CASTING COSTING CONCEPTS or even COSTING CASTING CONCEPTS

Trevor Law & Pamela Murray

Copyright Trevor Law, 2004

Casting Costing Concepts

Why the fuss about costing?

Costing of proposed new products can be rather difficult for foundries

There are several reasons for this...

Process characteristics casting is a completely unique process Business aspects of casting supply the customer / product relationship is unusual Penalties for error are draconian - foundries go out of business if they get it wrong!

Casting Costing Concepts

Casting is a unique process (i)

Foundries are unique because they usually destroy their tooling every time they make a casting
Risers Risers Product Product

Sand Mould

Loose Sand

Tool During Use Tool After Use

Casting Costing Concepts

Casting is a unique process (ii)

Foundries rarely time their operations as a matter of routine In fact many find problems with accurate WIP counts as well...

Casting Costing Concepts

Cost Estimating is also difficult

Because foundries rarely know accurately the answer to the most basic question...
How much will it weigh?

Casting Costing Concepts

Cost Estimating is also difficult

Because foundries rarely know how many castings will be ordered by the customer...

And remember, unlike other industries, most castings are unique to a given customer so making for stock is a no-no

Casting Costing Concepts

Historically many foundries sold castings on a weight basis

Selling on a weight basis had serious drawbacks Order-books would fill with loss-making difficult castings While foundries who costed on a difficulty basis got the simpler more profitable jobs...

Casting Costing Concepts

Weight Estimating Aids

Conventional paper-based systems split a complex shape into numerous simpler geometric shapes Foundrymen calculated weights for each shape and then added them together. Now computers can do this more effectively, often via a 3D CAD system Sometimes via a solidification model Or on occasions customers do it for them while designing the casting

Casting Costing Concepts

Cost estimating aids

When weight has been estimated, manufacturing cost must be assessed Several methods have been used in various countries Shape, weight, material and spatial classification to locate similar previous jobs Algebraic modelling to estimate the cost

Casting Costing Concepts

Cost estimating approaches...

Casting Classification
Based on research in old Soviet Bloc countries Used non-functional characteristics of castings such as Shape Complexity, Weight, Material, Spatiality. Related these characteristics to manufacturing difficulty and hence cost
After IBF Working Group E4

Casting Costing Concepts

Cost estimating via algebra

Algebraic Modelling
Various studies by industry working groups have recommended estimating and costing methods Most suggest the same basic procedure and layout - such as that shown here...

Casting Costing Concepts

Paper Based Estimating Models

Originally all foundry cost estimating was paper based Work study was widely used so accurate time data was available Systems were similar to this

After IBF Working Group E5 (1984)

Casting Costing Concepts

Back in the 1980s

Early estimating systems used very low-power computers Some were literally used on the shop-floor Surprisingly good work was done however... This was in the early 80s...

Commodore PET Computer with add-on twin floppy drive and estimating package

Casting Costing Concepts

What have we learned in the next 20+ years?

Make estimating part of an overall management system Effectively integrate costing & production databases Use a generic calculating tool (e. g a spreadsheet) Spreadsheet must input / output to foundry database Separate models for estimating & re-costing needed Must be usable day to day by normal foundry staff Needs a means of configuring a quotation Estimates for new parts provide basis for products

Casting Costing Concepts

This is one example

Section of SYNCHRO32 Flowchart - 2004

Casting Costing Concepts

Here is the Schematic CostEstimating Model for this system

Now Lets see how it works in practise

Casting Costing Concepts

Overview of program operation

Effectively this means WHICH CAN THEN BE definingPRINTED the data linkages FOR between data sources and an CIRCULATION IN-HOUSE embedded Excel spreadsheet used for costing

Casting Costing Concepts

Now! How did that happen?

Data files were interrogated (products, process names, process cost rates, metal weights and costs, moulding materials, etc Data was posted into an Input spreadsheet A calculation followed giving a result The cost result is displayed in the Output Spreadsheet The sheet is printed for circulation to managers

Casting Costing Concepts

Finally a quotation is printed and sent email or snailmail

Casting Costing Concepts

Summary
Estimating, Costing and Quoting can be semi-automated to considerable benefit The costing system should be integrated within a total foundry database Weight estimating by computer is worthwhile Building and linking the algebraic model is the most complex part of the job Cost estimating can benefit from shape and property classification Systems of this type have been installed on three continents, in foundries of all types