.67 hrs/monthTotal Labor, LE = (1W+1B+2W+2B+3W+3B)xHM

LE = $45,066.67Material Expenses

Materials Expenses, ME = OP + RM + MC$80,000.00

Factory ExpensesFactory Expenses, FE = MB + ME + PU + OE

$12,500.00Labor, Materials & Factory Expenses TE = LE + ME + FE

TE = $137,566.67

30%Gross Profit, GP = TE x GM

Gross Profit Margin from Input, GM =

GP = $41,270.00Gross Operating Cost (GC)

Gross Operating Cost, GC = TE + GPGC = $178,836.67

Sell Price per UnitAverage Units Produced per Month, UM = UH x HM P3

UM = 2080 Units per MonthSell Price per Unit, SP = GC / UM

SP = $85.98

Summary

Step-1

Step-2Select the Sell Price (SP) cell containing the present dollar value of the Sell Price.Step-3Pick menu: Tools > Goal Seek > To value: > Type any desired Sell Price > Pick the empty space for, "By changing cell:" > Pick, Hourly Wage (1W) > OK.Step-4Observe the change in Wage required to meet the Sell Price target. Step-5

that you would like to adjust to a new value.Step-5

ESTIMATING ASSEMBLY LINE FLOOR AREAInput

Number of Parts per Unit, NP = 80 parts/unitAverage Parts Assembled per cell, PA = 8 parts/cellAverage assemble Cell floor Area, CA = 100 sq ft/cell

Average cell assemble Cycle Time, CT = 2 minsCalculations

Number of assembly Cells, NC = NP / PANC = 10 Assy Cells

Assembly floor Area, AA = NC * CAAA = 1000 sq ft

BALANCING THE ASSEMBLY LINE FOR MAXIMUM EFFICIENCYEach assembly cell and machine cell has a: Capacity (say 30 units per hour)

and a: Load (say 20 units per hour)

Improve manufacturing efficiency by installing a duplicate cell in parallel or automate the cell.Automating includes: pick and place robots combined with vibrating bowel feeders and power screwdrivers.

Make adjustments to the above production Calculations:

Initial numbers for the monthly production Input factors are typed above.

Repeat step 2 by picking any cell under Calculations with a result in bold type

Repeat step 3 for any other factor under Input.

If the Load (rate of production) is greater than Capacity, this is a bottleneck.

Cell-1 Cell-4Cell-2 Cell-3

P4

P4Cell refers to Assembly or Machining

NC must be equal to the number of cells. InputNumber of Assembly/Machining Cells NC = 8 -

Cell 1 Cycle Time, T1 = 5.50 minsCell 2 Cycle Time, T2 = 3.50 minsCell 3 Cycle Time, T3 = 3.00 minsCell 4 Cycle Time, T4 = 4.00 minsCell 5 Cycle Time, T5 = 5.00 minsCell 6 Cycle Time, T6 = 3.00 minsCell 7 Cycle Time, T7 = 4.00 minsCell 8 Cycle Time, T8 = 4.50 mins

CalculationsSum of Cycle Times, SC = 32.50 mins

Optimum Cell Cycle Time, OT = SC / NCOT = 4.06 mins

InputSlowest Cell Cycle Time, ST = 5.50 mins

CalculationsAssembly Line Efficiency, AE = OT / ST

AE = 73.9%

Optimize Above Assembly / Machining Line Step 1

reducing the number of parts assembled in slow cells andincrease the number of parts assembled in fast cells. InputStep 2 Cycle Time Cell A, TA = 5.5 minsCombine cells with short cycle times. Duplicate Cells, DC = 3 cellsStep 3 CalculationOperate slow cells in parallel. Combined Cycle Time, CT = TA / DC

Operating in Parallel, CT = 1.83 minsMAKE OR BUY DECISIONAnnual cost comparisons should be made between the cost of makingparts and assemblies VS purchasing. Take into account that therewill be fixed costs for both make and buy.Cost to Make Data Input

MakeUnits per Year, UY = 20000 Units/yr

Fixed Cost per Unit, FC = $0.087 $/UnitMaterial Cost per Unit, MC = $0.085 $/Unit

Direct Labor hourly cost, DL = $16.00 $/hr

Change each cell cycle time to match the optimum time OT by

Cell-8 Cell-5Cell-7 Cell-6

Overhead Labor hourly cost, OL = $12.00 $/hrAnnual Direct Labor Hours, LH = 400 hrs/yr

Annual Cost to Make Calculations

Annual Cost of Materials, AM = UY x MC $1,700.00

Direct Annual Labor cost, AL = DL x LH$6,400.00

Annual Labor Overhead, LO = OL x LH P5$4,800.00

Annual Fixed Cost, AF = UY x FC$1,740.00

Total Annual Cost to Make, CM = $14,640.00

Cost to Buy Data Input Buy

Units per Year, UY = 20000 Units/yr Purchase Price per Unit, UP = $0.45 $/Unit

Fixed Cost per Unit, FC = $0.087 $/Unit

Annual Cost to Buy CalculationsAnnual Cost of Units, AM = UY x UP

$9,000.00Annual Fixed Cost, AF = UY x FC

$1,740.000 Total Annual Cost to Buy, CB = $10,740.00

Annual Cost ComparisonAnnual Cost to Make - Cost to Buy, MB = CM - CB

$3,900.00

P6

MFG Plan

EXAMPLE: Average monthly production values include:

Labor Input Production Units per Hour, UH = 6 Units/hr

Gross Profit % before taxes, GP = 30 %First Shift time span, 1S = 8 hrs/day

Second Shift time span, 2S = 8 hrs/dayThird Shift time span, 3S = 0 hrs/day

Number of first shift Employees, 1E = 12Number of first shift Employees, 2E = 9Number of first shift Employees, 3E = 0

Average Hourly Wage Shift 1, 1W = $20.00Average Hourly Benefits Shift 1, 1B = $22.00

Average Hourly Wage Shift 2, 2W = $22.00Average Hourly Benefits Shift 2, 2B = $22.00

Average Hourly Wage Shift 3, 3W = $22.00Average Hourly Benefits Shift 3, 3B = $22.00

Business Days per Week, DW = 5 days/wkBusiness Weeks per Year, WY = 50 wks/yrBusiness Hours per week, HW = 40

MaterialsOutsourced Parts, OP = 40000

Raw Materials for Manufacture, RM = 30000Miscellaneous and Contingency, MC = 10000

Factory Mortgage on Buildings and Land, MB = 4500

Manufacturing Equipment Payments, ME = 2000Power & Utilities, PU = 5500

Office Equipment and Supplies, OE = 500

Labor Expenses CalculationsAverage Business Hours per Month, HM = (1S+2S+3S)xDWx52 / 12

HM = 346.67 hrs/monthTotal Labor, LE = (1W+1B+2W+2B+3W+3B)xHM

LE = $45,066.67Material Expenses

Materials Expenses, ME = OP + RM + MC$80,000.00

Factory ExpensesFactory Expenses, FE = MB + ME + PU + OE

$12,500.00Labor, Materials & Factory Expenses TE = LE + ME + FE

TE = $137,566.67

30%Gross Profit, GP = TE x GM

Gross Profit Margin from Input, GM =

GP = $41,270.00Gross Operating Cost (GC)

Gross Operating Cost, GC = TE + GPGC = $178,836.67

Sell Price per UnitAverage Units Produced per Month, UM = UH x HM P3

UM = 2080 Units per MonthSell Price per Unit, SP = GC / UM

SP = $85.98

MANUFACTURING OPERATIONS SPREADSHEETS Quality Control

QUALITY CONTROL

The bearing, shaft, key, and gear parts illustrated above will form a subassembly.

Variations in shaft outside diameter and matching hub inside diameter must be controlledwithin specified limits to insure that all assemblies fit and function together.

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A turning center is pictured here.

Variations in part dimensions are due to cuttingtool ware, vibrations, thermal expansion, andchips of cut metal.

A part inspection booth is shown above.

P-2WAHSINER CMM INSPECTION EQUIPMENT

A probe travels from one surface to another checkingdimensions critical to the performance of the part.

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The CMM probe tip moves and comes into contact with a pointon the part. The probe continues to move a short distance before it comes to a stop. The probe speed is monitored and the distancefrom contact to the stopped position is subtracted to obtain thecorrect dimension.

The upper dimension limit is +3 Sigma's and The lower

dimension limit is -3 Sigma's in the normal distributioncurve shown above.

P-4

A 3-Sigma, "Run Chart" is pictured above.

The total allowable deviation in dimension is (3.010"- 3.000")or 0.010 inches.

The 0.010 inch total deviation in dimension is divided by 6 to obtain Sigma = 0.010" / 6 = 0.00167 inches.

That results in 3 Sigmas above and below the mean dimension of 3.005 inches.

3-Sigma is the present day standard for quality and results in 67defect per 1,000 parts manufactured.

A 6-Sigma, "Run Chart" is pictured above.

The total allowable deviation in dimension is (3.010"- 3.000")or 0.010 inches.

The 0.010 inch total deviation is divided by 6 to obtain 1.000-Sigma = 0.010" / 12 = 0.00083 inches.

That results in 6-Sigmas above and below the mean dimension of 3.005 inches.

6-Sigma is the state-of-the-art standard for quality and results 3 defects per 1,000,000 parts manufactured. P-5

Mailing Address: BuildingSteelWise LLC

1898 South Flatiron CourtSuite 210

Boulder, CO 80301

Tel. 303-825-2635Toll Free: 1-800-698-9473

Fax: 303-825-0390www.steelwise.com

Quote Sheet

Buyer: Date: 3/19/2007

Company: City,State:

Building Specifications

Width: 50 ft Length: 100 ft Height: 16 ft Roof Slope: 1:12Live Load: 20 psf Wind Load: 90 mph 10 psf 0 psf

Building Code: IBC 2003 Seismic: Ss 40.8 Exposure: BBay Spacing: 4@25 Endwall Girts: Flush 27,351 lbs

Left Endwall: Sidewall Girts: By-pass STD Tapered

Right Endwall: STD

Roof Panel: 26 ga Galv Roof Profile: “PBR” Wall Panel: Color, 26g “PBR”

John Andrew

Seneca, SC 29672

Ground Snow:

Collateral Load:

Frame Type:

Clear Span

Building Wt.

Bearing Frame

Column Spacing:

Column Type:

Bearing Frame

Column Spacing:

Wall Profile:

Accessories Notes Cost

Building A: 1 $34,800.00

Walk Doors: 4 Included

Windows 20 Included

Overhead Doors: 2 12' x 12' Overhead Doors $2,620.00 Framed Openings: 2 12' x 12' Framed Openings Included

Skylights: 16 Included

Ridge Vents Continuous Included

Insulation: All $5,070.00

Eave Type: All Included

Base Condition: All Base Angle Included

Additional Features: Included

Included

Quantity

50x100x16 Clear Span Steel Building Package3070G Half Glass (Glass not included) Walk Door, Lever Lock, and Weatherstrip

3040 AHS Mill Finish Frame, with Clear Glass

3’ x 10’ Light Transmitting Panels, Non-Insulated with Insulated Trim

12” x 10’ Non-Continuous, Galvalume, With Birdscreen and Damper

Fiberglass batting WMP-VR Facing, 3" Walls 4" RoofGutters and Roll Formed Downspouts on Both Sidewalls

All Building Standard Features (except as noted above)

Stamped & Sealed Engineered Drawings & Permit Drawings

Included

Included

Included

Included

8.556

BUILDING & COMPONENTS: $ 42,780.00FREIGHT: $ INCLUDEDTAX: $ TBD

$ 42,780.00$ 10,695.00

COD AMOUNT: $ 32,085.00*Due to fluctuating steel prices, the prices quoted here are good until March 16, 2007.

Account Representative: Harry Donahue Date: 3/19/2007

Land, errection, power and utilities instalation costs for the above building = 4 x Building Cost = 4 x $42,780 = $171,120Total Building and Construction Costs = 42,780 + $171,1200 = $213.900

BUILDING PURCHASE vs LEASE A commercial building, 50 ft wide x100 ft long clear span steel building with 16 ft high wallszoned for light manufacturing, can be leased for $6.00 per square foot per month.

Anchor Bolt Setting Plan & Concrete Reactions

20 Year Warranty On Roof & Wall Panels

Ultimate Extended Lifetime Roof Fasteners (upgrade)

Wall Eave Closures, Sill Closures (upgrade)

SUBTOTAL: ENGINEERING DEPOSIT

(25%):

 . 

The monthly building lease = 50 x 100 x $6.00 = $30,000 The annual building lease = 12 x $30,000 = $360,000 per year

The lease amount would pay for the building in 7 months!

Building

MANUFACTURING OPERATIONS SPREADSHEETS Equipment

MANUFACTURING EQUIPMENT

The initial cost of the automated assembly cellspictured here is much higher than manual assemblycells operating at the same number of units per hour.

A fully automated assembly line is pictured below.

The "EVANA" automated assembly cell is illustrated above.

P-1

The vibrating bowl feeder shown above delivers fasteners to the power screw driver at the right.

The pick and place robot above, is programmed to move the power screw driver above from screw to screw in this assembly cell.

The market place for industrial products today demandsinnovation, improved designs, high reliability, quality, and low prices.

This means rapid prototyping and production systems thatare agile and able to change more rapidly.

Hundreds of screws move up the spiral ramp in the vibrating bowl feeder pictured at the left. Having reached the top, the screws slide down the shoot

to the automatic screw driver.P-2

Compare the manual assembly line above with the automated robotline at the right. The manual line can be profitable with relatively The robots above can be programmed quickly to short production runs. accommodate small changes in product

configuration but the total number of unitsproduced must be very high compared to thatproduced manually.

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A typical manual machine shop is pictured below.

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A Computer-Numerically-Controlled (CNC) turning center (Lathe) is pictured aboveP-5

P-6The McMaster-Carr website, www.mcmaster.com, has 420,000 industrial products including: tools, metals, plastics, fasteners, materials handling equipment, etc. Descriptions and prices are provided for all items listed here.

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