COSTS MODELS IN DESIGN AND

MANUFACTURING OF SAND CASTING

PRODUCTS

Nicolas Perry, Magali Mauchand and Alain Bernard

IIRCCyN, 1 rue de la No, BP.92101, 44321 Nantes, France

Abstract: In the early phases of the product life cycle, cost controls became a major
decision tool in the competitiveness of companies due to world competition.
After defining the problems related to these control difficulties, we will
present an approach using a concept of cost entity related to the design and
realization activities of the product. We will try to apply this approach to the
fields of the sand casting foundry. This work will highlight the enterprise
modelling difficulties (limits of a global cost modelling approach) and some
specifics limitations of the tool used for this development. Finally we will
discuss the limits of a generic approach.

Key words: Cost management, Enterprise Product Cost modelling, Cost entity

1. INTRODUCTION

In the early Seventies, studies in the United Kingdom and in the United
States highlighted the strategic role of design activities. The conclusions led
both comp
m anies and authorities towards new aapproaches in order to imp m rove
the economic performances of companies. At the end of the Eighties, the
paramount role of quality in design was reinforced in the United States by
the Made-in-America report from the MIT Commission on the
Productivity [1]. The Commission on Engineering and Technical Systems
study (from the United States Committee on Engineering Design Theory r
and Methodology) confirmed these conclusions in the Designing for
Competitive Advantage report [2] in 1991.

69
A. Bramley, D. Brissaud, D. Coutellier and C. McMahon (eds.), Advances in Integrated Design and
Manuf
ufacturing in Mechanical Engineering, 69-80.
2005 Springer. Printedd in the Netherlands
d.
70 Nicolas Perry, Magali Mauchand and Alain Bernard
r
rd

As described by Perrin [3], the design phase is the key factor of the
product development process. The ability to produce new products with a
high quality, a low cost and which fit with the customer requests is
fundamental to improve national competitiveness. Consequently, costs (and
cost management from the early design to the end delivery) become as
important as the other technical requests.
Due to the global market and the worldwide competition, reactivity and
agility are the only way to maintain company competitiveness. This can be
characterized by the ability of a company to change its products and/or
r short time and at minimal cost. Cost control, at the early
processes in a very
stages of design, becomes a key factor of success, since this phase fixes an
average up to 70 to 80% of the end product costs (depending on the kind of
production).
Moreover, the distribution of costs (respectively direct and non direct) is
changing: more time and services are dedicated to the studies for smaller
product batches and shorter product life. The former cost-sharing methods
and the analytic or analogical cost-accounting methods no longer give
efficient results. Thanks to studies from CAM-I (Computer Aided
Manufacturing-International [4]) and authors like Johnson and Kaplan [5],
the increasing gap between traditional methods of cost estimation and the
new management requirements have been highlighted.
All these works lead to new approaches integrating the complete cost and
promote accounting methods based on the enterprise activities (Activity
Based Costing for instance). The French economist, Perrin [6], since the
Sixties, has also developed a method based on one single cost-inductor
through all the steps of the product development process (Added Value Unit
method). We implemented such a costing management in a French sand
casting foundry
r in order to allow a multi-level management approach, based
on indicators linked to the exact costs of the product to be delivered [7, 8]. In
this work we validated the concepts and also the methodology required for a
complete numerical traceability.
The work that will be presented in this paper concerns this former study
and uses a concept called cost entity [9]. It includes several concepts: cost
inductors from activity-based accounting methods, features from computer-
aided design (CAD) and homogeneity from analytical cost accounting.
Consequently, in order to define a cost entity
t , it is necessary
r to fill in several
attributes linking technical and economical variables. The product model
uses the concept of manufacturing feature. Costs are evaluated on the base of
specific knowledge and reasoning models with the tool Cost Advantage,
giving information on costs to the CAD model. This is adding a cost
semantic level to the CAD model. This model (called costgramme) makes
the expertise of the manufacturing cost available to the designer.