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SMTA Releases Industry's First Cost Estimating Guidelines
October 12, 2004 |Estimated reading time: 1 minute
Minneapolis, Minn.—Featuring ProfitPro, an Excel-based software application that calculates the cost and profit related to PWB assembly, the SMTA Cost Estimating Guidelines are intended to systematically model real-time cost estimating (RTCE) in the electronics industry.
While RTCE is simple in concept and involves no sophisticated mathematics, the calculations are quite tedious and cumbersome to perform manually, as they include many production variables, such as cycle time, hours per shift, shifts per day, days per week, set up time and unscheduled/scheduled downtime. Yield loss and cost of repair must also be considered, as well as inventory turns and interest rates.
Using these variables, ProfitPro can model RTCE for high-volume, low-mix to low-volume, high-mix lines, and after several hours of experience, a user can completely cost model their facility. Additionally, ProfitPro is user-friendly, in that it has "default" values of cost metrics, if the user does not know them, and it can calculate "what-if scenarios", such as the following:
- The amount of profit gained if setup time is reduced.
- The amount of profit gained if cycle time is decreased.
- The amount of profit gained if new equipment or materials increases productivity.
As an introduction to using ProfitPro, the following three particular scenarios are presented as examples in the printed portion of the guidelines:
- Does it pay to buy a $1 million chip shooter if it reduces cycle time from 28 seconds to 26 seconds?
- Solder paste reduces setup time, but costs more.
- Shutting down a line.
Arranged by Dr. Ronald C. Lasky, Indium Corporation of America and Dartmouth College, the SMTA Cost Estimating Guidelines with ProfitPro Software is a vital tool for capital investment decisions and productivity improvements. Visit the SMTA Bookstore on smta.org for more information, or contact SMTA director of communications and IT, Jesse Katzman, with any further questions at (952) 920-7682 or jesse@smta.org.