Converting data into a Cost

Performance is effectively the variance between the measured theoretical time and recorded actuals. The decision to apply performance and at what level, depends upon the activity being undertaken. For example, an automated process is far more likely to achieve 100% of the theoretical target, than a labour intensive process. Therefore, the manufacturing process and the component design are critical to the performance decision making process considerations.

The standard time man-hour value represents the application of techniques designed to establish time for a qualified worker to carry out a specified job at a defined level of performance. The motivated operator would be familiar with the task being performed and have all the necessary tools, equipment and components readily available at the work station. Whilst the application of a performance to standard times can bring reality to the value for some of the above criteria, another allowance has to be added to account for learning. This is done by application of learning curves.

These are widely used in industries where the typical number of units manufactured in a products life cycle is between 5 and 1000; typically shipbuilding, special electronic equipment and of course the aerospace industry. It is difficult to decide whether learning curves are invented or discovered. In the 1930s, philosophers investigating how people learnt, conducted laboratory experiments which recorded how the length of time to complete a task reduced with the number of repetitions of that task. They noticed a mathematical relationship between the results and without going into the maths, the time taken reduced by a fixed percentage every time the total number of repetitions doubled.

Generally speaking, in the aircraft industry, learning curves are in the range of 75% to 95%. The value of the curve varies depending on a number of factors including:

build rate at which units are made;

level of skill required to perform tasks;

organisational experience in managing this type of work;

level of automation involved;

levels of planned investment to update production equipment with new technologies;

standard of special tooling/jigging and fixturing.

We have now established within the costing process:

material costs;

man-hours/performance;

a learning curve.

<== попередня сторінка	\|	наступна сторінка ==>
Labour costs	\|	Other costs

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