Automotive - Comparative Study

8/19/2019 Automotive - Comparative Study

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Cost as a Business Driver – ACostE EMC Learning EventTerry Griggs – Ford Motor Company

Cost as a Business Driver

Cost Estimating Comparative Study

The Automotive Angle

Terry Griggs and Bill Ewin

- Ford Motor Company


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Content

• Introduction and verview

• Estimating Methodology

• Tools and !ata"ases

• Component Costing


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Introduction and verview


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Ford• #$

• Germany

• Spain• %orth America

• Me&ico

• Australia

• South A'rica

• India

()*• #$

Aston Martin

• #$

+olvo

• Sweden


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Manufacturing Engineering Purcasing

Finance

PD!Finance

T"M!Finance

CostEstimating


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The Cost Estimator develops estimates o' piece costand tooling cost 'or "oth present and 'orward modelcomponents purchased "y Ford 'rom suppliers,

*oles and *esponsi"ilities*oles and *esponsi"ilities


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• Strategy Costing

• Target Setting andAgreements

• Change Control

• )aunch Team

• Esta"lish Gap to Benchmar

• Supplier %egotiations• Competitive Teardown Analysis

• Cost *e.uests

*oles and *esponsi"ilities*oles and *esponsi"ilities


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Estimating Methodologies

Activity Based Costing• In estimating the cost o' a part the estimator de'ines the

individual manu'acturing processes used to produce the part

• Each process step is de'ined in terms o' the machine employed

• Each machine in the process has "een studied

with respect to the amount o' "urden it creates and the total "urden o' the product is the sum o'all the individual machine "urdens


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• There are two ma/or elements contained within"urdens0-

- )a"our

- Assets

Activity Based Costing

• Ford Cost Estimating uses a 1Com"ined )a"our2 costwithin an estimate, This is to recover the cost o' directla"our3 indirect la"our and 'ringe costs

• Asset costs comprise o' the owned machines3"uildings and 'acilities re.uired 'or manu'acturing


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4ero-Based Estimates 5ZBE 6

4BE is a Target cost 'or the supplier to

achieve through the evaluation o' e&istingcost structures and improvements inmanu'acturing operations,


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4ero-Based Estimates (ZBE)

• Actual production location

• Best and most e''icient process to manu'acture the part using optimum machine type and si7e

• Fully lean production 'acility with ma&imum possi"le utilisation3 no 8I9 and minimum scrap

• E&-wors conditions

• Ford de'ined )a"our and Machine rates and Ford GeneralMar-#ps

• )a"our and machine rates are "ased on researched data andrepresent average conditions

• Mar-#ps derived 'rom glo"al studies into automotive supplier accounts


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Tools and !ata"ases

• CA9E 5Computer Aided 9arts Estimating6

• G*IMM 5Glo"al *ate In'ormation - Material : Machines6

• and ,,,

Systems : !ata BasesSystems : !ata Bases

E&perience


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Tools and !ata"ases

Computer Aided 9arts Estimating 5CA9E6 is anadvanced nowledge "ased system designed to

evaluate "est processes and optimal costs 'or themanu'acture o' e&ternally purchased parts worldwide,

CA9E


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Tools and !ata"ases

• Metal Stamping• 9lastic In/ection Moulding• *u""er Moulding

• 9ressure !ie Casting• Tu"e Manipulation• 8elding• Assem"ly

• 8iring• Clean Sheet

CA9E E&pert Modules


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Tools and !ata"ases

• Assumes raw materials are purchased at high volumes3 net o' re"atesand incentives

• !irect la"our is graded appropriately to match the sill level re.uired 'orindividual cost elements per'ormed

• Capital e.uipment is chosen to e&actly satis'y part re.uirements without

e&ceeding them• Capital is 'unded directly 'rom the supplier company pro'its and not 'rom

a commercial "an loan

• Cycle times use state-o'-the-art technology• ;


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Tools and !ata"ases

G*IMM !ata"ase

Glo"al *ates In'ormation Machines and Materials5G*IMM6 the glo"al !B> main'rame system used to storematerial prices3 la"our rates and "urden values,


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Tools and !ata"ases

G*IMM !ata"ase

• !irect and Indirect )a"our and Fringe Bene'its• Multiple Industry Types and Sill )evels

• ver ;?


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Tools and !ata"ases

BritainBritain

GermanyGermany

SpainSpain

FranceFrance9ortugal9ortugal

ItalyItaly

%orth America%orth AmericaMe&icoMe&ico

Ma.uiladorasMa.uiladoras

ChinaChina

C7ech *epu"licC7ech *epu"lic

9oland9oland

ungaryungary

TureyTureySlovaiaSlovaia

SloveniaSlovenia

*omania*omania

India $oreaIndia $orea

Sweden South A'ricaSweden South A'rica

AustraliaAustralia

G*IMM !ata"ase


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Estimated9iece 9rice

End ItemScrap

SG:A

9ro'it

E!:T

Manu',Cost

Material

Standard 9arts

*aw Material

!epreciation

9lant Supervision3 9lant Eng

uality Control3ealth !ept3

Security3 Canteen etc,

Clean : Specialandling

Machine Maintenance

Tool Maintenance

Interest

Floorspace

IndirectMaterials

Insurance

#tilities

)a"our

!irect )a"our

Indirect )a"our

Fringe

#tilities

olidays3 Sicness3Bonuses

Burden Machine

verheads

Introduction andverview

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*aw Materials0 Usage

9urchased 9arts0 Usage

peration ;0 Mold

• Labor minutes (number ofdirect laborers, cavities, &cycle time)

• Machine minutes (cavities &cycle time)

peration >0 Assem"ly

• Labor minutes (number ofdirect laborers, cavities, &cycle time)

• Machine minutes (cavities &cycle time)

;, ow an EstimatorCreates Manu'acturing!etail

ABS *esin0 D;,


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Component Costing

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Component Costing

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Component Costing

Focus C-Ma&

8ire Material ;3@ $m

Tape Tu"e Material ?> m

Connectors ?;@Terminals ;LH<

Seals <

Eyelets >Fuses *elays ?>

Clips *etainer >><

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Component Costing

G#$MM EDG%&C'P (iring

Loom Data

Macine

Data

Benchmarking

Data (e.g.Materials, Clips, Tape, Tube, etc)

Termina) *

Connector

Price(iring Loom

Data

+%upp)ier,

(iringLoom Data

+%upp)ier&

Ford,

CAPE (iring Estimating

Data

-on %tandard Parts

Manua)

Estimating

Modification

Fina) (iring

Estimate

+)oca)condition,

.ear)y /pdate

Continuous /pdate

0vernigt /pdate /pdate 1!' days

1 2

'

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Component Costing

Glo"al *atesMachines andMaterials !ata"ase

$nc)udes a)) macine3materia)s and

standard

components +i4e4

Connectors3

Termina)s, inc)udingcost information

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Component Costing

E!GS C?9 !ataimported

A)) components and

materia)s are captured inte import fi)e for

do5n)oading to CAPE

AA 'M6T!1789''!:F M ;;

CC 1 A%M'G!761'!A TapePaper tapeCC ' A%8M'!G>61'!A TapePaper tape

CC 7 A%>6G!G178=2!7AA TapeTape

CC 6 A%M'G!7@AG!17A1>>!EA Tue$D1=41 Conv tue 1'=C

CC 16 >2=>@AG!17A1>>!8A Tue$D1CC 1@ 1'M6T!17A172!AB 0terLo5er Cover

CC 1> 1'M6T!17A=9

CC 2= 1'M6T!17A='7!AB 0terAB% Fuseo)der

CC 21 ''M6T!17797!GAA Termina)Termina) f 24@

CC 22 17'M6T!17797!GBA Termina)24@ ct =496!14== %-

CC 1'7 1'M6T!177@>!TAA ConnectorCF 1Pos -(P L%8 @4=

CC 1@' 1=1L'T!17A=>7!FA 0terFuse Mini 1=A #D

CC 1@7 21L'T!17A=>7!GA 0terFuse Mini 16A B/

CC 1@6 1'M6T!17A=


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Cost as a Business Driver – ACostE EMC Learning Event

Terry Griggs – Ford Motor Company

Component Costing

#pload o' Cape Estimatewith Grimm and E!GS C?9 data

Manua) /pdate of

! Missing components! Circuit t5isting

! (ire sing)e sea) assem)y

! %p)icing * Termina)

insu)ation! Termina) $nsertion

! Taping * Tuing

! etc4

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Component Costing

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Component Costing

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Component Costing

Application o' Mar-#ps

• Scrap

• SG:A

• 9ro'it

• E!:T

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Component Costing

Focus C-Ma& Cost BreadownMateria) CostF 2'2462

Laor CostF 6'466

Macine CostF 2=4'6

%crapF '4@6

%G*AF '64><

ProfitF 264>'

#*DF 124>6

Total Estimate M ?HG,;;

Laor MinutesF 6>74'> min

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Content

• Introduction and verview

• Estimating Methodology

• Tools and !ata"ases

• Component Costing

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T G i F d M t C

uestions

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Automotive - Comparative Study

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