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    Default Hourly rate for cell

    How would you price the work flowing through multiple machines in a cell?

    There is the rather standard $60-$120 per machine depending on machine payments.
    So let's say you have four $100,000 dollar machine in a cell.

    Is this four 100k machine ops or is it really just one big $400,000 machine?
    Assume one operator, no robots and a product mix that means many changeovers per day.

    Since most hourly pricing includes a lot of add-ons for overhead, supervision, etc, the numbers come out very different.
    Bob

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    Does each and every part go thru the cell the same way ?

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    The cycle time doesn't change just because you are running in parallel, you just end up with a shorter lead time.

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    The shop I worked at tried this sort reorganization when it was The Next Big Thing. Didn't work as well in practice as in theory. Some of the burden rate was reduced by commonality, not as much as originally envisioned. Much was made of the *distance* the part travelled in the conventional arrangement, not the *time* to move from department to department. Management ignored the fact that we didn't make large quantities of parts, we were a batch manufacturing operation. Changeover costs were killer; instead of a single machine doing setup, the whole cell was offline until all were ready. Decreased flexibility of the cell as compared to conventional: if a machine goes down, the entire cell is affected, perhaps stopped, instead of just moving the job to another machine. An emergency requirement to be run on one machine could bring down the rest of the cell. There's more, but you get the idea.


    The more they overthink the plumbing, the easier it is to stop up the drain.
    --Scotty, Star Trek

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    If you feel like you can change the costs by arranging machines in a square, I just have to ask...

    Who are you and what did you do with our usually very sensible Bob?

    You have one operator and four machines. You have some throughput. Price accordingly.

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    What's the competition like?

    I'd be inclined to go towards $/hr/machine....but it depends on the complexity of the parts. It's hard to get ANYONE to touch a job for less than $60/hr machine time.

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    Quote Originally Posted by Comatose View Post
    If you feel like you can change the costs by arranging machines in a square, I just have to ask...

    Who are you and what did you do with our usually very sensible Bob?

    You have one operator and four machines. You have some throughput. Price accordingly.
    Isn't that one of the key philosophies of lean manufacturing? You adjust the processes to match the maximum capabilities and efficiency of the operator, thereby decreasing overhead costs?

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    One guy on 4 machines with multiple daily change overs? I see a lot of machines sitting idle with no operator.

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    I would think the idea works if you are going to run 3 shifts of the same part or series of parts 3 shifts for a year

    OR if you happened to have a shop with 4 mills 4 lathes 4 saws whatever and the same guy always ran 'his' machine, it might make sense to keep 'his' work in one spot.

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    Easy, as said before. Cycle time. Time how long the part takes from the time it enters the cell, to the time it leaves. If you do that, it will include time for putting part in and out of machines. Also factor in tool changes.

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    Quote Originally Posted by rbregn View Post
    Easy, as said before. Cycle time. Time how long the part takes from the time it enters the cell, to the time it leaves. If you do that, it will include time for putting part in and out of machines. Also factor in tool changes.
    Not so easy.

    A $400,000 machine does not carry the 4 times rate of a $100,000 machine.in most pricing cases.
    Is the cell four machines or one big multi-spindle spread across some real estate machine?

    It gets worse when you run as such. You take 30 second operations at one and slow them down to 120 seconds to have a flow.
    How can that actually make money in the checkbook?
    Bob

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    Let's make it easy.
    You have a $100,000 machine and charge $1 per minute.
    You now are flush with cash and buy a $400,000 machine.
    Will you charge $4 per minute for it as a stand alone and get work? Probably not.
    So is the cell a 400k machine or 4 100k spindles?
    Bob

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    Quote Originally Posted by CarbideBob View Post
    Let's make it easy.
    You have a $100,000 machine and charge $1 per minute.
    You now are flush with cash and buy a $400,000 machine.
    Will you charge $4 per minute for it as a stand alone and get work? Probably not.
    So is the cell a 400k machine or 4 100k spindles?
    Bob
    I don't know.

    But the employee cost must figure in somehow.
    100k machine each has 1/4 of an operator ?
    400k machine has 1 operator ?

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    Quote Originally Posted by CarbideBob View Post
    Not so easy.

    A $400,000 machine does not carry the 4 times rate of a $100,000 machine.in most pricing cases.
    Is the cell four machines or one big multi-spindle spread across some real estate machine?

    It gets worse when you run as such. You take 30 second operations at one and slow them down to 120 seconds to have a flow.
    How can that actually make money in the checkbook?
    Bob
    Didn't you run a version of this thread before??

    Do you want help? It seems you and another couple guys are "the boss" when it comes to high volume stuff...

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    Sounds like to me these parts are not suitable for a cell set up. I ran cell operations before. All cycle times are similar for each machine. If you have one machine sitting waiting, then you are wasting money.

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    Quote Originally Posted by CarbideBob View Post
    ...Assume one operator, no robots and a product mix that means many changeovers per day.
    This right here answers it. Since it's multiple changeovers each day, your burden stays high. I'm quoting it out at standard shop rate for each machine(like 4 spindles).

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    Quote Originally Posted by CarbideBob View Post
    Let's make it easy.
    You have a $100,000 machine and charge $1 per minute.
    You now are flush with cash and buy a $400,000 machine.
    Will you charge $4 per minute for it as a stand alone and get work? Probably not.
    So is the cell a 400k machine or 4 100k spindles?
    Bob
    Geez Bob, I feel like I'm back in school. Are you asking a question, or are you trying to give a lesson (that nobody asked for) in a really annoying way?

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    Quote Originally Posted by [email protected] View Post
    Geez Bob, I feel like I'm back in school. Are you asking a question, or are you trying to give a lesson (that nobody asked for) in a really annoying way?
    Okay, everyone just forget it,
    Simply asking a question that myself and local job shop owners got into recently.
    The general idea was low volume, high mix, a thousand or so part numbers per year.

    Bob

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    Quote Originally Posted by CarbideBob View Post
    Okay, everyone just forget it,
    Simply asking a question that myself and local job shop owners got into recently.
    The general idea was low volume, high mix, a thousand or so part numbers per year.

    Bob
    I thought it was an interesting question with some interesting answers.

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    Quote Originally Posted by CarbideBob View Post
    Simply asking a question that myself and local job shop owners got into recently.
    The general idea was low volume, high mix, a thousand or so part numbers per year.

    Bob
    Bob -

    I think I know where you are coming from, but it is a chicken or egg kind of thing if I am understanding.

    I never priced machining - but spent many years either figuring or managing those who did in a printed wiring board operation. Very high part number counts, low volume. I used to say we were more of a fine jewelry store than a supermarket. However you figure it you have to capture all the costs and then apportion them in a way that makes sense. One time our director came across his desk at me - wanted the numbers to add up 'different'. He like to play games with what was overhead versus direct cost, etc. When I told him there were a couple of different ways to go broke and he was using more than one it did not go well.

    Don't fall into the 'financial engineering' traps. I've been retired for a while but too many of these 'new and improved' ways of dissecting the business devolve into serving the 'new way' instead of understanding the business.

    Your questions would be interesting to work on - but like many things, you would have to have a lot more detail. Too easy to make totally erroneous judgments otherwise.

    At least that's my 2 cents - which it might be worth.

    Dale

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