Fig. 1-2-25 Filter cost factors – Grinding. (Courtesy GE Superabrasives)
Coolant Disposal Cost (Cost of disposing the used coolant), Fig. 1-2-26. In the model, CBN grinding cuts coolant replacements in half. In some cases this is a minor cost, in others it can be significant depending on the coolant type being used.
Fig. 1-2-26 Coolant disposal cost factors – Grinding. (Courtesy GE Superabrasives)
Inspection Cost (Cost related to labor of inspecting part quality), Fig. 1-2-27. Through a more consistent grinding process, a higher confidence level in product quality can be achieved thereby reducing inspection time. The model shows that inspection time was cut 36% when CBN was implemented.
Fig. 1-2-27 Inspection cost factors – Grinding. (GE Superabrasives)
Inventory Cost (Cost of carrying raw material and in process parts before and/or after grinding), Fig. 1-2-28. This number is based on the scrap rate and the predicted production rate. Since the scrap rate is reduced using CBN grinding wheels, the number of parts kept in inventory should also be reduced. No information on this cost was available for this high-pressure turbine nozzle assembly grinding application.
Fig. 1-2-28 Inventory cost factors – Grinding. (Courtesy GE Superabrasives)
Total Grinding Cost (The summation of all the significant measurable costs on a per part basis), Fig. 1-2-29. The model illustrates that despite a three times greater wheel cost per part for a vitrified bond CBN wheel, the overall cost savings is $569.00 per part or a 36% reduction in total cost; this is partially due to a 13% increase in productivity.
Fig. 1-2-29 Total grinding costs. (Courtesy GE Superabrasives)
The operation is best evaluated on an annualized basis, comparing expendable grinding wheel costs to yearly savings in order to understand the effect that superabrasives have on the process.
This example demonstrates the inadequacies of the present costing methods by showing the need for a more thorough cost evaluation by process engineers. Conversion to CBN resulted in a total production system cost reduction of 336 × $569.40 = $191,318.40/year.
CONCLUSION
Using these proposed models, the process engineer can obtain a much clearer picture of the true cost of a machining or grinding operation. A total cost program should be used as a management tool to help identify process problems, reveal where change is necessary, and monitor continuous improvement. A structured data collection system must be in place to use these models successfully. The cost savings potential of such a model, however, far outweighs the effort required to use it.
The next time the corporate finance department argues against the conversion to a superabrasive process, manufacturing engineers should point out the inadequacy of the analysis. A thorough cost evaluation will demonstrate that the intangible benefits can have a major effect on a company’s profitability. The manufacturing plant of the late 1990s and early 2000s will redefine traditional cost accounting practices to recognize the many benefits of superabrasive processes in an environment of Advanced Manufacturing Technologies.
CASE HISTORIES – MANUFACTURING PROCESSES
Rapid Prototyping
In the automotive industry, many models and prototypes (models) are required before actual production can begin. Models are used to visualize designs, check engineering changes, check that parts are correct and fit properly, and sometimes check that they function properly. Automotive manufacturers have found that rapid prototyping can dramatically reduce model-making time and costs. The following examples show how one advanced technology can benefit a company:
▪A cylinder head flow box that normally took 320 hours to fabricate at a cost of $10,000 was produced by rapid prototyping in 80 hours.
▪An “A” pillar blocker was created by stereolithography from the surface data and from that a tool was made to create the mold. The savings in CAD and design time were $30,000.
▪A stereolithography intake manifold model was used to test the flow of gasses through the chambers. Three model changes were not necessary because of the accuracy of the prototype.
▪It was estimated that one automotive manufacturer saved $5 to 10 million in a two-year period using various rapid prototyping processes.
CAD/CAM
Simmonds Precision Products, a manufacturer of products for industrial and aerospace customers, implemented a CAD/CAM system to improve manufacturing productivity, reduce manufacturing costs, and improve product quality. The implementation plan included training a full-time centralized design group. The product selected for the first application was a printed circuit (PC) design with the following results:
▪PC design savings in the first year were $154,000; in 20 months, there was a total savings of $498,000 along with a 100% reduction in cycle time for the production of designs.
▪Production time for graphics was reduced from 2 to 6 hours to 15 to 60 minutes with a significant reduction in errors.
▪Direct labor reduction in engineering was reduced by 27%
CASE HISTORIES (MACHINE TOOLS & FLEXIBLE MANUFACTURING SYSTEMS)
▪General Electric Company, Erie Locomotive, Erie, PA, installed a $300 million FMS facility for the machining of locomotive motor frames. In two years the company increased its market share from 20 to 25% to nearly 50%.
▪Yamazaki Machinery Company, Japan, installed an $18 million FMS system that resulted in the reduction of machines required for production from 68 to 18; employees from 215 to 12; floor space from 103,000 to 30,000; and processing time from 35 days to 1.5 days. After two years, the company had saved $6.9 million in production costs.
▪Allen Bradley’s $15 million “World Contactor Line” can produce more than 125 variations of NEMA and IEC contactors at a rate of 600 per hour. This system is producing a 75% return on assets while allowing the product to compete effectively on the world market.
For more information on ECONOMICS OF ADVANCED MANUFACTURING TECHNOLOGY see Acknowledgement section for the Websites of an industry/organization listed.
(Jack Cahall, former Director of Human Resources – Cincinnati Milacron, Inc.)
High technology has arrived on the floor of America’s factories and the growing use of these technologies has led to operational excellence, higher productivity, and higher profits, Fig. 1-3-1. Conventional manufacturing is being rapidly replaced by new, fast-response, customer-focused techniques that maximize the manufacturer’s return on all resources – capital, materials, equipment, facilities, time, and especially