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Cycle Time and Setup Time

ljeremy578

Plastic
Joined
Aug 6, 2018
I am trying work on efficiency in our shop. We are currently using a calculator that includes the cycle time, minimum run quantity, and setup time. For example: Part A has a 20 minute set up time, a 60 second cycle time, and a min run of 10 pieces. Routing is set on a per piece basis, so each of the 10 pieces would get 2 min worth of set up time and 1 min of cycle time. Standard routing for Part A would equal 3 minutes ((20/10)+1=3). 30 minutes per shop order. So instead of cutting a shop order for 10, we decide to make 20 pieces this time. If we recalculate routing time we would get a standard of 2 minutes per piece. ((20/20)+1 = 2 40 minutes for the shop order) However routing is still giving us 3 minutes per piece which would equal 60 minutes for that shop order - efficiency is going to show at 133%. Does anyone have a better way to set this up?
 
Well, you are not giving us much info to help create a real solution. So....

I would figure out how to make the set up a variable rather than a fixed number in your equation.
 
Assuming it's a repeating order, playing with a treatment using calculus should allow you good insight to optimize lot sizes vs costs of carrying inventory. The principles discovered here will allow you to determine in advance if the job is worth quoting, or the charge necessary for any job to be profitable.
Related rates is something calculus is good at.
 
Check your system settings.
Amortization or Static
The ERP should and will allow you a setup and/or staging and also the run timeand other variables move time ,idle time.... Setup time Amortization, that's what you want.
 
In my opinion, the routing data must contain both setup time and cycle time per piece for every operation on shop floor. Setup time can be set to zero for an operation if it setup is not required for that operation. When work orders have different quantities, it is necessary to specify both setup time and cycle time in routing information for proper production planning and scheduling.
 
Isn't setup time a fixed cost regardless of how many parts you run? Yes cost could be divided up between however many parts, But for simplicity wouldn't it be the cost for 20 minutes as a stand alone line item used once in the calculation then, cycle time as another multiplied by part number?

For some customers, I bill a specific setup time for their job (repeat work) and then a per part basis, that can then be adjusted based on lot quantity for the parts.
 
I quote programming time , set up and run time at shop rate. I use McMaster to get material prices, add it to my cart to see what shipping charges are and mark it up 10%
I amortize that over the qty and that’s the price.

I’m not shy about telling customers that they pay for programming on every repeat order, but that’s how I avoid changing pricing every year.

They seem to be ok with it.
 
I quote programming time , set up and run time at shop rate. I use McMaster to get material prices, add it to my cart to see what shipping charges are and mark it up 10%
I amortize that over the qty and that’s the price.

I’m not shy about telling customers that they pay for programming on every repeat order, but that’s how I avoid changing pricing every year.

They seem to be ok with it.

Yes need to be making profit on the material too.
 
I quote programming time , set up and run time at shop rate. I use McMaster to get material prices, add it to my cart to see what shipping charges are and mark it up 10%
I amortize that over the qty and that’s the price.

I’m not shy about telling customers that they pay for programming on every repeat order, but that’s how I avoid changing pricing every year.

They seem to be ok with it.
I do very similar. With some other off the wall practices. For legacy customers I have a good relationship with? I do do exactly as you. Programming/set-up/cycle times, as well as jaws/fixturing, all factor in the quote, and get amortized out in the final per/piece price. And, that price only changes on repeat orders if material goes up (or down! I'm very honest and transparent). I am also the only guy I know that does not mark up material. This would be different if I had to go get it. But, all the suppliers I use will deliver it to my dock. All I have to do is get it off the truck. I don't see how that is worth the std. 10%? I do usually do a large percentage of the programming before I send off the quote, so I am quoting with accurate cycle times. I have my simulation very dialed. And, my button-to-button estimates are usually withing 20 secs. But yes, sometimes this is a sizable chunk of time that I never get paid for. Ohh-well. It keeps me, and my pencil sharp! That is for the customers I like. For new customers, that insist the job will repeat (they always do say that), but don't want to pay for programming/fixturing on repeats? I add a sizable NRE, and quote the exact same as I would for reg customers. But, less programming, and guess HIGH. In my experience, the ones that nit-pick from go? Are usually not great customers in the long haul.
 
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I am trying work on efficiency in our shop. We are currently using a calculator that includes the cycle time, minimum run quantity, and setup time. For example: Part A has a 20 minute set up time, a 60 second cycle time, and a min run of 10 pieces. Routing is set on a per piece basis, so each of the 10 pieces would get 2 min worth of set up time and 1 min of cycle time. Standard routing for Part A would equal 3 minutes ((20/10)+1=3). 30 minutes per shop order. So instead of cutting a shop order for 10, we decide to make 20 pieces this time. If we recalculate routing time we would get a standard of 2 minutes per piece. ((20/20)+1 = 2 40 minutes for the shop order) However routing is still giving us 3 minutes per piece which would equal 60 minutes for that shop order - efficiency is going to show at 133%. Does anyone have a better way to sere doing you ar if doesn't mattet this up?
A set-up is a set-up.
It doesn't matter if you are doing a one-off, or a million parts.
The damage is done immediately.
Bill it, flat out.
As a stand-alone line item.
Unless you like working for a percentage of what you have done.
After that, add in amortized machine hours, tooling costs', factored overhead, labor, consumables including coolant and...
Profit margin.
3 or 4 tool jobs here, I charge $150.00 tool set, plus fixture offsets and all the stuff you must do.
After you have compiled your numbers, you can tell the Customer that the first article is ( IE ) $750.00, and each additional is a buck-seventy five...
With volume breaks wherever you wish.
 
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I am also the only guy I know that does not mark up material. This would be different if I had to go get it. But, all the suppliers I use will deliver it to my dock. All I have to do is get it off the truck. I don't see how that is worth the std. 10%?
Charging a material mark up is an easy and simple method to ensure you get paid.
There is a cost even if you just order it in and it turns up.
You have to order it, unload it, stick it on a rack/ shelf but the biggest thing is you have to pay for it at some point and 10% plus on everything helps cover the cost to you when one customer doesn't pay.

If your not charging a markup on materials then you must be getting that money somehow else, higher hourly rate allotted, fat in the set up time or run time calculated etc.
 
Charging a material mark up is an easy and simple method to ensure you get paid.
There is a cost even if you just order it in and it turns up.
You have to order it, unload it, stick it on a rack/ shelf but the biggest thing is you have to pay for it at some point and 10% plus on everything helps cover the cost to you when one customer doesn't pay.

If your not charging a markup on materials then you must be getting that money somehow else, higher hourly rate allotted, fat in the set up time or run time calculated etc.

I'll never be rich. That is a fact and no secret. I step on my own %#$@ in many ways running my shop. For example: I work COD. When I'm done with the job, I get paid. Period. This pretty much rules out 98% of available work. I'm okay with that. Everybody preaches "you have to grow your business". Well, No "I" dont! I'm already bigger than I ever intended to be. I never claimed to be a smart business man. But, I am an honest business man. And, I feel charging one customer for nothing (really) in case another doesn't pay, is dishonest. The amount of time I spend handling material other than loading it in machines is nill. Charging a markup on it would be like theft. My conscience is clean. My shop rate is currently $95/hr for everything. Engineering (programming/fixturing), set-up work, and all machines, same rate. This is up from $75/hr in March of this year because our current administration are a bunch of traitorous crooks.
 
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My shop rate is currently $95/hr for everything. Engineering (programming/fixturing), set-up work, and all machines, same rate. This is up from $75/hr in March of this year because our current administration are a bunch of traitorous crooks.
You are giving away your time. You're on a melting iceberg (the investment in your machines, talent and equipment). The only thing keeping you afloat is slowly melting away. You're allowed to eat and live indoors.

As for material: you need to account for the handling somehow. You either need to mark it up a flat amount, a percentage, or you need to bill time against it. It costs you to sit down and order it, to book keep it after it arrives and to reconcile all the books at the end of the year. It isn't free unless you give away that time. This is costing you a double whammy because your rates are so low.
 
You are giving away your time. You're on a melting iceberg (the investment in your machines, talent and equipment). The only thing keeping you afloat is slowly melting away. You're allowed to eat and live indoors.

As for material: you need to account for the handling somehow. You either need to mark it up a flat amount, a percentage, or you need to bill time against it. It costs you to sit down and order it, to book keep it after it arrives and to reconcile all the books at the end of the year. It isn't free unless you give away that time. This is costing you a double whammy because your rates are so low.

Well I am glad you have seen inside my books. And know everything about my business.
Since you are all knowing, possibly you will take the time to consider these things (and educate yourself a little on how you word things on the internet):
I live on a $1mill+ property in Gilbert, AZ that I own free and clear (no mortgage) paid for by quoting the way I do.
I own all my equipment free and clear paid for by quoting the way I do.
I have a little nugget in savings put there by quoting the way I do.
I have a very relaxed and stress free work environment. I dont work nearly as hard as I used to. Created by quoting the way I do.
Look. My shop is a very unique dynamic. If I quoted the way everybody tells me I should, I would have no work. Period. End of discussion.
I know this for a fact. Because I have tried it.
 
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