Raw material is purchased in a configuration suitable for loading on to the PRIME machine - Automax III The billet condition of supply has been established via a ‘Make’ or ‘Buy’ exercise. The relatively ‘low value’ processes of shaping, drilling and tapping has been proved most cost-effective when performed by the material supplier.
Material costs are a fairly straightforward. The major cost driver within the assembly is the Aluminium Rib which constitutes 80% of the total material cost. In this case, aluminium billet is a relatively routine purchase. Values have to be agreed with the supplier covering the drilling and tapping of holes in conjunction with the surfacing and shaping of the billet. This will result in increased costs being agreed for work over and above the raw material costs, which are calculated on current market prices of £s per kg.