Cost estimation is a critical task due to the small margins between production cost and selling price in a competitive market. For machining companies, this process is complex because of the high amount of variation occurring. An intelligent software system provides accurate cost estimation based on 3D CAD models.

1. Manufacturing Day Page 1
May 10th, 2011
TechniQuote
Automated cost calculation
of complex parts
L. Berteloot
Software Department manager
Cetim - France
Automated cost calculation of complex parts – L. Berteloot

2. Manufacturing Day Page 2
May 10th, 2011
0706-05-GB
Automated cost calculation of complex parts – L. Berteloot

3. Manufacturing Day The French Technological Institute Page 3
May 10th, 2011 for mechanics
Governed by Articles
L342.1 to L342.13
of the Code of Research
Steered by mechanical industrialists
under the State’s supervision
Founded in 1965
700 people
with 56% engineers
Automated cost calculation of complex parts – L. Berteloot

4. Manufacturing Day Making Technological choices Page 4
May 10th, 2011 for the future
Mechatronics
Design Simulation 4 Inspection
Tests Measurement
Technological
axes
Materials - Processes Sustainable
development
Automated cost calculation of complex parts – L. Berteloot

5. Manufacturing Day Page 5
May 10th, 2011 Transfering of Technology to mechanical
Small and Medium Companies
Permanent information
30,000 visitors 15 technical days 2 international 800 participants to
every month 
60 mechanical mondays congresses flash Midest lectures
More than 30 000 30 new performance reports
technical calls/year 10 new issues/year
Catalogues: Training, Publishing, Software
Automated cost calculation of complex parts – L. Berteloot

6. Manufacturing Day Page 6
May 10th, 2011
Automated cost calculation
for complex parts
Automated cost calculation of complex parts – L. Berteloot

7. Manufacturing Day Page 7
May 10th, 2011
Introduction
TIME, COST and PRICE
• 3 different terms for a single concept COSTING
Remark : Time will be also used for Delay
Automated cost calculation of complex parts – L. Berteloot

8. Manufacturing Day Page 8
May 10th, 2011
Costing of complex parts
A part is complex by:
 Geometry
 Precision
 Quantity of details
 Manufacturing process
 Assembly (number of parts and their types)
 Standards
Costing can become complex with informal aspects :
 Importance for company (stakes and risks)
 Delay to cost
Automated cost calculation of complex parts – L. Berteloot

9. Manufacturing Day Page 9
May 10th, 2011
What is in Technical Cost ?
Technical Cost = Supply Cost + Manufacturing Cost
• Cost = f(Quantity, Machine and Tools, Process, Labour Rate)
Supply Cost
 preparation (bar, forged, casted)
 Losses (cutting mark, clamping, off cut)
Manufacturing Cost :
 O&M department
 Prep. (machine / tools), Mounting
 Machining + Tool Cost
 Subcontracting (painting, treatment, …)
 Controlling, Assembling, Logistics
Automated cost calculation of complex parts – L. Berteloot

10. Manufacturing Day Page 10
May 10th, 2011
What is NOT in Technical Cost ?
Margins problem are complex and multiple :
• Real margins : price = cost (1+ margin)
 Manufacturing, Supplying, Subcontracting,
• Hided costs
 Commercial or organization costs,
 Machine occupation rate, return on invest
 Non estimated activities (logistics, transportation, controlling, …)
• Risk coverage percentage
Automated cost calculation of complex parts – L. Berteloot

11. Manufacturing Day Page 11
May 10th, 2011
Costing : a global concept for company
• Engineering : COST
 Design to cost
 Value engineering
• Manufacturing : TIME* and COST
 Process optimization
 Anticipation of working load
 Data Flow optimization
 Best practices
• Sales/Procurement : COST and PRICE
 Shorten delay for quotation
 Increase precision and reliability of tenders
 Argue a quotation
• Management : COST
 Decision making aids (delocalization, investment, politics and strategy)
Automated cost calculation of complex parts – L. Berteloot

12. Manufacturing Day Page 12
May 10th, 2011
Why using an automated cost calculation ?
What is the job of a Cost expert ?
 Analyse and consultation
 Optimize process
 Estimate Time and Cost
Remark : Delay  and Risk 
First reasons :
 Faster and more precise  One solution
 Optimization by simulation  The solution
Main reasons:
 Repetitiveness, Reliability, Simulation tool
 Customizable (Costing know-how capitalization)
 Integration in the numerical chain (CAD-Costing-ERP)
Automated cost calculation of complex parts – L. Berteloot

13. Manufacturing Day Page 13
May 10th, 2011
Costing : different approaches
• Qualitative
 Intuitive or empirical
 From personal experience
 Analogical
 Search tool
• Quantitative (calculation tool)
 Analytical
 Exhaustive description of all the process operations
 Parametrical
 Parameterization of analytical approach
 Statistical
 “Black box” system with variables  ex : pomp (flow rate, power, efficiency, rotation,…)
Automated cost calculation of complex parts – L. Berteloot

14. Manufacturing Day Page 14
May 10th, 2011
Intuitive Approach
• Unformal analogical approach
• No real tool aids (sometime : excel file)
 cross-multiplication
 extrapolation
 direct costing without feedback loops
• Implementation
 Based on personal experience and feeling
Automated cost calculation of complex parts – L. Berteloot

15. Manufacturing Day Page 15
May 10th, 2011
Analogical approach
• Concept
 Database of part references with specific description and cost
 Search engine or multicriteria request to find closest references
 Interpolation to estimate Cost
• Problem : how do you valorize differences ?
 dimension, material
 serie
• Implementation
 Collect data on part description with associated cost
 Formalize of part description
 Determinate cost drivers
Automated cost calculation of complex parts – L. Berteloot

16. Manufacturing Day Page 16
May 10th, 2011
Analytical Approach
• Description of the operational process
 “Exhaustive” list of all the required operations
 Calculation of TIME (Raw material, Machine)  COST
 Estimation of TIME (technological data)  COST
 Sum up to get global COST
• Implementation
 Customize cost database
 Add-on specific ops.
Automated cost calculation of complex parts – L. Berteloot

17. Manufacturing Day Page 17
May 10th, 2011
Parametrical approach (1)
• Plain parametrical formula :
 Cost = Cost (material+drilling+machining+controlling)
 Raw Material = Vol (L*l*H) * C1
 Drilling = (Nb of drills)*C2+(Nb of taps)*C3
 Machining = (Vraw-Vfinish)*C4
 Controlling = (50 ch) * C5
 Implementation
 Quite close from intuitive approach
Automated cost calculation of complex parts – L. Berteloot

18. Manufacturing Day Page 18
May 10th, 2011
Parametrical approach (2)
• Parametrical based on analytical approach
 Identification of the
relevant process
 Change parameters
 Validate for
cost calculation
• Implementation
 Collect data on process
 Realize initial estimates
with analytical approach
Automated cost calculation of complex parts – L. Berteloot

19. Manufacturing Day Page 19
May 10th, 2011
Statistical approach
• No access to analytical approach / Few information / Complex project
• Early phase in the Product Life Cycle
 Parametrical approach based on statistical laws (Cost Estimation Relationship)
extracted from large ERP database
• Implementation
 Collect input data on project
 Determine cost drivers
 Identify stat. laws :
 Regression
 Main composant analyse
 Difference
Automated cost calculation of complex parts – L. Berteloot

20. Manufacturing Day Page 21
May 10th, 2011
How to choose your approach ?
Few information Projects Intuitive Analogical Statistical
X1 X 10 X50
Parametrical
Analytical
Risk
Parts X1 Analytical
reduction
X50
Process X1 Parametrical
Maxi of information
Operations
X1 Change control
Setting-up
Automated cost calculation of complex parts – L. Berteloot

21. Manufacturing Day Page 22
May 10th, 2011
Advantages / disadvantages
Intuitive Analogical Analytical Parametrical Statistical
Precise evaluation
Reliability     
Sensitiveness     
Right price
    
Implementation     
Set-up easiness     
Automation     
Technical Level     
Budget and resources     
Automated cost calculation of complex parts – L. Berteloot

22. Manufacturing Day Page 23
May 10th, 2011 Challenges for a company
implementing a costing solution
1. Correlation cost estimation and manufacturing cost
(feedback loop)
2. Update data (technical and economical)
3. Training and customization
4. Integration with ERP system (input and/or output)
5. Implementation in a group with subsidiaries
6. Vulgarization of Costing tool
7. Education of “ordering party” and “sub/contractors” in exchanging 3D model files
Automated cost calculation of complex parts – L. Berteloot

23. Manufacturing Day Page 24
May 10th, 2011
Study-case : automated cost calculation
from CAD file to Costing in few clicks !
• Cetim TechniQuote
 analytical
 automatic/interactive
Video
Automated cost calculation of complex parts – L. Berteloot

24. Manufacturing Day Page 25
May 10th, 2011
Costing : perspectives
- Enlarge Costing to multi-technology :
- Sheet metal
- Tooling
- Forging
- Composites
- Mix performant approaches
- Statistical and analytical
- Costing orientations
- Introduce as a major phase in the Product Life Cycle
- Feed back to engineering
- Optimization of process for O&M department
Automated cost calculation of complex parts – L. Berteloot

25. Manufacturing Day Page 26
May 10th, 2011
Thank you for your attention
Cetim
52, Avenue Félix-Louat
France - 60 304 Senlis Cedex
Laurent BERTELOOT
Tel : (+33) 3 44 67 47 79
Mail : laurent.berteloot@cetim.fr
Automated cost calculation of complex parts – L. Berteloot