Job Costing and Estimating
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This document discusses job costing and estimating techniques for manufacturing. It emphasizes that consistent quoting relies on both people and software using accurate part information and formulas. Operational formulas and examples are provided for estimating costs for specific parts based on factors like material type, piercings, bends, setup times, and overhead rates. Tracking actual costs through job costing analysis is important for improving estimates and identifying areas for increased efficiency or cost reduction.
Job Costing and Estimating
- 1. © MIE Solutions 2015. All Rights Reserved. Confidential & Proprietary© MIE Solutions 2015. All Rights Reserved. Confidential & Proprietary Job Costing and Estimating Presented NOVEMBER 2015
- 2. © MIE Solutions 2015. All Rights Reserved. Confidential & Proprietary Quote Consistency Where can quote consistency come from? People or Software? Both!
- 3. © MIE Solutions 2015. All Rights Reserved. Confidential & Proprietary Money OR Time Quoting
- 4. © MIE Solutions 2015. All Rights Reserved. Confidential & Proprietary What about FACTS? Part Size Part Thickness Material Type Number of Pierces Speed of Cut Number of Countersinks Chamfer Inches Number of Setups Number of Tool Changes Total Inches of Weld Total Inches of Grinding Number of Weld Starts Number of Parts in a Jig Number of Parts not in a Jig
- 5. © MIE Solutions 2015. All Rights Reserved. Confidential & Proprietary Operational Formulas
- 6. © MIE Solutions 2015. All Rights Reserved. Confidential & Proprietary Part - Gusset
- 7. © MIE Solutions 2015. All Rights Reserved. Confidential & Proprietary Quote Part ________ ________ ________ ________ ________ ________ ________ ________ • Linear Inches of Cut • Speed Of Cut • Number of Pierces • Pierce Time • Number of Bends • Number of Flips • Part Size • Helper Required Labor • Laser Setup ________ • Press Brake Setup ________ LaserPressBrake
- 8. © MIE Solutions 2015. All Rights Reserved. Confidential & Proprietary Quote Part ________ ________ ________ Nesting? Sheets Common Material vs. Amortization Material Cost • Sheet Cost • Parts Per Sheet • Part Size
- 9. © MIE Solutions 2015. All Rights Reserved. Confidential & Proprietary Quote Part • Anodizing Cost Lot Pricing Other Parts Sharing the Cost Time Frame / Expedite Outside Process ________
- 10. © MIE Solutions 2015. All Rights Reserved. Confidential & Proprietary Where does all this information go? ((Linear Inches of Cut/Speed of Cut)+(Number of Pierces*Pierce Time)/60)* $ + ((Number of Bends + Number of Flips + 1) * ((if(Length>14.9, (Length * 0.0005555) + 0.1086675, 0.1169) + (If(Helper=1, 0.025,0)))* + Outside Process Cost/Quantity + (Setup Time/Quantity)* + =Per Part $ Sheet Cost/Parts per Sheet $ $
- 11. © MIE Solutions 2015. All Rights Reserved. Confidential & Proprietary Shop Rates Employee Wages (Direct Labor) Overhead Variable Fixed Profit Do You Know What Your Rates Made Of?
- 12. © MIE Solutions 2015. All Rights Reserved. Confidential & Proprietary Overhead Direct Labor Profit Sell Rate Direct Labor Shop Rates Do You Know What Your Rates Made Of? = SHOP RATE
- 13. © MIE Solutions 2015. All Rights Reserved. Confidential & Proprietary Shop Rates Overhead • Variable • Directly Associated to Production (More Production = More Cost) • EX: Gases, Utilities, Machining Tools • Fixed • Associated to Production but (More Production ≠ More Cost) • EX: Equipment Leases, Rent, Depreciation • Operating Overhead • Marketing & Sales, Administrative Salaries, R&D
- 14. © MIE Solutions 2015. All Rights Reserved. Confidential & Proprietary Overhead Direct Labor Profit Shop Rates Do You Know What Your Rates Made Of? $ Material$ $ Buy Sell
- 15. © MIE Solutions 2015. All Rights Reserved. Confidential & Proprietary What WAS the Cost? Direct Labor Material Hardware Outside Process Overhead
- 16. © MIE Solutions 2015. All Rights Reserved. Confidential & Proprietary Cost Accumulation • Methods – Barcoding – Kiosk – Tablets – Manual Entry • Methods – Barcoding – Kiosk – Tablets – Manual Entry – Backflushing • Labor – Collection – Tracking – Scheduling / Capacity Planning • Bill of Materials – Costing – Inventory Control
- 17. © MIE Solutions 2015. All Rights Reserved. Confidential & Proprietary How Should I Compare? Job Costs Profit ? Shop Rate + Where’s the Profit? Material Job Estimate
- 18. © MIE Solutions 2015. All Rights Reserved. Confidential & Proprietary What Should I Compare? Profit ? + Direct Labor Material Hardware Outside Process Overhead Overhead Direct Labor Profit Outside Process Hardware Material Job Cost Job Estimate
- 19. © MIE Solutions 2015. All Rights Reserved. Confidential & Proprietary Job Costing When Should You Analyze a Job? Who Should Analyze the Job? Can I Start Performing Job Cost Analysis Tomorrow? What Should I be Looking For?
- 20. © MIE Solutions 2015. All Rights Reserved. Confidential & Proprietary Job Costing Company Level Reporting Department Level Trending Work Center Level Trending Employee Specific Reporting Part Type Trending Part Specific Trending What Can I Do With It?
- 21. © MIE Solutions 2015. All Rights Reserved. Confidential & Proprietary© MIE Solutions 2015. All Rights Reserved. Confidential & Proprietary Come See us! Booth S2256 We would be happy to answer any questions you may have!