Thesis 1983 Stockton PDF

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Improving the new product

development process
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THE NEWPRODUCT
IMPROVING
DEVELOPMENT
PROCESS
i
by
D. J. STOCKTON
(B. Sc.,
M. Sc.,
M. I. M., C. Eng. )
fulfilment
A Doctoral Thesis submitted in partial
for
the award of
the
requirements
of
Doctor of Philosophy
of Technology
of the Loughborough University
( February 1983 )
by D.J. Stockton (1983)
Acknowledgements
I would particularly
like
to thank Mr. J. Middle for the
help, advice and encouragement given throughout the period of the

research York.
In addition
Engineering staff
assistance,
my thanks are due to the Design and Production

at Herbert Morris Ltd. for their
to the Science Research Council for financial
support and to Mrs. J. Morley for the efficient

way in which this
Finally
and speedy
thesis was typed.
I would like
to thank Herbert Morris Ltd. for
allowing me to carry out the research at their

the financial
valuable
assistance
given.
company and for
11
SUMMARY
A system has been developed and is being used at H.M. -Ltd. for
the labour and overhead costs of components manufactured
estimating
by a wide variety
linear
of production
regression analysis
to develop estimating
measure the relationship
quantitatively
The system uses multiple
processes.
of a component and the factors
equations that
between the production time
that influence
this
Production
time.
times can then be converted to cost using appropriate
labour and
overhead cost rates.
The system uses design features

the estimating
only for predictor
Hence designers with little
equations.
in
variables
concept of
manufacturing methods can use the system to cost designs as they

evolve.
This feature
therefore
tool.
cost optimization
The manufacturing
times
the estimated
planning
will
and control
Software
components.
that
also
of manufacturing.
to the design
has been developed
equations
appropriate
conditions
This
generates
could
producibility
Morris
as standard
In this
features
to allow
form the basis

data for
equations
Ltd.
times for
Hence
the
way manufacturing
costs
of a product.
a computer to retrieve
and compute the production
software
estimating
at Herbert
can be used directly
linked
be directly
time data used to develop
operating
current
represents
provides designers with a powerful
times and costs

for
designers.
a larger
of
system
111
A method of allowing
designers to estimate the development times
components and assemblies has been developed.
for individual
This
enables the design process to be scheduled such that the
facility
new product development time could be minimized.
overall
element of this
scheduling method is the ability
to allocate
between components to be designed on the basis of relative

importance to. the overall
An important
resources
cost and
success of the project.
Models have been developed that allow :
(i)
The total
cost of a product to be estimated within
degree
of accuracy from a knowledge of the
reasonable
product's
(ii)
cost
(i)
(ii)
types of cost
The various
design
Finally
ten highest cost components.
solutions
design
factors
involved
to be established,
solutions
in alternative
hence enabling
minimum
to be identified.
been
has
carried
research
out into:
when developing
0
a technique
The factors
to consider
forecasting
the need for product development.
The factors
to consider when developing a prescriptive
guide frr
for
into
launched
the
that
when
ensuring
a product
market is a success.
iv
(iii)
Alternative
methods of solving the "assortment"
(i. e. determining
problem
the optimum number and specification
of
standard sizes to manufacture).

(iv)
The integration
of Value Engineering into the new product
development process.
(v)
The use of cost/design
specification
relationships
in the
generation of minimum cost designs.

The contribution
of existing
Computer-Aided Draughting and
Design systems to the new product development and original

design processes.
CONTENTS
Page
Acknowledgements
Summary
11
List of Contents
List
of Figures
xi
List
of Tables
xiv
Nomenclature included in Text
xvii
Abbreviations
xix
Introduction
Chapter
1
Product
Planning
8
f
1.0
Introduction
1.1
The New Product Development Process
9
16
1.1.1
Product Specification
19
1.1.2
Product Development
24
Criteria
25
1.2
NPDSuccess/Failure
1.3
Forecasting
for NPD
33
4 "
Chapter 2 Aspects of the Design Process
0-
58
2.0
Introduction
59
2.1
The Make or-Buy Decision
64
2.2
Value Engineering
76
vi
Page
2.3
The Assortment Problem
81
2.3.1
Solution
86
2.3.2
The Minaddition
Techniques
2.4
Design Planning and Control
2.5
Design Scheduling
2.6
Alterations
Chapter 3
91
Technique
99
109
110
to Product Designs
115
Costing Product Designs
f
3.0
Introduction
116
3.1
Total Manufacturing Costs
116
3.2
3.3
117
Costs
3.1.1
Material
3.1.2
Scrap Costs
119
3.1.3
Overhead Costs
125
3.1.4
Direct
Labour Costs
Analysis of Cost Estimating
128
at H.M. Ltd.
132
3.2.1
Function
133
3.2.2
Inputs and Outputs
136
3.2.3
HumanAgents
138
3.2.4
Sequence
140
3.2.5
Environment and Physical Catalysts
142
Work Measurement Techniques
144
3.3.1
Time Study
154
3.3.2
Pre-determined Motion Time Standards
155
3.3.2.1
MTM
3.3.3
Category Estimating
3.3.4
Synthetic
Time Standards
156
161
166
vii
Page
3.4
3.3.5
Work Measurement using Computers
167
3.3.6
Work Measurement Algorithms
172
3.3.6.1
Synthetic
173
3.3.6.2
Empirically
Derived Equations
180
3.3.6.3
Operational
Research
186
3.3.6.4
Multiple
Regression
188
of Work Measurement Method for Design

Costing at H.M. Ltd.
Selection
Chapter 4
Cost Estimating
4.0
Introduction
4.1
Classification
4.2
Techniques
System Development
198,
202
203
of Estimating
Models
204
Processes and Operations
4.1.1
Manufacturing
4.1.2
Size and Power of Machines
207
4.1.3
Manual Tasks
210
4.1.4
Component Tolerances
4.1.5
Material
and Surface
Finish
Processed
213
213
214
Data Collection
of Predictor
4.2.1
Selection
4.2.2
Data Source
217
Variables
219
226
Regression Procedure
4.3
The Multiple
4.4
Equation Validation
4.4.1
206
231
Accuracy of the Existing

H.M. Ltd.
Estimating
System at
240
4.5
Comparison with Time Study Data
240
4.6
Comparison with Existing
257
4.7
System Computerisation
Time Standards (STT's)
257
viii
Page
'
4.7.1
System Size
4.7.2
Variation
4.7.3
The Effective
4.7.4
System Expansion
of Machine Types
Chapter 5
use of Computer Time
267
269
270
272
Design Cost Forecasting
273
5.0
Introduction
274
5.1
Cost Relationships
275 -
5.2
Costing using the Pareto Distribution
285
Chapter 6
The Development of Design Scheduling Method
6.0
Introduction
6.1
Specifying
6.2
Sequencing Component Design
299
the Objective
Criterion
299
300
Component Development Times
301
between Development Tasks
307
6.2.1
Estimating
6.2.2
Interactions
6.2.3
Types of Activity
6.2.4
Accuracy
Interactions
of Estimated
308
Development Times
313
Importance of Components
317
6.3
Determining the Relative
6.4
Preventing Design Changes
Chapter 7
298
Computer Aided NPD
320
321
7.0
Introduction
322
7.1
Function Analysis
327
7.2
Data Acquisition
and Transfer
329
ix
Page
7.3
Design Creation and Improvement
331
7.4
Cost, Marketing and Manufacturing Analysis
335
7.5
Draughting
337
7.6
Integration
with Overall NPDProcess
338
Of
Chapter 8
Discussion
341
8.0
Introduction
342
8.1
Comparison of Work Measurement Techniques
351
8.2
Cost Estimating
8.3
The Make or Buy Decision
373
8.4
Cost Forecasting
376
8.5
Design Scheduling
380
8.6
CAD
385
Chapter 9
System Development
Conclusions
358
395
Chapter 10 Recommendationsfor Further Work
400
References
404
Bibliography
424
Appendix I
Development of the New EHB Range
429
Appendix II
Estimating
441
Appendix III
Design Cost Estimating
System:
Manual Method Description

Program (DESCOSTIMATE):
Operation Notes and Program Listing
453
A. 3.0
Introduction
454
A. 3.1
Running Procedure
456
A. 3.2
Program Listing
469
Page
Appendix IV
Descriptions
A. 4.0
Introduction
A. 4.1
Variable
482
of Variables
483
Description
Notes for Individual
Cost
Centres
484
A. 4.2
CommonVariables
506
A. 4.3
Variables Applicable
A. 4.4,
Illustrations
509
to Single Cost Centres
510
of Welding Positions
Appendix V
Data File for Design Cost Estimating
Appendix VI
Modifying the Regression Procedure
Program
512
521
X1
LIST OF FIGURES
Page
13
1-
Strategic
NPDDecision Flow Chart
17
Product
The
Life Cycle and Dynamic Competitive Strategy
34
Profitability
Number of Attributes
Planning Framework
36
Gap during Product Replacement

Examined per Buyer during the
Buying Decision
55
Optimum Number of Standard Hoist Sizes to Develop
97
70%, 80% and 90% Learning. Curves
Comparison of Scrap Levels Estimated from 90%, 80% and

70% Learning
124
Curves
Accuracy
Relative
122
against
Application
Time for
the MTM
158
Systems
10
Manufacturing
11
Outline
162
Time Bands
Procedure
for
Applying
the Category
Estimating
Technique
165
12
Machining Time Parameter Relationships
171
13
Method of Least Squares
190
14
Comparison of Average and Regression Lines
190
15
of Increasing the Numberof Regression Models

for a Specific Data Range
194
16
Comparison of*R with Average Proportional
Error
234
17
Comparison of F with Average Proportional
Error
234
18
Comparison of Coefficient
Proportional Error
Effect
of Variability
with Average
235
xii
Page
19
20
A Comparison of Actual and Estimated Labour Costs at

H.M. Ltd.
241
The Estimation of Negative Machining Times using

Regression Models
244
21
Frequency
ency Distribution
of 'E' Values
248
22
Frequency Distribution
of 'S'
248
23
Actual
versus
Estimated
Costs - Milling
24
Actual
versus
Estimated
Costs - Drill
Jigs
25
Actual
versus
Estimated
Costs - Plate
Gauges
26
Actual
versus
Estimated
Costs - Plug Gauges
254
27
Actual
versus
Estimated
Costs - Copy Templates
255
28
Actual
versus
Estimated
Costs - Drill
29
STT versus
Estimated
Times - Bar Lathes
258
30
STT versus
Estimated
Times - Chuck Lathes
258
31
STT versus
Estimated
Times - Bar Capstans
259
32
STT versus
Estimated
Times - Chucking Capstans
259
33
STT versus
Estimated
Times - Centre Lathes
260
34
STT versus
Estimated
Times - Horizontal
260
35
STT versus
Estimated
Times - Vertical
36
STT versus
Estimated
Times - Copy Lathes
261
37
STT versus
Estimated
Times - Radial
262
38
STT versus
Estimated
Times - Cylindrical
39
STT versus
Estimated
Times - Milling
40
STT versus
Estimated
Times - Saws
41
STT versus
Estimated
Times - Surface
42
STT versus
Estimated
Times - Gear Cutters
Values
Fixtures
(Box Type)
(Normal)
Jigs
Borers
Borers
Drills
Grinding
Machines
253
253
254
255
261
262
263
263
Grinders
264
264
Xlii
Page
43
STT versus Estimated Times - NC Chuck Lathe
265
44
STT versus Estimated Times - NC Bar Lathe
265
45
STT versus Estimated Times - Spline Cutters
266
46
STT versus Estimated Times - Shears
266
47
Descostimate Standard Input Data Form
271
48
Assembly Cost Inter-relationships
281
49
Total Costs versus Ld: D Ratio for the 3.2 Tonne EHB
284
50
The Pareto Curve of Cumulative Number of Stock Items

versus Cumulative Stock Cost
286
51
Log-Log Graph of the Pareto Distribution
290
52
Log-Log Graph of Cumulative Costs for H.M. Ltd. 's

Products
291
53
Actual versus Estimated Product Costs'(-<300)
297
54
Actual
55
Average Task Times versus

of NPD Tasks
Product
Estimated
versus
for the New EHB
Costs (>E300)
Cumulative
Cumulative
297
Number
305
56
Component NPD Network Diagram
57
Determination
of Development Times
= PARTS A and B'*,
315
58
Determination
of Development Times
- PARTS C and D
316
59
Actual versus Estimated Development Times
318
60
Pareto Curve of the 0.8 Tonne EHBComponentDevelopment

Times
318
Information
309
System
340
61
Integrated
62
Schematic
63
Load Spectrum of the New EHB Range
439
64
First
443
65
Flow Chart for
66
The Modified
Diagram of the New EHB Concept
Idler
MT Spurwheel
Descostimate
Regression
Objective
438
457
523
xiv
LIST OF TABLES
Page
Product Planning Strategies
The-Contribution
Financial
11
of Product Planning to Marketing and

Based Strategies
Product Development Matrix for H.M. Ltd.
The Design Functions Influence
22
on New Product Success/

30
in Attribute
Ranking between Product
Variability
Supplier
Attributes
Affecting
Relative
Importance
of New EHB Attributes
8.
Stages in the Design Process
Make or Buy Decision
10
Types of Batches Present
11
Manufacturing
the Purchasing
Types
Decision
65
in a Manufacturing
Organisation
73
Methods
13
Factors
79
14
Data Required
15
Optimum Product
16
Methods of Improving
17
Major
18
Factors
19
Assessment of a Work Measurement Department
the Assortment
the Minaddition
Problem
82
Technique
92
Range Data
Product
94
Profitability
105
Causes of Design Changes

Essential
70
Rope Guide Assembly
Cost Reduction
for
47
51
Criteria
Costs of Alternative
Designs (3.2 Tonne New EHB)
Affecting
43
61
12
20
Criteria
Failure
12
112
to Work Place Standardization
145
Check List
and Score Sheet
149
Operator Performance Factors
151
xv
Page
21
Accuracy and Application
22
Manufacturing Time for the New EHBRange
157
Time for the MTMSystems
160
163
Chart
23
50 Interval
24
Criteria
25
A Comparison of Estimated and Observed Machine Times
178
26
Equations for Estimating Metal Removal Times
181
27
Speeds and Feeds for Drilling
184
28
Classification
29
Manipulation
Estimating
for Establishing
176
Nd
Operations
208
of Costing Equations
Task Times for a Devlieg Spiramatic
212
. Jigmil
Factor (Machinability)
30
Material
31
Time Standard Estimation
215
Groups
for NC Flame Cutting'at

221
H. M. Ltd.
Design Factors
33
SPSS Output File
34
Examples of Altering
Estimating
224
Welding Duty Cycles
Affecting
32
.
Input
Variables
228
to Improve
243
Accuracy
245
Times
35
Minimum Operation
36
Causes of Variability
37
Component Classification
38
Cost/Hoist
Capacity
Relationships
39
Cost/Hoist
Capacity
Relationships
246
in Time Study Data

for
Determining
Assembly Times
250
276
Developed using the
0.8 Tonne and 3.2 Tonne Units
278
Costs at Various
283
40
Total
41
Cost Estimates
42
NPD Activity
using
Times
Drum Tube Lengths

Equation
47
295
302
xvi
Page
Project
Activity
Times
43
Factors Affecting
44
Objectives
of using CAD
324
45
Proportion
of Time Spent on Design Tasks
327
46
Process Cost Centres
444
47
Rules for Determining General Machining Cost Centre
445
48
Variable
49
Predictor
50
Labour and Overhead Cost Rates (f's/Hr)
51
Data File
Description
Notes for Cost Centre 202
Variable Coefficients
for Cost Centre 202
306
447
448
451
for Determining General Machining Input
Codes
513
Variable
Coefficients
52
Data File
for Predictor
53
Data File
for Labour and Overhead Cost Rates
54
Comparison of the Accuracy of Conventional and

Modified Regression Procedures
513
520
527
XV11
Nomenclature Included in Text
AI
B2.
Association
Machine Tooling Capacity
Index
C=
Cumulative Product Costs (i's)
Ca
Additional
Costs incurred
from adding one extra
Standard Size ('s)

Ce
Cm
Cp
Csv
Prime Costs ('s)
Total
Total Variable
Cost Saving obtained from adding one extra Standard

Size (`s)
Material
('s)
Costs per Unit
In-House Labour Costs per Unit ('s)
(mm)
D=
Rope Drum Tube Outside
Dm
Mean Diameter
(inches)
e=
Average Error
Ratio
E=
Average Proportional
f, g
Constants the values of which depends on the form

of the Pareto distribution
Ideal point on the ath attribute
Machining Factor
Total Machined Length (inches)
Rope Drum Tube Length (mm)
Labour Cost Rate at the"mth. Manufacturing

(f's/Hr)
Cumulative Number of Adopters in Time c
Component Complexity Factor
Nm
Number of Machines Controlled
Qb
Purchased Batch Size
Ia
Ki
Lt
Ld
Lm
Nac
Nd
Diameter
Error
by Operator
Cost Centre
xviii
Qp
Manufacturing
Recovery Period for Capital
Correlation
S
Sa
Sp
Sr2
St
Tm
Batch Size
Outlay (Years)
Coefficient
of the Error Proportions
Standard Deviation
Percentage average scrap per batch for a specific

"learning situation"
Percentage Scrap
Standard Error Ratio
Machine Setting
Production
Time (mins)
Cost Centre
Time at the mth Manufacturing

Frame Sizes
in the Interval
w=
The Number of Standard
Xi
Corresponding estimated value of the dependent

variable
A Constant equivalent to the intercept

of a straight line graph
xT, x2... xn
Coefficients
Mean Value of the yi's
yi
Actual Value of the dependent variable
The Value of the dependent variable
of the independent variables
Time at which 50% market potential

a=
Standard
on the y-axi. s
Deviation
of time
zl, z2... zn
is achieved
xix
ABBREVIATIONS
BM's
Basic Minutes
Computer-Aided Design
Critical
Compensating Rest Allowance
-"
Davy Computing Ltd.
DIAD
Distributed
DP
Dynamic Programming
Electric
Economic Order Quantity
Easily Used Computer Language for
CAD
CPM
CRT
DCL
EHB
EOQ
EUCLID
Path Method
Interactive
Automated Draughting
Hoist Block
Illustrations
and Drawings
FEM
FTF
H.M. Ltd.
LOCAM
LP
MBO
MLR
MOST
MRP
MTM
NC
NPD
OEM
PBC
Europeene de la Manutention
Federation
Floor-to-Floor
Herbert Morris Ltd.
Logan Computer Aided Manufacture
Linear
Management by Objectives
Multiple
Maynard Operation Sequence Technique
Materials
Methods Time Measurement
Numerically
New Product Development
Original
Period
Time
Programming
Linear
Regression
Requirement Planning
Controlled
Equipment Manufacturers
Batch Control
xx
PERT
PLC
PMTS
PPBS
p/t
REAP
Product Life Cycle
Pre-determined Motion Time Standards
Planning,
Prototype
Rapid Estimating
'SAPPHO
SPSS
STT
VE
and Review Technique
Performance Evaluation
Programming, Budgeting
and Planning
Scientific
Activity
Heuristic
Origins,
Predictor
Packages for
Statistical
Sales Target
Value Engineering
Time
and Systems Analysis
from Patterns with
the Social
Sciences
1
INTRODUCTION
Since the company's foundation

Herbert Morris Ltd.
in 1884 to market pull'
(H. M. Ltd. ) has become a leading UK manufacturer of
a wide range of mechanical handling equipment including

Goliath Cranes, Container-Handling
Cranes and Electric
In 1978 the company became part of Davy Corporation

international
blocks(t),
engineering and construction
In recent years the competitive
Overhead Cranes,
Hoist Blocks.
Limited the
group.
action of other European crane
manufacturers has led to many of the company's products becoming
H.M. Ltd. are still

in manufacture
competitors
enables
products
technically
acceptable they are labour intensive
and are therefore
in stock
more expensive
In addition
products.
holding
costs
than many of the leading
design
modular
and their
both manufacturers
reductions
Although the product designs of
in the market place.
uncompetitive
distributors
of competitive
to achieve
compared to the current
larger
range of the
of H. M. Ltd.
Since the products of H.M. Ltd. are financially

present recession in world markets has resulted
in sales levels
and hence profitability.
In order to recover from this

undertaking
an extensive
lines,
product
the
uncompetitive
in a considerable
decline
In consequence the company's
workforce has been reduced and product lines
ranges.
products
situation
sold off.
H.M. Ltd. are currently
programme of development of several major
which includes the wire-rope
and chain hoist
product
The need to simultaneously
develop several product lines
places
a heavy burden on the development resources of H.M. Ltd. and leaves

little
scope for further
products fail
product development should the replacement
to achieve their
expected profit
The research reported here arises

improved range of electric
decline
due to the continual
project
(New EHB) which is necessary
in sales of the existing
Ropemaster range
The EHB is also a major sub-assembly in H.M. Ltd. 's range
(Appendix I).
of Universal
from the development of an
hoists
wire-rope
objectives.
Cranes.
The constraints
surrounding the New EHBdevelopment
are:
(i)
Limited development time available
since an improved
product range needs to be launched quickly

further
serious decline
company and to restore

(ii)
in the market presence of the
for research and development
development
projects
since several
electric
are currently
(iii)
(electric
chain hoist and universal
reduced profitability
An inherent manufacturing
lack of capital
quantity
wire-rope
crane
range)
being undertaken in parallel.
Limited investment resources arising

current
(iv)
levels.
profitability
Limited resources available
hoist,
to prevent
investment
levels.
cost disadvantage since the
funds-limits
that can be manufactured.
have the advantage of cost reductions

the manufacture of larger
from the company's
volumes.
the annual
Competitors therefore
that arise through
(v)
The need to develop a product design that increases the

company's in-house manufacturing work load and hence
reduces the manufacturing
overhead burden on other
products manufactured by the company.
The present work attempts to reduce the effect
of these constraints
on the development of the New EHBrange with the further

providing
a contribution
Initially
of the NPDprocess and its
product planning,
a strategic
volume, multi-product
contribution
relating
of developing a prescriptive
projects,
element of
to the low
manufacturing environment of H.M. Ltd.
that determine the eventual success or failure

with the objective
to the strategic
planning process appropriate
Chapter 1 also reviews the literature
and future
Chapter 1 examines
Product development is an essential
planning process.
of
to the improvement of the new product
development (NPD) process in general.

the structure
objective
to the factors
of new product developments

guide for the New EHB
i. e. the product must enable the company to regain
an adequate market presence and prevent the complete erosion of its

hoist
block market by competitors.
Chapter 1 finally
reviews existing
sales forecasting
in order to develop a technique for forecasting

begin the NPDprocess with the objective
for the development process to be carried
the date
of allowing
techniques
at which to
sufficient
time
out, and hence minimize the
loss of revenue that normally accompanies product change overs.
Various aspects of the development process associated with the

have been examined in Chapter 2:
New'EHBdevelopment constraints
overall
(i)
A model has been developed and demonstrated for comparing

design solutions
the costs of alternative
and allowing
The model
the minimum cost solution to be identified.
1.0
by
those
the choice
affected
only
costs
considers
and enables the effect
of variations
in purchasing and
batch sizes and recovery period for capital
manufacturing
investment costs to be examined.

(ii)
The integration
of Value Engineering work into the NPD
improving
the
is
a
of
rate
and
method
considered
process
at which cost reduction
tasks can be carried
out is
proposed.
(iii)
Alternative
methods of solving
(i. e. determining
the "assortment"
problem
the optimum number and specification
of
standard sizes to manufacture) are examined and the

Minaddition
technique identified
as appropriate.
This
technique is then used to determine the optimum number and

the capacities
(iv)
Existing
of New EHB standard units.
methods of planning and controlling
examined in relation
to their
suitability
projects
are
for scheduling
the development process of a new product range such that

the overall
time required
to develop a product is minimized.
Chapter 2 concludes with an examination of the causes of design

changes and estimates the additional
design resources necessary to
carry them out.
Chapters 3 and 4 exmine: the existing
cost estimating
system at
H.M. Ltd. and a system is developed that can be used by designers.

major objective
estimating
therefore
The
of the present research is to develop a responsive
system that allows cost data to be generated quickly

the use of cost data in the planning and control
increasing
of the NPDprocess and the identification
and generation of minimum
cost design solutions.

IL
Whenexamined from a systems viewpoint

estimating
systems are clearly
estimating-systems
identified.
the faults
with existing
The prime causes for
being unresponsive are the work measurement techniques
used to estimate component manufacturing times since they require

personnel with detailed
methods used within
estimates.
knowledge of the production
a company in order to develop accurate cost
Hence the design function
separate estimating
must request cost data from a
or manufacture planning department.
departments often have other responsibilities,

must often queue until
the provision
Allowing
Since these
requests for cost data
service time becomes available
and so delaying
data
to the design function.
cost
of
designers to cost estimate designs would undoubtedly
improve the responsiveness of an estimating

of estimating
processes and
component manufacturing
system.
However, a method
times needs to be developed that
does not require
users to possess an in depth knowledge of manufacturing
In this
processes.
respect the technique of Multiple
has been found useful
in developing cost estimating
the causal relationship
Regression Analysis
equations by allowing
between manufacturing times and suitable
predictor
to be established.
variables
The development of a system for estimating
times which does not rely on a knowledge of machine process variables

(this
type of data is not normally available, to designers)
generation of a large number of estimating
equations to be quickly
arrangement
general
drawings
for
when it
the necessity
of preparing
design
product
to prepare detailed
drawings'for
product
drawings,
Also it
concepts.
therefore,
of standard units,
development and use of cost/design
costs
since cost/design
may not be possible
the optimum number and

Chapter 5 examines the
specification
a model has_been developed

alternatively
estimated
components.
specification
that
models for estimating
allows
In
models have limitations

total
without
e. g. choosing
product costs and for generating minimum cost designs.
addition
cost
know total
determining
However there
are available.
arrangement
general
between alternative
total
designs
is an advantage-to
are instances
specification
retrieved.
system developed allows cost data to be generated
The estimating
if
Hence
models has been developed to allow
estimating
a method of classifying
the
This is because
equations.
of manufacturing processes used at H.M. Ltd.
of the wide variety
appropriate
required
product
costs
from a knowledge of a product's
to be
ten highest
The examination of existing

and PERT) indicated
estimating
planning techniques (e. g. CPM
that they were unsuitable
Chapter 6 therefore
process.
project
for scheduling the NPD
describes the development of a method for
the development time for individual
the type of task interactions
components and identifying
that exist.
The designer can use the method developed to quickly

components that would lie
hence constantly
time is available
proposed therefore
path as design proceeds and
element in a scheduling system when limited

is the effective
allocation
of this
to the overall
success of the project.
installing
a Computer Aided
Draughting system, and are planning to extend this

aid,
the opportunity
of CADsystems to a NPDproject
involved
It is
(Chapter 6) that both development time and resources
Since H.M. Ltd. are currently
important
time.
development
between components to be designed on the basis of relative
cost and importance
manufacturing
those
reschedule the NPDprocess to avoid delay.
An important
are allocated
on the critical
identify
element of the total

in the original
was taken of assessing the contribution
in. which original

design activities.
or creative
of the cost estimating
design worksformed an
The individual
design process are therefore
(Chapter 7) and the present contribution

and Design systems assessed.
into a design and
In addition
tasks
examined
of Computer-Aided Draughting
the inclusion
into a CADsystem
system developed in the present work is examined.
1
CHAPTER
PRODUCTPLANNING
9
1.0
Introduction
(2'3)
Of the established
the
methods of strategic planning
(4, S)
product planning technique
seeks to maintain an acceptable
level
profitability
and maintaining
by directing
an effective
product mix for a manufacturing
involves
The technique therefore
long term plans towards developing
selecting
long term
an appropriate
for each product type manufactured within
planning strategy
company.
an
organisation..
examining the manner in which strategic
Ansoff(3)
developed since 1950 established

strategies
that the evolution
planning had
of competitive
and corresponding managementresponses had not been one

which in conjunction
of replacement but one of proliferation,
of the future
the decreasing predictability
managementbeing confronted with strategic

complex structure
and containing
had now resulted
with
in
planning problems of
many inter-related
factors.
Product planning techniques help to reduce the complexity of

(6)
by isolating the influence of such
the strategic planning process
inter-related
(i)
factors
as:
Manufacturing
product
skills
resources,
design with
i. e. the compatibility
manufacturing
can be established.
(ii)
Changing market requirements.
(iii)
Competitive
action.
facilities
of
and labour
10
(iv)
Product profitability.
(v)
Product obsolescence.
(vi)
Product worth, i. e. the total
benefit
of a product to
For example, does the product allow total
a company.
product range to be increased or improved.

.-P
(vii)
Investment risk.
(viii)
Market environmental changes, e. g. inflation,

legislation
government
(ix)
product
type effectively
rate
for
all
Price/quality
number and variety
exist
complexity
planning
since
planning
would
the company's product

cranes,
hoists,
electric
lifting
equipment.
chain
overhead
to retrieve
planning
variables
process.
be particularly
hoists,
crane ranges,
manual lifting
within
a company, since
of inter-relationships
and hence affect
Accordingly
applicable
range is diverse,
standard
is dependent on the
strategies
the type and level
of the long term planning
custom designed
in order
products
types manufactured
of product
between strategic
strategies
the required
of one
relationships.
influence
these two factors
increases
in sales
overhead costs.
The need to adopt product
that
i. e. a decline
interactions,.
consistent
(x)
and resource scarcity.
Product
recovery
recession,
the
product
to H. M. Ltd.
i. e. includes
electric
equipment
heavy
wire-rope
and hydraulic
11
The basic types of product plans identified

in Table 1.
listed
TABLE1
PRODUCT
PLANNINGSTRATEGIES
(i)
Add new products.
(ii)
Delete obsolete products.
(iii)
Modify existing
Altering
products.
of product types within
the volume ratio
product mix could be considered an alternative

However
this
to achieve
profit
(7)
by Lawrence
are
option
such short
is usually
restricted
term objectives
the overall
product planning strategy.
to enabling
organisations
as the maximization
of annual
levels.
Alternative
orientated
as product
objectives.
strategic
planning
actions)
are considered
planning
techniques
strategies
product planning as illustrated
by Kotler(8)
in achieving
However the author
that these alternative
methods (i. e. market and financially

to be equally
an organisation's
of the work reported
can benefit
in Table 2.
effective
long term"
here considers
from an element of
12
THE CONTRIBUTIONOF PRODUCTPLANNINGTO MARKETINGAND
TABLE 2
FINANCIAL BASEDSTRATEGIES
1.
2.
Strategy
Product Planning Contribution
Find new users of the product )
Improve product specifications
Find more 'uses of the product)
to
increase the number of possible

users and/or uses.
3.
Provide more effective
Modify product to improve sales
sales
appeal, e. g. include optional
promotion
extras,
improve product design style.

4.
Provide superior
(Sales, Technical,
Improve product quality,
services
Maintenance)
and maintainability
reliability
to reduce need
for service facilities.

5.
Reduce product manufacturing costs
Provide price discounts
to offset
reduction
in product
profitability.
6.
Sell to specific
Modify product design to customer's
customers
particular
Significant
is available
literature
requirements.
on corporate and product planning procedures
by
Gilmore
being
and
published
with useful surveys
Bandenburg(9), Cunningham and Hammouda(l0) and Berry(ll).

detailed
framework for preparing
strategic
by
Gilmore
plans provided
illustrate
be
l,.
to
Figure
Bandenburg,
can
used
and
process,
i. e. the activities
Strategy"
and "Specification
constituting
The
the product planning
the "Formulation
of Competitive
be
to
Action"
underneed
Programme
of
of
taken for each product type manufactured within
a company.
13
FIGURE 1
STRATEGICPLANNINGFRAMEWORK(after Gilmore
and
Bandenburg
(9)
14
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15
Figure 1 is also useful
in illustrating
important aspects of the
product planning process such as:
(i)
The need for co-operation
departments, i. e. both assessing the business
functional
of a company (activities
and manufacturing capabilities

13-19) and undertaking
(ii)
product development tasks
(activities
34-39) require
integration
and synergy.
Individual
product
the economic mission,

that
objectives
in addition
Wilson,
to considering
other
to the development
and integrated
i. e.
(12)
al.
of an organisation,
can be achieved.
of an organisation,
environment
essential
a high level of departmental
plans must be developed
the overall
such that
indicate
between
and co-ordination
et.
the total
business
characteristics
of effective
product
plans
are:
(a)
they must be future
(b)
they must be pro-active,
i. e. plans need to be
actioned now with future
benefits
(c)
orientated,
they must be flexible,
'i. e. easily
in mind, and
adapted to such
changing circumstances in the business environment

as unexpected competitive
This
need for
active
product
and flexible
to the strategic
future
effective
activities
product
action.
plans to be future
indicates
planning
is essential
plans.
the importance
process since
pro-
orientated,
of forecasting
a knowledge of
to the development
of
16
(iii)
The product development process (activities
or developing new products is
modifying
existing
.
to the basic product planning strategies
essential
listed
34-38) for
in Table 1 since even abandoning an obsolete
product normally necessitates
the development of a
replacement product.
i
(iv)
During the product development process the two basic.

elements of risk
involved
i. e. information
and performance uncertainty,
Information
in the product planning process
(13)
interact.
is associated with the uncertainty
uncertainty
surrounding the accuracy of various types of data used

(e. g.
sales
forecasts
and cost
estimates)
the prime cause of poor product

Performance
risk
the ability
of personnel
process,
plans
and is often
being developed.
due to the uncertainty
arises
involved
i. e. the relative
surrounding
in the development
success of development
is unknown and can be responsible
for
effective
activities
product
plans proving unsuccessful.
1.1
The New Product Development Process

The new product development process (NPD) has been well researched
a detailed
with Uman(14) providing
account of the stages involved,
and
flow charts being developed by Capon and Hulbert(15) and

(16).
The flow chart developed by Capon and Hulbert,
Cardozo and Ross
decision
Figure 2, is used in the present work to illustrate

between manufacturing
organisations
difficulties
the
hence
and
procedures.
involved
that exists
the variability
in the NPDprocess
in standardising
development
17
FIGURE 2
NPD DECISION FLOW CHART
's
(Ref.
1. SIZE OF POTENTIAL
It.
POTENTIAL
aouect
IURRIT
2 COMPANY KNOWLIDGI
OF THIS MARKET
3. COM/LG1INTARIT7
TTN
COMPANY STRUCTURE
WR[[T
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18
The flow chart indicates
that the NPDprocess is controlled
a New Product Committee and a Product Manager.
However these formal
managementsystems are but two of several alternative

controlling
the NPDprocess.
by
methods of
Other methods are Research and
Development Departments, Commercial and Technical
Project Managers,
Commercial and Technical Line Managementand Commercial and Technical

One-ManEfforts.
The type of managementsystem appropriate
to a NPD
is according to Souder(17) dependent on:
project
(i)
The nature
(ii)
The markets
(iii)
The relative
(iv)
The capability
of the technologies
being managed.
being served.
cost
of the development
project.
of the system to handle
innovative
conditions.
At H.M. Ltd. the NPDprocess is controlled

consisting
by a Progress Committee
of membersof each of the main functional
i. e. Design, Commercial, Quality
departments involved,
Assurance, Production Engineering and
Manufacturing.
Considering the level
of technology involved
New EHBrange a multi-functional

Souder(17) prove effective.
work indicates
if
in develooing the
NPDcommittee would according to

However experience gained during the present
that the effectiveness
of using an NPDCommittee is limitel
the frequency with which committees meet and attendance at committee
is
adversely affected
meetings
by assigning
a low priority
to NPDwork.
19
is difficult
Under these conditions
it
expended with benefits
(optimality
The type and level
to optimize development resources

of the product design) obtained.
involved
of activities
in Product Formalization
developed,
being
type
dependent
the
of
product
e. g.;..
on
are
(i)ce
High sales volumes indicate
that it
is important
to
design
in terms of manufacturing
a
product
optimize
cost, ease of manufacture and range of market
specifications
(ii)
Innovative
covered.
and high technology products indicate
extensive resources may require

Formal.ization
the activities
stage.
carried
the resources allocated
a large proportion
out could involve
The need to develop a reliable
(iii)
required
to specify
basic research.
to prototype
testing
and product development.
activities.
necessary are
The individual
and develop a new product are obviously
developed
being
therefore
type,
the
and
would
product
of
on
considerably
1.1.1
of
product could influence
To launch a new product the two basic activities

product specification
to the Product
allocating
In addition
that
tasks
dependent
vary
between manufacturing organisations.
Product Specification
The tasks involved
(i)
in specifying
Finding new product ideas.
a new product include:
20
(ii)
Selecting
(iii)
Obtaining detailed
suitable
specifications
new product ideas.

design, cost and market
for the new product.
(18)
For each stage of the NPDprocess Fogg
estimated the
average number of new product ideas needed to achieve one successful
product -as:
Average Number of New Product Ideas
NPDStage
Idea
40
Technical Search
10
Technical Feasibility
Prototype Testing
Pilot
2.5
Production
Launch
Success
The high rate of project
failures
indicates
that organisations
should endeavour to maintain an adequate flow of new product

ideas in order to ensure an acceptable number of product
successes.
However the available
in an organisation
effectively
development resources withlimits
be
ideas
that
can
considered.
product
to ensure successful
adopt alternative
products,
successful
the number of new

Under these circumstances
products are developed, organisations
approaches to the problem of finding
e. g. H.M. Ltd. formerly
must
new
developing
the
of
cost
reduced
products by concentrating
on improving existing
21
products and hence reducing the technical,

marketing effort
manufacturing and
(19)
According to Cooper
by remain-
required.
ing with existing
products and markets the probability
of
marketing a successful
product is improved since the company
can acquire an in-depth
knowledge of product technology and

However the concept of market evolution
market characteristics.
8)
described by Kotler(
indicates
that since the development of
a market is accompanied by a marked increase in competitive

action the chances of launching successful-products
can be
reduced.
The obvious
two approaches
(i. e. modify
develop, new products),

Table
following.
work at H. M. Ltd.
Chain Hoist,
Universal
to adopt therefore
strategy
3 indicates
and shows that
has direct
customer requirements.
to aid the methodical
data collection
is
and
presently
of development
(New Electric
Centrelift
(Hydraulic
the
and
Crane and Piledriver)
developed.
normally the responsibility
questionnaires
status
both improved
Wire-Rope Hoist,
Obtaining a detailed
function
products
which H. M. Ltd.
the present
Crane) and new products
are being actively
this
and improve existing
a strategy
New Electric
is to balance
design specification
for a product is
marketing
department since
the
of
access to the market place and hence

(20)
Several techniques are available
collection
and surveys.
of product design data such as
However the effectiveness
of the
stage is dependent on the type of data collected
22
PRODUCT
DEVELOPMENT
MATRIXFORH.M. LTD.
TABLE3
Adapted from Berry

Increasing Technological
Effort
No Product
Product
New
Change
Improvement
Products
011
Universal
Crane
Hydraulic
+) a)
a)rn
i
O
4
W
(0
Jack
Range
Centre
Lift
Crane Range
m
. r.
C)
'Y
rO
New Electric
. r..
Chain Hoist
t0
C)
N
x V)
110W
+-J
W
0Y
W i-3 i
M 4-)
LO
C
4--+ W
Z
O N
,-m -14
s.
>b
New EHB
Hydraulic
Range
Piledriver
Hydraulic
Crane
(11
23
it,
as well as the method used to collect

that all
influence
functional
i. e. it
is essential
departments involved in the NPDprocess can
the type of data collected
information
since their
requirements are often not compatible with those of the marketing

department.
process.
Consequently problems can arise during the NPD
For example, several problems arising
during the
development of the New EHBrange were:
(i)
The maximumlength of hoist block that the market

would accept was not obtained leading to problems
drum tube and related
in minimizing
costs.
component
It was necessary to determine the drum
tube length to outside diameter ratio

overall
(ii)
design costs.
The maximumspeed of lift
acceptable to the market
defined.
not
was
This data would have allowed gear
ratios
to be minimized and hence gear box
reduction
material
(iii)
that minimized
costs.
The relationship
between height of lift
(and hence
drum
length
size) and sales volumes
and
rope
rope
was difficult
to ascertain
gathered causing uncertainty
from the type of data

during the determination
lengths
drum
tube
the
standard
optimum number of
of
to adopt for each standard of New EHBunit.
24
(iv)
The market survey was primarily
designed to obtain
data for EHBunits sold for "runway duty", i. e.

,
(21).
However the objectives of the
Class I cranes
design department required developing hoist
for "crane duty",
i. e. Class II cranes.
department
the variation
marketing
I.,
blocks
For the
between hoist
blocks for Class I and Clase II cranes is negligible,

however to the design department the variation
represents significant
design differences.
Hence
data obtained from the market survey was not always

relevant
to the design problem in-hand.
Product Development
1.1.2
Product
of design,
following
development
manufacture
is an iterative
and test-activities
sequence:
(i)
Design
(ii)
Prototype build
(iii)
Prototype test
(iv)
Jig and fixture
design
(v)
Jig and fixture
manufacture
(vi)
Pre-production
(vii)
Pre-launch market trials
manufacture
process(22)
carried
consisting
out in the
25
The iterative
nature of the NPDprocess often requires
the
or parts of the above sequence to be repeated.
entire
involved in the product development process
Since the risk
with which development tasks could be
arises from the uncertainty

performed and the uncertainty
surrounding the accuracy of data
used during the NPDprocess, the present work considers the

overall
involved
risk
(hence the effectiveness
development process) and relates
this
of components that form the product.
involved
These factors
determine
and input data
in the development process, e. g. the cost estimates
required,
parts,
to the number and type
type of activities
the number of activities,
of the product
type of design decisions,

tests
reliability
manufacture of prototype
required and the jigs
and fixtures
necessary.
since planning the NPDprocess requires
In addition
development activities
are co-ordinated
costs are minimized whilst

benefits
maximum
complexity
that
such that development
at the same time ensuring that
are obtained from the product design, the
is
development
influenced
the
process
also
of
by
the number and type of components involved.
p) 1.2
NPD Success/Failure
Identifying
ful
the major factors
and unsuccessful
developing
Criteria
prescriptive
new industrial
that differentiate
between success-
products is an initial
step to
development
for
the
process
product
new
guides
26
which might separate the "winners"
since many of the variables

the "losers"
that,
determining
additionally,
of the firm.
Cooper(23) considers
importance of these
the relative
to the effective
is essential
factors
the control
are within
from
of development
allocation
resources.
Activity
such as SAPPHO(Scientific
(24),
Predictor from Patterns with Heuristic Origins)
and that
(25)
identifying
Gerstenfeld
the
by
centred
on
problems
out
carried
Initially
investigations
facing product developers by comparing successful

the differences
new products and establishing

SAPPHO
the
project
example,
for the formulation
in which the criterion

i. e. the successful
employed a "paired
and unsuccessful
and unsuccessful
between them.
For
comparison" technique
of a pair was commercial,
product competed for the same
market.
The effectiveness
comparison
failure
and
(i)
with
that
of the New EHB project
can be-examined
main areas of difference
the five
by
between success
emerged from the SAPPHOstudy:
Successful innovators
understanding
were observed to have a much better
of user needs.
market research study(26)

the wire-rope
information
In this
carried
respect the detailed
out by H.M. Ltd. into
hoist market has provided much useful

of user needs.
Companies established
within
a market must continually
these
can
alter
since
needs
user
monitor
market environment.
with changes in
For example, at H.M. Ltd. the Electric
27
Chain Hoist range has recently
been re-designed on a
modular concept to enable distributors
to maintain an
adequate product range with low stock holding costs,

i. e. current
interest
rates on borrowed capital
are
high hence stock holding costs have assumed greater

importance.
(ii)
innovators
Successful
The level
publicity.
to employ during
of marketing
the NPD process

At H. M. Ltd.
of distribution.
to marketing
pay more attention
and advertising
is related
the majority
and
resources
to the method
of hoist
blocks are sold through a small number of major distribhence the level of marketing and publicity
utors,
required
is low.
Publicity
is of course generated by the reputation
in the
developing
the
the new product.
of
company
place
market
the case of H.M. Ltd. market reputation
(iii)
and scientific
the specific
policy
area concerned.
In this
of H.M. Ltd. is to make full
the National
is high.
make more use of outside technology
advice, not necessarily
such as Leicester
In
University,
in general but in
respect the development
use of outside institutions
Engineering Laboratory.
and
28
(iv)
counterparts
individual
in unsuccessful projects.
for the successful
responsible
The
to integrate
departments involved.
the various functional
of these individual
than
development
of a new product must have the authority
objectives
attempts
more senior and had greater authority
were usually
their
in the successful
individuals
The responsible
functional
The
departments
are normally at variance during product development(27)

individual
hence the responsible
must have the authority

In recognition
those objectives.
to reconcile
of these
responsibility
for NPDat H.M. Ltd. is that of the
Technical Director,
who is a memberof the main board of
facts
directors.
(v)
perform their
but not necessarily
efficiently,
case of failed
determining
initiatives.
more quickly
It is in this
than in the
area that
importance of product development
the relative
would allow effective
criteria
development work more
allocation'of
development
resources.
models)
(e. g. rating
of techniques
A variety
were initially
importance
scales
used to determine
of development
criteria
and checklist
the relative
to the success or failure

test
Wind(28)
developed
a conceptual
model to screen new product
ideas for
market acceptability
of a new product.
by estimating
development
importance of
the relative
(29)
Cooper
compared the relative
subjectively
criteria.
29
importance of factors
i. e. each factor
using an arbitrary
weighted average,
was assigned a score of 1.0 if
reason and 0.5 if
a contributory
The
cause of failure.
score was then established
weighted rating
a primary
for each factor
from 101 examples of new product failures.

(23)
work Cooper
overcame the limitations
In later
previous work (i. e. basing the relative

development criteria
empirically
based weightings
of Cooper's
The application
project
that
is limited
since
that
service
estimates)
and developed
for success/failure
criteria.
work to the present
New EHB
observed
found to be significant
between industries.
as product
and competitive
price,
product
in
the market environment
changes
for
In addition
importance
the relative
criteria
success/failure
quality,
varied
importance of
the SAPPHO(24) project
factors
the individual
success or failure
(30)
Evans
observed
with
on subjective
of
of such
reliability,
prices
altered
(e. g. from energy
abundance to scarcity).
At H.M. Ltd. therefore

empirically
it
is not possible to develop
based models for predicting
success or failure
the potential
of a new product since the appropriate
data on past new product developments and corresponding

market conditions
does not exist.
30
However Cooper(23) developed a comprehensive list
from past research projects
criteria
success/failure
of
which could be used as a guide for the planning and

of the present New EHBand future
control
projects.
The criteria
listed
development
by Cooper indicated
importance of the design function
the
to the success of a
oe
new product since many of the factors
of the design department.
responsibility
particularly
This is
true at H.M. Ltd. since the design department
has the added responsibility

the NPDprocess.
of planning and controlling
(23)
Table 4 has been adapted from Cooper
to define more clearly
the influence
on new product success/failure
TABLE 4
involved are the
of the design function
criteria.
THE DESIGN FUNCTIONSINFLUENCEON NEWPRODUCT

SUCCESS/FAILURECRITERIA
Adapted from Cooper(23)
1.
Technical
(i)
and Production
Ensure compatibility
production
(ii)
of engineering
skills
and
resources with product design.
Ensure the design department carry out preliminary

technical
(iii)
Synergy and Proficiency
assessment and product development well.
Ensure that product design does not prevent

prototype
testing
being efficiently
and pilot
carried
production
out.
start-up
from
31
TABLE4 (Cont'd)
(iv)
Ensure design staff
fully
product design and manufacturing
technology,
technology used within
2.
understand product
the market and company.
Marketing Knowledge and Proficiency

(i)
Ensure that
study,
preliminary
test
provide
marketing
the design
assessment,
and market
function
which to base product
(ii)
market
with
launch
relevant
data on
understands customer's
buyer
price sensitivity,
and
wants,
needs
3.
phases
design.
Ensure design department fully
situation,
market
competitive
buyer behaviour and size of potential
market.
Newness to the Firm

(i)
Whenpotential
processes
customers, product use, production
required, distribution
method and product
technology are new to the firm the design function's

responsibility
is to ensure that product design is
factors.
these
with
compatible
(ii)
When new competitors

department
competitive
enter
the market
must have the capability

product
the design
of analysing
designs.
a
32
TABLE4 (Cont`d)
4.
Product Uniqueness and Superiority

(i)
The design department must ensure that the product

design, if necessary, has unique features
for the
to competing products in meeting
is
superior
customer,
customer's needs, allows customers to reduce costs,

carries
out unique tasks for customers and is of a
higher quality
5.
Product
design must allow
necessary,
product
in a highly
price
(i)
is important
to the buying
are presently
and Managerial
with
satisfied
The design department must ensure that
company's managerial skills

when advertising
(i)
decision
Synergy
is compatible with financial
Market
market where
products.
competitors'
Marketing
if
company to sell,
competitive
customers
and potential
7,
products.
Market Competitiveness and Customer Satisfaction

(i)
6.
than competitors
product design
resources available,
the
and aids the sales force
and marketing the product.
Dynamism
The design
department
situations
satisfactorily
frequently
must be able
introduced
change rapidly.
to handle
in which new products
to the market
and users'
are
needs
33
1.3
Forecasting for NPD

The ability
to forecast
the need for NPDprovides many advantages
including:
(i)
of R&D costs could be improved since product
The control
development is carried
to the alternative
of maintaining
planned product
strategies.
obsolescence
(ii)
out only when necessary as opposed
Adequate time can be allowed to carry out the NPDprocess

on development costs of schedule
hence reducing the effect

slippages.
(iii)
Adequate time can be allowed to ensure that the new

product design satisfies
requirements,
both market and manufacturing
i. e. in terms of product cost,
specification
and function.
Bentley
planning
(31)
(32)
have demonstrated that effective
and Wasson
strategies
can be developed using the sales or profit
life
its
during
market
of a product
forecasting
of
problem
products'
market life
for NPD involves
predicting
behaviour
Hence the
the shape of a
(PLC).
curve
cycle
Figure 3 illustrates
indicates:
as a planning tool.
the shape of a typical
product
PLC curve and
BEST COPY
AVAILABLE
Variable print quality
34
FIGURE 3
THE PRODUCTLIFE CYCLE AND DYNAMICCOMPETITIVE STRATEGY

32)
(Ref.
>
)Dt,
ioiS1
leaf Tiny product)
N
L
CL
A-Low
Learning
Products
1126,
TIME
Iesrdng
Injsalss
requirements.
loco,
and r.. nedy offering dedevelop . Idespread
facts puLkly.
and gals
vnr. oeos of benefits.
dopt. rs
vial by nrfy
ST tATEG7
DISUECTIVE
To establish a strong brand market

i. h. as quickly as
and discrlbution
possible
To
maintain
and
the marstrengttao
kilt niche achieved
through dealer and
for LLY
eooz-,
To deferd brand position against cotePilling brands and product category aBlast other potential prm. acts. through
eosstant att, taba to prod. wt Isnprrn. meet opportunles
and fresh promotional
OUTLOOK FnIt
COMPETTTIOY
is
f: ooe is 13ualy to be attracted
stages
the arty.
sprofitablit
Early
. nuance
also emulators
of numerous
aggr..
Price
tlon
her
Llmasd
hyslcel
of
sd
uodact
,
t! odular
s. Shclbn
with
models
offering
. slgss tsoth fcoossed on m1o1miaing learoing requirements.

aalgtu tx a_ and us. -englneerd
it.
t tr. o
. srL
and
snontroi
mart.
PRI21716
ONECTrVC
to east
appeal
"
tuft
. iimination
defects
rev sp(IvS
most
red.
segm
discounts
Cen
.e aliens
Oo"ect"es
1-du
JUTHIDt
POLICY
mu
ii
- iT E LLIGENCL
i OCI: 3
trans
and sampil, tf
awarenen
al Create widespread
and onto stasdieq of offering
benefits
b)Go:. trial by surly adopters
To order of slum
puytviry
Pursusi
sales
Mass e-oenewaodeuions
searo of a substa.
uN
and
A price lie. for every taste,

to. -. td to premium m. d. l.
Customary
trade discounts
Aggressive
1-1
promot
from
pricing,
f
with prices cal as fast
as coati
decline due to accumulated pro-
. eake.,
.
to substautlsl
protement
is
alert
Ine. naufid
. tt-ti..
A co.
to
improve-
opPoetsait1es
product
naus
Is the
change
tal ;. created
ab-
tea-
brand
some
_. artet
through
tithe,
t ug
py_sme.
hold cost-
ad price-penvtra!
un of ae. wartets
laraiucttoei
or major product . ha-ges
Coootase nUeotlos
of Danker products
for
iid
of deaigs
Cur-stet
line
'-tog
.1
rti. niart.
to
say r .us rot entura. ag a dl resw

prof..
tieveveemest
poxes
Re oe. vioatluo
cost cutting-
arrest
eemar
for
to possibilities
nod drops.
ping our becaaase or
decrease La Ce.
of
co-premises
.. y prod-
pricing to preserve
product
Search for Incr. category franchise.
mental pricing opport naties. tochling
pricing
private
oppe. rtunl-
Defeufto
Label
to
eowncts,
boo.
. alum.
Mal-.
re
of Pre-
level prlc Log . hl

tom, le".. disregard
ft
of an..
-!!.
es
market
slur.
end d, 1 on -prrirnee
and strengthen brad proferenre mmnng trade and final users

Stimulate general trial
Maintain consumer
franchise and
strengthen dealer
ties
S inst.
consumer and trade lot slay.
. itta atroe emphases on dealers and dinPromor. on of greater tee
trihutora.
frequetsey
Lust esauth I---Ietat- profit. blit dtstntaicw
Masa media
Personal sites
Sales pnn. oliona,
Mass media
Dealer pronotions
Pnrsoul
selllrg; n0
%Iasa md).
Dealer . nested
Cut d-.
sD wedis so
she tax-+so
ne
los
including
same-
peomolbos
Phase
We.
dealer.
out.
pr-on.
keepteg
-u.,,
a of
any k. ad
Sales promotions
Public dy
attention
to hand
. rage.
In med-l
and
M to gilortu
market
segmtntatlnn
to gnpn
snsage
of sampling
Create
Detallcd
d.
experience
Publicity
uso-
Increased attontlolt
to marke(-broadenIng and promotional
ilea
ling
e-ual de"elcying
s. s
is
went, tlght., ung up

ei line to elimnca:.
uoneceasary special
ties with little mukilt appeal
Intensive
Intensive and enensiv..

with dealer
E-lulte
or selectl. e. with
)teat high enough to keep
dlstrltsaoe
margins "rh enuuZ, to margins
Close attention to
. Lending them interested.
honey promotional
justify
rapid resupply of dlstrllaaor
stocks
u oil level,
and heavy inventories
systetss
deeis-C
neceuLry
duct
to uncover
n-
oon. Peeltioo
in design
l "his
To Ideetuy
Slmatar
stabslLad.
with fe. or w
exrases am mariet
shares taut
out the . esker
en-
approaches
Cowpetitbs
subject
of
--__bloss valuable
to so-
cry new segment and new tea. -spa

teed as fast as discovered
lntena lficatlun
(yT; O AI.
GU'DEI. UE. 5
to appeal
of variants
to quality
the wlnlnmm
of value
Ie rntng and to match
Perception of
r.! erer.
prcepcbs
the gal.
High
gaick
flaalbl.
set-
t'tlve
attention
t-rwreald
To imp_
the
rer.
to fac111tat.
design
distribution
squeeses
on the
industry.
shakl,
g
tra"
iR(. Dt. CT
7 LS; G::
OIy ECTTVC
and dlstrlbu-
and
To n: t n it. oC., t g
dry of ail passable
profit
market
miles
poshlo,.
confor
and exenad a strong

sir.,
emphasis on keeping
deader . ell supplied
but . Ito minimum
Inventory cost to hi
with . rang
and crania.,
emphasis on keet'mg dealer .. it auiplied.
but . mlaimum sen. nitory co. to him
I`tus. -. a eaten, as
they ; even, saarg, nal
Close attention
Intensifev
attertiw
product
Infornatbo
Imprvnemew
a.
potential
for
lid
to
In. pro"
product
1
tads.
to
broadening
to
em<n
marketch.,
Ccii.
fresh
to L'oasihie
Inn them..
pron..
sryf
)Moot,.
Inner-pedua
nor
. 1gns of teglnnisg
to pmsablo
Sharp
alert
for
c. "m pea lib.

decline
product
de-ally
at . roes
shu.
tslniq
the
LL
p. h. t
Prodset
Se passed
o. a
35
(i)
The rate at which a new product's
sales (or profit)
increases.
(ii)
The maximumsales (or profit)
(iii)
The period maximumsales (or profits)
level
reached.
are sustained
before they begin to decline.

(iv)
The rate at which sales (or profits)
Hence forecasting
existing
products,
decline.
the time and rate at which sales decline
and forecasting
and the maximumsales level
the rate at which sales increase
reached for new products could allow the
NPD process to begin such as to minimize the reduction

This profit
level
the sales decline
reduction
in profit
levels.
normally occurs during the period between
of an existing
product and the increase in profit
illustrated
as
product
a replacement
The PLC has been formulated

a product's
for
of
in Figure 4.
as an explicit,
verifiable
model of
sales behaviour and tested against actual data in 140
by
Polli
Cook(33).
However
products
and
of
non-durable
categories
(34)
develop
Polli
Cook
to
PLC
that
by
Doyle
and
a
and
curve
attempts
behaviour
failed
types
a
product
the
of
range
of
sales
expressed
identifiable
have
an
although most products
too irregular
tool.
describe
cycle,
such cycles are
to permit a commonPLC curve to be used as a forecasting
Presently
organisation's
life
since
the PLC concept is used to aid the formulation

short-term
objectives.
of an
For example, Fox and Rink(35,36)
how the purchasing department can control
buying policies
indicates
3
Figure
by
PLC
the
and
occupied
a
product
the
of
stage
on
based
the
36
FIGURE 4
PROFITABILITY GAP DURING PRODUCT

REPLACEMENT
4-
0
U +4
>U
------.e
I.
(Uco
4-3
.-atE
4-
s.. (1) (1)

acs..
G)
N>
r0
G) 1
>a)
Q) En
'Sf
c\
++ .
.v
y..
`c
o
iU +)
a
a)
C.
"C_
(L)
ov
-v
co
"r i
a.
C)
c Cc
"r
"r
C)
o10
C_+J C
Ec)o
tc)
o=
C)T)r
P-"
Ui
(L) =
Vf
I/f
0
i
i
i
i
I
I
I
I
iL
0
L +)
C. C)
N
L
fC3
pi
C. +3
C.
3
o"ra. Xa)
ZWZ
Profit
(E's)
Q)
aj
E
. '..
F-
37
use of the PLC curve in aiding a company to set product design and
pricing
objectives,
promotional
guidelines
and distribution
policy.
techniques such as Time Series Analysis,

(20,37)
do not have the ability
to
Moving Averages and Trend Projection
Established
forecasting
the PLC curve since these techniques merely project past sales
'Of
demand forward into the short term future in order to allow effective
forecast
production
planning and scheduling to be. carried
techniques cannot forecast
PLC "turning
these points are not related
Hence these
(i. e. points at which
points"
level
the
sales
and
maximumsales are reached
out.
begins to decline)
to past sales levels
since
but to such factors
as:
(i)
Purchasing motives.
(ii)
Product
acceptability
(iii)
Present
and future
(iv)
Strength of competitors

competitive
action.
The present New EHBdevelopment provides a typical
example of
forecasting
term
short
that
when
using
only
arise
could
the problems
The market share of the existing
techniques.
been declining
identified
during this
for approximately
as a trend,
Ropemaster EHBrange had
5 years before the decline was
i. e. the sales of the Ropemaster range increased
the
total
due
to
of
expansion
an
period
's
Ltd.
M.
H.
market share was gradually
However
market size.
being eroded (Appendix I).
38
Short term forecasting
methods gave no warning that development work
was necessary since these techniques analysed sales trends only and
not underlying
causes such as, poor product design, uncompetitive
product prices and poor marketing strategies.
By the time the need for extensive improvement of the wire-rope

'Oe
design was identified
an additional product range (Electric Chain
hoist
had also become unprofitable.
Hoist)
were available
development funds
for beginning the development of both product ranges

The Electric
simultaneously.
since the profit
priority
Insufficient
for the EHB range.
Chain Hoist (ECH) range was given

for this
potential
range was greater than
The NPDprocess for the EHB range was therefore
further.
delayed still
Diffusion
theory used to model the growth of a new product in
the market (i. e. the initial
stages of the PLC curve) suggests that
there is a time lag in the adoption of products by different

companies
(38)
Rogers
that
is
first
proposed
a
place.
product
market
a
within
by
a select
adopted
few "innovators"
adopt the product.
Thus it
non-adopters
the diffusion
Initial
deterministic
(assuming
who in turn influence
is the interaction
others to
between adopters and
that is assumed to account for the rapid growth stage in

in
seen
the
PLC
curve.
as
process
attempts
to model the diffusion
interpretation
a constant
process(39)
of the time dependent
market size)
resulting
aspects
employed a
of diffusion
in an S-shape diffusion
39
curve for the
cumulative
number of adoptions,
Nac (Equation 1).
t=C
r"
(1)
dt
Nac =
2
2a
L2a2J
exp.
'L"
t=o
oe
Where:
exp. = Exponential
Constant.
Nac = Cumulative
number of adopters in time-c.
deviation
a=
Standard
t=
Time period.
11
Time at which fifty
of time.
per cent market potential
is
achieved.
Mahajan, et. al.

potential
(40,41)
considered that assuming a constant market

since it was equivalent
for a product was unrealistic
is pre-determined
fate
"the
product
of
a
that
statement
to the
at the time of
A model was presented by Mahajan and co-workers for such
introduction".
heater,
water
machines
and
gas
washing
as,
consumer products
the
ceiling
which
on the cumulative.
in
adoption or the market potential
for a product changed with time.
Since both deterministic

variables
within
(a
u)
and dynamic diffusion
that are unknown functions
the market they specify,
diffusion
of total
models contain
marketing activity
models can only be used for
40
interpreting
data and not for predicting
historical
the initial
models cannot forecast
That is diffusion
future
performance.
stages of the PLC
curve.
Chambers, et. al.

in terms of ability
"turning
points",
and operational
(37)
compared eighteen forecasting
both long and short term events, PLC
to predict
requirements for developing the forecasting

Although qualitative
cost.
identified
Research
Market
were
and
"turning
points",
evaluations
as adequate predictors
(37)
(e. g. Regression Analysis
sales trends to their

methods are applicable
This reduces the level
on subjective
suggest that causal forecasting
techniques
and Econometric Models) overcome the need for
since these methods employ equations that relate

In addition
causes.
underlying
causal forecasting
since to be
to product planning strategies
individual
developed
for
be
models must
effective
of PLC
and hence are prone to errors.
by "experts"
evaluations
method
methods such as Delphi
these techniques rely heavily
Chambers, et. al.
subjective
techniques
of inter-relationships
product types. -
between forecasting
variables.
Hence to develop
curve
In this
sales.
since
is necessary
it
this
viewpoint,
respect
for
techniques
to determine
the criteria
the research
is an area of market
the socio-economic
forecasting
into"buyer
research
factors
that
the shape of the PLC

that
affect
behaviour"is
examines,
product
relevant
from the buyers
behind the purchase decision.
41
Current research by Newa11(42) and GrOnhaug(43) is based on the theory

that since the buyer seldom has full
full
product information
consequences in choosing a particular
decision is perceived as a risk

perceived risk
(iii)
by Newall are:
the purchasing problem:
(a)
the size of the product
(b)
the type of purchase or buying
(c)
the degree of product
essentiality,
(d)
the factors
the purchase.
provoking
expenditure,
the industrial
Those describing
task,
and
buyer:
(a)
his level
of general and specific
(b)
his level
of decision
(c)
his purchase history,
(d)
his degree of technical
Those describing
the purchase
The determinants of
problem.
buying identified
in industrial
(i)ce Those describing
(ii)
supplier
or knows the
self-confidence,
experience,
and
and professional
affiliation.
the buying environment:
(a)
the size of the buyer company,
(b)
the financial
(c)
the degree of decision centralisation,
(d)
the degree of decision
standing of the buyer company,
routinisation.
and
42
Many of the determinants of perceived risk

are beyond the control
by Newall
company, i. e. those describing
buyer and the buying environment.
the industrial
However the factors
the purchasing problem need to be considered in relation
describing
to their
of the supplier
identified
effect
on sales levels.
In this
respect the work by Lehmann
and O'Shaughnessy(44) has shown that the perceived risk

loo
of problems: likely
in adopting a particular
to arise
importance of the criteria
the relative
illustrates
affecting
product)
influences
sales levels.
Table 5
in ranking between four product types tested
the variation
by Lehmannand O'Shaughnessy, each presenting

to the potential
(i. e. the type
different
types of risk
buyer:
Type I Routine Order Products - products that are frequently

in
learning
is
there
problem
no
ordered and
products..
there is no doubt that the product will
In addition
its
out
carry
how to use such
function.
Type II Procedural Problem Products - the buyer is confident

that the product will
in training
exists
Performance
Type III
whether
ation
the product
for
which it
carry out its
function,
however a problem
personnel to use the product.
Problem Products
will
perform
there
-
satisfactorily
is being considered.
is doubt as to
in the applic-
43
TABLE5
VARIABILITY IN ATTRIBUTERANKINGBETWEEN
PRODUCT
TYPES
Attribute
Ref.
(44)
Ranking
I
Reputation
4752
Financing
Flexibility
3525
Past Experience
Technical Service
12
II
III
IV
16
16
13
13
10
137
Confidence in
Salesmen
14
15
15
16
15
17
17
17
11
11
Convenience in
Ordering
data
Reliability
43
2881
Price
Technical
Specifications
5966
Ease of Use
10
Preference of User
13
14
13
14
278
Training
Offered
16
12
11
Training
Required
17
12
14
15
10
11
12
10
Reliability
of
Delivery
1414
Maintenance
Sales Service
76
44
Type IV Political
large capital
rival
Problem Products - when products necessitate
outlays problems can arise since there are always
projects for the allocation
political
of funds.
More frequently
problems arise when the product is an input to
several departments whose requirements may not be congruent.
The variation
importance of factors
in relative
purchasing decision with perceived risk

product (Table 5) indicates
that a supplier
in adopting the
his product
must relate
and attempt to deduce from this
to the prospective application

problems the customer is likely
In this way the criteria
involved
the
affecting
the
to encounter in adopting the product.

a product's
affecting
sales levels
can be
deduced.
In terms of forecasting
Kotler(8)
(i)
identifies
the decline of a product's
sales level
two basic causes:
Changing market needs - environmental

to fundamental
changes in market requirements,
increasing
prices
for
large
importance
influenced,
oil
automobiles
of factors
is leading
.
affecting
e. g. high interest
tend to increase
to a decline
In addition
the importance
sales
rates
lead
effects-often
e. g.
in demand
the relative.
levels
can be
on borrowed capital
of product
price
45
(ii)
Competitive action - the introduction
of an improved
product onto the market by the competition

an existing
can lead to
This agrees with
products sales decline.
the behaviour of buyers observed by Cunninghamand

(45)
i. e. the comparison of product offerin. gs by
White
,
buyers
potential
e
..
industrial
buyers carry out two tasks which require
Criteria
product
carried
must be established
offerings
against
and
offerings
out for
which potential
must be evaluated.
acceptable
specification,
type of product
exactly
the collection
product data:
needed and number of products

supplier's
product
buyers is provided by Webster(46) which shows that
by potential
supplier's
(ii)
on the
account of the method of comparing alternative
analysis of alternative
(i)
influence
purchase decision.
A detailed
offerings
has a considerable
price
These include
band, delivery
to be purchased.
must be identified
Alternative
hence a search is
who may be able to provide
suppliers
needed and an examination
the
is made of what
they have to offer.
Buyers initially
select
possess the specifications
those product offerings
that
demanded. Those products that
cannot meet the specifications
are eliminated.
then compares the remaining product offerings
The buyer
and seeks to
determine the product that minimizes the perceived risk

involved
in the purchase decision.
Cunningham and White
(47)
46
in examining the purchase of four types of standard

machine tools sold into the UK market support this
They found that many of the supplier
observation.
thought to affect
product attributes
and
the purchase
decision did so to the extent that buyers required

an absolute level
of achievement on the part of
before offers
suppliers
could be considered for
comparison with competing products.
In order to develop a method of forecasting

therefore
(i)
it
PLC "turning
points"
is necessary to:
the relevant
Identify
criteria
affecting
product
sales levels.
importance of these factors.
(ii)
Determine the relative
(iii)
Determine the relationship
between these factors
and
sales levels.
(i)
the Relevant Criteria
Identifying
Kiser,
al.
et.
(48)
using
attributes
have imputed some importance

a definitive
developed
list
to which researchers
in the evaluation
of supplier
of suppliers,
attributes
which can be used in the form of a check list.

relative
importance
as product
all
factors
any specific
of attributes
varies
with
Since the
such factors
type and background of the purchasing

listed
buying
in Table
situation.
(Table
executive
6 could not be appropriate
to
6),
47
TABLE6 SUPPLIERATTRIBUTESAFFECTINGTHE PURCHASING

DECISION
(Ref.
Convenience-RelatedAttributes:
"'1. Deliverieswithout constant follow-up

2. Can deliverquickly
3. Answers all communications promptly
4. Advises us of potential trouble
'S. Handlesrejectionspromptly and efficiently

6. Adapts to specificneeds
'7.
8.
'9.
'10.
11.
12.
Allows credit for scrap and salvage

Offers broad product line
Accepts small order quantities
Is located in close proximity
Anticipates our requirements
Is "direct" source of supply
Economic-Financial Attributes:
01. Has competitive prices
'2. Offers volumediscounts

43. Guaranteesprice protection
'4. Has favourablefinancial position
'S. Sellsat a lower price
'6. Offers higher cash discounts

'7. Offers extended payment terms
1.
2.
'3.
'4.
'S.
Calibre- Capability Attributes:

Regularly meets quality specifications
Maintains up-to-date stock
Has good packaging. including packaging
slips
Has knowledgeable salesmen
Has high calibre management
'6. Has technicalability and knowled,^,e

'7. Has potential to expand capacity
68. Helpful in providing special handling
equipment
9. Has research and development facilities
Laagt-Depc'. ' R!! ity Atrrtuees:

'1. Reliable in quality
'2. Reliable in delivery
'3. Is fair and honestin dealings

04. Keepspromises
S. Has favourablereputation
'6. Has favourableattitude
'7. Exhibits desire for business
8. Maintains favourable fabcur management
relations
'9. Is a progressivefirm
'10. Offers well-known brands and/or
products
'11. Utilises effectiveselling methods
'12. Is a well known firm
'13. Is a large firm
48)
Inter-corporate Relations Attributes:

"1. Is a current supplier
2.
"3.
4.
"S.
"6.
7.
Sourcehas beenusedbefore
Is acceptedby our other departments
Is recommendedby our other departments
Is known to our firm
Is affiliated with our firm
Is a customer or our
Service-Related Attributes:
1. Helps in emergency situations
"2 Provides needed service information
"3. Invoices correctly -
"4. Makes salesmenavailable as needed

"S. Offers frequent delivery service
6. Helpful in overcoming our occasional
errors
'7. Maintains consignment stock at vendor

plant
'3.
9.
'10.
'1I.
Suppliesparts lists and operating manuals

Offers better warranties
Maintains technical servicein the field
Maintains repair service
12. Makes available test or demonstration

models
"13. Suppliesspecial reports
'14. Helpful in providing special handling

equipment
IS. Maintains frequent salescalls

'16. Provides information through advertising
'17. Provides information through
promotional activities
48
A more appropriate
method of identifying
is by market research since this

factors relevant
relevant
identifies
criteria
only those
From
buying situation.
(26)
the major
out by H.M. Ltd.
to a particular
the market survey carried

factors affecting
user choice of wire-rope
hoists were
found to be:
I
(a)
i. e. correct
Specification,
capacity,,
height of
and duty rating.
lift
(b)
Price.
(c)
Componentand product standardisation
through
range.
(d)
Delivery.
(e)
Life
(f)
Reliability.
(g)
Ease with which hoist
(h)
Technical and maintenance service
of product.
In general hoists
organisation
influence
are a -l ovalevel
levels required.
buying decision
and the Works Engineer usually
in determining
Because of this
important
can be serviced.
criteria
the make of hoist
has the greatest

to be purchased.
ease of maintenance and reliability

affecting
in an
the purchase decision.
are
49
It is obvious that reliability
and serviceability
be important factors
the make of product
affecting
purchased since hoists
are often located in difficult
(i. e. overhead) and when out of service
access positions
frequently
interfere
prevent or seriously
hoists
inoperative
experience of the effect
have on manufacturing processes.
with the
The author has
purchasers manufacturing operations.

practical
would
The overhead crane
furnaces
from
ingots
the
pre-heat
aluminium
unloading
to the hot rolling
at Alcan Sheet Ltd.,
mill
for several weeks prevented the
Gwent, when inoperative
cold rolling,
slitting,
annealing,
from operating,
operation
At H.M. Ltd. itself
of which could seriously
and Original
form a significant
concerned primarily
competitive
stock could be produced

much inter-
handling is dependent on overhead travelling
failure
cranes,
Distributors
embossing and packing)
since no hot rolled
to supply these processes.
variety
processes (e. g.
of the company's manufacturing
majority
Newport,
part
with
discounts
of options
affect
Equipment Manufacturers
of the hoist
quick
block
deliveries,
production.
(OEM's)
market and are

price,
and a product range with a large
(e. g. dual lifting
speeds, secondary
load brake and overload warning) and mounting positions.
50
(ii)
Determining
Relative
Importance
Several methods are available
for determining
the relative
importance of product and company attributes,

i. e. Regression
(49),
(50)
Analysis
the use of the Pareto Distribution
and
(26).
Market Research
e
determining
The regression technique involves

design attributes
multiple
of competitive
regression
between attribute
the relationship
hence
obtaining
,
sales levels
attributes
values and corresponding
the relative
is examined in detail
thesis.
of this
The use of this
since extensive data on competitive
Starkef(50)
is often difficult
model.
in Section
method is limited
of technical
back-up
to obtain.
determined the relative
design attributes
importance of
products (e. g. delivery
and level
time, product reliability

provided)
determine
in the regression
as coefficients
Regression analysis
3.3.6.4
products and using
to statistically
analysis
values for
by subjectively
importance of product
ranking each attribute
in order of importance and using the Pareto Distribution

to assess their
problems exist
relative
importance.
when using this method:
However, two basic
51
(a)
The initial
ranking of the attributes
decision and therefore

(b)
Assuming that
can be applied
prone to error.
the Pareto
(Figure
Distribution
to attribute
ranking
determined
of attributes
discrepancies
can result.
the most effective
of product
purchasing
a product
applicable
Market
attributes
since
importance
to the development
that
is normally
research
can be elicited
The relative
and the
and indicates
method of determining
importance
purchasers.
importance
by market research
use of the Pareto Distribution
the relative
the reasons for
directly
from
of attributes
of the New EHB is
in Table 7.
OF NEWEHB ATTRIBUTES
RELATIVE IMPORTANCE
TABLE 7
Market Research
Attribute
Pareto
Distribution
Ref. 50)
Reliability
0.39
0.49
Serviceability
0.24
0.35
Price
0.14
0.07
Life
0.10
0.04
Delivery
0.09
0.03
0.04
0.02
1.00
1.00
Service
50)
is not always
Table 7 compares the relative
correct.
listed
is a subjective
Levels
52
Whenusing marketing analysis
to obtain data it
is
necessary to consider the frequency with which market

studies are conducted since the relative
product and company attributes
alter
importance of
with changes in the
market environment.
between Product Attributes
(iii, ) Determining the Relationship

and Sales Levels
importance
When the relative

it
of product
is then necessary to use this

for
the customer preference
information
a particular
is known
attributes
to determine
products'sales
levels.
Models that
decision
view the choice
have
been
problem
established
making
for
buyer preference
product
choose between alternative
such as price,
Generally
process as a multi-attribute
quality
marketing
to predict
brands (i. e. a buyer has to

brands characterised
by attributes
and reliability).
studies
on multi-attribute
decision
making have concentrated on linear models of attribute

(51).
Although complex multiplicative
models
combination
(52)
have been-developed, Huber
reports that these models
have only similar
Effective
Equation
for
linear
accuracy
attitude
levels
to simple
linear
models.
in
form
the
shown
models of
(49)
2 have been developed by Beckwith and Lehmann
predicting
the relative
preferences
of individuals
for
53
various television
for predicting
programmes and Pekelman and Sen(51)
consumer preferences
for alternative
cereal brands and automobiles.
a=d
Wa (Uba -
Pfb =
(2)
a)
a=1
Where:
Pfb
= Estimated overall
Wa
Relative
=
Uba =
Perception
d=
Total
Ia
preference for product b.
importance of the ath attribute.

of product
b on the ath attribute.
number of attributes.
the
Ideal
on
ath attribute.
point
=
The research by Wildt and Bruno

attitude
(53)
models are more applicable
than consumer products.
indicates
that linear
to industrial
This is possibly
products
due to greater
care being exercised during the industrial
buying situation
than when purchasing consumer goods.

Since buyers compare alternative
the perceived
Equation
situation.
risk
inherent
in order
in the purchase
2 must be re-specified
That is
products
for
decision,
the industrial
'a would now represent
to lower
buying
the attribute
54
value for a competitive
product.
The problem begins to
becomecomplex when several alternative
products are being
considered since a value for Ia is difficult
to assess.
Pekelman and Sen(51) observed that most buyers used very

few attributes
when comparing alternative
due to the buyers poor information
This is possibly
decision.
handling
time in which to make the purchase
and limited
ability
products : (Figure 5).
Both factors
have been proposed by Gr$nhaug(43)
to explain the search behaviour of buyers, i. e. Equation 3.

of (PR, TP, AH)
Search is a function
(3)
where:
PR =
Perceived
TP =
Time pressure.
AH = Ability
performance
in information
Figure 5 therefore
multi-attribute
indicates
risk.
handling.
that the complexity
of the
decision making problem could be significantly
reduced by using only the small number of the critical

attributes
in Equation 2.
The use of multi-attribute
decision
models in predicting
buyer preference and hence product sales levels

in two ways:
is limited
55
FIGURE 5
NUMBEROF ATTRIBUTES EXAMINEDPER

BUYERDURINGTHE BUYING DECISION
of
Ref.
0.8
C)
40
0.6
C
0
4-3
So
0.4
0
S136
0.2
1234
Number of Attributes
Examined per Buyer
51
56
(i)
The method requires
extensive analysis of competitors.
According to Rothschild(54)
a disciplined
necessary to assess each major competitor
approach is
(and
interactions
between competitors)
at providing
answers to basic questions such as:
(a)
Who is the competition
which should aim
now and who will
it
be
in the future?
(b)
What are the key competitors'

objectives
(c)
and goals?
How important
competitors
strategies,
is a specific
market to the
and are they committed enough to
continue to invest?
do the competitors
(d)
What unique strengths
have?
(e)
Do they have any weaknesses that make them

vulnerable?
(f)
What changes are likely

future
(g)
in the competitors
strategies?
What are the implications

strategies
of competitors
on the market, the industry
ones own company?
and
57
(ii)
decision models do not take into
Multi-attribute
consideration
the observation
of Cunningham and
White(47) that a strong determinant of a buyer's

decision
patronage
natural
reluctance
extreme difficulty
le
is his past experience and

to change supplier.
in recapturing
Hence the
lost markets.
58
CHAPTER2
ASPECTSOF THE DESIGNPROCESS
59
2.0
Introduction
Product design can be considered essentially
process since the evaluation
design solutions
of alternative
decisions to be made. That is,
a single
as adecision-making
strategy
requires
must be chosen from
It is to be expected therefore that the

(55,56)
stages involved in the design process
represent those of
(55 57)
decision-making models,
a numberof alternatives.
of design problems presents a serious challenge
The recognition
to the designer since the rapid changes occurring

environment both create new problems and alter
of existing
(a)
in the manufacturing
importance
the relative
ones, e. g.
The need to design products on a modular basis,

i. e. the use of standard components and sub-assemblies
between products is becoming increasingly
in
important
to maintain an adequate range of
allowing distributors
product types and sizes with minimum stock costs.
(b)
Shaftel(58)
also
if
necessary
sub-assembly
standardize
all
products
there
considers
modules.
That is,
standard
it
on a few module designs

or applications
by using
against
modular
modules.
costs
is
manufacturing
to
may be worthwhile
that
will
be used in
even though a few more parts

The cost of delivering
few standard
the fixed
design
are economies of scale-in
than needed are installed.

parts
that
extra
balanced
be
modules must
of producing
more types of
60
(c)
There is a growing interest

Terotechnology(59'60)
design function
in the concept of
in which the objectives
are to minimize the total
incurred during the working life

comparedwith the current
of the
costs
of a product as
objectives
of minimizing
supplier manufacturing costs.

(d)
The design function
may be required to develop products
that can be manufactured in existing Group Technology

(61)
cells
or are applicable to modern production control
concepts such as Period Batch Control(62)
and Materials
Requirement Planning(63).
(e)
The growing use of flexible

to influence
bility
automation(64)
design criteria
since it
of use of machine tools
decision-making
solutions
effective
during
the NPD process.
insufficient
effort.
yield
to be obtained
for
However this
and hence allows greater
model (Table
each design
is normally
design resources since it would entail
Hence it
the greatest
is necessary to select
benefits
improves the flexi-
to be considered.
product design variability
The use of a formal
can be expected
8) could enable
problem that
prevented
occurs
due to
considerable
design
those problems that would
from use of a formal decision-making
process.
61
TABLE8
STAGESIN THE DESIGNPROCESS
(i)
Recognition of the design problem objectives.
(ii)
Specification
(iii)
Synthesis of alternative
(iv)
(v)
-
Evaluation
of the objective
of alternative
Deciding the solution
Ref.
(55)
constraints.
design problem solutions.

design
problem solutions.
to adopt.
The obvious method of selecting
design decisions
is to determine
(65)
design objectives.
Starkey
relative importance to the overall

(66)
identify three basic groups (Fundamental, Intermediate
and Sanders
their
in which the contribution
and Minor),
to the total
manufacturing
cost
involved in a design decision or the cost and ease of changing that

decision
is used to determine the relative
It is suggested that the relative

and Minor decisions
proportion
follow
Intermediate.
numbers of Fundamental, Intermediate
the Pareto distribution
number of decisions
of the total
importance of a problem.
are Fundamental and
Hence it would appear that these groups of decisions
could be solved using formal decision models.

or Intermediate
decision
For example, deciding

(Hydraulic
the fundamental design concept of the New EHBhoist
minor design decisions),

out.
However a Fundamental
is often the sum of numerous minor decisions.
or Electro-Mechanical)
could be carried
in that a small
involved the detailed
design (i. e.
of each concept in order that comparisons
62
During the synthesis stage of the decision-making

engineering designer is called on to use his creative
process the
ability
experience in proposing design solutions.
Ostrofsky(56)
that the higher the number of alternative
design solutions
the greater the possibility
and
suggests
proposed
of choosing the optimum solution.
During
the design of the New EHBrange it was observed that designers

difficulty
encountered little
solutions
but it was the evaluation
that restricted
(i)
in proposing alternative
design
and comparison of design solutions
the number that could be considered since:
The amount of data required
to evaluate designs
(e. g. costs, producibility,
reliability
and safety)
is large.
(ii)
Several functional
departments are often required to
hence
designs
co-ordination
evaluate
of input data is
difficult.
(iii)
The resources
available
departments
are limited,
are normally
sufficient
the various
functional
i. e. departmental
resources
within
to cope with
company data requirements

additional
The criteria
into
the following
amounts required
and cannot
during
used to evaluate alternative

categories:
the day-to-day
cope with
the
the NPD process.
designs can be grouped
63
Specifications,
c>>
i. e. design characteristics
the range of market specifications
that determine
Hence a
covered.
is defined as that characteristic
market specification
of a product required by a potential
buyer before the
product can be considered for comparison with competing

products.
i
(ii)
Attributes,
reliability,
i. e. those product characteristics

quality
and style
such as
that are used by a buyer
to compare competing products.

(iii)
Producibility,
i. e. the ease with which a product can be
manufactured and raw materials

(iv)
purchased.
Cost - of prime importance in appraising
designs since it
is used to evaluate other design criteria,

to design for,
of market specifications
quality
reliability,
ease of producibility
a major determinant
the level
of
and safety to design for and the

in terms of labour costs.
the manufacturing
addition
e. g. the range
In
cost of a product is normally
in the purchasing decision.
Several areas of H.M. Ltd. 's new product design process have been
identified
as limiting
can be economically
and/or preventing
A major factor
estimating
the number of alternative
design solutions
that
compared and/or leading to wasted design resources
an optimum product range being developed.
that causes problems is the inability
system at H.M. Ltd. to quickly
of the current
generate the large amounts of
64
cost data required during the design process.

examines in detail
the estimation
need for an estimating
In consequence Chapter 3
of product costs at H.M. Ltd.
The
system that can be used by engineering
designers is proposed and such a system is developed in Chapter 4.
Other areas of the design process called
into question are:
(i)
the "make" or "buy" decision,
(ii)
value engineering,
(iii)
the "assortment"
(iv)
planning
(v)
scheduling
(vi)
the changes that occur in product designs.
problem,
and control
of the design
of the design
process,
process,
and
These areas of the design process are now examined in greater

detail.
2.1

The decision
from an outside
to manufacture a component in-house or purchase
supplier
is a frequent
problem facing the designer.
In theory each component of a product design must be assessed in this

manner.
However the decision
to make or buy is often obvious.
For example
65
either the companydoes not possess the equipment to manufacture

in-house, or the component is a standard, mass produced part,
developmentobjectives
are to design for either
or the
in-house manufacture
or purchasing.
For components in which the decision to make or buy is not

obvious the factors
to be taken into consideration
and Haas and Wotruba(68).
by Claret(67)
have been identified
These factors
are listed
in
Table 9.
MAKEOR BUYDECISIONCRITERIA
TABLE9
(i)
The need to maintain economic utilization
of capital
equipment.
(ii)
The need to absorb high overhead costs.
(iii)
Assurance of supply.
(iv)
If the component design is a trade secret.
(v)
Transportation
(vi)
Companyreputation
rather
costs and ease of transportation.

gained through manufacturing
than merely factoring
them.
(vii)
The need to diversify
(viii)
The need to smooth seasonal variations
(ix)
Lack of sufficient
(x)
The familiarity
parts
operations.
capital
in order patterns.
to finance required
investment.
involved.
technology
the
with
experience
or
66
Haas and Wotruba examined the make or buy decision

to marketing products which the potential
in relation
customer could also make,
i. e. the prospective customer is at the same time a potential
competitor.
They concluded that the decision to make or buy was dependent on the
difference
between the cost to the prospective
customer should they
manufacture the required product in-house and the prices of that

11
product from possible suppliers.
The manufacturing costs highlighted

both the direct
direct
material
indirect
and indirect
costs,
by Haas and Wotruba included

components (i. e.
costs of manufacturing
factory
labour costs and factory
direct
costs,
supplies
However Claret(67)
overhead costs).
directly
those
that
costs
only
considers
(i.
e. variable
components manufactured
related
labour costs,
to the volume of
manufacturing
should be
costs)
decision.
buy
in
the
or
make
used
is more realistic
The approach adopted by Claret
Haas and Wotruba since normally only variable

the decision
are usually
Claret
to make or buy.
incurred
considers
cannot
considered
fixed
decision.
However during
costs
and should
overheads
of the type of decision.
in certain
be used elsewhere)
resources
costs are affected'by
Fixed costs such as factory
irrespective
that
than that of
circumstances
that
direct
not be included
the development
labour
(where labour
costs
can be
in the make or buy
of a new product
range
be
to
should
produce
not
a component
the labour resources required
considered fixed
since an objective
is
to
department
design
the
of
67
minimize a component's manufacturing costs which include a labour cost

element.
be included in the make or buy
Labour costs must therefore
decision during new product development.
Levy and Sarnet(69) considered that the make or buy decision should
be based on the differential
involved
risk
of the cash flows (e. g. investment outlay

sales quantities
in the various components

for capital
and the purchase and production

However this
engendered by the alternatives.

considered if one alternative
necessitates
quantities
costs per component)
approach need only be
a higher level
investment, in which case the basic Uncertainty

and estimated costs makes it
equipment, forecast
of capital
surrounding forecast
apparent that the alternative
that requires the more expensive equipment constitutes
the greatest
risk.
Normally
component designs
is purchased
i. e. the raw material

in-house.
in-house.
designers
Quantity
total
a designer
must decide
casting
in what form to
and part
operations
moulded
to carry
approach to the make or buy decision

by using
to make such choices

(70)
to develop
theory (EOQ)
classical
a model for
out
allows
Economic Order
calculating
the
costs per unit of a component when purchased,
both.
in-house
of
or
a
combination
manufactured
control
of both make and buy,
from which a component is manufactured
and which manufacturing
The present
variable
elements
(e.
bar,
g.
or components
components)
plastic
therefore
Frequently
buy raw material
contain
the
variability
allow
also
models
The use of stock
of component cost with
into
batch
be
taken
consideration.
to
sizes
purchasing and manufacturing
68
The total
cost of a component is calculated(71)
material
using
Equation 4.
Cm =k+k.
Ic
+ Cb. Qb-'
(4)
Where:
Cm = Total material
Purchase cost per unit.
k=
Ic
costs per unit.
interest
holding
Stock
=
rate per unit per year.
Cb = Purchase cost per batch.

Qb = Purchased batch size.
The variable
by the following
Cp =C +
costs of in-house manufacturing operations

expression(71) :
Cs. Qp-1
(5)
Where:
Cp = Total variable
in-house labour costs per unit.
Cy, = Total
labour cost per unit.
Cs = Total
setting
Qp =
is given
Production
up cost per batch.
batch size.
69
Capital investment costs such as special

fixed and non-recurring
tooling
costs,
although
over the short term, are recovered over a
specific time period the length of which is normally a management

decision (at H.M. Ltd. this
period is normally three years) and is
therefore influenced by managementsattitude

the development project
and financial
Equation 6
constraints
involved
CT.2.718-r.
(6)
p=r
Ncp
p=1
Where:
Ct
investment
Tooling
cost per component.
or
=
CT
Total
tooling
=
or investment costs.
Ncp = The number of components manufactured for the

first
p years of the product life.
Recovery period
r=
for
capital
Company's discount'rate
outlay
for capital
in
on borrowed capital.
investment costs is given by
for recovering capital

(72):
Ostwald and Toole
Ct
to the risk
(Years).
investment.
70
The expression 2"718-r.
is used to take into consideration
tooling or investment costs are incurred
that
at the beginning of the payback
be discounted to give a more balanced
period and must therefore
perspective to the investment costs.
The total
component is therefore
Equations 4,5
cost involved
variable
in buying and/or making a
the sum of the individual
costs obtained from
and 6, i. e.
(7)
Cv = Cm + Cp + Ct
Where:
Cv = Total variable
According
since
for
there
to Burbidge(73)
TABLE 10
Qb and Qp are not always identical
ways in which parts
are different
convenience
component costs.
in production,
Table
are batched
together
10.
TYPES OF BATCHESPRESENTIN A MANUFACTURING

ORGANISATION
Ref.
(i)
Order Quantity
(OQ) - quantity
for production
or purchase by a manufacturing
purchase order.
(73)
of a component authorised
order or
71
TABLE10 (Contd)
Run Quantity (RQ) - quantity
of a component run-off
at
a machine or other work centre before changing to some

other component.
(iii)
by a supplier
(TQ) - quantity
delivered
at one time
to a customer, or transferred
in a factory
Transfer Quantity
as a batch between two machines for succeeding operations.

(iv)
Set-Up Quantity
necessarily
all
(SQ) - quantity
of components (not
the same) which are produced on a
machine before changing the tooling
and machine set-up.
Classical
Qb and Qp must therefore be determined separately.
(71)
be
to
theory
used
can
calculate the value of Qb
stock control
that minimizes Cm. It must be assumed that the values of Qp for each
operation
identical
to
a
component
are
manufacture
required
represents efficient
In addition
established
control
of a company's manufacturing
since this
operations.
Qp
be
Cp
for
that
then
minimizes
can
value
a
by the classical
stock control
approach, i. e. differentiating
Cp with respect to Qp,with the minimum value of Cp occurring
dC=0
d (Qp)
when:
72
Equation 7 is therefore
a useful tool for determining the costs
involved in the make or buy situation
and can be used by engineering
designers for comparing design alternatives.

design alternatives
For example, various
were proposed for the New EHBRope Guide, the
assembly which prevents adjacent rope strands from rubbing together

the rope is being wound around the drum tube and hence prevents
whilst
110,
rope wear.
IA
The alternative
designs considered were:
purchased phosphor bronze casting

existing
hoist
(currently
block range) with tooling
used on
costs included
in the component purchase cost.

II
A purchased, fully
component (machined
machined plastic
by the supplier).
III
A purchased
costs
IV
plastic
moulding
with
separate
and no subsequent machining
required.
tooling
A purchased plastic
moulding with separate tooling
costs that required
finish
machining operations
at
H.M. Ltd.
VA
purchased plastic
and finished
moulding with separate tooling
costs
machined by the supplier.
(determined
using Equation 7) of the
costs
The comparative
alternative
(the current
life
designs
in
11
for
Table
are
shown
r=3
rope guide
H.M. Ltd. payback period)
tools).
the
moulding
of
and r=
years
10 years (the nominal
73
TABLE 11
MANUFACTURING
COSTSOF ALTERNATIVE ROPEGUIDE
ASSEMBLYDESIGNS (3.2 TONNENEWEHB)
Manufacturing
Costs/Unit
('s)
EOQMethod
Design
Alternatives
10 years
r=
years
r=3
PBC System
r=3
years
10 years
r=
69.24
69.24
69.24
69.24
11
71.25
71.25
71.25
71.25
III
31.48
10.61
31.95
11.08
IV
32.31
18.33
39.55
25.51
30.74
16.70
37.80
23.76
The influence
is seen,
alternatives
expensive.
tooling
tooling
cost
life
be obtained
at a period
Burbidge(62)
approach(59)
that
a compromise
III
but recovering
approach
tends to inflate
alternative
in the PLC when competitive

rate
of design
and recovering
indicates
Of course,
However this
the growth
Hence choosing
become a marketing
of a product's
the appropriate
design
prices
sales
the
are an
in the
alternative
could
decision.
Control
Batch
Period
that
the
of
use
suggests
reduces manufacturing
organises
by using
costs
V is the least
alternative
(r = 10 years)
expensive.
over 3 years.
to increasing
place.
nominal
is the least
of a product
advantage
market
over their
III
costs
years
the Terotechnology
could
solution
i. e. when r=3
However using
costs
alternative
on the comparative
of payback period
costs since this
and plans manufacturing
production
operations
control
by controlling
(PBC)
technique
the flow
74
That is,
of stock.
the batch quantities
are determined from production
the level
sets
(on a series
actual
batch quantity
"cycle
time".
product
assigned
is dependent
is divided
to each"cycle"must
demand and is allowed
to fluctuate
into
in
orders
Hence all
'i. e. OQ = RQ = TQ = SQ (Table
termed "cycles".
equal time periods
releases
of common due dates).
selected
The year
technique(62)
control
are identical,
quantities
as opposed to the EOQmethod
of stocks.
The PBC production

product
due dates
programmes based on sales orders
received or short term sales forecasts

which controls
ordered and their
batch
10).
The
on the manufacturing
a number of approximately
The production
volume per
be in balance with
the market
with demand. The "cycle
time"
throughput
time
for
less
than
the
be
the
any
of
components'
cannot
included
in the PBC product sets and must not increase the proportion
of machine setting
required
time so that capacity
is reduced below the level
to meet demand.
Assuming a PBCsystem was operating

compare the alternative
Equation 7 could be used to
rope guide assemblies,
Qb = Qp = Ns. Te. Nw
Table 11, i. e.
($)
Where:
Ns =
TI
Nw =
Sales demand.
Longest
individual
Number of working
throughput
time (weeks).
(weeks).
in
the
year
weeks
75
For the 3.2 tonne New EHBunit Ns = 380/year, TZ =6 weeks and

Nw = 48 weeks and Qp = 47.5.
From Table 11 it
can be seen that the effect
sizes through the introduction

cost effectiveness
of lowering batch
of a PBCsystem tends to increase the

tooling
of components requiring
or investment
costs to the disadvantage of machined components. In addition

several difficulties
are encountered by the design function
when
developing products for a PBCsystem:
(i)
It is necessary to determine the "cycle time" before make

or buy decisions
and comparisons of alternative
concepts can be made. This requires

longest individual
design
a knowledge of the
component throughput time within
product.
(ii)
schedules
in order
Hence scheduling
constraints
consider
(iii)
detailed
A PBC system requires
planning
to reduce set-up
flexibility
since
arise,
the overall
is
Hence the design function

fit
to
components
times.
reduced and new design
manufacturing
to reduce manufacturing
and operation
the design
PBC systems use Group Technology
of manufacturing
function
must now
sequence of a product.
(62)
manufacturing
cells
cycle times and stock levels.

could need to consider designing
into existing
cells
in order to avoid
76
the cost of redesigning

applicable
particularly
if
a cell
within
structure
the cell
in multi-product
This is
organisations
is in existence for other products
the company's product mix.
Engineering design changes introduced to improve materials
(iv)
or manufacturing
methods could form causes of inaccuracies
in computerised inventory
systems such as PBC

(63)
Requirement Planning (MRP)_
and Materials
2.2
structure.
control
Value Engineering
During the New EHBdevelopment period a Value Engineering (VE)
Committee was formed to examine methods of reducing manufacturing costs.

In accordance with value engineering methodology(74) the members of
the
from
functional
of
each
main
chosen
were
the committee
involved
engineering,
purchasing
method of reducing
and estimating).
product
H. M. Ltd. achieved limited
(i)
development
in the new product
manufacturing
process
(i. e. design,
Although
costs
departments
production
VE is a recognised
the committee
at
success since:
VE meetings were not held regularly
therefore
the number
limited.
be
that
could
examined
was
of components
The
in
VE
order
should
meet
frequency with which a
committee
be
can
represented
product
range
examine
a
to adequately
as:
Vf
Ta.
Tp. Nw.TA
9)
77
Where:
Vf
(per
VE
Frequency
of
committee
week).
meetings
=
Ta = Average VE time per component (hours).
Ne = Number of components examined.

Tp = Product development period (years).
Nw = Number of working weeks per year.
TA = Average length of VE committee meetings (hours).
From examination of the current value e.ngineering

Ta =2 hours,. Ne = 400, Tp = 2.5 years,
TA =3 hours.
work
Nw = 46 and
Therefore from Equation 9 the frequency
with which VE committee meetings must be held is:
Vf
400
2.3 per week
=2x
46 x 2.5 x3
holding over two 3 hour VE meetings per week would
Clearly
be difficult
sufficient
since committee members could not have

time available
to
found
be
either
must
to attend.
Therefore methods
reduce the number of components
be
VE
improve
the
can
carried
work
at
which
rate
examined or
out.
Since VE is a creative
than an analytical
technique)
VE work could be carried
cost reduction
tool
(rather
improving the rate at which.
inherently
be
out would
difficult
78
whereas obviously
concentrating VEtime on high cost
components achieves the initial
option.
However to increase the rate at which VE work can be carried

(75)
out a method employed by the author during VE exercises
was found to produce advantages. The technique involved
applying an individual
components within
method to all
cost reduction
a product design.
listed
methods
reduction
Each of the cost
in Table 12 were applied to a
product design in this manner.
In this way the Value
Engineer takes advantage of a "learning

That is,
the
curve" effect.
as the number of components examined increases,
the speed with which succeeding components can be examined

and potential
cost savings identified
To reduce VE time further

this
in
conjunction
method
high cost
components,
sufficient
be ignored
during
later
stage.
is also
with
possible
the technique
i. e. the order
determined
is
are examined
time
it
also increases.
by their
is not available
the NPD process
to employ
of examining'
in which components
relative
low cost
cost.
If
components could
and value
analysed
at a
79
TABLE12
COSTREDUCTION
METHODS
(a)
Reducing the volume of material
(b)
Reducing the number of bought out componentsy
used per component.
i. e. improving overhead recovery.
(c)
Reducing-the
(d)
Converting material
(e)
Examining the possibility
(f)
Examine components for possibility
of using plastics.
(9)
Examine components for possibility
of using standard
labour cost per component.

costs to labour costs.
of using cheaper materials.
replacement parts.
(h)
Reducing the number of components required.
(i)
Reducing. the number of components required

the possibility
of components carrying
by examining
out the functions
of others.
(j)
Standardization
of chamfers, radii,
bolts,
nuts, bearings,
screws and threads.

(k)
Examining the possibility

of components.
of reducing dimensional tolerances
80
(ii)
During meetings formalised

followed.
VE procedures were not
To achieve results
programmemust be followed
(Information
stages
a carefully
basic
of seven
consisting
gathering,
planned
Speculation
phase,
Evaluation phase, Programmeplanning stage, Programme

execution phase, Recommendation stage and Implementation
stage).
Again a reduction in the number of components
examined would effectively
time for
allow additional
the formal VE procedure to be adopted.
(iii)
WhenVE is carried
is necessary
build
and test
out during the development process it
to recommend design
in order
work being necessary.
changes prior
to prevent
further
to prototype
development
However because of the inherently
VE
(compounded
by
work
can
proceed
which
at
speed
slow
the lack of regular
test
VE meetings) the prototype
took
assemblies
place before the VE
of
many
stages
designs
the
involved.
examine
could
committee
the need for design changes occurring
test
build and
stage value engineering
be completed prior
prototype
and test
preliminary
phases.
the prototype
of a component design should
to the release of the design for
manufacture.
an essential
after
To prevent
VE should therefore
step prior
be considered
to the prototype
build
81
2.3
The Assortment Problem

Whendeveloping a product to cover a range of market specifications
(e. g. size,
decisions
fundamental
to be made are,
and
power),
capacity
the number of standard sizes to manufacture and the exact specification

With respect to the New EHBdevelopment project
for each standard size.
these problems centred around deciding:
the number of basic frame capacities
(i)
standards,
and
the Safe Working Load capacities
(ii)
to develop as
of each standard size.
into an important class of problems

(76)
defined as "the assortment problem" which according to Swanson
Decisions of this
type fall
basic
two
sub-classes:
of
are composed
(i)
The "set-up
(ii)
The "job-shop
and inventory"assortment
problem.
assortment"problem.
In general the assortment problem looks at the determination

if
of what,
that
be
standard
sizes
might
manufactured such
of
system
any,
large
through
number
manufacturing
a
obtained
scale
economies of
than
offset
more
sizes
few
standard
of a
(material
is greater
and manufacturing
the lost
extra capacity
time) in supplying products whose size
than the customer requires.
With the "set-up and inventory"
have
to
is
the
a
assumed
of
manufacture
method
assortment problem
82
certain set-up cost and optimal production

it.
Therefore when different
standard the inventory,
run length associated with
size products are combined to form a
set-up and manufacturing costs must all
be
considered in deciding whether or not to combine the various sizes

During the "job-shop"
into a standard.
is assumedto be performed exactly

i
Hence there
little
is relatively
assortment problem manufacturing
to the specification
inventory
and the main consideration
costs for various methods of manufacture.
is the differing
The assortment problem involves many subjective

influence
of the solution
the optimality
to formulate
difficult
are often
problem must also reconcile

departments involved
Important
criteria
which
and hence assortment problems

The solution
objectively.
the competing objectives
to the
of the functional
in new product development.
to consider
criteria
are listed
in Table 13.
PROBLEM
FACTORSAFFECTING THE ASSORTMENT
TABLE 13
A,
of the customer.
MARKETINGFACTORS
(i)
Customer acceptance of sizes other than those historically

available.
(ii)
larger
sizes
would
Determining whether customers
accept
than their
(iii)
Competitive
price
requirements.
sizes
product
comparisons
if
'competitors.
the
than
which may prove to provide
standards
were chosen that
poor
were larger
83
TABLE13 (Contd)
(iv)
The actual demand pattern,
i. e. the preferential
sizes favoured by the market.

(v)
The range of sizes provided for the market.
(vi)
The profitability
i. e. product size versus
pattern,
profit.
lead times required.
(vii)
Manufacturing
(viii)
The need to market a full
range of product sizes,
e. g. at H.M. Ltd. product sales are strongly

dependent on customers standardizing
requirements in order to simplify
maintenance procedures.
hoist
block
stock holding and
Therefore customers tend to
buy from manufacturers who can supply their
specific
requirements.
B.
FACTORS
MANUFACTURING
>
c>
flexibility,
facilities
handle the level
design
associated
variation
of standard
(ii)
i. e. can the manufacturing
Production
Stock policy,
of product
with
and component
increasing
the number
sizes.
i. e. stock costs can be expected to rise
increases.
the
of
standard
sizes
number
manufactured
as
84
TABLE13 (Contd)
(iii)
Production control
methodology, e. g. batch scheduling,
PBC, MRP
(iv)
Machine utilisation.
(v)
Machine set-up and operation

Machine type profile,
costs.
i. e. the number and type of
automated machines.
(vii)
Type of manufacturing
volume production,
production
(viii)
C.
system, i. e. job shop, batch, high
group technology layout or automated
lines.
Cost of standardization.
DESIGN FACTORS
(i)
The development resources available
influence
the number
of standard sizes that can be designed.

1 i)
"Bought out" to "made in" component levels
in the
product design.
(iii)
The degree of standardization
(iv)
The suitability
(v)
Level of material,
between product sizes.
of the product to modularisation.

labour and overhead costs.
85
TABLE13 (Contd)
D.
CORPORATE
FACTORS
(i)
New product range development time scale.
(ii)
Corporate policy.
.le
(iii)
Long term objectives

Labour policy,
for the product range.
i. e. degree of flexibility
in labour
allocation.
(v)
Working capital
work-in-progress
constraints
levels
tend to limit
therefore
stock and
reducing the number
of standard sizes that could be manufactured.
Since many of these factors
are difficult
to quantitatively
the
around
centres
estimation
often
the assortment problem
quantifiable
criteria.
(i)
benefits
of the
in order to weight these against the subjective
The problem definition
then becomes either:
determine the minimum number of standard sizes such

that the loss from manufacturing
product sizes larger
than customer requirements is acceptable,
(ii)
or
determine the number of standard sizes such that the

disadvantages of manufacturing one extra standard size
are greater
define
than the benefits
incurred.
86
13) must be examined for its
Each of the above constraints(Table

tive
importance to the assortment problem.
scale is an important constraint
For example development time
in the assortment problem for the New
is necessary to limit
EHBrange since it
rela-
the development period. in
order that a new product range can be launched before a serious

loss in sales levels
2.3.1
Solution
of the existing
Ropemaster range.
Techniques
There are several established
techniques for solving
the
assortment problem; complete enumeration, random enumeration,

dynamic programming and the minaddition
technique.
attempts to determine the number of standard units
Complete enumeration for example involves

all-possible
the analysis
from
each, with the solution
obtained
savings
being adopted.
the number of possible
yielding
However the number of possible
increases
to
exponentially
consider
combinations
with a rise
in
sizes and the number of standard sizes.
be
's
Ltd.
H.
M.
to
used
enumeration
cannot
solve
complete
there
to
eighteeen
select
are
since
sizes
problem
assortment
(and hence 6.4 x 1015 possible
solution
of
combinations of standard sizes to determine the
the maximumbenefits
Therefore
and their
sizes that minimizes manufacturing costs.
respective
relative
Each method
would require
combinations)
an excessively
and the problem
long time to evaluate.
from
87
Randomenumeration of a limited
possible but it
number of combinations is
is difficult
to determine how close to optimal
is.
combinations based on
Selecting
any trial
solution
intuition
and experience is also liable
Several investigators
Programming (DP) algorithms
(76'77'78)
to the same uncertainty.
have used Dynamic
to solve the assortment problem,
i. e. the problem is represented as a sequential

which is solvable
in stages.
The first
(the
largest
size
one
standard
size'requiredto
problem
stage is to select
This decision
size).
normally a marketing or manufacturing

largest
decision
constraint,
is
e. g. the
cover the intended market segment or
the maximumsize that can be manufactured due to component

size limitations
on production
equipment.
The subsequent stages involve
selecting
decreasing
in
size.
of
order
standard
each individual
The underlying
is
known
"principle
the
techniqe
DP
the
as
argument of
which states that an optimal policy
optimality",
property
that whatever the initial

decision,
available)
and initial
constitute
an optimal policy
from the first
decision.
state
philosophic
of
has the
(number of sizes
the remaining decisions
must
with regard to the state resulting
88
Jackson and Zerbe
(77)
initially
solved the assortment
problem using the DP technique but according to Swanson(76) they

specified
(i)
the problem illogically
The solution
required
since:
the pre-determination
number of standard sizes,
i. e. this
of the
is a decision
variable
(ii)
and cannot therefore
The solution
determined which particular
should become standards whilst

sizes as custom designed.
of determining
objective
be pre-specified.
standards is basically
sizes
leaving the other
However, the overall

the optimum number of
to reduce the number of
sizes produced by manufacturing only a limited

number of standard sizes.
Taking these factors
decision
initial
the
necessary at
single
sizes,
feasible
item and working
At the second decision stage all
double standards were examined in the same manner.
It can be seen that extensive

required
stage to examine all
largest
beginning
the
with
standards
down to the smallest.

feasible
into account Swanson(76) found it
when considering
i. e. 5,6,7
...
amounts of computation are
even small numbers of standard
89
can be solved for simple problems using
The DP algorithm
technique developed by Swanson but for more complex
a graphical
decision
problems the sequential
process method is required.
of the problems increase the DP technique
As the complexity
becomes cumbersomeand a computer is necessary to solve
rapidly
the problem in a reasonable length of time. For a problem the

lo, H.M. Ltd. 's
approximately 11K core storage is necessary
size of
is
time
the
approximately
computing
and
A major disadvantage
problems
assortment
by Martin
highlighted
solution
and piff(78)
lift
problem
sales prices
trucks
indicated
management
The DP
such as manufacturing
manufacturing
The subjective
costs
and
truck
estimate of
that only 5 standard sizes should be

in results
The large variation
that the subjective

solution
to determine
22
that
standard fork lift
and recommended
be
manufactured.
should
sizes
produced.
non-quantifiable
to manufacture.
factors
possible,
to solve
This problem has been
when attempting
considered
range of sizes
quantities,
of including
making process.
the optimum number of fork

to this
the DP technique
is the'difficulty
in the decision
criteria
of using
20 minutes.
listed
criteria,
indicated
the effect
in Table 13, have on the
to the assortment problem.
Considering
algorithms,
can be solved
that
subjective
to the assortment
optimum solution
technique(79)
the effect
has certain
since
advantages
an assortment
in a reasonable
criteria
have on the
problem the Minaddition

over the use of DP
's
Ltd.
H.
M.
magnitude
of
problem
time
without
of
amount
the aid of
90
Hence the cost of developing computer software
a computer.
when employing DP algorithms
The Minaddition
is avoided.
technique can be used to solve the
assortment problem assuming that any required size not a

standard can be provided from the next standard size up.
This constraint
is applicable
in excess material
development and, results

being required.
The Minaddition
the particular
select
excess costs.
to the present New EHB

and labour costs
technique is then used to
set of standard sizes that minimizes
When profit
margins vary with product size
then the problem can be respecified
to minimize total
profit
loss.
Using the Minaddition

into two distinct
resolves
(i)
technique the assortment problem

sections:
Use the Minaddition

cost or profit
technique to determine the
loss from manufacturing various
numbers of standard sizes.

(ii)
Determine the extra costs incurred
from increasing
the number of standard sizes.
The optimum number of standard sizes to manufacture therefore

is that
from
the
adding one extra
savings
obtained
number where
is
considered unjustified
standard
costs and manufacturing
manufacturing
efficiency,
when compared with the extra
problems involved,
e. g. reduction
higher work-in-progress
levels.
in
91
2.3.2
Technique
The Minaddition
Wolfson
Minaddition
(79)
published a detailed
description
included
and
a flow diagram to aid computermethod
when complex problems need to be solved.
isation
of. the
The technique
New
development
determining
during
EHB
for
the
be
used
can
optiwum number and lifting
capacities
the
of standard frame sizes
to manufacture.
Initially
the data to be obtained includes the range of
frame sizes that are being considered,

"cost"
the
frame
size
and
per
The type of "cost"
per unit,
material
costs per unit,
margins are similar
per unit,
circumstances
manufacturing
labour cost per unit
During the present analysis
cost per unit.
affect
Table 14.
determined depends on the specific
costs (i. e. material
therefore
sales quantities
of each frame size,
be
profit
may
and
of each problem
direct
forecast
costs
or
the prime
and labour costs) are used since profit

throughout the product range and would not
the outcome of the Minaddition
solution.
The maximumand minimum frame sizes considered in Table 14

knowledge of the size range used within
from
determined
a
were
(26)
the total market.
The Minaddition
technique considers the range of possible
in
sections
sizes
standard
that bound each section
and temporarily
(termed "interval")
regards the sizes

as standards.
The
92
TABLE14
DATAREQUIRED
FORTHE MINADDITIONTECHNIQUE
Ref.
Sales Forecast
(Units per Year)
Prime Costs
("s)
0.16
21
241
0.20
10
252
0.25
89
266
0.32
10
284
0.40
24
306
0.50
383
333
0.63
74
367
0.80
170
449
1.00
184
466
1.25
142
533
1.60
192
627
2.00
94
734
2.50
289
868
3.20
79
1016
4.00
131
1270
5.00
74
1515
6.30
24
1886
8.00
2368
Hoist Unit
Frame Size (tonnes)
Of
(26)
93
prime costs for each interval
total
stages, i. e. the cost that results

the interval
are then calculated

when all
are provided from the larger
The prime costs in any interval
sizes.
in
other sizes in
of the two bounding
would therefore
remain
the same no matter which sizes greater or smaller than the

interval
bounding frame sizes were varied.
Costs are denoted
by:
Ce = AW (min'
max
(10)
Where:
Prime costs.
Ce,A
Sm.
lower
bounding
The
frame
size.
=
Smax = The upper bounding frame size.

w=
The number of standard frame sizes in the

interval.
The objective
of the Minaddition
technique is therefore
to minimize Ce for successive values of w.
Minimum prime costs have been determined for successive

listed
are
values of w and
(with the corresponding optimum
15.
in
Table
to
frame
manufacture)
sizes
standard
94
RANGEDATA
PRODUCT
OPTIMUM
TABLE15
v
a
.r..
.0
0
rn
4J
x
aI
a
cm
c
f0
N
+)
N
E
0
(L)
N
. r..
N
i
t0
C
du
>
N
U
v
d
CM
ct
C)
0
CD,
r--
01
-d"
co
M
N
ONN
Ol
O1
rLO
r-00
N
r0T1
--
to
q; r
C11
N
1,-
00
X
W
v
4-
U
Vf
N
O
C..)
C)
E
Cl
0
0
r
'x
ct
M
O
rO
fM
C)
C
CD
VI
C)
N
cw
9ww
O
N
C;
O
C9.0w
Lf)
LA.
LA
LI)
N"
N.
LAw
Cp
C)
E
.N-
CO
C9.
LL.
G )I
.
C
O
I
e
.,..
4-)
0
C)
06
Lj)
C.
CQ
C
w
LA
NN
C4
ww
C;
Ll)
"N.
LC)
w
Lj)
e-
Ow
Ow
r-
r-
p-.
LAw
L1')
l0
...
CV
Lj)
ww
CD
LA
r-
r-
r-
06C.
CV)
Ct
LO
..
,a
b
c
N
4O
r-
m
E
95
Since the Minaddition

costs from manufacturing
cost saving resulting
technique determines the prime
a fixed
number of standard sizes the
from adding one extra standard size can
be determined using Equation 11.
(1 1)
Cep - Cep+l
Csv =
loe
Where:
Csv
Cost
saving obtained from adding one
=
extra standard size.
Cep
Cep+1 =
Prime cost for p standard sizes.

Prime cost for p+1 standard sizes.
Having determined the cost savings it
is necessary to
in
increases
the
them
manufacturing
with
compare
are incurred
through manufacturing additional
These cost increases arise primarily
(i)
Increasing
costs that
standard sizes.
since:
the number of standard sizes within
product range effectively
lowers the average
batch
and
sizes,
purchase
manufacturing
incurring
(ii)
additional
hence
purchase and setting-up
The increased number of batches that require

processing effectively
utilization
level.
lowers the machine
costs.
96
(iii)
Increased costs are incurred
for special
(e. g. rope guide moulding tools)
tooling
and jigs
and
fixtures.
(iv)
The efficiency
of production
planning and control
systems could be lowered hence labour costs could

be increased,
i. e. extra idle time is incurred.
(v)
Work-in-progress
(vi)
The reduction
and stock levels
increase.
in labour costs and scrap levels
through the "learning
curve" effect
(see Section
is decreased.
3.1.2)
In order to determine the optimum number of standard sizes

to manufacture it
is necessary to compare the cost savings with
the added costs involved
in increasing
the number of standard
The optimum number occurs when Csv < Ca where Ca represents
sizes.
the additional
It
is an advantage to use the Minaddition
determining
estimation
costs incurred.
technique in
the optimum number of standard sizes since accurate

of Ca is not required.
Figure 6 illustrates
incurred
cost
savings
which
are
at
rapid rate
indicates
and
sizes
standard
of the additional
therefore
costs incurred
optimum number of standard sizes.

incurred
costs
extra
the
when adding extra
that only rough estimates
are needed to determine the

H.M. Ltd. estimated that the
in adding an additional
standard size lay
97
FIGURE 6
OPTIMUMNUMBEROF STANDARDHOIST SIZES

TO DEVELOP
Cost Savings
(Csv)
Ln
0
X
V1
C'e
C
"r
>
Optimum range of
Si
standard sizes to
Vli
manufacture
y. i
N
O
U
0.5
L- ----------------
Estimate of
-r
increase in costs
from_adding onp-____
extra standard
I
I
II
345678
Number of
Standard
Sizes
98
between 150,000 and 1100,000.
Hence Figure 6 indicates
that
the optimum number of standard sizes to develop would be five

number chosen would depend on a company's
The actual
or six.
That is,
long term objectives.
choosing to manufacture 6
standard sizes would aid the company in lowering material

labour costs but would require
the organisation
and
to improve or
A,
level
high
a
maintain
actual
to develop five
policy,
because the limited

constraint
H.M. Ltd. 's
efficiency.
standard sizes,
was adopted
development time available
was the overriding
on the number of standards that could be designed.
The basic
1.6 tonnes,
costs
of manufacturing
frame sizes
3.2 tonnes,
from this
arising
optimum policy
for
five
2.5 tonnes,
5.0 tonnes
of 191,000
(Table
15).
chosen by H. M. Ltd.
5.0 tonnes
policy
and 8.0 tonnes.
is equal
standard
are 0.8 tonnes,
sizes
and 8.0 tonnes)
The prime
to 238,600.
(0.5
tonnes,
gives
rise
Hence an additional
The
1.25 tonnes,
to prime costs
saving
of
238,600 - 191,000 = 47,400 is possible. by changing. to the

optimum policy.
However the range of standard sizes adopted
by H. M. Ltd. was chosen primarily
because these lifting
those required
capa-
by the market for crane
cities
are traditionally
duty.
Hence these sizes are necessary since the EHB is a major
's
Universal
Ltd.
H.
M.
in
sub-assembly
Minaddition
analysis
crane range.
has shown the additional
of adopting a non-optimum policy

judge the value of that policy.
However the
cost to H.M. Ltd.
from which managementcan
99
2.4
Design Planning and Control

Since the design of a new product range is essentially
be
design
time
the
must
allocated
process,
using subjective
i. e. the design phase is planned by apportioning
a conceptual
judgement,
design time
available
that
the
makeup the product.
sub-assemblies
major
amongst
It is
of the engineering designer to ensure that
then the responsibility
designed
is
within
sub-assembly
each
in this
design time allocated
the time allowed.
Normally the
manner is not subsequently distributed
components that form each sub-assembly.
between the individual

there is no effective
control
target
a
since
component
over the allocation
Hence
of time to design a
design time for each component will
not have
been allocated.
In addition
exists
the possibility
available
since
design
time
target
times
of engineering
for
components are not allocated
designers
between components.
mis-apportioning
Under these
conditions
the relative
design time allowed for components may not always reflect
the relative
importance of the components to the overall
design.
the product
success of
For example, during the design of the New EHB
items
bearing
housings,
such
as
minor
cost
on
time
the
expended
range,
items
to
the
the
to
overall
contribution
relative
was not proportional
the
product.
of
new
producibility
and
reliability
cost, quality,
be
to
design
allocated
resources
To enable
a project
effectively
into
that
takes
consideration
technique
planning
importance of each component within
a design.
requires
the relative
100
The conventional
are Gantt Charts, Critical
projects
development
methods of planning and controlling
Path Method (CPM), Performance
Evaluation and Review Technique (PERT), Managementby Objectives

and Planning-Programming, Budgeting and Systems Analysis
Gantt Charts, CPMand PERTnetworks
(80)
(MBO)
(PPBS).
illustrate
graphically
the chronological
order in which development tasks should be performed
and are therefore
practical
tools
for monitoring
CPMor PERTnetworks are superior
development projects.
Charts since these methods illustrate

tasks and can therefore
project
i. e. those activities
a project,
delaying
the project
the progress of
the relationships
determine the "critical
to Gantt
between
path" for
which cannot be delayed without
completion date.
PERTnetworks are useful for planning and controlling
the new
the
development
since
uncertainty
process
product
into
be
taken
consideration.
times
can
task
surrounding development
(81)
Task times are determined
12.
Equation
using
T=
act
T, + 4T2 + T3
6
Where:
Tact
Activity
=
T1
Optimistic
=
T2
time for a task.

time for a task.
Most likely
time for a task.
Pessimistic
time for a task.
(12)
101
Although the PERTtechnique was originally
designed for
controlling
development projects,
controlling
the development of the New EHBrange had several
the use of the technique for
disadvantages:
The cost of implementing PERTis high, hence the project
c>>
being planned must be sufficiently

this
large to justify
Smith and Mahler(82)
expense.
in comparing
computer CPM and PERT programs indicate

between number of activities
cost.
Using this
EHB component if
3400 events)
being planned and program
in detail
would represent
117,000 for
the development
relationship
planned
a PERT software
to increase
(ii)
To construct
of approximately
Purchasing
package.
be cost
the equal opportunity
the size
design
a PERTnetwork diagram projects
comprised of a series of identifiable
identified
be
always
tasks.
is essentially
the
tasks
resulting
process,
effective
of using
of the H. M. Ltd.
desigq
the
activity
since
of each
(i. e. approximately
a cost
PERT system would not therefore

compared with
the relationship
this
when
cash
team.
must be
However,
a creative
from the design phase cannot
in advance of design being carried
length
type
the
and
g.
of reliability
e.
out,
trials
depends on the assembly design concept adopted, hence

diagram
be
PERT
constructed
cannot
network
a
accurately.
102
(iii)
PERTde-emphasises cost (both development and manufacturing

costs) as a specific
project
factor
to be considered during a
since resources are directed
scheduled development time.
Although PERT/COST
network
diagrams are designed to take financial

Kahalas(83) indicates
consideration,
ol
that the technique
to implement since the allocation
to individual
tasks within
the projects
"one offs",
a project
into
objectives
is difficult
is,
the
at maintaining
of costs
is not easy.
That
for PERT/COST
are generally
suitable
hence the development of standard costs for

task is extremely difficult
any particular
and often not
cost effective.
(iv)
Network analysis
techniques such as PERTare concerned
with controlling
development time and the allocation
project
resources to the cost effective
development time.
the relative
overall
of each project
contribution
project
task to the
to carry out a particular
project
development time is limited
it
task.
the time required

However when
the primary aim of a planning
technique should be to allocate

tasks such that
This is necessary
resources.
Equation 12 is concerned with determining
priority
of
As such these techniques do not consider
success of the development process.
when allocating
(v)
minimization
of
development time between
is used efficiently.
103
MBO(83) is a planning technique designed to motivate management

at every level
by involving
of an organisation
process (i. e. goal setting)
and evaluating
them on their
effectiveness
in setting.
Using the
in achieving the goals which they participate

MBOphilosophy to plan and control
the development of a new product
would force managementto establish

set of development objectives
them in the planning
a consistent
and comprehensive
for the organisation
and could produce
a higher degree of commitment to the development goals.
However the MBOtechnique is normally limited
by the degree to
which the organisational
and the personal goals of individual
can be made compatible.
This is a major problem during new product
development since managers are conscious that decisions

for the life
of the product.
The tendency, therefore,
managers
are effective
with using MBO
lead
that
to departmental functions
term
focus
goals
is to
on short
concentrating
on individual
objectives
For example, the manufacturing
aims.
rather
function
to minimize labour costs rather
materials
than on organisational
could tend to choose
than total
manufacturing
costs.
for
by
USA
Department
Defence
the
developed
use
of
PPBS(83'84) was
decision-makers
to assist
projects
with varying
numerous projects
cost-benefit
benefits
levels
of costs and resulting
limited
for
competing
are
analysis
is carried
from one project
from an alternative
in choosing, planning and controlling
When
development resources a
out to compare the cost of achieving
with the cost of receiving
project.
benefits.
defence
equivalent
benefits
104
The philosophy
of the PPBStechnique is applicable
product development process since each component within

be considered a candidate for design time.
to each component based on the benefits
i. e. the relative
contribution
analysis
benefits
for
basis
comparing
common
to be established.
the outcome of alternative
can vary considerably
are often compared qualitatively
In addition
projects
the formation
analyst
can have multiple
to be gained,
development objectives.
to the overall
The need to carry out a resource-benefit
benefits
a design can
The design time must
then be allocated
projects
to the new
rather
objectives
However since
alternative
than quantitatively.
and benefits,
often
depends
basis
on the ingenuity
of a common
in using the information
requires
at hand to develop benefit
hence
of the
and cost
descriptions
comprehensive
and
outcome
meaningful
measures which provide
in
addition
and
provide a basis for rational
The basic benefit
to be gained from increasing
design resources allocated

the overall
profitability
choice amongst alternatives.
the level
of
to a component is of course an increase in

of a product design,
i. e. the total
profit
life of the product.

However overall
total
the
market
during
obtained
in
derived
be
ways, examples of which are
numerous
can
profitability
listed
in Table 16.
105
TABLE16
1.
METHODS
OF IMPROVING
PRODUCT
PROFITABILITY
Lowering product selling
price and therefore
increasing
sales levels.
2.
Designing a more attractive
3.
Improving the delivery
or desirable
product.
time of the product.
Enabling the product launch to coincide with an
-4.
increase in sales demand.

5.
Widening the range of specifications

the potential
covered to improve
market.
In examining the means by which overall
profitability
can be
improved the present work considers that the four basic activities
involved
are:
(i)
Improving product design specification.
(ii)
Improving product characteristics

reliability,
quality
and serviceability.
(iii)
Lowering the product manufacturing
(iv)
Improving the producibility

design.
product
a
such as style,
costs.
(ease of manufacture) of
106
of design resources must determine the
Hence the allocation
of resource allocation
affect
specification,
their
effect
and cost) and determine
producibility
attributes,
(i. e.
on design characteristics
product profitability.
on overall
designs manufacturing cost is the
When comparing alternative

Ile
design characteristic
that can be related
Product specifications,
with accuracy and consistency.

and producibility
are difficult
such subjective
criteria
relate
attributes
to product
depends on
of these characteristics
as the purchasing motives of potential
Hence the relative
buyers.
to accurately
since the effect
profitability
to product profitability
cost of components within
design is the most logical
criterion
a product
to use for allocating
development
and design resources.
Although it
basis of a component's relative

that nevertheless
factors
(i)
cost within
a product design, several
must be considered are:
to determine the influence
The necessity
(specifications,
design criteria
(ii)
design resources on the
to allocate
is feasible
of other
attributes
and
producibility)
on the level
The allocation
design
for
be
used
only
of resources can
improvement, i. e. it
design solution,
this
solution
of resources allocated.
is necessary to develop an initial
estimate the manufacturing
costs of
level
the
to
these
estimate
costs
and use
improvement.
design
for
to
use
of resources
107
(iii)
The necessity
to develop cost targets
order to ensure the efficient

Here. target
for designs in
use of design resources.
costs could be defined as those costs
beyond which additional
cost reductions would not
the cost of the extra design resources
justify
required to obtain them.
In practice
cost limits
practical
Brooks
(85)
margins required and quality-levels
the design proceeded.
tool a "cost trend chart"
the anticipated
An anticipated
variances
cost trend allows a greater degree
are within
actual
the pre-defined
and target
reduction
to indicate
action
indication
limits.
required.
That is,
product costs
The extent of the variance between

the type of cost
small differences
would tend
could be achieved by the engineering
indicate
large
would
variances
designer whereas
value analysis.
cost
costs) when plotted
of whether total
indicate
be
to
used
could
costs
that cost reduction
cost reduction
In addition
between actual and target
on the chart provide a visual
was
growth in product costs as
design
tasks.
in
the
of
freedom
sequencing
of
(the difference
necessary.
of costs during NPD. In order to provide
managementwith a usable cost control

that indicated
product
costing to develop a
used the concept of target
programme for the control
constructed
to assess, hence more
could be obtained using competitors
expected profit
prices,
are difficult
such cost targets
that a more radical
technique was necessary, e. g. value engineering
or
108
If negative cost variances were obtained (i. e. actual costs were

lower than target
costs) this
could indicate
the designer spends in attempting

be reduced, hence the overall
plan and control
Since existing
alternative
to improve manufacturing
costs could
design time could be lowered.
during the development of the New EHBto
It is important
effectively'
that the amount of time
project
the limited
design resources available.
planning techniques are not appropriate
developed.
be
to
needs
method
an
Such a planning method
would need to contain:
(i)
A method of allowing
data quickly.
designers to obtain component cost
This data would then be used to allocate
design time.
(ii)
A relationship
between design time and the relative
cost of components within

(iii)
A method of determining
suitable
product costs.
and controlling
In this
A
on
product costs and expected profit
A method of monitoring
against
component cost targets.
base
be
to
cost targets
would
method
competitor's
(iv)
a product.
margins.
design time
case a suitable
"cost
the
trend
be
the
of
use
charts"
would
(85)
by Brooks
method
proposed
109
2.5
Design Scheduling
Undertaking development tasks in the correct
in minimizing
development time by ensuring that tasks that form
total
path are not delayed.
the critical
However during the design of a new
path may be constantly
product the critical
changing since the design
lie
development
tasks
that
create
process may
on the critical
For example, a component may be designed requiring

period for raw materials
critical
existing
therefore
sequence is essential
or special
a lengthy delivery
hence affecting
tooling
path.
the
path, or a component may need to be long term tested

forming a new critical
automatically
path.
The scheduling of work through the design phase has important

effects
functions
departmental
the
other
on
within
the NPDprocess.
design
from
the
department in the
is
design
released
Normally
work
form of finished
product or major sub-assembly drawings which result
departmental
functions.
being
on
other
loads
placed
in high work
a Jig and Tool department
level
the
For example,
of resources within
is normally
to cope with the relatively
sufficient
low level. (as
term
tooling
NPD
of
short
requirements.
requirements)
with
compared
for
is
NPD
available
normally
requirements.
Limited spare capacity
In addition
manufacturing
tooling
term
short
to continue,
operations
NPD tooling
requirements.
high levels
of tooling
normally
overloads
tasks are needed to allow day-to-day

hence they take priority
It is therefore
over
necessary to avoid releasing
requirements during the NPDprocess since this
the tooling
department.
Hence to ensure the
development schedule-work must be sub-contracted

the
to
delay
minimum
leading
development
costs.
increased
to
110
Scheduling design work such as to minimize total

since it
time is not always the major objective

to plan work such that total
is in order to financially
is often necessary
product costs can be estimated.

justify
This
the development work with the
minimum loss in development resources.
In addition
of product costs allows control
estimation
development
the early
procedures to be established
that would allow costs to be reduced to an acceptable level.
However since development time is limited
to sequence design work could be of significant
the ability
Again existing
project
planning methods are not appropriate
method needs to be developed.
alternative
a method of allowing
need to contain
time
during the NPDproject
for
required
development
task
interactions
(in
order
hence an
Such a technique would
designers
components and assemblies
benefit.
to determine
to be developed
to identify
"critical
the total
and
path"
components).
2.6
build
Alterations
to Product
Designs
Altering
designs
after
component
their
and test
NPD
be
frequent
the
to
was
observed
process,
a
of
stages
release to the prototype
during the New EHBdevelopment process.
activity
determine
total
to
the
used
chosen at random were
that
changes
Nt
A sample of components
number of design
had occurred in this manner, i. e.
Na.Nr. Nq
(13)
111
Where:
Nt
design
incurred.
Total
of
changes
number
=
Na = Average number of design changes per component.

N-r = Total number of components within
the product range.
NA = Average number of design changes per component that

from design interactions
result
between components,
i. e. caused by Na type changes.
For the New EHBprocess Na = 4.5, Nr. = 400 and NA = 2.5

in Equation 13:
hence substituting
Nt
4.5 x 400 x 2.5
= 4500
it
designers
was established
From a sample of experienced
that
design
change
was
to
approximately
each
time
out
carry
the average
0.50 hours (includes
Therefore total
draughting
and functional
calculations).
design time needed to alter
existing
designs
15:
4500 x 0.5
2250 hours
17.6%
the
total
of
hours
2250
represents
available
for the New EHBproject.
design resources
Hence it would be an advantage
design
during
take
the
NPD
that
changes
place
of
the
number
to reduce
112
This would also reduce the effect
process.
of design changes on other
stages in the development process, e. g. prototype

fixture
build.
testing
and jig
and
From an examination of the design changes that occurred
during the development of the New EHBrange the major causes of design
changes were identified,
Table 17.
TABLE17
MAJORCAUSESOF DESIGNCHANGES
Proportion
Cause
of
Proportion
of Total
Design Resources
Changes
Cost Reductions
improvements
Functional
improvements
Attribute
Producibility
improvements
Improving specification
Table 17 indicates
carried
range
0.78
0.137
0.10
0.018
0.05
0.009
0.04
0.007
0.03
0.005
that the majority
out to reduce product manufacturing
in obtaining
of design alterations
costs arising
from
data
the present cost estimating
cost
were
from the delay

'
system. During
had
be
designs
to
to
the prototype
often
NPD
released
the
process
and test
delay
the
to
to
serious
prevent
project
stage
completion date.
been
had
designs
costed, cost reduction
Subsequently when
found to be necessary normally resulted
Table 17 also indicates
required
the proportion
design
alterations.
to carry out
build
exercises
in changes to component designs.

of the available
design resources
113
from cost reduction
Design changes arising
tasks can be reduced
in two basic ways:
(i)
Develop a more responsive cost estimating

data
quickly
cost
provide
reduction
loe
system to
in order to allow cost
exercises to be performed prior
to the
designs
design,
date
to
the
of
prototype
release
and test
build
The decision
(ii)
related
stages.
a component design should be
to alter
benefits
to the potential
that could be obtained.
Only minor savings would be obtained from reducing the

hence
these
low
savings should
components,
cost
cost of
be compared with such disadvantages of design changes as
delay in project
fixture
date,
alterations
completion
to jig
and
design and resources required to improve component
design.
Functional
revealing
functioning
design improvements arise due to prototype
design deficiencies.
Design alterations
therefore
are
of a product
ment process.
design defects
The small proportion

indicates
life
bearing
such as
a natural
testing
to improve the
part of the develop-
of changes that arise
because of
the power of mechanical engineering models;
equations, and the experience of the designer in
designs.
developing working
86'87)
114
The proportion
product specifications
of design changes arising

and attributes
that market data is collected

department.
attribute
competitive
However a certain
could be reduced by ensuring
in a suitable
proportion
format for the design

of specification
and
design improvements could be necessary to counteract

action during the NPDprocess.
Requests by the manufacturing

of designs should take place prior
prototype
from the need to alter
build
and test.
function
to improve the producibility
to the release of designs for
Hence the manufacturing function
in
design
the
designs
to
process.
early
examine
allowed
must be
115
CHAPTER
3
COSTINGPRODUCTDESIGNS
116
3.0
Introduction
Costing is essential
designs.
to the development of effective
new product
To determine the manufacturing costs of a product design it
is necessary to identify
the relevant
cost elements involved and
decide how each element is to be estimated.

Z
Equation 7 is useful to designers when comparing alternative

product designs but since this
of manufacturing
model contains only the variable
cannot indicate
it
the true cost of a specific
In
to
this
to
design
order
achieve
company.
a
product
the total
costs (which includes fixed
manufacturing
costs
objective
costs) must be
obtained.
3.1
Total Manufacturing
manufacturing costs are determined using
At H. M. Ltd. total
This model is similar
to Equation 7 but in addition
defective
for
an allowance
components manufactured and
Equation 14.
contains
elements for recovering
..
CM =
Costs
rI
both fixed and variable
---
m=n
("im.
k(1+Sk)
m=1
-1
im)
+1+
overhead costs.
Om
Ct
1+ Oa
(14)
117
Where:
= Total manufacturing
costs.
Sk- = Allowance for defective

Production
Tm
components.
time at the mth manufacturing cost centre.
Labour cost rate at the mth manufacturing
cost centre.
m=n
Tm.Lm
(See Equation 5).
Cp
m=1
Om
.= .
Manufacturing
overhead rate for the m"" operation.
Administration
=
Costs
Material
3.1.1
The material
link
the principal
involve
can
the purchasing
with
function
in up-dating
assigning
department
material
a company is initially
since
suppliers.
when product
Up-dating
costs
bf standard
costs
for
many
and purchased
However, the effort

is normally
each type of component and raw material
Lists
material
on the part
ranges contain
types of raw materials
material
they are normally
amount of effort
as in the case at H. M. Ltd.
components
involved
data used within
a considerable
of different
thousands
cost.
cost
by the purchasing
procured
costs
overhead rate for the company.
avoided
by
a standard
commonly used parts
and raw
of
118
are maintained and issued to departments requiring
materials
cost data.
material
intervals
These lists
at monthly
are re-standardised
using average percent price increases based on such
economic factors
inflation
as current
rates.
At intervals
(the length of which is determined by the cost of the raw

is up-dated using actual cost
each raw material
material)
data obtained from material
suppliers.
The use of standard cost data for costing new product

designs could represent
a possible
source of error
standard costs do not always reflect
for current
structures
order quantities.
new product could therefore

hence the discount
the true price of the
standard costs may be based on discount
In addition
materials.
since
alter
The manufacture of a
these order quantities
and
rate that was applicable.
During the development of"a new product engineering

designers
-potential.
obtaining
frequently
suppliers.
cost
However, the final
as supplier
reliability,
sourcing and vendor rating(88)
the
ultimate
choosing
when
more efficiently
the relevant
responsibility
data must belong to the purchasing
factors
such
since
multiple
cost data directly
obtain material
carried
material
from
for
department
material
availability,
need also to be considered
supplier.
This task can be
out by purchasing personnel who possess
background experience.
119
3.1.2
Scrap Costs
The basic types of scrap costs that must be considered
designs are:
when costing
(i)
Waste material
'
flash
costs such as machining swarf,
produced during forging
incurred
and waste material
during flame cutting.
Defective
component costs,
i. e. components that
are manufactured outside the accepted quality

requirements and must therefore
be scrapped.
is assumed during the present discussion
It
that
bought out components are replaced free
defective
of charge.
At H.M., Ltd. the excess cost that arises

defective
of
the
scrapping
and
increasing
the value
standard
sheet,
casting
levels
produced.
engineering
In addition
for,
other
be
used
can
then
final
this
can be taken
material
raw material
could provide essential
tasks.
cost
percentage,
type
(e. g. bar,
purposes
into
of scrap
costs should be determined from the
between the initial
this
since
shape
cost
and is based on past experience
However, waste material

difference
by a fixed
the
depends
on
raw material
of which
or tube)
loss
components is compensated for by

costs
material
from material
if
form and final
cost data for value
the waste material
or has a significant
consideration
of components.
component
produced
scrap value
when determining
the
120
Basing defective
simplifies
component costs on material
the problem since other factors
type over-
that need to be
considered are:
(i)
Component design.
(ii)
Batch size.
(iii)
Quality
(iv)
Dimensional tolerance
(v)
Operator experience.
(vi)
Complexity
(vii)
Reliability
requirements.
requirements.
of manufacturing
of production
process
used.
equipment
used.
A simple model (Equation 15) for predicting
the number of
components produced based on the manufacturing

(89):
Sims
by
is
given
size
defective
Ndef.
(15)
QP
Where:
Ndef.
Qp
Number of defective
Manufacturing
=
batch
components.
batch size.
121
Sims then uses the "learning
arising
in both labour cost and scrap loss
the reduction
consideration
from the "experience
a graphical
representation
effect".
quantities,
The "learning
components manufactured) arising
skills
and experience.
The "learning
transformed
curve" is exponential
in character
and is therefore
line,,
Figure 7, if
plotted
into a straight
curve" is
of the improved performance (reduction
in the percentage of defective

from increasing
curve" concept to take into
on log-log
graph
paper.
According to Sims the reduction

the "experience
in scrap loss arising
is taken into consideration
effect"
Equation 16 to estimate the number of defective
Ndef.
Sa
=
from
by using
components.
jQp
(16)
Where:
Percentage
specific
average scrap per batch for

"learning
situation".
The- value of Sa depends on the particular

situation"
rate
'which can be defined as the relative
(i. e. -learning
"learning
decrease in the
curve performance) at which defective
manufactured.
are
components
factors
such
is dependent on
The learning
curve performance
as the component quality
and
122
FIGURE 7
70%, 80% AND 90% LEARNING CURVES

Adapted from Ref.
ae
ae
0
rn
(89)
aR
0
CC)
C
C
C
0
c
c
CD
N
C'
C
U
N
O
J
N
"r
tn
C".
0
0
C)
ko
(PS)
0
c
C)
N
(ale: )s 60l)
CD
CJ
dea: )s a6eaanya6e;
CV
u30J3d
(D
L..
.
123
dimensional tolerances
required and varies between manufacturing
For example machine shop work has a learning
operations.
curve
90% and complex assembly work one
performance of approximately
of 65% to 85%.
8,
Figure
the
comparison,
of
scrap proportions
-A
using Equation 17 for 90%, 80% and 70%
produced when calculated
curve performances indicates
learning
(Sp)
that only small differences
exist.
Ndef.
.SP =
In addition
Qp
100%
these differences
Hence a common learning

of manufacturing
to accepted
tasks
estimating
learning
curves
errors)
in the scrap proportions
that
manufacturing
curve for
involve
large
approximately
(relative
errors
evaluated.
90% and assembly work

use at H. M. Ltd.
both machining
these
two
be
the
of
average
values,
would
Manufacturing
a variety
complex machine type work usually
of approximately
operations
batch size.
be used for
incurring
approximately
in-the
increasing
without
70% a suitable
tasks)
decrease with
curve slope could
Since Sims indicates

develop
(17)
(where
and assembly
i. e. 80%.
batch sizes for the New EHBproduct average
100 components, hence from Figure 8 the errors
levels
scrap
80%
learning
by
an
using
produced
curve
124
FIGURE 8
COMPARISON
OF SCRAPLEVELS ESTIMATEDFROM
90%, 80% AND 70% LEARNINGCURVES
i.
II1
LO
-1
ct
MN
(dS) de.A:)S %
r-
I^
125
(as opposed to individual

would be +2.4% to
accuracy limits
learning
curves for specific
These error
-1.4%.
the
are within
by managementand the actual
of 10% specified
accuracy (see Section 4.4.1)
levels
processes)
of the current
estimating
system
at H.M. Ltd.
3.1. J' Overhead Costs

Overhead costs form a significant
part of the operating
expenses of a company and are recovered using either
Absorption costing
costing(90).
marginal
by H.M. Ltd. and is carried
is the method adopted
out by apportioning
costs to each component manufactured within

suitable
overhead recovery rates
(i)
A large
proportion
cost
overhead
increased
decreases.
are fixed
the volume of
Therefore
is to be recovered
maintained
margins
higher
are: -
of overhead costs
components manufactured.
place
a company using
and hence do not vary with
costs
overhead
(Omand Oa, Equation 14).
problems that exist
technique
total
new product designs using the absorption
However, when costing

costing
costing and
accounting methods, i. e. absorption
financial
of two
if
a fixed
and fixed
overhead recovery
rates
profit
must be
when the number of components manufactured

Hence if
new product
when a company's sales

overhead
recovery
rates
development
takes
volumes are low the

in operation
could
126
"overcost"
effectively
the new product design.
This
occurred during the development of the New
effect
EHB range when H.M. Ltd. increased overhead rates

by an average of 135%. However, since the new
product is intended to improve the sales demand a
product design cost could be obtained
more realistic
sales volumes to determine overhead
by using forecast
This would appear a logical
recovery rates.
since both material
method
and labour costs are also based
sales demand.
on forecast
When costing
new product designs it
only relevant
overhead expenditures
is essential
that
are absorbed by
true
to
the
to
cost
of
a
product
prevent
a product
distorted.
becoming
a company
At H. M. Ltd.
both standard
is particularly
important
custom-designed
products
are manufactured,
custom-designed
products
require
(e. g. drawing
services
which are not necessary

product
rates
ranges.
for
benefit
office,
for
Hence using
both product
the manufacturing
since
this
additional
tendering
the production
and
i. e. the
overhead
and costing)
of standard
a common set of overhead.
types would tend to inflate
cost of the standard products.
to a company in manufacturing
standard
be
then
reflected.
genuinely
not
would
products
The
127
(iii)
If
the prime manufacturing

of a product
costs)
improvements
be lowered
less
costs
are reduced through
the overhead cost
could
also
contributes
of a company.
be considered
could therefore
+ material
design
recovered
a lower cost product
since
to the overhead recovery
the design
(labour
Hence
less
desirable.
Marginal costing
product designs.
is an appropriate
Using this
method of costing new
method fixed overhead costs-are
the
from
variable
separated
elements of total
costs and the
contribution
of products to the total
determined.
However, when using the marginal costing technique
it
overhead costs is
is necessary to determine the proportion
incurred
that
are
overheads
of total
company
by the product range being examined
in order to adequately reflect
the true financial
contribution
of the product.
1 1.
annual
Since overhead
costs
manufacturing
costs,
the
by
enables
company
used
form a large
proportion
the absorption
greater
control
costing
of H. M. Ltd. 's
method presently
to be exercised
over
than
the
would
costs
marginal costing
of
overhead
the recovery
.
technique.
128
3.1.4
Direct
Labour Costs
of labour costs is dependent on the
The determination
of the time required to carry out each of
accurate estimation
the operations needed to manufacture a component. Hence estimating labour costs is synonymous with that of estimating'the
to carry out manufacturing
tasks.
Tm (Equation 14) at the mth manufacturing
The time required
time (FTF) and is
"floor-to-floor"
the
is
termed
cost centre
to complete all
the time required
When costing
cost centre.
is broken down into

that
factors
affect
whilst
Knott(92)
machinery operations
production operations
at a
the FTF time
elements, each of which have distinct

their
costs.
times to be made up of preparation

process manipulation
time
Blore(91)
tasks,
considers FTF
process tasks,
tasks and component manipulation
tasks
considers gauge and/or inspect to be an
additional
activity.
(i)
Set-up
These tasks are now considered in detail:
or Preparation
Time
The set-up time is that time required to position

the various
tools and fixtures
out the manufacturing operations

tasks as adjusting
necessary to carry
and involves
machine settings
the type of machine jaws.
such
and changing
129
that is necessary
Normally each type of operation

to set-up
a manufacturing
However Owen(93) points
time.
the process
equipment
adjustments
required
always simple
i
process
since
is given a standard
determining
out that
tools,
settings,
fixtures
and
to machine a component is not

the problems of "complete
set-up",
in which the set-up

and "adjust
already
is started
set-up",
from a stripped
in which the correct
on the production
equipment
machine
tools
and only
are
need
must be considered.
adjusting,
In addition
production
maximization
scheduling rules,
of machine utilization
such as the
also affect
set-
up times since components are sequenced to minimize

set-up tasks.
Component Manipulation
Time
Component manipulation
tasks
involve
unloading
components onto and off
equipment
and if
necessary
loaded.
when
component
loading
and
the production
re-positioning
the
The time taken to manipulate
dependent
is
on:
a component
(a)
component size,
e. g. large components often
loaded
be
to
and unloaded using mechanical
need
handling devices which result
times being dependent on their
in manipulation
availability.
130
(b)
design shape, i. e. holding fixtures

required to position
(c)
type of operation,
(iii)
components on machines,
i. e. the accuracy and hence
positioning
time with which components are
positioned
varies depending on the type of

to be performed.
operation
.41'
may be
Process Time
The process time represents the time required, for the
equipment to carry out the processing
production
tasks,
e. g. metal
The factors
pressing.
are dependent
and welding
metal
feeds,
that
forging
influence
and
forging
time
process
being carried
For
out.
time is dependent on welding
process;
availability;
welding,
on the process
welding
example,
speeds,
removal,
speed
is dependent on power
removal times are dependent on
machine power rating
and condition
tools
the
used.
and
machine
of
(iv)
Process Manipulation
Time
Process manipulation
tasks are those required
the
that
processing conditions
ensure
e. g. altering
selecting
are satisfactory,
feeds and speeds, positioning
welding conditions
and tools.
to
tools,
131
In the present research this
element contains the
time required to carry out the quality

referred
to by Knott(92)
tasks
control
as separate tasks,
e. g.
checking component dimensions and surface finishes.

checks (although often separate tasks) are
Quality
an extension of machine manipulation
tasks since
they are necessary to verify
the effectiveness
process control
In many instances
checks also form part of a manipulation
quality
task,
activities.
of
for example, when positioning
a horizontal
boring tool.
The production
time to carry out all
activities
necessary
is
the
converted to cost using an
component
to manufacture
labour cost rate (variable
appropriate
listed
Ltd.
H.
M.
are
cost rates used at
A factor
be divided
control
by the
involved
Labour
in Table 50, Appendix II.
to consider when calculating
number of operatives
operators
Lm, Equation 14).
production
in each operation.
cost is the
That is,
when
hourly
than
cost rates must
one
machine
more
number of machines controlled
*shown
in
as
Equation 18:
Llm
Nm
(1s)
132
Where:-
Lim
= Labour cost rate for the mth cost centre.

Number of machines controlled
by operator.
McGrath and Conlon(94) have examined the "interference

when an operator
effect"
two machines in order to develop
controls
schemes that ensure the operator
-incentive
to keep both pieces of equipment operating

The "interference
capacity.
through setting-up
effect"
or operating
occurs when the operator
one machine must allow the other
to increase the FTF time of a component.

controls
industry
in
common
of, increasing
effect
Situations
would tend
in which
a number of machines are becoming more
hence the "interference
effect"
will
become
importance and subsequently may need to be included
14)
for
(Equation
estimating
the
in
model
Since this
costs.
at maximumpossible
It can be seen that this
idle.
be
to
machine
one-operator
has the motivation
the "interference
type of situation
total
manufacturing.
is not commonat H.M. Ltd.
on FTF times has been ignored during
effect"
the present work.
3.2
Analysis
Estimating
Cost
of
'estimation
The
defined
system" as
processes
purpose(s)
costs may be considered a "works
of manufacturing
(95)
i. e. "a works system is the operational
by Nadler
financial
human,
the
of
combination
its
at H. M. Ltd.
input material,
desired
a
of
and physical
information
resources which
or humans to achieve the
state of a product or service".
133
fact
Recognition of this
function
(Inputs,
characteristics
is possible
it
to determine the role each system
or interactions
In addition. relationships
istics
By examining these factors
plays in achieving the overall
characteristic
can be more easily
can be highlighted
identified.
system objectives.
between system characterHence incompatibilities
and if
between
and among system features,
and system objectives,
system characteristics
seven system
Outputs, Environment, Physical Catalysts,
Sequence and HumanAgents).
individually
enables the cost estimating
a company to be described using Nadler's
within
Function,
therefore
necessary improved.
Function
3.2.1,
The function
management with
of a cost estimating
the type, quantity
and quality
plan and control
needed to'efficiently
system is to provide
of cost data:
a manufacturing
organisation.
Anthony and Lahiff(96)
use of sophisticated
techniques
estimating
therefore,
must
system
increases
a particular
normally
large
managementscience
complex operations.
to plan and control
to future
of
by managementcan be expected to increase due
cost data required

to the increasing
point out that the quantity
have the ability
in demand for cost data.
A cost
to respond
This would prove
development
during
which
product
new
advantage
requires
quantities
an estimating
data.
cost
of
system to quickly
generate
134
of cost estimating
An aspect
is that
literature
function
response from an estimating

product
development
quickly
changing
in order
during
a large
resulted
possibly
lengthy
to prevent
to
to react
price
in
in designers
sub-optimum,
design
making
decisions
to the. NPD programme.
delays
number of design
changes were incurred
the NPD process.
The accuracy
designing
when
an important
level
in new
of the New EHB difficulty
cost data often
and therefore
Consequently
lead to delays
such as competitors
During the design
subjective,
A poor
programmes or the inability
market forces
obtaining
quickly
cost data.
can provide
system could
to in published
which is the rate
of system responsiveness
at which the estimating
reductions.
not referred
of cost
an estimating
element of risk
acceptable
of risk
estimates
In large
organisation.
consideration
this
represents
system since
factor
in management decision
and hence estimate
on the volume of product
dependent
is an essential
making.
accuracy
manufactured
volume manufacturing
The
required
within
is
an
systems changes
in component design or work methods, although leading to small

in
a components manufacturing cost,
changes
could when multiplied
by the large number of components manufactured result

cost variations.
substantial
estimates
in
Hence the accuracy of cost
be
fundamental
these
circumstances
would
a
under
consideration
and could therefore
take precedence over other
cost estimating
system characteristics,
responsiveness
and estimate preparation
such as system
costs.
135
The cost
consideration
of preparing
estimates
the estimating
since
that
The amount of overhead expenditure

function
the estimating
is related
numbers of components made.
batch or job
shop manufacturing
design
are not of a standard

requirements)
the ratio
could
manufactured
estimates
represent
a significant
generate
and cost
data that
which
requires
large
high.
if
particularly
(i. e. designed
to-customers
required
products
specific
to components
Hence the number of
the manufacturing
low level
enables short
to be performed.
not sufficiently
hand, in small
On the other
system at H. M. Ltd.
the relatively
is
because of the
small
could
activities
overhead expenditure.
The estimating
activities
for
systems the estimating
of cost estimates
to control
level.
can be justified
systems,
be relatively
required
an
to the type of manufacturing
In large volume manufacturing

system.
r
cost per component would be relatively
large
is normally
function
must be held at an acceptable
that
overhead expenditure
is also an important
responsive
has been designed
of manufacturing
term planning
Consequently
to
time standards
and control
the estimating
system
to the needs of the NPD process
amounts of cost data quickly.
data
H.
M.
Ltd.
time
standards
at
cost
and
The accuracy of
depending
the
to
annual quantity
on
vary
is allowed
manufactured.
function
of components
Hence the overhead burden of the estimating
is maintained within
acceptable limits.
136
3.2.2
Inputs
and Outputs
Input data required to prepare cost estimates is provided

departments, i. e.
by several functional
(i)
Marketing provides information
and long range sales forecasts.
quantities
(ii)
on annual sales
Design provides general arrangement drawings,

product designs, parts lists
detailed
and quality
requirements.
(iii)
Purchasing
quantity
(iv)
provides
discount
Manufacturing
to estimate
machining
and jig
material/component
costs
and
data.
provides
the production
feeds and speeds,
and fixture
process
data with
times,
e. g.
set-up
times,
which
costs.
Finance provides labour and overhead cost rates.
(v)
The amount and detail
of input data is dependent on the
the
estimate required.
of
accuracy
manufacturing
costs within
would require
a detailed
For example, estimating
a high volume manufacturing system

breakdown of the operations
necessary
to produce a component, whereas for less accurate cost estimates,

be
appropriate
which may
individual
detail
operations
for jobbing and small batch situations,
may be aggregated hence reducing the
data.
input
the
of
137
since the input data used to develop a cost
In addition
it
that these conditions
is essential
for a component
the manufacturing conditions
estimate reflects
are controllable.
Any
from the manufacturing conditions
permanent deviation
used
of that
to prepare a cost estimate would reduce the validity

estimate.
i
Output data must be provided in many forms to satisfy

functions.
the needs of different
uses cost data on a product and
planning and control

manufacturing
cost centre basis, whereas the production,

department use production
control
and
planning
i. e. the manufacturing
The designer
to be evaluated.
design
individual
For example, financial
times of single
requires
This
cost
or batches of. components.
data to enable design
could necessitate
features
time standards,
costing
such as machined bores,
concepts
in detail
chamfers.
and threads.
It
is essential
therefore
information
able to provide cost
detail.
That is,
that an estimating
in a variety
on a design feature,
system is
of forms and
process, component,
basis.
basis
centre
cost
or
sub-assembly, product
138
3.2.3
HumanAgents
The humanagents (estimators)
istic
system since they must be familiar
of an estimating
Since conventional
to develop cost estimates.

a detailed
methods require
is usually
familiar
are fully
estimating
breakdown of the method of
it
of
components
manufacture
,
with
methods used and types of input data required
the estimating
estimators
are an important character-
that
essential
with products,
processes and work
a company. It is normally the degree of
methods used within
background experience of estimators
that determines the speed
be
developed.
estimates
can
which
with
and accuracy
Ostwald
training
and Toole
training
have no formal
in that
the current
skills
estimators
detailed
gather
the estimating
function,
than a
need to develop
a considerable
grounding
being
the
and
methods
costed
processes
with
have the ability
manufacturing
This situation
processes of a company.
preparing
of
the
cost
enables
estimators
the majority
"more of an art
through obtaining
in the manufacturing
Familiarity
towards
attitude
that
education.
or estimating
Therefore
science"(98).
and concluded
is considered
estimating
estimating
surveyed the type of background
to estimators
given
reflects
(97)
estimates to be reduced since
to make subjective
estimates of
to
hence
time
the
required
avoid
and
costs
input data.
139
existed to the development of reliable
were found to
time allowed to prepare estimates,
lead to inconsistent
For example,
estimates.
such as high work loads and
undue pressures on estimators

insufficient
barriers
found that additional
Anthony and Lahiff(96)
and inaccurate
estimates being developed.
It is necessary to consider these factors
when costing new
data
large
the
designs
amounts
of
required
since
cost
product
during the development process often overloads the estimating
department.
Companies such as H.M. Ltd. are unable to cope with the

development
the
data
of
new
product
process
requirements
cost
"
when the estimating

relatively
low levels
day-to-day
manufacturing
required
to support
are insufficient
effective
of cost
short
experience
Therefore
estimators
estimators
are also
over
cost
term planning
activities
of estimates
of a company
estimating
methods and processes

of numerous estimating
must perform
responsible
for
other
for
function
new product
require
cost
a wide
the
engineers.
duties.
At H. M. Ltd.
short
maintaining
These tasks normally
the
to control
required
(as in the case of H. M. Ltd. ) if
operations.
estimating
to provide
The low levels
to make an individual
range of manufacturing
manufacturing
information
activities.
particularly
background
has been designed
function
term
take precedence
development.
140
3.2.4
Sequence
The number of stages involved in developing cost estimates
can influence
the responsiveness of an estimating
system.
The
time to develop a cost estimate can be considered, using

70),
to be the sum of a queueing time (the time
Queueing Theor3
a request for a cost estimate must wait before the actual
task of estimating
begins) and a service time (the time taken
to carry out the estimating

estimating
The responsiveness of an
task).
system is the sum of the queueing and service
and is therefore
times
dependent on the number of stages involved
in
developing a cost estimate.
Queueing times are dependent on:
given to requests for cost estimates.
(i)
The priority
(ii)
Humanfactors
such as motivation.
4
(iii)
The current
estimating
work load and capacity
of the
function.
Service times are dependent on:

. ,t
(i)
The cost estimating

determines the level
data.
output
method used since this

of detail
factor
of input and
141
(ii)
The accuracy of estimates required

determines the estimating
factor
since this
method used.
(iii)
The experience and ability
of the estimators.
(iv)
Capacity of the estimating
function.
)
to Anthony and Lahiff(96asedbiased cost estimates
if
developed
be
could
the person or department preparing
effected
or favourable
an adverse
this
or favourable
effect
For example,
since
there
for
EHB
New
range
the
designers
data,
estimators
of cost
cost
preparing
during
have little
system.
the design
without
incentive
of
the
in
in developing cost estimates
engineering
managementstructure.
department determine
times for components and the commerical department

data into manufacturing
therefore
formed
queues are
estimating
then
of an estimating
of a company's internal
At H.M. Ltd. the production
convert
function
data quickly.
function
be
a
can
this
the action
to make decisions
The number of stages involved
manufacturing
the estimate in
if
on the estimating
is a tendency
from the estimate
does not have an
an estimate
to reduce the responsiveness
tends
benefit
Similarly
manner.
from not preparing
resulting
adverse
the action that resulted
system.
costs.
Hence two distinct
reducing the effectiveness
of the
142
the costs of non-standard products
For estimating
H.M. Ltd. have recently
their
altered
procedure to
estimating
by
using the commercial department
responsiveness
improve its
to estimate both initial
manufacturing times and costs,
removing the production engineering
i. e.
departmental link.
Although the accuracy of estimates can be adversely

is no longer carried
(since the actual estimating
effected
most intimately
by
the personnel
out
manufacturing
to prepare
processes)
the total
allowing
connected with the

production
cost estimates
was not possible
department
load
the
on
work
the extra
engineering
could
since
not be adequately
handled.
Environment and Physical Catalysts
3.2.5
The environment (working conditions

physical
catalysts
. system are closely
(estimating
(e.
g. variety
of a company
processes,
level
over operations)
estimating
methods used) of a cost estimating
since it
related,
of a company) and
is the working conditions
of products,
of planning carried
variety
in manufacturing
out and level
of control
that determines to a large extent the appropriate
methods used.
Cost estimating
in
the manner in which the
methods vary
determined.
is
task
to
manufacturing
a
perform
time taken
are derived
differ
They
from work measurement techniques which themselves
level
the
to
according
of detail
down
for
broken
estimating
are
tasks
into which manufacturing
purposes.
143
In general the higher the level of detail

estimate manufacturing
used to
times:
(i)
The greater the accuracy of estimates.
(ii)
The greater the time required
to prepare an
estimate.
(iii)
The more familiar
an estimator
must be with the
working methods and processes in use.

(iv)
The less responsive the estimating
(v)
The higher
to prepare
the cost
system.
an estimate.
Since the method of work measurement has a significant

on the accuracy
effect
it
system,
is this
-appropriateness
and responsiveness
system characteristic
of an estimating
that
determines
system for costing product
of an estimating
designs during the new product development process.

estimating
the
influences:
method
(i)
The personnel who use the system.
(ii)
Estimate accuracy.
.
(iii)
Time to prepare the estimates.
(iv)
System operational
(v)
System development costs.
costs.
The
144
System responsiveness.
(vii)
Degree of subjective
and input data
estimating
used.
(viii)
Range of manufacturing
loe (ix)
Level of cost detail
(x)
Ease with
tasks costed.
obtained.
which computer software
can be
developed.
3.3
Work Measurement Techniques

It
is necessary
to measure the work content
a component in order
manufacturing
which
can be expected
would
be expected
to accurately
to take to carry
to develop
represent
involved
production
in
time standards
the time an operator
out manufacturing
tasks.
Time
to regulate their work performance to a

operators
allow
standards
(99)
facilitates
therefore
and
work planning,
rate
scheduling
pre-set
scheme operation.
incentive
and
to
manufacturing
regulate
determine
labour
the
Since production
time variability
time standards
help
they can be used to
cost of component manufacture.
Work measurement techniques are the methods by which standard

production
time
times can be established.
Since many factors
it
component
a
to
manufacture
taken
conditions,
subsequently
affect
the
is necessary to state the
have
time
been
developed
standards
which
and
under
to
these
conditions
adhere
the component.
during actual manufacture of
145
The development of standard production times is therefore

development
the
of standard working conditions.
with
synonymous
Defining,
standardising
and maintaining
difficult,
'particularly
in large, multi-product
can be
working conditions
organisations
since these tasks are dependent on the level
M.
Ltd.,
H.
as
such
of
exercised over the manufacturing operations.
management control
Ile
it
That is,
is necessary to optimize the level

companies with its
in multi-product
working
and production
conditions
i. e. `workplace
orientated
factors
of managementcontrol
The criteria
cost.
times are basically
that affect
of two types,
and operator performance factors
(e. g. the pace at which operators work).
Workplace Factors
in discussing
cooling(100)
maintaining
developed
TAB
18
the working conditions

indicates
in
management's responsibility
under which time standards were
the types of factors
that are important
(Table 18).
FACTORSESSENTIAL TO WORKPLACESTANDARDISATION
Ref.
at the work place on time.
(i)
Material
(ii)
Consistent
material
(iii)
Consistent
quality
(iv)
Well maintained tools
arriving
quality.
specifications.
and equipment.
(100)
146
TABLE 18 (Contd)
(v)
The avoidance of incorrect

inconsistent
(vi)
or faulty
tooling
causing
work quality.
Correct positioning
of tools,
equipment and material
at the workplace.
(vii)
Consistent
(viii)
Reduction in the variety
training
of operators.
of methods used, i. e. greater
job specialisation.
Effective
(ix)
However Cooling
and hence avoid
practice
the level
The affect
performance
organisations
to plan and control
problem situations
arising.
operations
amount of light
machine design,
conditions,
available,
layout of control
and hence production
have
in
However, in
is restrained
of work place environmental
temperature,
place
work
levels,
manufacturing
and work place problems arise as a'matter
considerations
noise
assumes that
management resources
sufficient
detail
communications.
by financial
of course.
such as,
absence of glare,
panels on operator
times are the specific
been
have
adequately examined(101).
Ergonomics and
province of
147
Factors
Performance
Operator
argues that the rate at which work is carried
Fein(102),
in a measurement sense, since in order to
quantifiable
not rigidly
out is
kind
be
there
of
any
must
a means of measuring work
measurements
make
definable
rate that is exact,
clearly
reference standards
(normal work rates)
and reproducible
and a set of
against which these measure-
be
gauged.
can
ments
Fein argues that work measurement literature
does not sufficiently
provide definitive
(standard)
of normal
all
concept
time
the relationship
that
for
work.
are adjusted
values
rating
performance
(103)
Owen
example,
measurement
that
found
work
performance
working
conditions,
between
trade
the technique
in which
rating
his own
at work against
factor
rating
of the observed work to his mental

a time standard,
by the performance
rating
as being
criticised
examined the effectiveness

in producing
realistic
the observed
factors.
However,
inaccurate.
of present
time
For
work
standards.
He
to adequately
rate
loss
of management control
of
cause
was a major
over
inability
the
requirement
are based on the
a numeric performance
In calculating
is often
techniques
standard
performance
compares the operator
of normal and establishes

indicates
which
is called
synthesis
mentally
analyst
concept
study
reference
For example,
of the analyst.
judgement
time
in
used
this
in common, i. e. all
have one characteristic
subjective
the
work rates.
used to. fulfill
Techniques
guides for the establishment
unions
of work study
leading
practioners
to the introduction
and management.
of rates
negotiated
148
Mansoor(104) found that the accuracy of time standards

was dependent on the ability
estimations
out the rating.
carrying
to develop a check list,
of the time study engineer

(105)
This dependence led Faherty et. al.
Table 19, of factors
essential
to successful
which could enable large groups of independent companies
estimating
to reduce. the variations
in time standards developed by individual
time study departments.
in estimating
The difficulty
overcome by applying
data(106,107).
study
of
Pre-determined
An extension
Time Standards
been given
a basic
determined
Time Standards
rated
rating,
also
only
work
tasks
time.
performances
applicable
techniques
statistical
have been broken down into
performance
of this
has been largely
to the analysis
of time
approach is the development
such as, MTM, in which work tasks
a set of basic
motions
However, although
data eliminates
each of which have
the application
the need for
were used in their
to large
ratings
performance
development.
volume manufacturing
of Pre-
They are
systems in which
are repetitive.
The individual
factors,
Table 20, that affect
operator performance
by
Archer
Siemens(108)
fall
and
examined
and
been
adequately
have
four
main groups.
into
149
TABLE 19
ASSESSMENT
OF A WORK MEASUREMENT
CHECK
LIST
AND
SCORE
DEPARTMENT
(105)
Ref.
SHEET
Possible
Points
A.
MANAGEMENT
X. Does the department occupy a suitable place in the company organisation
central service not tied to a particular department)?
(i. e. as a
2
Wiz. Is the status of the head of the department commensurate with his responsibilities
(Le. at least equal to that of the heads of the departments served)?
3. Are the staff deployed
Is Ile
to match the production
organisation?
there a central cell responsible for policy, research, etc?

s. Are staff interchanged from time to time?
6. Is ' there a policy manual?

7. Is there a manual of standard procedures?
24
I}
U. ` SELECTION
8. Are staff recruited from both internal and external sources?

9. Is selection by single interview, several interviews (1), board (2) or examination
(ONC, C&G,
AMIWSP,
etc. )
Io. Is a formal qualification required?
D.
$,
(3)?
TRALNING
formal
Are
course of at least 4 weeks?
a
given
recruits
untrained
II.
)
IWSP
(e.
Is
the
of
course
to
syllabus
satisfactory?
g.
standards.
and
the
conduct
12.
for
least
6
Is
trainees
period
of
at
months?
a
probationary
there
13.
2 years at least?
14. Are staff sent on continuation or refresher courses-every
from time to time as a regular practice?
held
departmental
'
Are
seminars
IS.
least once every 2 years?
departmental
Is
conference
at
there
a
16.
t
PERSONNEL
board
(t),
(2),
by
is
recommendation
or examination
seniority,
promotion
17.
for
involved?
levels
the
type
Are
of
work
reasonable
the salary
1g.
between ao;; and 5% per annum?
Is
turnover
the
staff
19.
2
3
z
(3)?
PROCEDURES
NJASUREMEN'T
WORK
before
measurement?
Are
method-studied
operations
20.
in
detail
issued?
when
standards
are
Are
specified
methods
21.
PMTS?
of
Is
made
use
maximum
22.
local synthetics, job comparisons, tables etc.?
of
Is
made
use
maximum
23.
z. }. Is the BSI rating scale used?
in
stop-watch time study?
Are
rated
all elements
25.
(z),
for
(1),
checked
consistency
sample
size
studies
adequate
time
P.
re stop-%ratch
26.
(1)?
time
recorded
against
time elapsed
data regarding
to
systematic
means
used
provide
some
Is
snore
pli
activistsa
27.
q
ether
contingencies
defined?
properly
allowances
Are
contingency
28.
for
fatigue
used
allowances?
tables
Are
guidance
29.
defined
and
standardised?
allowances
Are
personal
30.
31. Are the various allowances reviewed periodically?
issued for setting-up machines?
times
Are
standard
32.
for
the `learning curve' when long runs are expected?
made
due
Is
allowance
33"
temporary
or
used when small quantities are processed?
values
allowances
Are
run
short
34.
for non-repetitive
work?
comparative
estimating
used
Is
or
analytical
35"
3
3
2
2
z
2
2
2
2
4
2
3
4
t
3
2
I
2
I
I
2
2
I
3
Score
150
TABLE 19 (Contd)
Possible
Points
F. QUALITY
CONTROL
36. Are regular rating check sessions held, at least once every 2 months?
37. Where possible, are time studies repeated before a standard is issued:
(a) by another Time Study Man (TSM)?
5
2
s
i
I
(b) with another operator?
23. Are standards
by section (section leaders) before issue?
approved
Are
studies and/or computations scrutinised by seniors as a regular routine?
-39.
40- Do TSM
G.
Scor,
levels of operator
review
performance
in their
areas at regular intervals?
WORK LOAD
Is the ratio of TSM to operators adequate?
42. Is the number of permanent standards set per week reasonable?
(Bearing in mind cycle time, batch sizes and duration of studies. )
4t.
2}
2}
FL APPRECIATION
43. Arc appreciation courses given as a regular routine
(a) New employees
(b) Shop stewards and union representatives
(c) Supervisors
(d) Managers
SL'ALMARY
Management
Selection
Training
Personnel
Work Measurement
Quality Control
Work J; oad
Appreciation
General Impression
to:
I
I
I
I
II
7
13
7
Procedures
33
IS
5
4
(at Assessor's Discretion)
S.
I
TOTAL
zoo
TABLE 11
SSONTTORLìG
OF A WORK
MEASL'RF-NiENT
Frequency
Items to be checked
Number of operators on PBR

Operator
Performance
Number
of permanent
DEPARTMENT
Monthly
X
(by depts.! product
centres)
standards set
Dumber of permanent standards revised

Number of Time Study Men
X
X
GraFh of results of rating check sessions

Turnover of Time Study Men
Changes
in : Management
Changes
in policy
recorded
hours
recorded
on Unmeasured
hours
Allowed
Time
Total
Total
on Measured
hours
as received
Changes in standard procedures

Total
( 6-. North
Work
Work
x
x
x
151
OPERATORPERFORMANCE
FACTORS
TABLE 20
Ref.
(i)
Job Aptitude
Rote
Factor,
-
Dexterity
Factor,
(iiY
Operator
Versatility
(iii)
Job Responsibility
(iv)
Job Conditions
(i)
Job Aptitude
(a)
(108)
Comprehension Factor,
Stamina.
Style,
-
Materials.
Repair,
-
Reject.
Equipment.
-
The Rote Factor

equivalent
"learning
described
to the Incipient
with
blueprints,
and the conditions
Learning
and Siemens is
Stage of the
in which the operator
curve"(109),
becoming acquainted
instructions,
by Archer
the set-up,
to memorize the essential
the tooling,
the workplace
of the process.
details
is
arrangements
The time required

of a job
task
depends on the experience

operator.
Carlson
and training
of the
(109)
and Rowe
considers this
influenced
is
also
stage
interruption"
is,
portion
by the "forgetting
of the learning
when a job is interrupted
That
the amount of "forgetting"
decreases as the number of units

interruption
curve.
or
occurs is increased.
completed before an
152
It
is at the final
(the Maturity
stage of the learning
Stage) where the limit
curve
to job
improvement has been reached that the remaining

factors
examined by Archer and Siemens begin to
influence
(b)
operator performance rate.
Comprehension - Howwell the job details
have been
learned.
(c)
Dexterity
The
ease with which a trainee
-
is able
to achieve and maintain the standard production

for a specified
(d)
pace
time.
Stamina - Refers to the time required to build up

the stamina necessary to perform the job at the
standard pace for the daily
working period.
Operator Versatility
Reflects
the time required
the introduction
(style)
by an operator to adjust to
of minor variations
and the effects
in job description
of changes in materials
on
machine settings.
(iii)
Job Responsibility
The time required
work operation.
to either
reject
or repair
mistakes in
153
Job Conditions
The time needed to repair
The operator
performance factors
listed
be difficult.
performance is cyclical
the initial
is low'during
in character,
that
The cyclical
use of a single
of operator
nature
time standard
for
since performance rate
rises to a peak and falls
work period,
towards mid-day, with the cycle repeating
suspect.
in Table 20 indicate
a standard work rate over the daily working period could

(110)
This is supported by Dudley
who established that
maintaining
operator
or adjust equipment.
_
off
in the afternoon work period.
performance
a specific
indicates
that
the
is
task
manufacturing
Again however, the accuracy of time standards needs to be
the
those
of
cost
preparing
standards and the consequences
with
compared
.
inaccurate
an
of using
inherent
The problems
as
estimate.
standard
maintaining
can be expected
in estimating
working
to increase
conditions
growing
with
concepts,
Enrichment("')
Job
such as
the level
of work planning carried
for
example,
that
such
their
involves
workers
and operator
over working
in developing
standard
performance,
and Job Rotationt112),
out is reduced.
tasks
such
use of manufacturing
The result
conditions
production
skills
or redesigned
and determine
is a reduction
which could
times.
since
Job Enrichment
being designed
are able to use more of their
own work pace and methods.
management control
difficulty
manufacturing
time standards,
reliable
in
increase
the
154
Within
the level
industry
manufacturing
of control
a wide variation
in
exists
exercised by managementover working conditions
performance rates. Tn consequence a number of work

,
measurement techniques have evolved with each technique being
, and operator
for specific
suitable
of: work measurement have therefore
methods
been examined in order to
system for use at H.M. Ltd.
the appropriate
-identify
Existing
manufacturing conditions.
Time Study
3.3.1
develops standards by direct
Time study(113)
work whilst
it
is being performed.
observation
The method cannot therefore
used to estimate manufacturing times and hence is unsuitable

estimating
design
considered,
technique
the pre-production
time study analysis
features
However,
be
for
design costs during new product development.
However during
NPD cycle,
of
that
the cost
since
could
manufacturing
be useful
reduce the producibility
effectiveness
time study
and therefore
Cost effectiveness
in highlighting
of a product.
of using the method needs to be

is a relatively
most suited
slow and expensive
to high volume repetitive
in low volume manufacturing
from the use of time study analysis.
In order to be cost effective:
work.
systems, as
would be dependent on the possible
in th'e case with H.M. Ltd.,

that
could result
savings
stage of the
155
'
c-Fs <N
(CI-C2)
(19)
Where:
Cry
.e
N=
Cl
Cost of time study analysis
per component.
Numberof components manufactured.

= Componentmanufacturing cost prior
to time
study.
C2
Component
manufacturing
=
cost after
time
study.
It would appear logical
therefore
to focus available
high
cost components since larger
on
resources
study
time
Cl-C2
be
possible.
could
values
3.3.2
Pre-Determined Motion Time Standards

Pre-determined Motion Time Standards work measurement
based
the
that
(PMTS)
on
concept
are
all
systems
tasks can be broken down into a limited
motions which when allocated
times to be built-up
involved.
manual work
number of basic human
basic times enable total
from a knowledge of the basic motions
To avoid the need to subjectively
rate operator
basic motion are

basic
for
times
the
each
performance
developed statistically.
job
156
Methods-Time Measurement (MTM)(113),
Work Factor(114)
and Maynard Operation Sequence Technique (MOST)(115,116)

are examples of PMTSsystems, each varying in the type of
basic motions into which work tasks are broken.
in terms of method of application
systems are similar

-application
r
the suitability
Since these
and
be
such
used to determine
one
system
can
cost,
of PMTSfor costing product designs during
MTMhas been chosen since this
the NPDprocess.
system is
used throughout the UK.
already extensively
MTM
3.3.2.1
PMTS systems in the MTM family
There are various

integrated
form
an
which
individual
systems I,
Willey(117)
indicates
III
in terms of characteristic
and accuracy
by aggregating
for
capacity
of time standards.
comparing the speed and accuracy of the
by analysing a simple work cycle,

that if
The
and V have a specific
speed of analysis,
such as
description
methods
MTMfamily
II,
to each other
relationship
features,
work measurement system.
Table 21,
the measurement system is simplified,
basic motions into larger
speed of application
groups, the
increases and the accuracy of the
9.
is
Figure
developed
reduced,
time standards
157
AND APPLICATION TIME FOR THE

ACCURACY
TABLE 21
MTM SYSTEMS
(117)
Adapted from Ref.
MTMI
MTMII
MTMIII
MTMV
12.3
16.3
% Relative Error (as

I)
MTM
with
compared
Application
Time (mins)
93
Estimated Job Time (mins)
Accordingly,
5.5
43
0.268
in deciding
15
0.283
- 0.301
the MTM system to adopt
balance
the economics of greater
must
management
ing accuracy
application
against
H. M. Ltd. 's manufacturing

production,
high level
time and cost.
conditions
(small
of custom designed
a low level of manufacturing planning),

potential
greatest
0.312
Considering
batch
products
and
MTMV offers
for cost effectiveness
lowest
the
has
application
system
estimat-
the
since this
time and therefore
cost.
The comparison of application

family,
Table 21, indicates
application
times for the MTM
the relationship
between
time and the estimated manufacturing time.
Using the relationship
for MTMV the total
time required
design
be
EHB
New
the
costs
can
product
to estimate
determined as:
158
FIGURE9
AGAINSTAPPLICATIONTIME FOR
RELATIVEACCURACY
THE MTMSYSTEMS
Adapted from Ref.
(> )
O
0i
0
Co
ta
"E
0)
E
F-
oc
LC)
"r
4J
-ra
u
.'...
CD
r
%:
C)
cY)
CD
,-
CD
N
.-
I W1W44M paaeowoo se
00
AoJa3 anPelaa
159
Test
Tap'TM
(20)
Where:
Test
Total
time
to
required
prepare
=
estimates.
MTM
V
application
=
Tap
time per hour of
estimated time.
Total
manufacturing
=
TM
time for the New
EHB range.
For MTMV, Tap = 16.03 hrs/hr.

The manufacturing
converted
labour
to labour
hours for
Hence using
hours,
Equation
Table 22.
using
H. M. Ltd. 's
20 the total
times
number of
time to estimate
the
is:
hours
6917
=
431.5
Number of man years
The total
range is 431.5 hours.
the complete
New EHB manufacturing
16.03
estimated
work measurement methods have been
synthetic
existing
costs
Total Application
Time (Hours)
No. of Working Weeks/Yr x Hrs worked/Wk

6917
46x37
4.06 man years
160
It is considered therefore
is not feasible
for costing
low volume product designs
such as the New EHB. Knott(92)

MTMV within
examining the use of
a machine shop supports this
He states that "MTMV like

family
that the use of MTMV
are more suitable
conclusion.
the other systems in the MTM

to mass production
operations
than to low volume or jobbing shop manufacturing

conditions".
TIME FORTHE NEWEHBRANGE

MANUFACTURING
TABLE 22
Labour Costs (i's)
General
ac fining
0.8
1.6
Tonne Hoist
if
11
Assembly
Fabrication
60.1
7.7
40.3
2.5
99
71.5
10.2
44.7
3.0
80.7
11.5
48.5
5.7
95.2
15.7
57.9
9.5
138.7
20.3
69.8
12.1
30.7
6.2
-
10.7
2.9
35.7
7.1
12.1
3.9
512.6
78.7
284.0
39.6
5.0
8.0
C. L. Trolley
6.3
TOTAL
(Vs/hr)
Rate
Cost
Labour
Labour Hours
Machining.
Block
3.2
3.2
Multi-
2.60
197.2
0.85
92.6
2.25
126.2
2.55
15.5
15.5
431.5
126.2
Hours
197.2
92.6
+
+
Hours
=
+
=
Total Labour
161
3.3.3
Category Estimating
Category estimating
manufacturing
as illustrated
allocated
divides
tasks into a sequence of non-overlapping

in Figure 10.
to an interval
an, individual
of
intervals,
Manufacturing jobs are then
and assigned a single
interval.
that
with
associated
estimate
.
the time range distribution
Hence it
time standard
is not necessary to
time standard-for
a manufacturing task.
A simple approach, Table 23, developed by Boehringer(118)

uses an interval
estimating
chart representing
50 equal time spaces.
time standards merely requires
an estimator
decide
judgement
to
which interval
personnel
within,
Since
to use
the job time falls
the ease with which work measurement can be carried
out makes category
estimating
suitable
for
low volume manufacturing
situations.
More sophisticated
category estimating
systems have been
analyses of job time distributions.

121)
assume that the
Secor and Kogovsek(119) and Steele(120;
developed using statistical
job
times
within
of
range
a company's manufacturing
processes
job
However
times
distributed.
examined
at
normally
are
,
(122),
turning, milling,
gear cutting,
H. M. Ltd. for welding
fitting,
and
assembly
exhibit
a log-normal
horizontal
distribution..
boring and flame cutting
162
FIGURE10
TIME BANDS
MANUFACTURING
Ref.
(g1)
tKtuV=Nl-r
U
C)
SLOT 3
()
5LL(1)
SLOT 4
-,
F--0O
7
SLOT 5
SLOT 6
17
Range of Job Times within
a Company
163
TABLE 23
50 INTERVALESTIMATINGCHART
Ref.
Std item/min
5.87-6.14
Pcs/hr
10.0
Std item/min
1.86-1.93
(118)
Pcs/hr
31.6
5.60-5.86
10.5
1.77-1.85
33.1
5.35-5.59
11.0
1.69-1.76
34.7
5.11-5.34
11.5
1.62-1.68
36.3
4.88-5.10
12.0
1.54-1.61
38.0
4.66-4.87
12.6
1.47-1.53
39.8
4.45-4.6S'
13.2
1.41-1.46
41.7
4.25-4.44
13.8
1.34-1.40
43.7
IS
14.5
1.28-1.33
45.7
3.88-4.05
15.1
1.23-1.27
47.9
3.70-3.87
15.8
1.17-1.22
50.1
3.54-3.69
16.6
1.12-1.16
52.5
3.38-3.53
17.4
1.07-1.11
55.0
3.22-3.37
18.2
1.02-1.06
57.5
3.08-3.21
19.1
60.3
2.94-3.07
20.0
2.81-2.93
20.9
2.68-2.80
21.9
2.56-2.67
22.9
2.45-2.55
24.0
2.34-2.44
25.1
2.23-2.33
26.3
2.13-2.22
27.5
2.03-2.12
28.8
1.94-2.02
30.2
974-1.01
.
931-. 973
.
889-. 930
.
849-. 888
.
811-. 848
.
774-. 810
.
739-. 773
.
706-. 738
.
674-. 705
.
644-. 673
.
615-. 643
.
587-. 614
.
i
AG
*. 064.24
63.1
66.1
69.2
72.4
75.9
79.4
83.2
87.1
91.2
95.5
100.0
164
Recent developments in category estimating

the log-normal
distribution
of job times.
Kirby(123)
the
for
category estimating
applying
a procedure
in setting
log-normal. distributions
have used this

tool
estimating
in Figure 11 requires management

in which the job time
to choose the number of categories

should be divided,
Figure 10, since the width of
the time bands determines the individual

standards
time standards for
The procedure for developing a category
system outlined
distribution
technique to
Harris and Melven(124)
technique for estimating
tasks..
repair
outlined
time standards for non-
jobbing work, Figure 11.
repetitive
have recognised
developed.
accuracy of the time
According to Fairhurst(125)
it
is
management's responsibility
to optimize the widths of the
time bands and estimating
cost since when system accuracy is
increased
the cost in terms of planning time also rises.
Although category estimating
is suitable
for developing
time standards in small batch manufacturing systems it
is generally
for costing newproduct designs because:
inappropriate
Its use requires
c>>
facturing
is suitable
knowledge of manu-
processes and methods.
need to be fully
conditions
a detailed
familiar
used within
Hence estimators
with the manufacturing
a company. Therefore it
for use by foremen and chargehands
but not by engineering
designers.
165
FORAPPLYINGTHE
OUTLINEPROCEDURE
ESTIMATINGTECHNIQUE
CATEGORY
FIGURE 11
Ref.
(123)
t
oe
Group job durations into clash which
tuocessirely increase in range by a
Common factor (e.. a 21.
Convert boundaries to togs and
t
calculate x Sic. 5.7
movie
Use Xa ten to chm* goodness of fR

to 'tog normal'
movie
Check accuracy /Avrnoc

of sample size t4
5a)
Take further
6aI
TA*
6W
Repeat 6
6c)
Check cortgatabdlity
of samples
rj
i2
`
6d)
fun. lw
<E4vTaos
Sz
S
Ef
Ef,
Add sump4esar+d
repeat 5&6
tie)
Repeat 6abcd until

sample is big enough
10
Calculate mid-values for each category

by working through probabilities at
msd-boundanes and de. iatgns.
It.
Calculate
standard
time
for
Nwage
job in each category by use of data

from 7 and 8 and relaxation allowance.
12.
Set up work standards on master heel
11.
Supervision ssumatt job eategar. es

before they are don..
14.
Obtaat sample of ategwtsed
IS.
Venfy eslomating in ample by

Comparing with work standadi
14
Calculate performance by canoarn. q

total standard fours (from ess.mated
Categories) with total clocked Wur%
17.
Prrpue
incent. ve Scheme
lxrformance.
cards
based
on
166
(ii)
The method is not designed to provide accurate cost

estimates for individual
jobs but an accurate
average time over large numbers of parts.

(iii)
Detailed manufacturing data is not used to establish

detailed
time standards therefore
cost breakdowns of
product designs could not be developed.

(iv)
A new product introduction
could significantly
job time distribution
the existing
alter
of a company.
job
Hence basing component costs on an established

time frequency distribution
inaccurate
3.3.4
Synthetic
Synthetic
cost estimates.
Time Standards
time standards
method of cost estimating

ments.
(113)
within
The method is similar
that'manufacturing
could give rise to
estimating
is an established
environ-
to the use of PMTstandards in
tasks are broken down into basic elements
basic
times.
assigned
the
elements
and
However synthetic
time standard elements are specifically
related
products and manufacturing
and therefore
activities
only
suitable
normally
are
standards
to a company's
PMT-
unlike
for use in the company for
developed.
they
are
which
The benefit
of using synthetic
standards arises
since
individual
be
of
any
combination
standards
can
as
chosen
elements
to
that
variety
a
common
are
tasks
work
of manufacturing
processes
167
In order to develop a synthetic
and products.
system it
estimating
is necessary to identify,
measure a large number of work elements.

type and extent of work tasks included
in ensuring estimating
is essential
standards
define and
Definition
of the
in the work element
accuracy.
.ol
time standards data is presently
Synthetic
.,
designs.
to
Ltd.
H.
M.
cost
product
at
time for
estimate
development
of MTMV.
similar
to that
process
and cannot cope with
In addition
estimators
processes: and methods,

responsiveness
3.3.5
However,, the application
synthetic
Consequently
the large
time standards
is
is a slow
estimating
amounts of cost data
the NPD process.
during
required
using
being used
must'be
thus it
familiar
with
is more difficult
of H. M. Ltd. 's estimating
the manufacturing
to improve the
system.
Work Measurement using Computers

The initial
development of work measurement software
programs was directed
at using the fast
processing speed and
highlighted
the
to
advantages
achieve
computers
high accuracy of
by'Ke11er(126):
(i)
To increase the speed at which estimates can be

provided.
168
(ii)
To relieve
cost estimators
of the routine
part
of work measurement.
(iii)
To eliminate
humanerrors
that occur when large
amounts of data are handled manually.
Initially,
therefore,
software packages were developed
around conventional
work measurement systems.
Kopp(127) describes
the structure
improving time study synthesis.
For example,
of a computer system for

The computer is used to collect,
data,
in
time
the
development
study
rapid
of
and
process
store
Since the basic time study technique remains
time standards.
the
computer system examines only existing
unchanged
methods and like
manual time study synthesis
work
cannot estimate
development
for
the
new
product
process.
time standards
of time standards
Since the estimation
(e. g. PMTS) requires
techniques
work measurement
early
attempts
software
input
of
amounts
extensive
timed.
to develop
Software
was limited
be
estimated.
could
using
for
these
data to define
conventional
methods planning,
techniques
required
the work tasks
in the type of work'tasks
being
that
For example, Mason and Towne(128) developed
I
MTM
time
system
using
measurement
work
ARMAN,a computer
standards,
to measure the work content of complex electronic
tasks.
maintenance
169
The American "WOCOM"

production
includes
planning system(129l30)
both MTMI and Work Factor work measurement modules.
To reduce the amount of input data required

work, tasks the modules operate on two levels
"motion"
level
to define
complete
which are the
using input symbols that correspond to Work-
Factor or MTMI motions and the "task"
level
in which motion
and work place layouts for commonoperations
patterns
can be
from the computer memory.- The work measurement modules
retrieved
to a wide section of industry
are applicable
to different
computers including
and can be adapted
time sharing devices.
is increased,
Although the speed of estimating
through the
based
work
measurement
modules
of
computers,
on PMTSstandards
use
labour
time
standards within
estimate
cannot
batch
environments
manufacturing
is normally
description
methods
are not planned
in sufficient
since
the detail
too imprecise.
detail
job shop or small

of work
That is,
jobs
to enable MTM-I work
be
to
performed.
measurement
Steele
planning
(120)
within
recognising
measurement software
this
be
suitable
would
system
estimate
resorts
systems, developed work
(based around MTM-2data) for measuring
and assembly work.
fitting
the imprecise nature of methods
Again however it
is unlikely
that
for use at H.M. Ltd. since to
time standards for non-repetitive

to a category estimating
technique.
work tasks Steele
(131)
170
Computer work measurement systems have gradually

since the late 1960's to become an integral
production
evolved
part of much wider
The range of manufacturing tasks
planning systems.
covered by such systems is diverse and includes manufacture of

(132)
(133)
(134,91)
tanks
storage
cardboard cartons
and
machining
,
The systems differ according to their accuracy, ability
to
lo,
optimize production plans and the level of subjective judgement
,
by the estimator
required
in order to develop time standards.
to optimize,
In terms of ability
developed
a software
planning
machining
operations
and metal
optimize
the machining
software
was limited
number of variables,
process
being
resulted
cutting
to optimizing
in a large
for
procedure
of turned
Figure
Halevi
and Stout(135)
specifying
in order
criteria
Although
components.
the "turning"
12, affecting
machines,
to
the
process
the
the optimization
amount (80K bytes)
of core storage
required.
(136)
A recent software system developed by Logan
succeeds
in reducing the level
interaction
required to
develop work plans and hence time standards.
The system,
LOCAM, consists
information
manufacturing
I
of operator
of a data base containing
all
the relevant
about a company's manufacturing facilities

logic
program which is designed to extract
and a
data
171
MACHININGTIME
FIGURE 12
PARAMETERRELATIONSHIPS
(135)
Ref.
94VE
OF
SURa6CE
PLAT
FlN1SH
POWER
DE p 1).4
CF Ni
XIOL
TYPE
CUT-17N.7.
FOPCE
E14T
i
-"
"".
.
CVrr wG
CVTTwG
FC; K--E
dr. s'E
; K--E
/\\
\NN.
OE7i+--
R<iF
OF
'CRSAOw
CW7(!
+G K'Simq
`'`, `
:/
F=ED
I
.
--
GEP'M
-------
OF
CUT
CU'
/I
IY.
Or
Cra. Cc:vG
//
CwU;
ER
T9lFR WCES
Of
LOCA'b+
Ga1Cxl, {
///
LE
OF
CUt
C7aOr.
Mn[ul\N
AE`. iU, aF,
cti'S
172
from the data base, manipulate it
and perform calculations
In essence LOCAMsimulates
with it.
the planning engineer would follow
the logic
process which
through in his mind.
LOCAM
has been designed for use by planning engineers and is therefore

unsuitable
for use by engineering
designers.
loe
Work Measurement Algorithms
3.3.6
of time standards can be performed by
The estimation
developing algorithms
that express the causal relationship
tasks and the factors
that effect
Although the development of estimating
tasks.
difficult
and may require
following
benefits:
(i)
computers, their
The cost of estimating
these
models can be
use provides the
is reduced since estimates
can be developed quickly.

(ii)
The level
of subjective
judgement required
to
develop an estimate is reduced.

(iii)
The need to hold extensive manufacturing time data

files
Many factors
difficulty
involved
due to the difficulty

variables
is avoided.
affect
manufacturing
in constructing
estimating
in establishing
on the manufacturing
task times and the
times.
the effect
algorithms
arises
of individual
There are four basic
173
methods of constructing
empirically
estimating
based studies,
(i. e. synthetics,
algorithms
use of operational
techniques and the use of statistical
research
techniques)
each of
developing
is
of
models with acceptable accuracy
capable
which
levels.
Synthetic Techniques
3.3.6.1
The development of estimating

requires
models synthetically
the use of humanjudgement to alter
and the method of combining variables
until
both variables
an equation
is arrived
at that produces time standards of acceptable
accuracy.
The method therefore
on the skill
relies
judgement of the personnel constructing
A critical
in using subjective
equations.
estimating
the model.
examination of the model synthetically
derived by Mahmoud(137,138) illustrates

inherent
and
the problems
judgement to develop
Mahmouddeveloped a "universal"
21)
for
(Equation
estimating
model
the costs of turned
components.
C=
mnf
Bi Nd
.
60
Kc. Ll Dm
.
+
4.77 ,
St
BL.Qp
+k
(21)
174
Where:
Cmnf = Manufacturing cost of the component being

turned.
Bi
= Hourly labour rate
(including
Factory
Overheads).
/
Nd
= Componentcomplexity
Kc
K2.
Kmat.
K1.
=
K1
Machining
KZ
Machine type factor.
Kmat
Material
LI
length
Total
machined
=
Dm
(inches).
diameter
Mean
=
St
= Machine setting
time (mins).
B2.
= Machine tooling
capacity.
Qp
Batch
size.
=
k=
Material
Equation
21 is similar
factor.
factor.
floor-to-floor
(inches).
cost.
to the model used to estimate
H.
M.
Ltd.
costs
at
manufacturing
(Kc.
Li.
Dm
expression
Nd
+
4.77
factor.
(Equation
St
B2. Qp
time of a component.
14).
The
represents
the
175
The component complexity

by determining
factor,
Nd, is calculated
the number of discontinuities
surface and is,
according to Mahmoud,a measure of the
component design complexity.

"...
represents
on the machine
Mahmoudstates that Nd
the probable number of passes of the: tool

Therefore the more irregular
over the machined surface.

!
and interrupted
tool
the surface,
the greater
the number of
passes required to produce the component, i. e. it
is therefore
indicative
the component".
of the amount of work done on
However the method of calculating
(i. e. the types of discontinuities
Nd
considered, Table 24)
(Li.
Dm)and the type of
depending on the value of
varies
(e. g. bar, casting,
stock material
fabrication)
the
from.
is
manufactured
component
By varying the method of determining
Nd, the equation
to
designed
be
enable estimated component costs to fit
may
the observed costs rather
between component costs and their
relationship
factors.
than to express the exact causal
It is possible therefore
are not causally
related
that variables
to the manufacturing
be included in the estimating
influencing
which
costs can
model, hence poor estimating
accuracy can result.
This argument is supported by examination of other

variables
within
to be related
Equation 21.
to Nd.
That is,
For example, St is assumed

the number of surface
176
TABLE 24
CRITERIA FORESTABLISHINGNd
Ref..
Machining
1.
Number
2.
Unmachined
3.
Machined
of
set
Feature
Discontinuity
Rating
ups
1 for
parts
5.
surface
surface
4. " Threaded
Shoulders
if unmachined
before
threading
if machined
before
threading,
e. g.
turned
or drilled
before
if machined
threading,
e. g.
Drilled
and bored
s' 3
faces
or
if
1Y6-
if
>
1"
16
.
6.
7.
Chamfers
_
Radii
if
if>
if
-
(138)
0
1
1"
1"
00, ts
.x
1
8.
9.
Drilled
holes
Bored holes
10.
Reamed holes
11.
Recesses
1
-if
bored
- if
bored
- previously
- previously
if
if>
<
1"
1"
4
wide
2
and reamed
cored
drilled
or cast
or
bored
3
1
1
1
3
each
177
features
is related
to the number of tools
Although this
those features.
instances when a single
tool
design
features,
of
number
operation,
could apply there are

is often used to machine a
particularly
during the turning
hence St could be independent of Nd.
According
multiplying
used to form
to Mahmoud(138) St must be corrected
by Nd
by
Again however the methods of calculating
B2
the actual
value of Nd vary:
Bs
(i)
When Nd > Bz then Nd

B2
determine
the setting
Using this
=i
time correction
does not take into consideration
rule
to
factor
cases in which
single tools machine numerous surface features

and therefore
Nd must be less than one to

B2.
reduce the setting

(ii)
time to the correct
value.
WhenNd.< B2-then St is reduced by a factor

Nd
This rule does not consider components
Bz
that require
a different
tool
for each surface
feature.
The variable
tolerances
tightened
required.
Ki is dependent on the dimensional

If dimensional tolerances
Ki increases to reflect
the increase
are
178
in machining time experienced due to the need for

depths of cut,
smaller
increased number of machining
passes and use of slower machining speeds.

the use of a single
tolerances
to account for dimensional
variable
required is unsuitable
since KI for components
with various dimensional tolerances,

Of
is machined to different
feature
is difficult
causally
is clearly
times
machining
actual
in which each design
dimension tolerances,
to determine.
The problem involved

not truly
However
related
illustrated
times estimated
observed times.
with using variables
that
are
to component manufacturing
by Table 25 which compares
using
Equation
Poor estimate
21 and the
accuracy
is
indicated.
TABLE 25
A COMPARISON
OF ESTIMATEDAND OBSERVED
MACHINETIMES
Estimated Times
Equation
Observed Times
(H. M. Ltd. Time Study Data)
%
Error
297.2
290.7
+ 2.2
35.4
39.0
9.2
55.0
81.7
32.7
-
69.0
48.0
+ 43.8
45.7
53.8
15.1
-
261.9
61.4
+326.5
52.1
52.6
0.9
179
TABLE25'(Contd)
Estimated Times
(Equation
,,
Observed Times
(H. M. Ltd. Time Study Data)
%
Errors
115.8
78.0
+ 48.5
15.0
66.2
77.3
-
147.0
182.9
19.6
-
35.2
31.1
+ 13.2
25.7
33.0
22.1
-
9.5
18.0
47.2
-
102.8
90.0
+ 14.2
22.3
37.5
40.5
-
65.1
34.3
+ 89.8
14.8
8.0
+ 85.0
1.2
1.5,
20.0
-
2.5
12.0
79.2
-
4.7
14.0
66.4
-
2.3
4.2
45.2
-
19.7
13.5
+ 45.9
Estimating
Accuracy:
E=-O.
C8
S=0.55
Equation 21 could not be used to estimate New EHB

manufacturing
times since the variability
is
developed
not within
estimates
limits
of
,S=.
in the accuracy of
H.M.. Ltd. 's current accuracy
'O.314 (See Section 4.4.1).
180
3.3.6.2
Empirically
Derived Equations
derived estimating
Empirically
equations of the form
shown in Table 26 are developed under "laboratory"

That is,
conditions.
the variables
times are individually

influence
exact
r
manufacturing
therefore
controlled
of each variable
affecting
allowing
on the total
the
manufacturing
times to be determined.
The majority
derived equations estimate
of empirically
(e.
times
g. metal removal times for turning,
machine process
boring,
and drilling)
milling
since these operations
to a wide range of industries
applicable
and the factors
machine process times can be easily
that influence
are
varied
to
each other.
respect
with
However empirical
exact
conditions
for
although
to carry
out turning
inapplicable
conditions
since
cutting
cutting
is,
under the
to be maintained.
For example,
the time
use with
according
NC machine tools
speed facility
between the spindle
its
operations,
(NC) machine tools
Controlled
only
which they were derived.
22 is used to estimate
Equation
constant
models are valid
Numerically
to Moore(139)
are provided
enabling
required
with
optimum cutting
Hence a linear
relationship
speed component (used to calculate
speed) and Dl(Equation
23) does not apply.
181
The cost effectiveness

for estimating
of using empirical
is questionable
models
since the variables
used
to determine machine process times in Equations 22 to 26

are themselves dependent on a wide range of factors.
EQUATIONSFOR ESTIMATING METAL
TABLE 26
REMOVALTIMES
Turning (Manual Operation)
Ref.
(140)
(22)
tm = n. Dt. Lz. Vc-1. Fl-1
Where:
tm = Metal removal time (mins).

DI
Lz=
Diameter
of work surface
(mm).
Length of surface to be machined (mm).
Vc = Cutting
speed (m/min).
F1; = Feed rate (mm/rev).

Turning (Numerically
Controlled
Machines) Ref.
(139)
Lm = -ff.(D1-dt). (F1. Vc)-1. (D1. dt). (D1+d1)-1
Where:
di
The
turned component diameter (mm).
=
(23)
182
TABLE26 (Contd)
Ref.
Drilling
(141)
tm = L3. VS-1. Fj -1
(24)
Where:
Ls
hole
(m).
Length
of
=
VS = Spindle speed (rpm).

(Reciprocating
Face Milling
tm
(142)
Cutting Operations Ref.
-1 (V1 + V2-1 )
F2Lz.
63.
=
.
(25)
Where:
B3 = Width of surface to be machined (mm).
Fi
vi
V2
(mm/min).
Feed
Stroke
per
=
=
Average forward
Average return
(Roughing)
Gear Cutting
tm
=nt.
cutting
cutting
Ref.
M=
speed (m/min),
(143)
Mod.(Fw + 20). 600-1. F3. F. Fv. Fu. Fm
Where:
RE
speed (m/min) .
Number of teeth.
Module (mm).
(26)
183
(mm).
Fw = Face width
F3 = Tooth
umber coefficient.
F = Helix angle coefficient.

Fa = Coefficient
of the material.
of the strength
Fu = Machinability
for influence
Fm = Coefficient
12 illustrates
Figure
influencing
material
ships-between
increase
reduction
parameters
Since the relation-
machinability.
shown in_Fiqure
12 are
empirically
the estimator
tables
such as Table
to the use of reference

consequent
of machine size.
the process
the variables
to derive
difficult
coefficient.
in estimating
in estimating
must resort
27, with
speed and therefore
costs.
The accuracy of empirical
estimating
dependent on the degree of control
models is
exercised over machining
specifications
and quality.
(145)
found, during an examination
Bhattacharyya and Coates
conditions,
material
of machining conditions
used within
industry,
variation
in both the machining characteristics
materials
(both between and within
of
batches) and machining
(feed
used
rates and cutting
parameters
addition
a wide
speeds).
Bhattacharyya and Coates established
In
that in
124
SPEEDSAND FEEDS FOR DRILLING
TABLE 27
Ref.
OPERATIONS
cn)
O
`
[o
cJ
.p
O
"
rl
SI
I ( o
- -, --
In
Cl
CIC to
g
.o
,nt
=,.
O1
o
fi l
in
L'
I 1,
,
s
"0
.0
LIL
c_J
ln
.aT
:
\
Iv
\
n
--
,.
-5
;,
``
00 i
n
':
pi
IA\;
o
.s
G Ir
.o
(
o
o
of
.o
a;
sl
of
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r1 i
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cc
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cr1
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r-
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185
60% of the samples studied the selection

parameters was controlled
indicate
empirical
of machining
by the operator.
that in the majority
These results
of companies the use of
modus to estimate manufacturing times could
be suspect since insufficient

the machining conditions
control
used on the shop floor
specification
is exercised over
However the increasing
of raw materials.
improve the
use of NCmachine tools would effectively

value of empirical
(i)
and the
since:
Machine process parameters can be closely

controlled.
(ii)
Equations
for
estimating
of machine processes
and tool
In addition
optimizing
manipulation
specific
the manual content
(i. e. loading,
tasks)
are not required.
equations can be developed for
machining operations,
e. g.
of the turning
(i)
Cost optimization
(ii)
Optimizing machining conditions

(147)
demand
(iii)
Selection
unloading
operation(146).
with sales
of the optimum machine tools
(148).
186
Operational
3.3.6.3
Research
The operational
research techniques that are suitable
for developing estimating
(i)
Simulation. - Manual simulation

the synthetic
,or
equations are:
is idhntical
to
development of estimating
equations in that both variables

of combining variables
and method
are altered
until
an
equation is obtained that produces accurate

time standard estimates.
The use of a computer to carry out the simulation
improves the accuracy of the
technique greatly
models developed since a larger

variables,
variable
combinations and actual
time standard observations

the estimating
(ii)
number of
(used to construct
model) can be considered.
Queueing Theory - Queueing Theory has been used

(122)
to examine the waiting times
by the author
of welders
using
overhead
heavy fabrications.
the indirect
welding
costs
cranes to manipulate
The data obtained

of the handling
to be quantified.
allowed
content
of
187
(iii)
Linear Programming - Observations of

manufacturing tasks can be formulated
into
a series of simultaneous equations (constraints)

which when solved using linear
yield
programming (LP)
the relationship
and manufacturing times.
variables
11,
Ballard and Hichkad(149) and Oliver
(150)
formulated LP models of the form shown in

Equation 27:
=n
Aq. Xqj
Bi
E2
.-
= Yi
(27)
Where:
Aq
Estimated
Frequency count of the qth work

element in the jth
Eij; Ezj
to. perform
of the qth work element.
one unit
Xqj
time coefficient
operation.
= Error elements which represent the

amount of time per unit of the jth
operation
the total
requiring
an adjustment in
time for that operation,
i. e. these elements are the times

either
unaccounted for or in excess
and result
from the chosen set. of
work elements.
Y
= Total standard time per unit of the

nth operation.
188
To solve Aq > 0, Xqi > 0, Ei

J>0,
Ezi > 0, Yi >0
The objective
of the LP program involved the
minimization
of the sum of the error elements

is then a set of time
E1j and E2j.
The result
coefficients,
Aq's, for each work task.
The benefits
of using LP to construct
estimating
equations are:
(i)
data can be introduced
Managementcontrol
into the model in the form of extra constraints

that influence
(ii)
Negative
Multiple
3.3.6.4
regression
extension of the "line

simple linear
establish
of leas
regression,
the relationship
dependent
variable.
a
and
Y=
Aq's are avoided.
is essentially
an
squares method", i. e.
technique used to
between an independent variable

Multiple
on a dependent variable
of the following
(151)
a statistical
however, determines the effect

variable
for
coefficients
Regression
linear
Multiple
the time coefficients.
linear
regression
(MLR),
independent
than
one
of more
using a first
order equation
type as a model, i. e.:
X0 + x1Zl
+ X2Z2 +
... .
XnZn
(28)
189
Where:
Y=
The value of the dependent variable.
X0'=A
constant equivalent
on the y-axis
to the intercept
line
of a straight
graph.
or
Xi, X2... Xn = Coefficients

variables
of the independent
Zl, Z2... Zn respectively

the individual
and represent
effect
that each independent variable
has
on the dependent variable.
When used to develop

technique
regression
minimizes
the dependent variable,
Figure
13.
and actual
values
Estimates
of
can
be derived from the equation of the "least
squares" line through actual
observations.
technique guarantees that no other line

actual observations
The regression
through the
of the dependent variable
have a smaller sum of squares as illustrated

It therefore
yields
the coefficients
to predict
the
equations,
the sum of the squares'of
between estimated
the differences
therefore
estimating
an unbiased and efficient
the value of the dependent variable,
the values of the independent variables.
would
in Figure 14.
estimate of
with which
given
190
FIGURE13
METHOD
OF LEASTSQUARES
Ref.
(114)
Dependent
variable
berm
Constant
Vzrahla
m
1
si -minimum
i-1
FIGURE14
--m
OF AVERAGE
AND REGRESSION
COMPARISON
LINES
Ref.
14
(114)
RANGEOF DATA
12
e
1$
10
'=
1 ..,;
ix
2I
0
.-
CaE'"i'
?:,
' _.
:
i
4y
:]E!
I-c. Y. S x Ma
11
191
Although a linear
without
model is produced (with or
a constant term Xo) it
can be used to predict
values for a dependent variable

the exact functional
variable
when it
either
expresses
between a dependent
relationship
or when it
and independent variables
is an
acceptably accurate approximation of a more complex

Ile
e. g. a non-linear
relationship,
Using the multiple
linear
relationship.
regression technique
be
from
data
to
used
an existing
enables
it
system (while
operates) to develop the regression model.
This therefore
data
from
designed
to
the
generate
need
experiments
removes
in which independent variables
have to be controlled
to determine the influence
individually
of each on the
Whendeveloping regression models
dependent variable;
for estimating
production
direct
from
obtained
time standards,
observation
if
estimates
or previous
data can be
accurate.
of the regression
depends on the assumption
of "cause and effect",
the independent
chosen actually
variable
distinguish
cannot
occurring
variables
being examined.
between a natural
by chance.
tasks
of manufacturing
sufficiently
However the effectiveness
dependent
-'
technique
i. e. that
influence
the
The regression
model
relationship
or one
192
Crocker
(152)
observed, "the ease with which noncan be found is surpassed only by
relationships
existent
the ease of missing important

essential
is,
It
ones".
to choose independent variables
therefore,
with care.
The use of personnel familiar
with the work being studied
can aid in the identification
of independent variables.
MLR in Cost Estimating

The regression
in the field
20 years,
technique has been known to be applicable
of production
time standards estimation
although the applications
been used, though diverse,
for which the method has
have been limited
in highlighting
critical
the development of estimating
Canning
(153)
factors
is
that influence
models.
used the regression
in number.
literature
Nevertheless an examination of available

useful
for over
technique to establish
the man-hour requirements for a jobbing
transformer
assembling
shop
cores.
Regression models that
degree
of accuracy were developed for
acceptable
gave an
individual
sections of the job shop and for each product

The work undertaken by Canning
made within
a section.
illustrates
how the accuracy of estimating
improved.
By establishing
models can be
models for each section of
the job shop and for each product type made within
section
both the range of variablity
of assembly times
193
and the number of possible variables

times were reduced.
variability
error
assembly
affecting
Reducing the assembly time

lowers the maximumpossible
effectively,
obtained from the estimating
model and therefore
improves estimate accuracy.

i
In addition
if
the actual
dependent and independent
variables
models may be used to
of estimating
Canning effectively
that influenced
between
relationship
is non-linear,
a number
improve estimate
in Figure 15.
illustrated
as
accuracy,
factors
causal
reduced the number of variables
assembly times by removing the effects
such as:
(i)
Variation
in production
methods between
stations.
(ii)
Variation
in production methods between
products.
(iii)
Variation
in productivity
levels
between
in productivity
levels
between
stations.
(iv)
Variation
products.
of
194
FIGURE15
EFFECTOF INCREASING
OF REGRESSION
THE NUMBER
MODELS
FORA SPECIFIC DATARANGE
Ref.
(154)
...
C)
-0
t0
S..
tC
C)
. O,
C'
C)!
C)
4O
C)
10.
Independent Variable Values, (x, x2, x3, n)

A
Bi , B2, B3
data
for
the regression model
complete
range,
max. error = e2
the regression
max. error
models for sections

= el
<
el
e2
of the data range,
195
(155)
Cochran
states the limit
to reducing data
in this manner is the point where the errors
variability
obtained from using the average value of the dependent

are acceptable and the use of a regression model
variable
improve this
would not specifically

i
In practical
accuracy.
terms, however, the number of models developed would be a

managementdecision
since the greater the number of models
developed the higher the application
cost.
Hence application
cost would need to be optimized against estimate-accuracy

in determining
the number of models-to develop.
Salem(156) determined the indirect

required to load pallets
variables;
predictor
labour time
with packed material
using the
number of cases packed per pallet,
number of orders per pallet
load, weight of packed material
load and the volume of cases per pallet
per pallet
load.
It was found that the number of cases packed and number of

orders per pallet
whilst
other-
the model.
residual
load were the best measures of job time,
predictor
variables
The criterion
standard deviation
model should be minimized.,

existed
did little
for choosing predictors

resulting
was that
from the regression
A high inter-correlation
between the two remaining variables
of cases and number of orders per pallet

bought into question the need for
the model.
to enhance
(i. e. 'number
load) which
both variables
Therefore Salem used Student t-tests
determine which of the two variables
within
to
should be dropped
196
These tests
from the equation.
indicated
of the number of cases packed per pallet
coefficient
had the best statistical
and in addition
precision
gave
of packing times per pallet.
an adequate estimation
Doney and Gelb(157) used the multiple
,or
that the
linear
regression technique to estimate the cycle times of

turned and bored components on an automatic lathe.
Componentdesign features
on cycle
effect
finished
times were stock
factor,
machinability
turned
selected as having the greatest
outer
overall
improved the regression
length
diameter,
Several
bore diameter.
outer
diameter,
of the component,
hub outer
variables
material
diameter
when transformed
and
however
model:
Variable
1=
Stock outer diameter xn

Material Factor
Variable
2=
Stock OD - Finished
2x Material
Outer diameter
Factor
(29)
(30)
Although the model developed gave low percentage

estimating
errors
(+2.3% to -2.6%) the variability
times used to construct
in cycle
the model was narrow (1.2 minutes
to 2.4 minutes).
Regression equations can only be assumed
to be applicable
the data range from which they were
constructed.
within
Hence-the regression model developed by
197
Doney and Gelb would be limited

It is essential
therefore
to a narrow data range.
when developing regression models
to provide actual data points to limits

all
work likely
that would include
to be encountered.
An important advantage of using MLRto develop

r
estimating
models is the wide range of manufacturing
tasks for which the technique is applicable.
For
MLRhas been. used to develop models for estimating
example,
time
standards for cost control and scheduling of Flexowriters

(158),
in a sales order office
setting incentive payments
for
vehicle
developing
deliverers
tooling
estimating
costs
(162)
gross time standards
and for estimating
assembly and fitting
cranes
(159),
times
for
heavy,
(160,161)
custom-designed
(154)
.
(136)
Logan
recognised the cost-effectiveness
regression
based estimating
systems.
of using
Regression analysis
was used to reduce thousands of individual
time standards
to simple formulae hence improving the estimating

ation time, removing the high level of skill
applic-
and background'
experience required to develop time standards and therefore

easing the problem of training
Software for carrying
new estimators.
out the MLR solution
technique
now forms part of several work measurement computer systems,

e. g. WOCOM(129),LOCAM(136)and REAP(91) where the
198
technique's
ability
to estimating
3.4
Selection
new product
(i)
in jobbing shop and low volume
systems.
of Work Measurement Method for Design Costing at H.M. Ltd.
When selecting
developing
time standards
models ensures that these systems are
commercially viable
production
to reduce individual
work measurement system for
the most appropriate
an estimating
development
system capable
process,
during
the
methods can be ignored:
several
since this
Time Study
designs
of costing
time
method cannot predict
standards.
(ii)
PMTS
since
these time standards
shown to be suitable
manufacturing
appropriate
facturing
(iii)
Comparative
Estimating
have been
in high volume
systems and are not

to the small-batch
manu-
of H. M. Ltd.
environment
since this
method cannot estimate
accurately
the individual
manufacturing
costs of components.
Synthetic
(v)
since these are difficult
Algorithms
prone to high inaccuracies.
Operational
normally operational
to develop and
research techniques
Research
are used for optimization
Algorithms
their
problems, hence
develop
to
estimating
use
equations
199
(v)
Contd
...
i. e. the computing
could prove costly,
cost to determine optimization
solutions
is in excess of that required to find the

between dependent and
relationships
independent variables.
systems used in low volume manufacturing
Estimating
normally
task
times)
process
Therefore,
times).
of using
suitability
standards
be
cost
not
would
involves
work
the
models or synthetic
of the present
and cannot handle efficiently
of the New EHB development
time
Synthetic
algorithms.
to increase
machine
a suitable
determining
regression
manual
estimating
models are the basis
estimating
effective
the present level,
design
derived
and empirically
requirements
costing
estimating
(for
algorithms
multiple
system at H. M. Ltd.
estimating
(for
the problem of selecting
costing
either
empirical
and
standards
derived
and empirically
for
method
measurement
time
time standards
employ both synthetic
systems
project.
estimating
the
Since it
resources
over
these work measurement methods must also be
discounted.
When examined with respect to the estimating
system requirements of
the new product design process, the development of equations using

regression
(i)
analysis
i. e.:
appears possible,
Accuracy
regression
level
The
-
of accuracy
using
models can be improved by reducing
variability,
i. e. increasing
developed.
Accuracy
since
obtained
the number of equations
therefore
the number of equations
against system operating
data
cost.
is a management decision
developed
must be optimized
200
The present work develops estimating

the accuracy limits
(ii)
system (Section 4.4.1).
Setting-up
Cost-
time
The cost
can be expected
of developing
and carry
out a costly
cost
regression
to be low since
study data can be used, i. e. it
to design
(iii)
of H.M. Ltd. 's existing
estimating
equations
equations within
existing
is unnecessary
time study programme.
Operating Costs - The cost of using such a system would

be low since time standards retrieval
data files
from extensive
would be unnecessary enabling estimates to
be prepared quickly.
(iv)
Responsiveness
The
responsiveness
-
be dependent on the personnel

The present
estimating.
who carry
reducing
out the
work establishes
by
design
use
of
system capable
the effect
of the system would
engineers,
of queueing time
an estimating
therefore
on system
responsiveness.
(v)
Type and Detail
of Cost Data - Previous literature
diversity
the
shown
has
of manufacturing tasks which have
been estimated using regression models.

can be expected that regression
Therefore it
equations could be
developed for the wide range of processes used at

H. M. Ltd. and at various
levels
of cost detail.
201
(vi)
Subjective
Judgement - Since design engineers are to use
the estimating
system, the level of subjective
degree
of familiarity
and consequently
judgement
with manufacturing
methods and processes required to develop time standards,

must be minimized.
types of predictor
This factor
variables
quantitatively
evaluating
is dependent on the
chosen and methods of
these variables.
202
CHAPTER
4
COST ESTIMATING SYSTEMDEVELOPMENT
203
4.0
Introduction
The development of a cost estimating
analysis
equations
(i)
equations necessitates
tasks to which each model relates.
manufacturing
to identify
relevant
jare
defining
for which specific
Factors to consider are:
valid.
is essential
that
equations
equations can be accessed

can be located
both the wide range of manufacturing
processes
at H. M. Ltd.
estimating
levels
the
This allows estimators
equations and the conditions
The ease with which estimating

It
and the need to achieve
S=0.314,
a large
developing
levels
the current
within
(i. e. E=0.096,
each design
see Section
estimating
of the small
retrieval
operating
number of equations
used to code or classify
(ii)
system that uses. regression
The number of predictor
out
carried
accuracy
at the company
4.4.1)
(>200).
requires
The system
the
models must allow
number of equations
to be carried
since
quickly
required
to cost
out quickly.
variables
within
each estimating
equation
This number should be minimized where possible to reduce the

effect
of interactions
between variables
models of greater accuracy.
reducing the number of variables

effectively
total
and therefore
per estimating
Hence it
However,
equation
increases the number of equations within
system.
help
the
is necessary to balance estimating
accuracy with system size.
204
(iii)
The type of factors
chosen as predictor
Since the estimating

engineering
system is being developed for use by
designers it
is necessary to minimize the effect

of those factors
on manufacturing cost estimation

data is inaccessible
variables
Such factors
to designers.
for which
would
(e. g. machining feeds,
include machine process variables
speeds and depths of cut) since the generation of this

type of data lies
training
(iv)
The level
outside the normal experience and

designers.
of engineering
of. detail
by the estimating
of cost data that
can be provided
system
The system needs to estimate the cost of machining individual

in order to allow designers to carry out
design features
detailed
4.1
cost comparisons of alternative
Classification
Initially
feasibility
of Estimating Models
an examination was carried
of using existing
out to determine the
component coding systems to classify
Coding systems. such as VUOS0(163), Opitz(164)
cost centres.
Brisch(165)
designs.
enable design features
could possibly
and
to be coded and therefore

enable estimating
referenced.
However existing
the rapid
retrieval
components with
systems are primarily

of drawings
respect
concerned with
either
groups of similar
(166,167).
requirements
or selecting
to production
been
have
not
they
specifically
such
designed
for
As
cost estimating
205
Since GombinskV(165) points out that the use of
purposes.
systems of classification
for purposes other than those
intended is not always possible

existing
it
systems would be suitable
appears unlikely
that
for costing purposes.
This assumption is confirmed by work carried

(1
and Blore91).
and Schilperoort68)
out by Remmerswaal
Remmerswaaland Schilperoort
systems in terms of their
information
evaluated component coding

to provide the type of
ability
required to enable various departments to function.
They found that although classification

information
systems provided
for planning and scheduling,
the manufacturing
time standards used were assumed to be known. Blore(91)

coding systems during the
abandoned the use of existing
development of the REAPsystem (Rapid Estimating
During the present work the classification

models required the exclusion
of variables
and Planning).
of estimating
considered inaccessible
to designers since this would then-overcome the need to request

data from other functional
departments and therefore
response of the estimating
system.
to be that which is involved
Accessible data is considered
in the design decision making
process, e. g. component dimensions, design features,

materials
improve the
and the manufacturing
operations
required.
tolerances,
Inaccessible
data is associated with the manufacturing input to the estimating

task,
e. g. machining speeds, feeds and manual manipulation
tasks.
206-
Examination of relevant
machining literature
indicates
is caused by:
that process variability
(i)
(169)
The process being carried
out, e. g. machining,
welding and flame cutting.

(ii)
The operation
being performed, e. g. turning,
boring
and milling.
(iii)
The size and power of the machine used.
(iv)
The manual work content involved.
(v)
The tolerances
(vi)
The material
4.1.1
and surface finish
required.
being processed.
Manufacturing
Processes and Operations
The manufacturing
have been identified
processes carried
and classified
out at H.M. Ltd.
for ease of access into
four main groups:
(i)
Pre-machining - processes used to prepare material

for subsequent machining operations.
are
sawing, shearing,
flame cutting
Examples
and
fabrication.
(ii)
General Machining - those processes, such as

turning,
boring,
drilling
that can be carried
and thread cutting,
out on a wide range of
machine types, e. g. capstan lathes,
centre
207
lathes,
bar lathes,
numerically
horizontal
borers,
lathes and vertical
controlled
borers.
(iii)
Special
Machining
carried
out on specially
tools.
Examples are gear cutting,

drilling,
radial
grinding
(iv)
those
processes
-
Post Machining
are
designed machine
spline
and surface
that
cutting,
milling,
cylindrical
grinding.
- processes
such as painting
and assembly.
Estimating
carried
for
equations
out within
a process
which estimating
Table 28.
were developed
This table
also
were developed
includes
cost items for which estimating
4.1.2
each operation
The process
group.
equations
for
other
and operations
are listed
in
manufacturing
equations were developed.
Size and Power of Machines
At H.M. Ltd. "General Machining" and gear generating

operations
capacity
represent approximately
and are carried
The variation
out on a range of machine sizes.
of power input of machines results
range of process variables
In order to effectively
process variables
divide
70% of the machine shop
in a broad
being used.
remove the influence
on manufacturing
costs it
of machine
is necessary to
the range of general machining and gear cutting
208
TABLE28
CLASSIFICATIONOF COSTINGEQUATIONS
PRE-MACHINING
SPECIAL MACHINING
Flame Cut
Gear Cut
Saw
Mill
Shear
Cylindrical
Weld
Surface Grind
Grind
Spline
GENERALMACHINING
Radial Drill
Turn
POSTMACHINING
Face
Drill
Assembly
Bore
OTHERCOSTS
Ream
Chamfer
Milling
Fixtures
Radius
Drill
Jigs (Normal)
Drill
Jigs (Box Type)
Groove
Circlip
Groove
Copy Templates
Thread
Plate Gauges
Tap
Plug Gauges
Rope Groove
Recess
MATERIALCOSTS
MANUALTASKS
Rigid
Steel
Joists
Rigid
Steel
Girders
Load/Unload Machine
EN8 Round Bar
Machine Manipulation
EN8 Plate
Machine Set-up
Hollow
Bored Bar
209
machines into groups.
a group does not have a significant
within
variability
on manufacturing
effect
In this way the machine process
times.
Machines that performed general machining operations

were therefore
grouped (according to machine size and power
by machine type,
availability)
i. e.
Bar Lathes
Bar Capstans
Chuck Lathes
Chuck Capstans
Centre Lathes
Borers
Horizontal
Vertical
Borers
Copy Lathes
NC Bar Lathes
NC Chuck Lathes
Within each group of machines there is insufficient

variation
in machine size and power to significantly
the accuracy of cost estimates.
These factors
influence
can therefore,
be ignored.
Although
gear cutting
and type an examination

equipment
equipment varied
revealed
that
by both size
the particular
dependent
is
is
on which a component
machined
on the number and module of gear teeth.
210
Estimating equations could therefore

for specific
be developed
size ranges of spur and pinion gears
(Appendices IV and V) enabling the variability

process factors
to be effectively
to
classify
not necessary
in machine
It was thus
removed.
the gear cutting
equipment used
at H.M. Ltd.
r
In addition
the material
type from which the gear or
found
be
to
was
related
was
manufactured
pinion
module so that a Material
Factor equation
to the
(see Section 4.1.5)
was not required.
4.1.3
Manual Tasks
The model developed by Mahmoud(138) does not estimate
separately
the manual content involved
in machine processing.
The usefulness of this model is therefore
limited.
For
example, the manual work content removed by process

be
determined.
cannot
automation
The present work therefore
was designed to enable manual task times to be estimated

independently of machine process times.
Halevi
independently
and Stout('35)
determined
of machine processing
of machine process
approach unsuitable
dependent on factors
time.
since
other
manual task times
time but as a proportion
The present
manual tasks
author
times
than the machine
considers
could
process
this
be
time.
211
Tool manipulation
times for example, are often dependent
on the distance moved between machining operations
rather
than on the time spent machining.
manual tasks a detailed
Whenclassifying
such as illustrated
of each operation,
considered inappropriate
in Table 29, was
since a knowledge of methods
be
then
required for their
would
planning
adopted by Blore(91)
their
main objectives
manipulation
breakdown
The method
use.
of grouping manual tasks according to

(i. e. machine set-up tasks, machine
tasks and machine loading and unloading tasks)
has been used in the present work since sufficient

design
for
be
costing
provided
could
Although Knott(92)
further
a
as
of components
this
work
present
integral
level
purposes.
regards"inter-process
measurement"
manual task objective,
for the
form of measurement is regarded as an
part of machine manipulation` tasks.
of quality
detail
control
checks required
The low
during the
H.
I.
I.
Ltd.
at
components
also allowed these
of
machining
be
included
in
to
the
tasks
machine manipulation
measurement
tasks without
loss of estimating
The manual content involved
accuracy.
in gear cutting
less
5%
than
the
total
of
represented
was therefore
operation
operations
time and
included in the machine process task time
since a significant
loss of accuracy would not be incurred.
212
TASK TIMES FORA DEVLIEG

MANIPULATION
TABLE 29
SPIRAMATICJIGI4IL
Ref.
List
S.
of
B. Ma.
Elements
Load and Unload

Load/Unload
Component to Table
".
50 lb to
10 cwt
Up to
50 lb
35
.
Machine Manirulation
Fit/Remove Tool. to Flash Change
Fit/Remove Tool to Quick Change*
to Cut
Position/Retract
Index. Table
Change Feed or Speed
Position
to Axis (Tape or Manual).
Apply Tapping Grease
Deburr by Hand
Clear
Spindle
Workplace
Move In
of
Cut.
Cuttings
Out of Bore
Blow Cuttings
Set Depth of Cut'
Set 'X' Axis to Zero
Set 'Y' Axis to Zero
Gau
Micrometer
Internal
External
-
Rule
Depth Vernier
Caliper Vernier
Plug Gauge
Internal
Caliper
External
Screw Gauge - Plug
Air Gauge - Plug
B. Ms.
Basic Minutes
Over
10 cwt
2.43
(No
Fixture
True)
Table
Position
or
on
(True
Table
by Clock).
Position
on
(True
by Scribe Line).
Table
Position
on
Gland or Clamp (1'Nut or. Screw)
Tighten/Release
Retract
(144-)
...
40
.
2.33
1.62
58
.
25
.
20
.
28
.
13
.
16
.
52
.
14
.
"13
59
.
26
.
14
.
29
.
9.49
3.49
32
.
31
.
20
.
45
.
41
.
30
.
32
.
35
.
46
.
213
However, the number of estimating
equations within
system would be reduced hence lowering operating

and increasing
the
costs
the speed at which estimates could be
prepared.
ComponentTolerances and Surface Finish
4.1.4
equations were developed for
Separate estimating
those machining operations
with dimensional
<+ 0. lmm and those operations
tolerances
of >+ 0.1mm.
with tolerances
This took account of the variation
in machining speeds,
feeds and depths of cut caused by differences

tolerance
a surface finish
average and dimensional tolerances
not influence
the variability
since these tolerances
factors
operation.
grinding
In this
+0.20mmwith tolerances
to be left
of <2. Oumcenter
of <+ 0.05mm did
in General Machining process

were achieved by a subsequent
case a grinding
on the allowance of s+ 0. lmm had
Processed
Obviously machining times are influenced

with which a material
material
allowance of
on the work during the General Machining operations.
Material
4.1.5
in dimensional
requirements.
Components requiring
line
of
is termed its
can be machined.
"machinability".
can be used to quantitatively

machinability.
by the ease
This property
of a
Various criteria
measure a materials
(170,144)
Of the commoncriteria
the metal removal rate per horsepower is
machinability
for use during the present work.
suitable
indicates
the relative
materials
and can therefore
This criterion
metal removal rates for different

be related
to machining times
The relative
and hence manufacturing costs.

'Of
used to define
rates of
metal removal are determined under constant power

These conditions
conditions.
exist
during the present
work due to the method'of developing estimating

for specific
machine sizes.
Using metal
removal rate
this
to their
relative
materials
machinability
is not influenced
classification
during the present work.

of a materials
data obtained
were classified
(Table 30).
Since
by the specific
of machine shops it can be used
manufacturing conditions
effect
per horsepower
Group(144)
from the P-E Consulting

according
equations
To take into consideration
machinability
the
on machine process
times, the machining times estimated using the regression

factored
be
must
equations
equations listed
4.2
Factor
in Appendices IV and V.
Data Collection
The collection
initially
using the Material
required
and a suitable
of data for developing the estimating

predictor
(independent) variables
data source identified.
equations
to be chosen
215
MATERIALFACTOR(MACHINABILITY)GROUPS
TABLE 30
Ref.
(144)
Material
Factor Group
MF1
EN9
EN18
EN36C
EN43B
EN24T
EN15
EN19
EN36T
EN43C
EN5B
EN16
EN19C
EN39A
EN45
EN16J
EN23
EN39B
EN56A
EN16S
EN24
EN42
EN56B
EN16T
EN36A
EN43
EN58
EN16U
EN36B
EN43A
EN58A
High carbon, Alloy and Stainless
MF2
EN6
EN8A
EN14A
EN20B
EN6A
EN8B
EN16B
EN22
EN7
EN8D
EN16H
EN33
EN8
ENGE
EN19A
EN34
SAE 8620H
Medium Carbon Steels
MF3
Cast Iron
Cast Steel
MF4
Steels
ENIA
EN3A
EN32A
EN2
EN3B
EN32B
E7112A
EN3C
EN352
EN2C
EN8t4
EN355
EN2D
EN32
216
TABLE 30 (Cont'd)
Material
Factor Group
MF4
Cont'd
Free Cutting Low Carbon Steels

loe
Low Carbon Steels

Nodular Iron
MF5
PB1
LMG
LM9
PB2
LM4M
LM9M
PB3
LM4WP
Phosphor Bronze,
Gun Metal,
Free Cutting
Leaded Bronze
Hard Brass,
Soft
Brass
Aluminium Alloy Castings

Plastic
Materials
Brass
217
4.2.1
Selection
of Predictor
Selecting
the regression
predictor
Variables
variables
is a critical
procedure since the variables
part of
chosen
(Appendix IV) are assumed to have an actual causal effect

on the-dependent
Although this
variable.
often be proven by empirical

laboratory
evidence obtained from
studies of manufacturing
Equations 22 to 26), many situations

is not possible.
manipulation
assumption can
processes (e. g.
exist
Examples are, welding,
tasks and tooling
costs.
where this
machine
Hence care must
be taken when choosing independent variables.

the present work predictor
reference to personnel,
variables
During
were identified
with
such as foremen and production
engineers, who were familiar
with the manufacturing tasks
being examined.
Estimating
accuracy and system complexity were
improved as follows:
(i)
Various types and combinations of predictor

variables
were examined to determine the most
accurate estimating
variable.
model for each dependent
For example, it was found that during
the development of estimating

boring operations
equations for
that the use of length of bore
and diameter of bore as separate predictor

variables
gave more accurate results
the product of these two dimensions.
than using
218
(ii)
When estimating
levels
models gave unacceptable error
both the independent variables
and the
data source used to develop the models were

re-examined for suitability
dependent variable.
in estimating
the
For example, the use of
H.M. Ltd. 's standard welding time data was

.-Ir
found unsuitable
and other more reliable
(see
had
be
data
found
Section
to
of
sources
4.2.2).
(iii)
When small differences

levels
existed
between alternative
in accuracy
equations,
consider-
ation was given to the standardization

predictor
variables
of
between equations and
hence the simplification
For
of the system.
example, a number of estimating

developed for estimating
equations were
the times to turn

i. e.
components on a range of machine types,

bar lathes,
bar capstans, chuck lathes,
chuck
capstans, NC lathes and centre lathes.

small proportion
For a
of machine types using the
dimensions
"turned length"
the
of
product
"depth of cut" as a predictor
the greatest
estimating
"turned length"
accuracy.
gave
However,
and "depth of cut" were used
as separate predictor
not seriously
variable
and
variables
impair estimating
allowed the predictor
variables
times to be standardized
since this
did
accuracy but
for turning
between all
machine types.
219
4.2.2
Data Source
A library
of measured time study data was. held by the

department.
engineering
production
by carrying
This data was collected
out observations
on operators with rating

(113).
This
80
the
0/100
on
scale
of
rating
performances
0/100
is
than
the
the
average
slower
performance
on
pace
scale,
i. e. the average rate at which a large group of
qualified
and motivated workers could be expected to
achieve.
However it
operators
can be expected to work under -the manufacturing
conditions
at H.M. Ltd.
result
manufacturing)
become familiar
jobs.
represents
the standard rate at which
These conditions
in operators
with the production
Hence overall
(low volume
frequently
having to
requirements of new
work performance is lowered.
In order to represent current
operating
conditions,
data to be suitable
for the present

(113)
(CRT)
allowance
compensating
rest
study, a
was added
and hence allow this
manual task times.
This allowance represents the
non-working time required
to take account of such factors
to all
as
operator
fatigue
and personal needs.
The standard
CRTallowance used at H.M. Ltd. was 17.5%.
Manufacturing
been collected
tasks for which time study data had not
by the production
dealt
with in the following
were
engineering
manner:
department
220
(i)
Sawing, Spline Cutting and Shearing Operations

The standard production
shop floor
for control
times issued to the

purposes at H.M. Ltd. are
termed Sales Target Times (STT's) and have been

estimated using synthetic
work measurement
techniques.
These times were used to develop
estimating
equations for sawing, spline cutting
of
and shearing operations
since:
(a)
control
Lack of effective
recording
by shop floor
of job time
personnel resulted'
in recorded job times having little

comparison with the actual times taken
to perform tasks.
(b)
The STT values used were initially

examined by production
engineering
personnel and considered appropriate.

(ii)
Numerically
Controlled
An existing
procedure employed by the estimating
Profile
Flame Cutting
department (Table 31) for developing flame cutting

times was adapted (Appendix IV) for use within
estimating
system.
of estimating
and still
The adaption involved no loss
accuracy over the existing
allowed the individual
in flame cutting
tie
method
tasks involved
to be costed separately.
221
TABLE 31
TIME STANDARD
ESTIMATIONFOR
NC FLAMECUTTINGAT H.M. LTD.
OPDE2.
No.
TA?E No
Nd.
..
SETuP.
A*
No
TAPES
aF
No
CP NOZZLE SET?tNGS
.
X-
00
S.
shtis =
3.00 sds =
_x
PoEtL
C.
C ST= -1
FZ.
LOAD ATE
S.OOsts -
L'uNtv-.
ALJ
-:
D
C
TutCKNESS
mm]
FLATS
No OF PIZEHEATS
=E
&U
UN1L0i1D COWONENTS
&tt?NtNG
VALUES.
Tl-iK.
ZNtM
LMn-t/nuN
C55
ID
12
15
560
x*0.10
CV,
x )
510
405
SM VALUE
SET UP
A+B
2.080
3.855
305
3"B55
32
255
4. co2b
35
255-
4.626
50
2o-3
5.72
75.
i50
7.7t0
SM's =
VJofZK VALUES.
1 850
.
2.313
2 "Eeo
VS=
2.
Y. oo srns=
305
. 305
2-2.
25
x CDI__,
CLCIM.OF PP.
CMl
rFtLE1
I9
x Is.Go
VALUE ISSUED =
RZOFILE
3. $S5
C+E+F+G=
VAL.'UE
Standard Minutes
tSSuED
222
is used to prepare edges for
When flame cutting
welding then the time estimated
from
the
shape
component
of
flame cutting
the
doubled
to
be
obtain
must
stock material
total
(iii)
for initial
time required.
Welding
The method of estimating
labour time standards
(STT's) for welding tasks at HJI. Ltd. involved

the total
calculating
joint
rate factor.
and applying a single

influence
of factors
welding position,
length to be welded
Since the
such as, type of joint,
electrode
wire diameter,
thickness was not
handling time and plate

taken into consideration,
the use of STT times
for developing regression
equations was considered
That is,
inappropriate.
inconsistent
STT times would be
with the actual work content

Examination of welding data confirmed
involved.
that similar
fabrications
had widely varying
STT's issued (up to 200% difference).

The approach adopted by the present author
initially
involved developing models to determine

between the "basic arc time
(171)
issued by the Welding Institute
the relationship
standards"
and weld design factors

Notes, Appendix IV).
(see Variable Description

Since the "basic arc time"
223
for a weld is that amount of time the arc is

burning,
actually
it
is necessary to add on a
time allowance for such tasks performed by the

welder as weld joint
the fabrication
preparation,
to gain access to the weld joint
and adjustment of protective

O
manipulating
In
clothing.
since the standards issued by the
addition
are "basic times" they must

(113)
be converted to "Standard Times"
by adding
Welding Institute
appropriate
allowances.
relaxation
The'basic arc time" is related
to the total
time required to weld a fabrication
as shown in
Equation 31(172,173)
Tarc
Or =
(31)
Twe1d
Where:
OF
The operating
Tare
Basic arc time
factor
(mins).
Total fabrication
Tweld =
or duty cycle.
time (mins).
From Equation 31 it*can
be seen that the
cycle is the proportion
of the welders time in
which he is actually
metal.
welding or depositing
Duty cycles are influenced
conditions
duty
weld
by the working
in the welding shop, the welding
224
involved
type
the
and the
of
work
used,
process
help given to the welder in the form of unskilled
labour.
of these factors
influence
The actual
by
be
time
duty
the
measured
only
can
cycle
on
A previous study(122) of
and motion studies.
the welding of standard fabrications

/
at H.M. Ltd.
that the average duty cycle was
indicated
0.35 for a combination of 80%
approximately
Gas Metal Arc welding and 20%Manual Metal Arc.

However, an average duty cycle for a range of
is unsuitable
fabrications
for the present. work
since duty cycles can be expected to vary

between fabrication
Duty cycles
design
TABLE 32
(i)
must thus be related
features.
influence
types and welding processes.
The principal
duty cycles
to specific
features
are listed
that
in Table 32.
DESIGN FACTORSAFFECTING WELDINGDUTY CYCLES
The number of planes that welding is carried
out on.
This factor
determines the number of times the
fabrication
must be re-positioned
to enable the
joint.
the
to
to
weld
access
gain
welder
(ii)
The number of individual
weld lengths.
determines the number of weld start

ancillary
operations.
This factor
locations
and
225
TABLE32 (Cont'd)
(iii)
Location of welds and their
(iv)
Shape, size and weight factors
ease of access.
that influence
the
of the
time for manual or mechanised manipulation

fabrication.
The primary process used to weld standard

at H.M. Ltd. is semi-automatic
fabrications
Gas Metal Arc welding and is therefore
the only
welding process considered in the present work.

The range of the duty cycle for the Gas Metal
Arc welding process is considered to be 0.25 to
0.60(172).
Although Myers(173) considers that
for small amounts of welding the duty cycle could

approach 1.0, a figure
of 0.6 is considered during
the present work to be a practical

since the maximumrelaxation
upper limit
allowance
that
35%. To this figure must

_
be added allowances for assembly and tack welding
is.
be
could
added
and equipment handling.
of the fabrication
Although
actual
accurately
listed
time studies
estimate
are required
the influence
in Table 32 on the welding
subjective
estimates
are considered
sufficiently
during
accurate
(using
for
of the factors
duty cycle
experienced
the present
to
personnel)
work to be
estimating
purposes.
226
(iv)
Chamfers, Circlip
Little
Grooves, Radii and Tapping
was observed in the machining

55)
times for these features.
Cochran('
points
variability
out that in such circumstances,

accuracy levels
can be obtained by using the
average of the operation
adequate
times.. Henceregression
equations were not developed for these operations.
4.3
The Multiple
Ezekiel
carrying
Regression Procedure
and Fox
(174)
and Hawkins
out the regression
procedure
models)
using a desk top calculator.
rapidly
lose their
variables
within
provide
methods of
(i. e. developing
estimating
However, manual techniques
as the number of independent
effectiveness
a regression
(175)
model increases.
In addition
when large numbers of estimating
models need to be developed
the use of a desk top calculator
becomes both tedious and time
consuming.
However since multiple

statistical
linear
regression
is a standard
procedure used in a wide range of business and
research applications
for most micro-,
mini-
computer software packages are available

and main frame computers.
The regression
independent
in
the
variables
vary
of
packages
number
software
that can be dealt with and the type and range of supporting
statistical
data produced.
227
The regression
package at the Loughborough University
Computer Centre is a module of the Statistical

Package for the
(176)
Social Sciences (SPSS)
and has been used during the present
work since the package:
(i)
can deal with 50 independent variables
and hence
the maximumnumber of independent variables

expected to be required
(i. e. 20)
equations,
(ii)
provides
a wide range of supporting
data
statistical
(see Table 33).
(iii)
combines standard
regression
procedures
to be exercised
variables
(iv)
and stepwise
has the facility
model,
to test
inter-correlation
independent variables
work since this
and
independent variables
for
from the
This overcomes the need to test

for inter-relationships
to running the regression
The stepwise regression
control
of independent
and exclude variables

basis.
linear
which enable considerable
over the inclusion
in the final
model-on this
multiple
prior
procedure.
procedure is suited to the present
procedure allows those independent variables
to
be chosen which provide the best prediction
model possible with
the fewest independent variables.
the method recursively
constructs
a prediction
That is,
equation one independent variable
at a time.
BEST COPY
AVAILABLE
228
SPSSOUTPUTFILE
TABLE 33
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231
The first
step is to choose the single
the best predictor.

to the regression
The second independent variable
then proceeds in this

by-step until
recursive
no other variable
The program
step-
make a significant
to the prediction
is selected given
package allows the data for each'machine
to be held in separate sub-files.
can then be carried
are in
in the equation.
The SPSSregression
The regression
out on individual
procedure
or combinations of these
Hence equations can be developed for single or ranges
sub-files.
of machine types enabling the total
4.4
will
At each step the optimum variable
the other variables
within
variable.
fashion adding variables
(normally a user decision)
equation.
tool
with the first
the desired number of independent variables
the equation or until

contribution
to be added
equation is that which provides the best
in conjunction
prediction
which is
variable
number of estimating
models
a system to be minimized.
Equation Validation
Since the multiple
linear
used when the exact relationship

variables
estimating
is unknown, it
regression
between dependent and independent
is essential
that the accuracy of the
models is confirmed to be within
of H.M. Ltd.
technique is to be
(E = 0.096 and S=0.314,
the current
Section 4.4.1).
limits
To indicate
formula accuracy the most commonmethod adopted(174) is the

Correlation
Coefficient
(Equation
32):
232
i=N
iY;
R=1
II
N.0'y. 0"x
- Y)(X;
(32)
- X)
i=1
Where:
R=
Correlation
Coefficient.
deviation
Standard
=
of actual values.
(Tx
deviation
Standard
=
of estimated values.
yi
dependent
Actual
the
value
of
variable.
=
xi
= Corresponding estimated value of the

dependent variable.
y, x
Mean
values of y and x respectively.
=
Number of data points.
N=
Coefficient
The Correlation
the proportion
indicating
by
accuracy
for.
been
has
that
accounted
y
to
1
the
unity
closer
and
and
of the model.
is said to measure. fornula
The value of R lies
variation
the greater the estimating
measure the difference
(termed
"residuals")
values
estimated
a model's estimating
accuracy.
since little
it
accuracy
between actual and

cannot truly
measure
The present work supports this
correlation
is observed (Figure 16)
between the value of R and the Average Proportional
in
between 0
However, Cochran(155) points out that since R
does not directly
observation
of the original
Error
(Equation 36) which is a measure of formula accuracy based
233
Hence the use of R to measure
on the size of residuals.
formula accuracy could be misleading

high residuals
to unity
be obtained and the model
could still
would have poor predictive
since when R is close
powers.
Other commonly used methods of measuring the estimating

lo,
of regression
accuracy
of Variability
Coefficient
with
the size
dependent
out that
simply
data has a narrow range.

1-e could
fails
that
be an unreliable
17 and 18.
to consider
foundation
and
for
therefore,
Coefficient.
the estimates
the use of the quantity

it
and is,
on the use of the Correlation
variable
correlation
in Figures
accuracy
be
to
accurate,
appear
could
formula
and
33) proposed by Cochran makes direct
Equation
However, Cochran points
since
also possess little
to measure formula
use of residuals
the F-ratio
1-e (where e is the average error ratio
using
an improvement
is,
as illustrated
of residuals
The quantity
is calculated
models that
(176),
(174)
obtained
from a
because the actual

In these circumstances
be a poor measure of accuracy
a narrow base of experience

projecting
future
results.
However, the present author considers that the use of an

is
data
a pre-requisite
range
adequate
building
hence removing this
objection
xi)
Ny
to regression model
to the use of 1-e.
(33)
could
234
OF R WITH AVERAGE
ERROR
PROPORTIONAL
FIGURE16 COMPARISON
1.0
01x
0.8
cx
x..
iX
0.6
xx
XXx
-P
a
'v
0.4
xXX
. r44-
14 0.2
xX
C-)
-0.5
-1.0
+0.5
Error
+1.0
(E)
AVERAGE
PROPORTIONAL
OF
F
WITH
ERROR
COMPARISON
17
FIGURE
70
xX
60
. -.
v
0
.
50
(Ki
40
30
t0
. r.
i
(0
x
it
)c
IL
yl
XYX
19
20
xx
x
10
it
-1.0
-0.5
+1.0
+0.5
Error
(E)
235
FIGURE 18
OF COEFFICIENT OF VARIABILITY WITH

COMPARISON
AVERAGEPROPORTIONAL
ERROR
41
"r
r
"r
-0
70
60
X
X
"r
L
tC
50
4O
d-)
aJ
"r
U
.r
44O
x
X
ix
xx
40
xx
I
30
20
Xx
xx
10
1t111111
-1.0
-0.5
+0.5
Error (E)
+1.0
236
To take into consideration

an estimating
construct
model, Cochran suggested using the
Index (AI, Equation 34) which again increases in
Association
direct
the range of data used to
to the degree to which the formula accounts
proportion
in the cost data.
for variability
AI
(34)
=1-T
TY
Where:
e2
=1
iY;
- xi)
21
zI
Qy
=N2
Q'e2
Standard Deviation
of the Residuals.
Standard Deviation
of the Actual Values.
0y
However, although
in actual
in a factor
estimating
the Association
data to be considered,
(y) other
values
by doing
than the difference
influencing
AI is not, therefore,
Index enables
the calculated
so it
the variability
effectively
between actual
accuracy
results
and
of a model.
a true measure of formula accuracy.
In this
is
1-e
disadvantage
the
of
a
use
since this measure of
respect
formula accuracy also includes the term y in its
determination.
237
An index of formula accuracy, the Standard Error Ratio

(Sr2, Equation 35), is provided by Ezekiel and Fox(174).
index is suitable
it
since
models
Sr2
for measuring the estimating

uses only the size of residuals
=N,
I(Yi
This
accuracy of costing
in its
determination.
- xi)`-
(35)
----
Sr2 is a measurement of the range of estimating

therefore
equation
and
an
using
obtained
indicates
errors
the closeness
estimate may approach the unknown actual
with which any specific

value.
The present author considers that an indication

estimating
overall
Proportional
accuracy can be obtained using the Average
Error (Equation 36).
takes into consideration

large,
of the
The use of this
equation
circumstances where residuals,
be
however
a relatively
only
may
small proportion
although
of
corresponding y values.
(36)
E=1
N
yi
Where:
E=
Error
238
The Average Proportional

average error as a proportion
Error is a measurement of the

of actual values and is appropriate
for product costing equations since the accuracy of cost estimates

is normally determined as a proportion
of actual costs.
be used to indicate
For the present work the value E will

e
the accuracy
this
of estimates
method of computing
of the regression
using
regression
error
proportions
despite
the apparent
estimating
accuracy
procedure.
analysis
Minimizing
between
conflict
and the objectives
the values
(yi
does not necessarily-result
- xi)
in the
being minimized.
Yi
However the regression

accuracy
estimating
of high cost
to form the majority
(Section
5.2)
products
manufactured
with
procedure
the ability
improves the
effectively
items which have been shown

of the total
at H. M. Ltd.
This
costs of the
together
advantage
to improve the estimating
accuracy
of equations
data
low
the
the
of
end
range using minimum operations
at
(see Section
suitable
4.5)
make the normal regression
method of developing
costing
technique
times
the most
models at H. M. Ltd.
It is possible to modify the regression procedure to

%1)
`
into
to
take
values
consideration
and
yi
xi
minimize
-
y; /
the relative
numbers of components manufactured.
(Appendix
VI)
be
would
more applicable
procedure
This modified
to high volume
239
systems in which the large batch quantities
manufacturing
involved could magnify small costing errors
into large cost
variances.
To indicate
in individual
the variability
hence the effective
accuracy of regression models, the present
Ile
author proposes the use of the quantity
represents
the Standard Deviation
hence indicates
(Pi - E)2I
S (Equation 37).
of the proportional
in individual
the variability
s=
errors and
errors and
errors.
i
(37)
Where:
S=
Pi
Standard Deviation
Proportional
=
of the error
yY
error
x )
proportions.
for the ith
observation.
E and S values can be used as descriptive

accuracy, location
and variation
frequency distribution
irrespective
of the labour times.
to determine confidence intervals

that the random variation
since this
measures of
of the type of
They cannot be used

requires
an assumption
of labour times is normally distributed.
240
4.4.1
Accuracy
of the Existing
Estimating
System
at H. M. Ltd.
Using the quantities
system at H.M. Ltd. was determined.
estimating
(Figure 19) indicated
results
S=0.314
in the individual
estimating
errors
since
(i. e. 31.40).
Comparison with Time Study Data
4.5
The accuracy
was tested
set
the +10% accuracy limits
However, there is a high
that managementspecify.
variability
The
that the Average Proportional
This is within
Error is 0.096.
E and S the accuracy of the
against
time study
at H. M. Ltd. 's current
data with
accuracy
(Appendix
the acceptance
limits
V)
criteria
of E=0.096
and
Time study data used to develop the equations was
S=0.314.
to
test
employed
not subsequently
In this
model developed
of each estimating
way a more valid
indication
the accuracy of these equations.

of estimating
accuracy would
be obtained.
Those equations that failed
to meet the acceptance criteria
imoroving
for
possible
methods
of
estimating
were examined
The causes of poor estimating
(i)
Incorrect
Frequently
accuracy were found to be:
combination
either
predictor
variables
variables
and/or
accuracy.
of predictor
changing
the combination
used and/or
removing
variables.
of
adding new
variables
improved
the
241
FIGURE 19
A COMPARISON
OF ACTUALAND ESTIMATEDLABOURCOSTSAT H. M. LTD.
E=0.096
S=0.314
le
3.0
N,
d-
O
2.0
O
L]
.
tC
J
r
t0
1.0
1.0
2.0
Estimated Labour Costs (VS)
3.0
242
estimating
typical
(ii)
accuracy of models.
Examples of
out are shown in Table 34.
changes carried
The use of negative coefficients
the
within
A disadvantage of using the
estimating
models.
regression
procedure is the possibility
of
developing equations which contain independent

Hence the
with negative coefficients.
variables
of negative manufacturing times is
estimation
possible.
If the negative sign is contrary

causal effect
the
that
variables
suggests
model without
had to be re-run without
variables
variables
The regression
variables
procedure
producing negative
included.
equations exclusion
of the predictor
with negative coefficients
equations that failed

criteria
accuracy.
with many equations developed
during the present work.
For certain
Thelwell(151)
can be excluded from the
serious loss of estimating
This proved correct
coefficients
to the suggested
to meet the stated acceptance
for accuracy levels.
of these
Inclusion
however improved the overall
equations but resulted
produced
accuracy of
in negative operation
being estimated at low values of predictor

(see Figure 20).
times
variables
In order to overcome this difficulty
243
TABLE 34
EXAMPLESOF ALTERING INPUT VARIABLES TO IMPROVE

ESTIMATING-ACCURACY.
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>
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l0
OaO
Nu00NU
M:
C)
>
O
O
C7
au
rn
(c
S-
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o
S..
a)
>
cc
O1
r
T7
O
to
O
C7
a
m
a4-.
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a
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LL
4-)
"r
a
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to
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v
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i
co
a)
4-)
a)
E
a)
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., _
N
4J
U
. '..
,a
C)
i
0
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O
"r"
0.
. r...
i
U
N
a
O
i
O
LL
rd'
4O
. -
NUQ.
=w 0-
4O
-1
000
>G
ddd=
Z
w F--
v)
G)
>
0
O
S.
t4-3
C
e0
-m
td
GJ
C7
i
+j
0
244
FIGURE20
THE ESTIMATIONOF NEGATIVEMACHININGTIMES

USINGREGRESSION
MODELS
.le
4
Regression
Line
oe
(n
C
. r.
"r
IC,
C
"r
C
I
UI
+ve
0
-ve
ii
.-I
Negative Machining Times
Independent Variable Values (xl, x2, x3

xn)
...
245
the dependent variables

minimum operation
times shown in Table 35 below
which estimated operation

Since the allocated
concerned were allocated
times could not fall.
times are based on an
examination of actual minimum operation times

this
procedure effectively
improves the accuracy
oe
of estimates from equations with negative

coefficients.
TABLE 35
TIMES
MINIMUMOPERATION
Cost Centre
Equation
4.7.1)
(see Section
Number
Minimum
Operation
Times
(rains)
201
203
1,2,17,18
204
1,2,3,4
214
216
219
216
202
1,2,3,4
204
18
209
0.5
1.0
2.0
210
17
236
1,2
214
the
246
TABLE35 (Cont'd)
Cost Centre
Equation Number
Minimum
(see Section 4.7.1)

202
Operation Times
(mi ns)
9,13,18
)
3.0
219
1)
210
1-54.0
206
5)
)
209
5.0
18
The time study data used to construct

for
accuracy.
checked
was
also
equations
in this data source were identified
the estimating
The causes of variability
and are listed
in Table 36.
TABLE 36
CAUSESOF VARIABILITY IN TIME. STUDY DATA
1.
in machine process data (e. g. machining speeds
2.
Variation
identical
between
feeds)
and
machining operations
from the absence of detailed
methods planning and control.
Variation
in the dimensions and quality
e. g. the dimensional tolerances
arising
of materials
of cast materials
and the
presence of casting defects.

3.
The rating
of the work performance of operators is a
subjective
decision
and would therefore
between time study engineers.
used,
tend to vary
247
Models were not developed for estimating

since preliminary
attempts indicated
to H.M. Ltd.
(Figures 21 and 22) for the E
The frequency distributions
equations developed indicate
and S values of the estimating
of the equations is within
the accuracy of the majority

accuracy levels
current
of H.M. Ltd.
levels
had
accuracy
equations
limits
component or material
This type of data is normally
manufactured by suppliers.
not available
costs
that a major predictor
was the volume of a particular
variable
material
the
A number of estimating
that lay outside the current
of H.M. Ltd.
for
These were equations
estimating:
(i)
assembly task times,
(ii)
tooling
(iii)
vertical
costs,
times for horizontal
load/unload
(v)
boring times (tols.
(vi)
turning
vertical
(vii)
turning
and
borers,
(iv)
vertical
times for horizontal
! O.lmm) for chuck lathes,
borers and horizontal

times (tols.
and vertical
borers.
borers,
>0. lmm) for chuck capstans,
borers and copy lathes,

times (tols.
borers,
and
<0.1mm) for centre lathes
that
248
DISTRIBUTION OF 'E' VALUES
FREQUENCY
FIGURE 21
100
N
4)
N
O
i
d)
50:
0.25
0.20 0.15 0.10 0.05 0
0.05 0.10 0.15 0.20 0.25
DISTRIBUTION OF 'S'
FREQUENCY
FIGURE 22
(E)
Error
VALUES
100
N
IN
C..)
4O
50
CU
.aE
//
//
/
/
/I
-I- I
0.05 0.10 0.15 0.20 0.25 0.30 0.35

Standard
Deviation
of Proportional
Errors
249
(i)
Assembly Task Times

Since time studies of assembly tasks had-not been
out at H.M., Ltd. data was not available
carried
develop
to
estimating
which
models.
repetitive
The use of MTM

to highly
time standards are more applicable

'Oe
from
work tasks which are normally not found
in-low volume manufacturing
systems such as H.M. Ltd.
An attempt was made to use STT times for various

sub-assemblies and determine the relationship
between
STT times and the types of components that formed

the sub-assembly
(Table
37).
(e.
Equation
g.
models
produced
of which clearly
procedure
38) the coefficients
did not reflect
of the predictor
effect
The regression
the actual
variables.
causal
Hence the
be
included
in the estimating
could
not
equations
system.
At
4.48a1 + 93.87a2 + 48.01a3 - 101.09a4

44.86a6
130.73a7
80.50a5
71.89a8
+
+
+ 76.61a9 - 38.75a10 - 9.49a11 - 514.66
Where:
At
al, a2, a3... all
(mins).
Total
time
assembly
=
types
The
number
component
of
=
(Table 37) within
the assembly.
(38)
250
COMPONENT
CLASSIFICATION FOR DETERMINING
TABLE 37
ASSEMBLYTIMES
COMPONENT
DESCRIPTION
VARIABLE
NAME
EQUATION
38
CODE
Disc shaped with outside diameter <150mm
a4
DISCB
Disc shaped with outside diameter $,150mm
a10
SHAFTA
Shafts with length <250mm
a6
SHAFTB
Shafts with length p250mm
a5
BRINGS
Bearings, keys
a2
SCREWS
Screws, plugs,
CCLIPS
Circlips,
dowel pins,
retaining
rings,
DISCA
PLATE
Plate sections
SMALLFAB
Castings,
nipples,
nuts,
dust
springs,
bolts
caps,
washers
SEAL
Castings,
a1
a9
Pressings and Fabrications
dimension
maximum
of <150mm
with a
LARGEFAB
all
a8
Pressings and Fabrications
with a maximumdimension of >150mm
a7
Seals, gaskets
a3
251
Equation 38 illustrates
analysis
regression
That is,
a disadvantage of using
to determine causal relationships.
as the number of predictor
to construct
used
equation increases it
an estimating
appears that the possibility

technique finding
variables
of the regression
non-existent
also
relationships
increases.
The technique
models was that
regression
author
for
developing
adopted for
by the
used previously
models for
when establishing
assembly time
estimating
the. assembly of heavy custom designed
The technique
involved
using
the assembly of existing

H. M. Ltd.
product
to choose predictor
assembly times
for
with
ranges within
variables
levels
various
cranes(154).
familiar
personnel
times
and estimate
and combinations
of variables.
From this
data, estimating
models were developed that

between assembly time and
expressed the relationship
the dimensions of various component types, such as

disc shaped components, pins,
plate and fabrications.
castings,
shafts,
In addition
numerous
(Appendix
IV) were allocated
components
times shown in Appendix V.
the standard
252
The accuracy of the estimates developed by

these equations could not be measured against current
in
STT assembly times because of inconsistency

the STT times.
is particularly
when comparing STT times for assembling
noticeable
similar
This inconsistency
In these cases maximumdifferences
products.
of 200% have been observed.

(ii)
Tooling Costs
Attempts to develop equations for estimating
tooling
of various special
as illustrated
successful
Whilst
examining
suggested
the data used. to construct
tooling
special
The primary difficulty

manufacture of jigs,
in sub-contractors
increases,
are difficult
fixtures
numerous sub-contractors
firms.
since the design and

and special
levels,
tooling
of variations
overhead rates,
labour rates and material
to isolate.
that
costs was inappropriate.
arises
profit
the
models for
Hence the influence
sub-contracted.
factors
were highlighted
the use of regression
estimating
price
items were only partially

in Figures 23 to 28.
models factors
estimating
the costs
In addition
costs
since
could be employed these
would also vary between sub-contracting
is
253
800
t/f
700
W
4-3
N
O
U
600
. 500
400
400
500
Estimated
600
700
800
Cost (i's)
700
Vf
W
....
+1
N
0
U
600
600
Estimated Cost ('s)
700
254
100
80
. --4
(N
W
"
t/1
0
60
U
Q
- 40
20
20
40
Estimated
60
80
100
Cost (S's)
14
12
Vf
10
W
v
4-)
N
0
U
2468
10
Estimated Cost (I's)
12
14
255
107
W
4-,
1/f
O
U
r
i-,
V
150
.
Estimated
200
Cost
250
('s)
700
N1
W
v
600
4-3
N
O
U
4-)
V
C
500
400
300
300
400
500
Estimated
600
Ws)
700
256 '
Therefore it was decided to remove the jig

fixture
costing
and
equations from the estimating
However in the event that H.M. Ltd.
system.
decide to manufacture jigs

the procedure for calculating
been retained
in-house
and fixtures
costs has
tooling
in the estimating
software program
(Appendix III).
of estimating
At the present moment the lack

equations in the data file
a default
initiate
message informing
that equations for estimating
will,
the user
tooling
costs are
not yet available.

(iii)-(vii)
Manual Task Times and Machine Process Times
The equations
for
estimating
times for
horizontal
and vertical
times for
horizontal
borers;
n. lmm) for
horizontal
chuck lathes,
borers;
borers;
boring
times
for copy lathes and vertical
(tols.
(tols.
and
<O. lmm)
borers represent a
(0.3)
of the total
percentage
small
equations developed.
times
borers
vertical
turning
load/unload
number of
The causes of inconsistency
between estimates and time study data could not be

found.
It is therefore
arises
from the factors
assumed that this

listed
inconsistency
in Table 36.
257
4.6
Comparison with existing

Although
the estimating
equations
are within
determine
whether
times
this
objective,
estimates
been compared with

time for
machining
tools
it
for
complex designs
This will
operation.
using
STT's since
to
which require
ensure that
In order-to
additive.
the regression
these times
a component processed
and are therefore
is necessary
of the
can be used to build-up
are not wholly
errors
estimating
limits
the equations
more, than one manufacturing
of the majority
accuracies
the stated
manufacturing
accurate
Time Standards (STT's)
equations
represent
on individual
the sum of the individual
achieve
have
the total
machine
operation
times.
The accuracy with which the regression

is
illustrated
STT's
estimate
ideally
4.7
all
points should lie
equations can
by Figures 29 to 46 in which
on the 45 lines.
System Computerisation
Although the system can be used manually as described in
Appendix II,
software has been developed('77)
to carry out the tedious calculations

computational
errors.
to allow a computer
involved and hence reduce
Operation notes for the computer program
in
III
Appendices
are contained
to V:
258
20
I-N
"r
Ftcn
15
a)
E
"r
H
10
Q"
i..
cc
F-N
G)
N
10
Estimated
15
Time
20
(Mins)
50
N
c
"r
..
40
.
IFN
Ei
E
30
a
(ii
I-
20
m
N
10
10
20
30
40
50
259
5
N
FN
N
E
"r",
F-I
3
Of
+-)
N
cn
LI
NI
4)
r0
tJ')
234
Estimated
5
Time (Mins)
25
...
N
20
F-
d
E
15
F4-3
N
0)
L
to
H
10
N
C1
10
15
20
Estimated Time (Mins)
25
260
200
tN
C
.
160
F-FN
E
120,
"r
4-3
F--
80
4)
r
NI
40
40
80
Estimated
120
Time
160
200
(Minn)
100
Ni
CI
.r
80
f-N
60
"r
F
4-J
(I)
S..
t0
f"
V1
G)
r
40
t0
V)
20
20
40
60
80
100
261
50
N
C
. r.
FI-N
v
40
a
E
"r
h-
41
ai
30
rn
cC
Vf
G)
r
20
10
10
20
Estimated
.t/1-
30
Time
40
50
(Mins)
25
... i
H
H
N
20
C,
E
"r
Fi-
G)
C,
S-.
r
Fvf
C)
r
r6
Cl)
15
10
10
Estimated
15
20
25
262
25
N
. r.
Z:
IH
N
20
Q)
E
."
"r
I-
15,
4-,
a
rn
S.
-" U,
N
r
f',
10
tN
10
Estimated
15
20
25
Time (Mins)
25
0N
"r
FFcN
()
E
. rF-
20
15
4-3
G)
O)
t.
r0
FN
G)
r
L 10
IO
N
10
15
Estimated Time (Minn)
20
25
263
Vf
C
"r
15
,I.--,
FN
.. -I
C)
E
H
ti
+J
rn
10
e
t/)
10
Estimated
FIGURE40
15
Time (Mins)
STT VERSUSESTIMATED
TIMES
COSTCENTRE236
SAWS
.tN-
C
"-.
i
..
10
1
II-c/)
"r.
I-
4-2
N
L
1-`
cn
a)
r
b
/)i
5
Estimated
10
Time (Mins)
264
30
"r
M:
. -,
. -
r! 2
C)
20
H
4J
C)
rn
SN
R3
10
20
10
Estimated
30
Time (Mips)
200
"r
160
120
%80
40
40
80
Estimated
120
Time (Mips)
160
200
265
25
t/1
C
. r.
0F
N
v
20
a
E
If-
4-3
a
15
,or
Sto
FN
. G)
r-
tN
10
15
10
Estimated
20
25
Time (Mins)
STT VERSUSESTIMATEDTIMES-
FIGURE 44
COST CENTRE258
25
NC BAR LATHE (BATCHMATIC-) xx
N
C
"r
20
f-
N
dJ
E
.,.
H
15
4J
d)
RV
Xx
al
(If
C)
10
V)
Y.
Xx
I1
10
15
20
25
266
FIGURE45
STT VERSUSESTIMATED
TIMES
COSTCENTRE270
SPLINE CUTTERS
t/1,
C'
I
'ix
-.
F-N
...
W
E
"r
F-
xx
4-)
N
xx
Q
L
N
r
a)
5
N
c
.v
. -,
II-
I)
a)
P
"r
4-3
(1)
r. P
S(0
F-CA
a)
rrd
N
234
267
(i)
Appendix III
contains the operation
the program and a full
notes for using
program listing.
Included is
of the input codes for the manufacturing
a list
processes that can be estimated using the system

(Flow Chart Code 3).
(ii)
IV contains
equation
codes and the order
variables
(iii)
definitions
Appendix
should
be entered
of predictor
in which values
into
data required
for
the computer program.
Appendix V is the program data file

relevant
variables,
and contains the
to determine the machine type
when general machining processes are being costed

(Table 51), a list
ing coefficients
of the predictor
variable
for each operation
estimat-
that can be
(Table
52) and the labour cost rates,
costed
manufacturing
overhead rates and administration
overhead rates for each cost centre
(Table 53).
System Size
4.7.1
The system consists

models.
of a large number of estimating
A method of numerical coding was required to allow
the appropriate
initially
was
equation
machine tool
retrieved.
Each
coded according to the applicable
group (using H.P. Ltd. 's managementaccounting
cost centre classification)
and secondly allocated
an
268
operation reference number in order to allow each individual

equation to be located in the data file,
e. g.:
AA
L
i
Equation number for a rough turning
operation
Cost centre coding for bar lathes
Specific
equations can therefore
the cost centre classification
be isolated
and equation number.
Exceptions are cases in which different

have identical
using
cost centre codings.
types
machine
At H.M. Ltd. these
are:
Cost Centre Coding
Cylindrical
and Surface Grinding
216
NC Bar Lathe (Batchmatic)

258
NC Chuck Lathe (Churchill)
It has been necessary therefore
to add an extra
the
to
input
to
form
cost
centre
code
codes (see
numerical
Flow Chart Code 3, Appendix III)
for the computer program.
The use of H.M. Ltd. 's coding system enables the

be
to
simplified
software
for the conversion of production
times to costs since both labour and overhead cost rates
269
vary with machine type.

is
not required
number
costing
4.7.2
Hence an additional
to identify
classification
each equation for
purposes.
Variation
of Machine Types
The range of machine groups capable of carrying

general machining operations
to develop decision
It was necessary
machine group, i. e. normally
engineers choose machines for components.
This type of data is therefore
inaccessible
to designers.
Examination of the component limitations

factors
the
that
main
revealed
affecting
of machine tools
the choice of
machine type are:
(a)
rules to enable engineering designers
to choose the appropriate

production
is large.
out
Whether cylindrical
or prismatic
operations
are required.
(b)
Whether a boring operation
(c)
The component diameter.
(d)
The component length.
(e)
The annual quantity
is required.
of components.
270
In the present study prismatic

"those
operations
as,
only with horizontal
out about the axis of
not carried
borers (input
is not necessary to include this
the decision
are defined
of the component" and are associated at H.M. Ltd.
rotation
it
operations
rules for determining
Hence
code 0,209).
group of machines in
the relevant
input
code.
The length,
diameter and annual quantity
have been used to develop decision

Appendix V).
rules-(see
of components
Table 51,
Two groups of rules are necessary since the
length
is
dependent
type
per
machine
maximumcomponent
boring
operation
a
not
or
on whether
The annual quantity

the cost
effectiveness
is to be performed.
of components machined determines
of using
numerically
controlled
tools.
machine
4.7.3
use of Computer Time
The Effective
To obtain effective
use of computer time it was
to
enable estimators
necessary
for the estimating
estimators
system.
This involved
to determine the relevant
Table 47, Appendix III

variables
to collect
and to identify
using the appropriate
in
Appendix
IV.
contained
the input data

allowing
input code using

the independent
Variable
Description
Notes
A standard form (Figure 47)
271
FIGURE47
DESCOSTIMATE
STANDARDINPUT
DATAFORM
PAGE:
MANUFACTURING TINE/COST
ESTIMATIONS
bF
DATE:
PRCDUCT:
D.: tING
No.
F:/C
CENT.'2L
OPERATION
A
CODE
Il?/C
F. T. _
TIME
/
TIi: 7--,
COST
272
has been designed in order to aid the collection
and
input of data.
Although the decision

appropriate
rules for determining
the
General Machining input code have
been included in the system software (for use when

is
limited)
time
not
computer
Description
Variable
the estimating
Design system.
the inclusion
of the
Notes could only be justified
software formed part of a Computer Aided

Cost estimating
could then take place
operator intervention.
without
Estimators with a detailed

techniques
(e. g. production
knowledge of manufacturing
engineers) would know the
machine code for estimating
relevant
determination
for
code
machine
module
equations,
the
can therefore
the
hence
system application
reducing
passed
4.7.4
if
be by-
time.
System Expansion
Since in the course of time new manufacturing
are likely
be easily
to be introduced
expanded.
In addition
of two extra machine groups.
equations to be included.
since the flexibility
enables estimating
developed.
space has been left
each machine group contains vacant data lines
to enable additional
beneficial
into H.M. Ltd. the system must
Hence data file
introduction
the
for
vacant
processes
This is
of the regression
equations for specific
operations
procedure
to be
For example, the machining of grooves for rope
drum tubes (Equation Code 20609).
273
CHAPTER5
DESIGN COST FORECASTING
274'
5.0
Introduction
based estimating
The regression
to quickly
system developed allows designers
estimate product costs if
general arrangement drawings exist
from which to obtain the values of predictor

having to carry out more detailed
This avoids,
variables.
design work which is necessary for
costing purposes when using conventional
costing techniques.
The
based
estimating system permits economic consideration of
regression
number
designs
of
alternative
and therefore has considerable
a greater
advantages over conventional
The ability
still
the likelihood
by reducing
accomplished
designs.
concept
and costing
costs
the necessity
without
to undertake
total
be
to
enable
technique would
(i)
this
objective
limited
be economically
to cost
required
task
using
of designs
of designs
estimation
of total
high levels
of
of a cost forecasting
The benefits
to be gained
are:
design resources could be allocated
more
efficiently,
(ii)
in the
product costs to be determined as
in the design process as possible.
in achieving
or best
only
the costing
to be, "the
The objective
stage would improve
could
Cost forecasting
considered
design and cost estimating".
early
This
techniques
task.
is
therefore
work
product
needs.
that
alternatives
the ideal
the amount of resources
forecasting
become
a
would
present
of emerging with
Rather than being an estimating
drawings
established
at the concept
considered
defined
to
meet
system
possible
techniques.
to add to the number of design
could be economically
further
costing
the level
of design resources employed on cost
ineffective
design concepts could be reduced,
27 5
(iii)
specification
for the optimum standard sizes could
be identified
early in the NPDprocess, and
data
on competitors
cost
(iv)
products for sales
techniques could be more easily
forecasting
provided.
5.1
Cost Relationships
An obvious
method of cost
forecasting
when designing
a new
is
the
of
cost/design
use
specification
relationships.
range
product
(178)
that
has
relationships
shown
can exist between
Pedder-Smith
design
such as product
characteristics
reference
to the New EHB development,
developed
from selected
hoist
sizes
causal relationships
capacity.
capacities
using
and costs.
cost
Hence, with
relationships
the costs
of remaining
can be predicted.
Since regression
relationships
hoist
size
analysis
is an effective
the technique has been used to quantify
the
between manufacturing costs of components and hoist

Examples of costing equations are shown in Table 38,
i. e. only the coefficients

listed.
The predictor
capacity
(Tonnes)".
of the costing model (Equation 28) are
variable
in all
cases is "basic hoist
276
TABLE38
COST/HOISTCAPACITYRELATIONSHIPS
Component
Type of
Cost
Equation 28
Estimating
Coefficients
Xo
Accuracy
ES
('s)
i
Brake
Material
9.3
29.1
-0.002
0.077
Gearbox
Material
13.2
58.6
0.003
0.030
Gearbox Assembly
Labour
20.6
5.6
0.002
0.056
Hoist Block
Material
204.3
278.0
-0.008
0.042
Material
207.9
115.3
0.007
0.040
Material
56.2
36.4
0.020
0.090
0.021
0.097
0.000
0.023
Labour
Dual WoundMotor
Squirrel
Cage Motor
Rope Band
Material
Moulding Tool for

Rope Guide
Tooling
0.451
5393
0.234
504.6
It can be seen that the accuracies of the cost models listed

Table 38 are well within
S=. 0.314.
the present accuracy limits
of E=0.096,
However these cost models have been developed using the
total
the
of
costs
cost estimating
product range.
required
hoist
of
minimum number
In order to reduce the amount of
cost models must be constructed

sizes.
hoist
the
number
of
minimum
model
In order to construct
sizes is two.
It
develop
to
two
hoist
models
cost
using
only
'necessary
determine the overall
accuracy of these models.
using the
a linear
cost
is therefore
sizes and
in
277
Whenusing regression analysis

necessary to employ the full
encountered.
hoist capacities
range of cost data expected to be
using the smallest
(0.8 tonne) and largest
(8.0 tonne) that form the product range.
However this
is not always possible
since the order in which
units are designed must often consider marketing factors.

the schedule for the New EHBrange required the initial
1.6
3.2
tonne
tonne
0.8
tonne,
the
and
units-since
of
total
the
92.0%
of
represented
profit.
In addition
forecast
Developing
costs
outside
since the cost models may not represent

data range.
hoist
This is illustrated
development
these units
sales and hence the largest
to be obtained.
cost models from a limited
to
predict
use
subsequent
For example,
the development and launch of a limited
product range would allow early profits
levels
Therefore,
general arrangement drawings prepared must be for these
the initial
potential
is
Hence in terms of the New EHBdevelopment cost estimating
equations must be constructed
units.
to develop cost models it
this
data range and their

range is not recommended
the causal effect
in Table 39 which lists
of the total
the accuracy
developed
the
0.8
tonne and 3.2 tonne
using
models
of cost
units.
278
COST/HOISTCAPACITYRELATIONSHIPS
DEVELOPED
USING
THE 0.8 TONNEAND3.2 TONNEUNITS
TABLE39
Equation 28
Type of
Component
Cost
Estimating
Coefficients
x0
AccuraSy
xi
Es
(i's)
Brake Assembly
Material
13.7
28.8
Gearbox Assembly
Material
18.0
Labour
is
Dual Wound Motor

Cage Motor
54.0
-0.036
0.038
22.3
4.3
-0.056
0.060
Labour
269.2
245.1
-0.024
0.040
Material
196.5
114.8
-0.018
0.036
Material
33.4
51.5
0.121
0.123
-0.014
0.272
-0.001
0.022
Material
Rope Band
Moulding
0.077
Material
Hoist Block
Squirrel
0.049
0.333
Tool for
Tooling
Rope Band
5400
Comparing Tables 38 and 39 indicates

is
reduced.
models
still
0.333
within
500
that the accuracy of the cost
Although the accuracy levels
shown in Table 39 are
accuracy levels
the present estimating
of H.M. Ltd. this
Hence
be
the
is
assumed.
use
of
cost
always
models
restricted
not
could
in
do
which
costing
development
programmes
requirements
not conflict
to
with
of the marketing function.
those
Cost models are also useful

designs.
in the cost optimization
For example, the wire-rope
the wire-rope
during operation
of product
drum tube is used to wind and store
of the hoist
block.
The outside diameter
279
drum
is
tube
the
machine grooved to prevent adjacent
steel
of
mild
and hence causing premature rope wear.
together,
rubbing
strands
rope
The main dimensions to be determined during the design process
are:
loe
(i)
length
-(ii)
and
(t)
thickness
wall
(Ld)
(D)
diameter
outside
(iii)
These will
in
detail.
be
considered
now
Wall Thickness (t)

The wall thickness
since it
required
should be sufficient
hoist
the
maximum
under
load.
is related
to the hoist capacity
to prevent the drum tube buckling

The required wall thickness
be determined from the appropriate
can
crane design standards(179).
Since the present example looks at the design of the 3.2 tonne
drum tube the wall thickness
it
can be considered constant.
Hence
is not a design variable.
Length and Outside Diameter

Since the drum tube stores the wire-rope
operation
rope.
it must be capable of containing
The relationship
during hoist
the full
length of
between length (ld) and diameter (D)
for a hollow tube is given by Equation 39.
280
H. N. 1.125G
Ld =
(39)
D
ir.
Where:
(Metres).
H=
Height of Lift
N=
Number of Rope Falls.
1.125G = Rope Groove Pitch (where G is the rope.

diameter in millimetres).
Drum tube length allowance to allow the
locate
to
the rope on the
guide
rope
outer rope grooves of the tube,
be obvious
It will
the tube length
required
However, as D increases
also
increases.
dimensions
(a)
that
as the tube diameter
to hold unit
the cost
length
per unit
as Figure
In addition,
influence
(mm's).
the costs
of other
increases,
of rope decreases.
length
of drum tube
48 indicates,
components viz:
The length of the drum tube influences

of the drive shaft,
tiebars,
drum tube
the length
rope anchorage and
support tubes.
(b)
The diameter of the drum tube influences
the
diameters of the rope guide assembly and drum

tube end plates,
and the gearbox reduction
required to provide the specified
hoisting
ratio
speed.
28.1
COSTINTERRELATIONSHIPS
FORTHE
ASSEMBLY
FIGURE48
NEWEHB
a)
v'
a:
ai
Y
(10
i
X
O
t:
Q)
CJ
.n
FE
L
0
co
aV
n
0
CL
0
w
U
0
r--
4-3
V-
E
0
4-)
4-)
"r
0
co
>
a)
rn
c
rts
If.
+1 (1)
O
a)
C
CL U
= (0
OC
OrM: d
Q: Q
N
S.
C)
. fI-
Motor
Brake
Gearbox
*
*
*
Drum Tube
Rope
Rope Guide
Bottom, Block
Drive Shaft
Tiebars
Support Tubes
Mounting
Plate
*-
Cost Relationships
282
Since both D and Ld influence
the total
components the problem of cost optimization

designer is to determine the Ld: D ratio
cost of these
faced by the
that minimizes total
Costs.
Using regression
analy
analysis
the relevant
cost relationships
le
determined:
were
Components
Cost
Cost
Identification
.
Drive
Shaft
+ Tiebars
Relationship
Support Tubes + Rope
Ct, = 56. OLd
(40)
Anchorage
Ct2
Drum Tube End Plates

Rope Guide Assembly +
Ct2 = 46.0 + 143.94D (41)
Gearbox Casing
Ct3
Drum Tube
Ct3 = 6.17 + 0.00233
(TT(D2_(D_2t)2)Ld)(42)
4
The total
(Table
40)
were determined over a range
costs
lengths.
tube
drum
of
283
DRUMTUBELENGTHS
TOTALCOSTSAT VARIOUS.
Table 40
Drum Tube
Diameter (D)
Drum Tube
Length (Ld
Total
Component Costs ('s)
Costs
(mm)
Ct1
.
Ct2
Ct3
Ct1 + Ct2 + Ct3
0.458
39.20
111.82
42.41
193.43
0.423
42.00
106.89
41.92
190.81
0.80
0.393
44.80
102.57
41.49
188.86
0.85
0.367
47.60
98.83
41.11
187.54
0.90
0.343
50.40
95.37
40.64
186.41
0.95
0.324
53.20
92.64
40.44
186.28
1.00
0.306
56.00
90.05
40.14
186.19
1.05
0.290
58.80
87.75
39.87
186.42
1.10
0.275
61.60
85.58
39.54
186.72
(M)
0.70
0.75
oo,
Using the total

(Figure
cost curve
that
Ld: D ratio
(i)
in Table 40 the minimum'
49) has been constructed.
"minimum" costs are incurred
(i. e. 2.6 - 3.3).

actual
costs listed
The curve indicates
over a range of Ld: D ratios
Factors to consider when deciding the

to adopt. are:
The minimum drum tube to rope diameter ratio

design
the
hoist
under
relevant
permissible
(180)
Using these standards the
standards.
drum
tube diameter is 320mm.
minimum
284
FIGURE49 TOTALCOSTSVERSUSLd: D RATIO FORTHE-3.2 TONNEEHB
a
4-)
Q)
(0
r
~OM
M
M
.-O
E
:3
E
-0
+
J
"r
"
"
'O
cn
C)
LO
O"
O
"
M
tu
JCi
CD
I^
er
"O
ko
N
LU,
LLC)
IIIII1III
0
rn
LO
Q1
F-N
E
.
ipW
s-I
n
-P
Vf
oI
U
C.)
Ln
Co
r
.r.
4-)
ro
vo
J
cm
285
The maximumlength of hoist
(ii)
block acceptable in the
(an increase in the length of the hoist
market
block reduces the working area of the hoist).

Since the market survey(26) did not determine the
maximumhoist
length acceptable in the market it
is
necessary to choose a drum tube length at the low

end of the minimum cost area.
As the drum tube diameter is reduced the lifting
(iii)
speed for constant drum tube revolutions

decreases.
per minute
Thus to maintain a constant lifting
speed the gearbox reduction
ratio
In order to lower the reduction
must be lowered.
ratio
the number of
teeth and outside diameter of the spur sears must be

reduced.
However reducing the outside diameter of the
spur gears forces the gear centre lines

together.
Therefore,
the limit
closer
to the minimum
drum tube diameter which is feasible
occurs at the
point where the gear centres cannot be moved any

nearer to each other.
5.2
Costing using the Pareto Distribution

If the cumulative
its
that
cumulative
percentage of an element is plotted
percentage effect
the resulting
curve will
distribution,
Pareto
The
then the Pareto distribution
be of the form illustrated
although applicable
against
predicts
in Figure 50.
to many areas of industry,
286
FIGURE50
THE PARETO
CURVEOF CUMULATIVE
NUMBER
OF STOCKITEMSVERSUS
CUMULATIVESTOCKCOST
,or
80
..
v
60
G)
G)
>
.r
fl7
r
40
c.)
20
11i
-1
20
40
Cumulative
60
Item Count (%)
80
287
used to design selective
is principally
only the minority

(181
of stock costs
stock control
systems which
of stocked parts that account for the majority
control
The equation for the curve shown in Figure 50 is of the general

type:
i
Cstk
9
f'Nstk
where for stock control
Cstk
Nstk
f, g
(43)
purposes:
cumulative
value of stock costs.
cumulative.
number of stock items.
constants
the values
of which depend on the
form of the curve.
In terms of costing products Equation 43 finds

the
electronic
-in
and aerospace industries
where the evolution
design of a product to a stable configuration

manufacturing
of the
takes place during the
In these circumstances Equation 43 also

of learning(182)
represents
the effect
to predict
the reduction
therefore
and can
in manufacturing
be used
costs that arises due to
,
an increase
in the number of products manufactured.
cumulative
is
be
log-linear
to
assumed
curve
cost
unit
stage.
a wide application
determined
be
Hill(182)
to
according
can
cost
Whenthe
the resulting
using Equation 44.
288
(Nu
C=f
hh
1+9
1+g
Nu
h-1 J
(44)
Where:
= The cost per unit
Ch
The cumulative
Nuh
for the hth unit.
units
number of
= h.
Nuh-1 = h-1 units.
Examination of the component costs of a wide range of products

that
followed
Ltd.
H.
M.
component
revealed
costs
manufactured at
Pareto distribution.
typical
It could be expected therefore
determine
the
total
to
be
43
used
Equation
could
if
the coefficient
and Slope respectively
C-intercept
that
costs of a product
f and indice g could be determined.
log-linear
be
to
is
assumed
equation
Since the
f and g would represent the

of the log-log
straight
line
curve
45.
Equation
of
(45)
Log10C = Loglof + gLogloNu
Where:
C
(S's)
Cumulative
costs
product
=
.
Nu
Cumulative
of
components
number
=
.
Therefore
using only a small proportion
both
C-intercept
the
product
a
components of
straight
line
curve may be determined.
of the high cost

and the slope of the
Hence if
the total
number
289
a product are known the total
of components within
cost of a product
may then be estimated.
The obvious advantage of this
method is the reduction
in the total
to be accurately
product costing
number of components that need
costed.
However this
method when used to cost various products manufactured
at H.M. Ltd. resulted
in large inaccuracies
being obtained.
That is,
be
to
found
three
to
times
than
up
were
greater
actual
costs
estimated
product costs.
A model of the type expressed by Equation 43 was found by Swan

to be useful in solving
and Worrall(183)
problems.
organisational
to
found
account
were
for
be improved.
sales
could
using
Equation
various
industrial
For example, a small number of shoe models

the majority
The "over
43 can be explained
that the slope of the straight
of annual
costing"
since
line
sales
effect
indicated
's
Ltd.
M.
H.
products
of
Determining the coefficients
Swan and Worrell
greater
seriously
when
indicate
curve obtained from Equation 44
a similar
effect
Examination
(Figure 52).
f and g using various percentages
(10-50%) of Nu did not significantly
than fifty
hence forecasting
experienced
(Figure
Nu-axis
the
51).
distance
along
decreases at a
developed.
of the models
and
improve the estimating
In addition
developing cost models using
percent of a product's
detailed
the
of
amount
reduce
accuracy
components would not

cost estimating
required.
290
51
-FIGURE
LOG-LOGGRAPHOF THE PARETODISTRIBUTION
Ref.
(183)
"- C-axi s
%rber
?Wotiows
at
CTatirr
(i. e.,
""
t"l,
: "1s2.3"1":
s3. etc. ).
soo
I,
I
I.
ISO
dc
too
dNu
/;, i
;J
ed
J6
10
t_34S6
7$
9 10
IS
"
:o4;
rwy
"Organizationproblems. Croup priorities.
rri.,
rity
Nu-axis
291
FIGURE 52
LOG-LOG GRAPHOF CUMULATIVECOSTS

FOR H. M. LTD'S PRODUCTS
100
50
N
4--l
rn
4-J
U
a)
-.
10
't
.
Q)
>
"r
4--3
r6
t.
- ---r ....
1
5
Cumulative
A-1.6
Tonne New EHB
B-3.2
Tonne New EHB
C-0.5
Tonne Electric
10
Percentage
Chain Hoist
50
Components
100
292
Values for coefficients

estimating
f and g that produce an acceptable
accuracy are difficult
dc (Figure 5)
Uffu
to determine since the point
at which the slope of the straight
be
predicted.
cannot
changes
that the relative
However, it
values of f,
g and Nu affect
a relationship
the position
levels
of point
and values of f, g
In order to test this
may exist.
determine the relationship
hence
quantitatively
and
assumption
involved,
curve
is reasonable to assume
dc Visual examination of previous error

.
BNu
and Nu indicated
line
actions were taken:
the following
H.M. Ltd. products the values of f and g
From existing
c>>
10
determined
highest
the
using
were
cost components.
(ii)
Using the regression

between total
and f,
product
logarithmic
regression
the relationship
(the
cost
(the
Nu
and
predictor
g
To ensure that
(iii)
technique
the variables
dependent
variables)
variable)
was examined.
are linearly
form of each variable
related
was entered
the
into
the
procedure.
Various combinations of independent variables
were tested
in order to determine the model with the highest

estimating
accuracy.
Log10 C=
Log10 f+g
Log10 C=
Log10 f+g+
Log10 C=
Log10 f+
The combinations tested were:
Log10Nu
Log10Nu
...............
Log10g + Log10Nu
(46)
293
Using the method of determining

previously
(S and E) an expression of the form shown in Equation 46

the highest correlation
was found to yield
accurate for product costing
had
errors greater
estimated
costs
following
the
causes
possible
since 401oof the product
than +15%. When the products

accuracies were examined for
producing unacceptable estimating
(i)
between dependent and
However the model developed was not considered
independent variables.
sufficiently
equation accuracy developed
reasons were found:
The highest cost items used to determine the regression

were found to be inappropriate
coefficients
since the
those
of sub-assemblies and not of
were
used
costs
individual
components.
Hence cost items need to be of
a commonform.
(ii)
Whendetermining
circlips,
split
Nu items such as washers, screws,
dowel pins,
locknuts,
included.
been
had
pins
precision
nuts and
However, such items
are normally considered consumables and are therefore

included
in H.M. Ltd. 's indirect
overhead costs.
the inclusion
of such items when calculating
to inaccurate
estimates being obtained particularly
products that require
Hence
Nu can lead
large numbers of such items.
in
294
(iii)
f represents
The coefficient
expensive component within

regression
the cost of the most

Although the
a product.
procedure estimates the value of f it was
found that using the actual value of the highest cost

component improved estimating
Upon correcting
accuracy.
the input data the costing accuracy of
the subsequent regression model (Equation 47) was

improved.
f0.9948 101.209g Nu0.162
C=0.5916
(47)
Comparisons of actual and estimated costs using

Equation 47 are shown in Table 41 and Figures 53 and
54.
Table 41 shows that:
65.2% of estimated product costs are within
91.3%
8.7%
11
11
11
11
11
11
If
11
11
11
Although the small Proportion

levels
it
+10%of actual
+15% "
+15%
11
11
to
of products with high error
It is therefore
concluded that although
Equation 47 has improved the estimating

precisely
since
it
were re-examined no obvious reasons could be found
for these levels.
overall
is
values
reflect
the point of deflection
accuracy is however within

E= -0.015 and S=0.096.
accuracy it
cannot
of the slope.
H.M. Ltd. 's current
The
limits,
295
COST ESTIMATESUSING EQUATION47
TABLE 41
Nu
fa
Actual
Cost
0/
Estimated
Cost
Difference
57
27.9
0.441
99.1
106.6
+ 7.6
174
64.6
0.529
354.7
375.8
+ 5.9
58
7.6
0.682
60.1
57.4
7.7
7.7
4.5
0.0
0.471
522.8
529.7
+ 1.3
25
175
,1 .50.594
107.1
29
1.8
0.639
10.2
10.5
+ 2.9
178
198.1
0.453
907.3
931.1
33
1.9
0.642
11.5
11.9
+ 2.6
+ 3.5
40
20.0
0.519
80.2
89.7
+11.8
67
152.5
0.814
1637.2
1659.6
+ 1.4
37
80.4
0.798
732.3
769.1
+ 5.1
27
24.3
0.810
226.4
229.1
+ 1.2
19
36.5
0.445
117.4
117.5
+ 0.1
19
48.7
0.408
142.7
141.3
1.0
-
25
7.4
0.247
16.4
14.5
202
63.0
0.397
279.0
280.5
-11.6
+ 0.5
40
74.0
0.653
434.6
478.0
+10.0
26
46.5
0.440
169.6
154.9
29
4.6
0.509
19.3
19.3
8.7
0.0
79
36.5
0.835
434.6
122
240.10
0.522
12
23.2
127
436.5
+ 0.4
1381.0
1288.2
0.369
57.9
56.2
6.7
2.9
-
339.2
0.580
2220.4
2138.0
+ 3.7
12
29.0
0.360
69.8
69.2
0.9
-
291
78.7
0.521
648.8
486.4
45
5.6
0.535
29.7
26.9
-25.0
9.4
-
60
8.4
0.666
70.8
60.8
-14.1
81
62.0
0.311
207.8
173.8
31
1.0
0.732
7.7
8.1
-16.4
+ 5.2
34
15.4
0.223
30.0
29.5
1.7
-
63
9.2
0.67,1
80.0
68.4
-14.5
296
TABLE41 (Cont'd)
Nu
-'
Actual
Cost
fg
-
Estimated
Cost
%
Difference
+10.7
+ 2.5
39
140.6
0.664
840.8
931.1
73
0.526
16.2
16.6
60
3.3
"9.5
'0.727
95.0
81.3
20
2.9
0.676
15.7
18.2
-14.0
+15.9
29
0.7
0.858
6.8
7.4
+ 8.8
22
1.1
0.671
5.9
6.6
70
0.6
0.799
6.8
6.4
+11.9
5.9
-
77
9.7
0.719
106.9
84.7
91
15.5
0.578
83.8
93.3
566
45.8
0.546
390.8
338.8
63
11.2
0.785
138.7
113.8
31
1.0
0.617
6.9
6.0
202
69.0
0.383
244.9
274.2
70
27.5
0.590
166.4
164.1
52
67.4
0.509
315.6
305.6
-20.8
+11.3
-13.3
-18.0
-13.0
+12.0
1.4
3.2
-
297
FIGURE-53
ESTIMATED
ACTUALVERSUS
PRODUCT
COSTS <300)
250
i/f
200
W
v
(A
4-)
t/f
0
V
150
4-)
U
0
C3-
100
r
t
7
4-,
U
Q
50
50
FIGURE 54
100
150
200
Estimated Product Costs (i's)
250
ACTUALVERSUSESTIMATEDCOSTS (>E300)
200
N
N
d-3
Vf
0
U
4--3
U
150
-0
O
i
CS.
+I
U
100
50
500
1000
1500
Estimated Product Costs (Its)
2000
298
CHAPTER6
OF A DESIGN SCHEDULINGMETHOD
THE DEVELOPMENT
299
6.0
Introduction
The scheduling of components through the design process is similar
to the sequencing of operations within
a machine shop where the
approach to developing effective

(184)
described by King
centres upon:
theoretical
(i)
Specifying
an objective
scheduling rules
criterion
by which alternative
schedules can be judged.

Developing a method of ranking components in the order
-(ii)
with which their

(iii)
design should be completed.
Developing
a method of determining
importance
of each component to the overall
of a product
thus enabling
to be effectively
design
success
resources
allocated.
scheduling the design process requires
In addition,
determining
available
the relative
the
probability
reducing
or
affect
could
these
changes
since
a method of
of design changes occurring
any design schedules developed.
is analogous to the problem of re-working
defective
This
components during
manufacturing.
6.1
Specifying
the Objective
The conflicting
Criterion
aims of the various
departmental functions
involved
development
process can make the task of specifying
in the new product
an objective
financial
criterion
difficult.
For example, a major concern of the
department is the minimization
the manufacturing
time of a product.
function
of product cost whereas that of
could be the minimization
of the manufacturing
300
However, the time available

by marketing policy.
was limited
therefore
the minimization
The choice
importance
of this
of development
e
(23
11
in the market place

on its
profitability
cost effectiveness
The objective
Sequencing
criterion
chosen was
of development time.
obective
criterion
reflects
time to the ultimate
the growing
success of a new product
However the success of a product also depends
and-design optimization.
of any reduction
on design optimization
to the effect
6.2
for development of the New EHB range
Therefore the total
in development time must be related

and profitability.
Component Design
The sequence with which components are designed is important to

the minimization
of development time and forms the basis of conventional
project
PERT
CPM(80'83).
techniques
as
and
such
planning
correct
design
requires
of
component
sequencing
time required
a knowledge of the total
to develop each component, i. e. the sum of the individual

development
the
stages, and the interof
at each
times required
relationships
Accordingly
that exist
between various development tasks.
involved in the new

large
components
normally
of
are
numbers
Since
it
is
to remove the dependence of
necessary
development
process
product
development
data
from
time
to
the
component
request
need
designers on
functional
other
departments.
301
6.2.1
Estimating
Component Development Times
Since the tasks required to develop each component within

a product are a direct
result
of the design process it
is
reasonable to assume that the development time per task can be

related
design factors.
to specific
In order to develop a method
component development times it
for estimating
the design criteria
identify
to
necessary
development task.
Hence ascertaining
is therefore
associated with each
the development time per
task would allow designers to directly
estimate component
development times.
From discussions
relevant
times
average
and
maximum
minimum,
the various
is possible
for
design
involved
determine
hence
and
The tables
all
it
(Table
designer
the appropriate
the total
Using Table 42 it
development
development
time
tasks
the interactions
required
per component.
to ensure that
Initially
however
between activities
in order to determine those tasks that can be carried

simultaneously
for
to examine a component
development tasks are considered.
is necessary to identify
the
42) were estimated
can be used in the form of a checklist
relevant
of the
Chain Hoist),
in the NPD process.
an engineering
and identify
departments
and examination
(i. e. Electric
and past NPD projects
tasks
functional
Department),
the Purchasing
(particularly
present
with
and that would thus reduce the total
out
development
time of a component.
In this
"critical
would allow
path" components to be identified.
way a knowledge of such interactions
302
NPDACTIVITY TIMES
TABLE42
rN
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rd
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r
11
U
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O
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t
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L
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303
TABLE42 (Cont'd)
X
Q
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r
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LA
LO
N
U)
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rr
f- LLJ
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00
r
r-
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LO
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0
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t/N
-v
V1
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NO
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UN
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LL
NU
"
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aa
s.
aa
UNN
tu
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c
0
co
r
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(A
C)
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N
c.
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lp
MM
N
01
04
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O
NN
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a1
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a
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C)
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., _
c
b
a
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L
rd
3
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304
Maximumand minimum times for each development task have

been included in Table 42 to enable designers to gain. a realistic
outline
of the limits
of the possible
development time required.
Although Table 42 provides a quick estimation
of development task
times the actual development times should be obtained when

for
potential
searching
material
suppliers.
If the cumulative percentage activity

tasks is plotted
against number of tasks a Pareto distribution
(Figure 55) is obtained indicating

Stock Control policies)
the possibility
(as with
of ranking components in order of
length of development time required.

identify
time of the various
This procedure would
those components that could form the "critical
isolate
to
be
it
possible
Hence
would
the critical
path".
components
be
times
development
must
estimated.
for which accurate
305
FIGURE55
AVERAGE
TASKTIMES VERSUS
CUMULATIVE
NUMBER
OF NPDTASKS
CUMULATIVE
0
Lr)
M
LO
NN
Y
t/1
iJ
G
d
Z
4O
i.
a)
.0
LC)
a)
. r..
O
r-
LO
CD
Co
C)
t.0
C)
cr
CD
N
(%) sawl Jsel anTpLnwno
306 -
In addition
to the development tasks listed
there are other NPDactivities

difficult
are
which
factors
that affect
in Table 42
(Table 43), the task times of
to obtain from past NPDprojects

these tasks vary considerably
since the
between
projects.
TABLE43
.le
AFFECTINGPROJECT
ACTIVITY TIMES
FACTORS
Influencing
Activity
1.
Prototype
(a) parts marshalling

(b) assembly
Factors
Number of standard sizes,

complexity of product design
and type of products
2.
Pre-production
(a) parts marshalling

(b) manufacture
(c) assembly
3.
Launch (a) parts marshalling

(b) assembly
(c) stock build

4.
Launch quantities required,

sales forecasts, product type,
design complexity
Sales forecasts,
design
product
type,
complexity
up
Test area organisation
Type of product, type of tests

carried out, length of testing
period
5.
Plant layout/rearrangement
Level of changes required,

of plant layout adopted
Removal of obsolete stock
Present stock levels,
type
rate of
sales
7.
Design and Manufacture of

Production/Assembly aids
Sales quantity required, cost

feasibility
of manufacturing aids
307
6.2.2
between Development Tasks
Interactions
The two types of interactions

scheduling(55)
(i)
involved
in project
are:
Precedence Interactions
Task
A
Ii
Task
B
F--*
Task I-a
C
Here task B is preceded by task A (which must be

and leads to task C (that must be
carried
out first)
carried
out next).
are therefore
scheduling objectives
to determine the order in which tasks
should be carried
required
The project
out and the total
is the sum of the individual
development time
task times
involved.
(ii)
Simultaneous Interactions
Task
A
Task
B
Task
c
-01
Here tasks A, B and C can be carried

(i. e. in parallel)
and it
out simultaneously
is the task that requires
the
longest time to perform that is used to determine the

total
development time for a component.
308
It was possible to classify
the tasks involved in the
New EHBdevelopment process using the two types of activity.

interactions
and hence construct
a network diagram (Figure 56)
for the development of individual
components.
Task interactions
6.2.3.
in
Section
described
are
'
An element not shown in Figure 56 is the need for an
information
feedback system from each of the NPDtasks to the
design stage since the design function

corrective
6.2.3
action is required.
Interactions
Types of Activity
(1)
should be involved if
Design Tasks of individual

be carried
sub-assemblies can normally

(except when combining
out simultaneously
sub-assemblies)
available.
if
In general however lack of sufficient
resources requires
the design of sub-assemblies to
In addition
be sequential.
component within
interaction
design resources are
sufficient
the design of each
a sub-assembly is a precedence
since this
is the basis of creative
design.
(ii)
Procurement Tasks can be carried

involved
time
the
since
out simultaneously
in placing
is minimal when compared with
procurement orders
the delivery
period of
the supplies ordered.
That is, procurement task times
are basically
periods"
simultaneously
"waiting
since they require
development resources.
which can occur

small amounts of
309
NPD NETWORK
DIAGRAM
COMPONENT
FIGURE 56
4"
a
v
"r
4-J
.r
4J
C.I
fC3
CCC
O00
41
(L)
CL
>,
}
41
OOO
N
--
-0
O.
"
iLi
"r-
""-
"OII
0
i
td U
UUUi
rN t0
Cl.
rn
c
."V1
t6
": -) i
"r'
CGN
F-
Otz
Z"r"
a
S.4)
u`
-1b.
(0
4.,
rn
.
N
ei
--'
(A
N
F"
rti
mO
N
Q.
U). RS
-0E
+1
(41 4-)
t3l
td
+i
r-
NN
CL
nG
ZbZU
310
(iii)
Checks (Incoming Supplies)
Quality
since the time required
as simultaneous activities
to test materials,
can be regarded
is small
components and tools
when compared with the overall
development period.
Componentsthat determine the critical

this
stage are those that either
path through
long term
require
tests or must be tested outside the
reliability
company.
(iv)
Prototype
to precedence
hoist
period
of the length
since
had to be carried
and bottom block
(v)
the prototype
EHB
had
be
New
developed
the
to
of
assembly
at the beginning
short
must be
of the prototype
For example,
required.
are subject
Sub-assemblies
constraints.
sequenced in order
test
of Sub-Assemblies
Manufacture
long term reliability
trials
out whereas the suspension

(hook)
term function
sub-assemblies
required
a prototype
only
testing.
Prototype Manufacture of Components within

Sub-Assembly.
frame
The total
time required
component consists
each
to manufacture
of a "waiting
period"
(the time a component must wait before a manufacturing

operation
(the time to
begins) and a "service-time"
carry out an operation).

in excess of "operation
Since "waiting
times",
periods"
i. e. measured in days
as compared with hours for "operation
times" the
latter
total
can be ignored when estimating
manufacturing
times.
are
311
Manufacturing activities
between components can
(even though more than one
occur simultaneously
the use of the same equipment,
component may require
since in these situations
all
"development components"
are normally batched for manufacturing
purposes)
unless components need to be processed together

lo,
(e. g. precision
machining and welding fabrications)

are imposed.
when precedence constraints

The "waiting
for each operation
periods"
on an individual
out
component must however be added
interactions
since precedence
incurs
"waiting
a
component
manufacturing operation
waiting
carried
i. e. the
exist,
between each
period"
required.
Hence total
time is the sum of the individual
"waiting
periods".
(vi
Post Manufacturing Quality

each operation
required to manufacture a component
and are therefore
subject to precedence constraints.
This is particularly
quality
Checks can occur after
important
to consider when
However between
checks are sub-contracted.
components, quality
checks can be regarded as
for
similar
simultaneous
of incoming supplies,
reasons to the testing
i. e. testing
when compared with overall

when reliability
trials
time is minimal
development time except
are required.
312
(vii)
Testing
Prototype
since
determines
it
are designed
are designed
of the prototype
assemblies
not directly
trials
reliability
The order
task
in which
is dependent on the
Those sub-
period.
involved
can therefore
design
the
end of
(viii)
test
precedence
in which sub-assemblies
the order
and manufactured.
sub-assemblies
length
is an important
in long term
be placed
at the
schedule.
The actual prototype
testing
be
carried
of course
out simultaneously.
of sub-assemblies can
Jig and Fixture
Design are precedence tasks when
limited
departmental resources are available.
tooling
The actual manufacture of jig
and fixture
identical
to
subject
are
task interactions
manufacture of prototype
components.
Whenjig
and fixture
are sub-contracted
components
as the
design and manufacturing

then they could be carried
tasks
out
simultaneously.
(ix)
Procurement of Pre-production
similar
to the procuring
are therefore
Materials
of prototype
subject to identical
are tasks
materials
and
task interactions.
313
(x)
Pre-production
Manufacturing
tasks are similar

That is,
tasks.
prototype manufacturing
to
the tasks
are normally simultaneous between components but

operations
carried
out on individual
components are
subject to precedence constraints.

Product Launch is a major precedence task since it
(xi)
could determine the order in which the standard sizes

within
a product range are developed.
the New EHBproject
is desirable
to develop a
product range (e. g. 0.8,1.6
limited
units)
it
In the case of
and 3.2 tonne

development
in order to reduce the total
before
that
elapses
revenue can be obtained
period
from the new products.
Accuracy of Estimated Development Times
6.2.4
It
is important to recognise that Figure 56 represents the
that
task
diagram
must
undergo
component
a
each
of
network
involved
in the development process.
design
will
a product
require
Not all
components within
every development activity.
For
hence
bearings
components
purchased
and
are
require
example,
manufacturing
and jig
and fixture
building
no
tasks.
Since the order in which product sizes and sub-assemblies

by major precedence constraints
determined
is
developed
are
(e. g. marketing constraints
period)
and length of prototype
testing
the designer need only consider the order in which
314
components within
sub-assemblies are designed.
In addition
the order in which these components are designed is determined

by the amount of development time required to prepare components
for prototype
Hence the use of Figure 56 in conjunction
assembly.
with development activity
development time of each component within
estimate the total
Examples of development time estimation
design.
product
illustrated
times (Table 42) allows designers to
are
in Figures 57 and 58.
Upon completion of the prototype testing

drawings are the tools
stage engineering
that allow development tasks between
be
to
carried
components
individual
out simultaneously
(although for
components each development task must be carried
out in the correct
order) except when components need to be
together.
manufactured
The validity
development times (using
of estimating
Table 42 and Figure 56) was tested using the actual development
times for the 0.8 tonne and 3.2 tonne New EHBcomponents.
results
indicates
59
in
Figure
shown
The
that close agreement is
development
between
times.
and
actual
estimated
obtained
However a proportion
exist
of the points indicate
that differences
between estimated and actual development times.
large variances arise primarily
since in actual practice
been
have
that
carried
could
tasks
i. e. development activities
total
minimize
These
out simultaneously
were not,
were not scheduled such as to
development time.
many
315
FIGURE5.7
DETERMINATION
OF DEVELOPMENT
TIMES
- PARTSA AND B
PART B
PART A
DESIGN
GEAR
OUTPUT
BEARINGHOUSING
i.aterial
Procure B2a
Procure
Metric B3c
Hobber 30
__
Procure
Metric B3c
Cutter 30
4r
Examine
1I.
Dla 1
Procure
Material
4r--
.+
nle
JTurn,
Turn
,,.
Faro
MV\.
1Cut Gear
Clb 15
Teeth 217
9A
217) C1b15
Examine Dlb
f
..A
1
1/
Examine D2 5
ri..
Bore 2fl4 Ala iu
Cut
Splines
Face
Bore(202) Cla 10
Bla
0.5
Task and
Task Code
t
I
t
L_
Task
Tine
Surface C2 10
Harden
Examine D2 5
Total = 76 days
PROTOTYPE
ASSEMBLY
AND
TEST
Total = 56.0 days
316
FIGURE58
OF DEVELOPMENT
TIMES -- PARTSC AND
DETERMINATION
D
PART p
PART
-C',
GEARCASE
Examine
Total
DESIGN
ENDPLATES
Dla
days
122
=
PROTOTYPE
ASSEMBLY
AND
TEST
Total = 47.5 days
317
The cumulative distribution
of development times
estimated for each standard unit were found to form a typical

(Figure 60) indicating
Pareto distribution
level
the
reducing
by
"management
exception"
a
directing
the possibility
of
resources by operating
This would involve
policy.
managementresources to the control
of those
development
longest
times.
the
with
components
6.3
Determining
the Relative
Importance
According to Ostrofsky(56)
development of alternative
these solutions
this
of Components
engineering
design solutions
design requires
and the comparison of
in order to choose the most appropriate.
However,
to adopt in projects
design methodology is difficult
with limited
is
there
frequently
design
since
resources
development and
sufficient
design time to develop an initial
solution.
design methodology.
alternative
to
an
adopt
necessary
involve:
would
such a methodology
(i)
developing the initial
(ii)
determining
only
Hence to
design resources are used effectively
ensure that available
the
it
is
The stages in
design solution.
the benefits
to be gained by allocating
improving
design,
to
design
the
resources
extra
(iii)
determining
benefits
and
(iv)
the relative
to the overall
use of this
relative
design resources.
importance of these extra

success of the product,
importance to allocate
available
318
FIGURE59
TIMES
DEVELOPMENT
VERSUSESTIMATED
ACTUAL.
100
N
80
E
"r
4-3
cl
UJ
60
O
N
40
4-)
U
Q
20
20
40
Estimated
FIGURE60
ae
60
80
100
Development Time (Days)
DEVELOPME.
1T TIMES
CURVEOF THE 0.8 TONNEEHBCOMPONENT
PARETO
80
a)
E
t+J
c
a)
E
60
0
a)
a)
a)
>
"r
r0
r
40
20
80
40
60
20
Cumulative Number of Components ()
319
Determining the relative

necessity requires
importance of design solutions
a commonbasis of comparison with which to relate
designs that could perform quite different

planning technique
the PPBSproject
functions.
reduce manufacturing
market specifications).
cost,
However, manufacturing
to quickly
assess
To allocate
cumulative
system previously
manufacturing
the available
and widen
cost is the most

since the regression
developed allows designers
costs.
design time the Pareto curve of
product costs versus number of components is useful since
the cumulative
cost axis can be converted directly
The amount of design time to allocate
time.
(e. g. improve
improve quality
convenient for comparison purposes particularly

based cost estimating
Examination of
(Section 2.5) has shown that the
design process can produce many types of benefit

producibility,
by
direct
be
a
as
thus
obtained
to available
design
to each component can
measure of the relative
cost of a
component.
The Pareto distribution

allocate
could only indicate
to each component since factors
considered.
However it
the design time to
other than cost need to be
is an advantage to use such a chart since the
the
then
additional
weigh
designer must
design resources)
(in
terms
of
cost
benefits
required
to be gained with the
to achieve them.
320
6.4
Design Changes
Preventing
Design changes have been estimated
amount of design resources (2250 hours).
considerable
proportion
(78%) of design changes resulted
design cost effectiveness

ability
cost estimating
occur to be reduced.
be ascertained
functions.
benefit
it
That is,
the cost effectiveness

to their
estimates can be quickly
of designs can
release to other departmental
based estimating
system could be of
prepared and help to
on the design department to prematurely
design drawings in order that prototype
In addition
from the need to improve
would enable the number of design changes that
Hence the regression
reduce the-pressure
Since a high
is reasonable to assume that an improved
and improved prior
since cost
the possibility
for
releasing
not
reason
prime
releasing
(Section 2.6) to consume a
release
manufacture can begin.
of having to change designs is a

design work in a smooth flow.
design work in a smooth flow of "stabilized"
However,
component designs
do
in
high
that
development
workloads
not
arise
subsequent
ensure
would
jic
as
areas such
and fixture
manufacture.
The estimating
be
design
to
established
costs
developed allows
stabilized)
earlier
in the design process.
system
(and therefore
Hence the ability
designs
to
for
flow
in
subsequent development activities
designs
smooth
a
release
improved.
be
would
321
CHAPTER7
COMPUTER
AIDED NPD
322
7.0
Introduction
The growing use of computers to aid various manufacturing,

(185,186)
will in the future undoubtedly
planning and control tasks
include the NPDprocess. The immediate challenge according to
(187)
is to devise systems and procedures that provide the
Hancock
links
to integrated
manufacturing
systems since progress with sub-
systems has reached the stage where the majority
of the tasks involved
in manufacturing
industry
can be automated.
With respect to the development process it

that has received most attention
is the design phase
with the development of a wide variety
(CAD)
Draughting
Design
and
systems.
of Computer-Aided
been developed by both academic institutions
Systems have
and commercial enterprises
drawing
the
have
a
of
office,
needs
analysed
who
studied the manner in
CAD
(e.
design
Distributed
produced
packages
and
evolves
g.
a
which
(DIAD)(188),
Draughting
Applicon(189), Polysurf(190,191)
Automated
Interactive
(193)
)Comdraw
to
the
IV(192) and Ferranti
meet
majority of the require,
ments possible
in keeping with a reasonably priced total
H. M. Ltd. intend to install

although
with
an Autotrol
AD/380 system(194) which
not the lowest cost CADsystem available
the Ferranti
system.
(i. e. 150,000 compared
system cost of llO, 000), has the advantage of being
Ltd.
Computing
Davy
by
marketed
(DCL) who in commonwith H.M. Ltd. are
Companies.
The
Group
Davy
of
the
primary
advantage
of purchasing
of
part
the Autotrol
system is the ability
for training
purposes at a relatively
to use DCL's own CADsystem, EUCLID(195)

low cost.
H.M. Ltd. use the
Univac
DCL's
mainframe computer through an existing
on
EUCLID system
323
computer link.
Since the actual
plotting
of drawings is carried
have
H.
Ltd.
M.
DCL,
only to purchase and install
at
equipment such as
The Autotrol
an interactive
out
low cost peripheral
graphics unit.
AD/380 system however runs on a dedicated mini-
is
the
by
the user company.
of
package
purchased
part
which
computer
The system supports peripheral
storage/reader
libraries
and since it
and teletypes
digitisers
unit
equipment such as workstations,
facilities,
plotters,
has magnetic tape and disc
the system can compile in-house
of data.
The drawing language. of the Autotrol
system is similar
"every
day"
EUCLID
words.
and
uses
the
system
EUCLID can be accomplished quickly.
Features that make the Autotrol
Hence the changeover from
In addition
be
transferred
EUCLID
can
the
system
using
to that of
data files
to the Autotrol
system preferable
generated
system.
to the EUCLID
system are:
(i)
The ability
to zoom into or out from a particular
area
drawing.
a
of
(ii)
The ability
to draw in refresh,
commandis invoked a particular

around the screen and positioned
i. e. if
the refresh
feature
can be moved
as required.
324
(iii)
The ability
to invoke a series of commandsby the touch
of a single
key.
position
The AD380 workstation
has a 240
keyboard which can be overlayed by a menu card
and then touching one of the 240 keys invokes the set of
commandswhich have been assigned to that
there is no limit
key.
to the number of different
240
the
be
up,
position
set
can
which
considered as multi-layer
rather
Since
menu cards
keyboard can be
layer.
than single
Although the advantages obtained through using CADsystems have

level
the
documented(196,197)
been well
dependent on the specific
considers
(Table
it
implementation
TABLE 44
1.
A better
reduction
before
idea of the objectives
embarking
on the selection
OF USINGCAD
OBJECTIVES
Ref.
design.
improved
through
product
in design errors
a computer.
representation
(198)
CADmay result
in a
and in improved performance at lower
optimization
of the design parameters.
be
design
cannot
easily
which
problems
Solving
circuits.
and
of a CAD system.
better
through
a
costs
2.
achieved are
(198)
Hence Laxon
design application.
have
to
a clear
necessary
44) to be achieved
of benefits
Examples include finite-element
tackled without
analysis,
computer
integrated
design
and
computerised
of
surfaces
of
325
TABLE44 (Cont'd)
3.
Reduced design costs through a reduction
in manhours. The
replacement of engineers and draughtsmen by a computer system

can lead to substantial
savings in direct
increase in time as salaries
will
rise
These savings
costs.
and computers become
cheaper.
4.
design capacity.
A greater
full
productive
potential
Many companies cannot reach their

for a product because of a bottleneck
is impossible
If it
in the design office.
CAD
draughtsmen,
may offer
and
5.
Reduced design
stage
time.
to recruit
designers
a solution.
The use of CAD at the conceptual
design
lead
time
to
the
needed
get a new product
reduce
can
the market.
response
For detailed
to customer's
design
and faster
queries
Determining the benefits
CAD can result
onto
in a faster
delivery.
to be achieved is not straight
forward
during
NPD
the
CAD
an
aid
the
as
system
process,
a
since
using
when
of resources expended on the individual
relative
proportion
involved
in the design process varies
This is influenced
(i)
by such factors
The innovativenessof
original
considerably
activities
between NPDprojects.
as:
the product design.
the product design the greater
design
time
on
expended
creation
of
The more
the proportion
activities.
326
(ii)
The type and number of functions
the product carries
out.
Products such as automobiles and heavy cranes require

large amounts of stress,
(iii)
The complexity
of the design.
the amount of detailed
Hence for a particular
This factor
could increase
draughting work required.
NPDproject
it
in the design process.
is necessary to determine
The approach adopted during the New
EHBdevelopment process for achieving this

Activity
the
of
activities
and performance analysis.
amounts of resources expended on the various activities
the relative
involved
function
objective
involved the use
Sampling work measurement technique(113).
required
to prepare various assembly designs from their
the
to
preparation
conception
intervals
at random
The
of production
drawings were examined
in order to determine the proportion
of time
(Table 45) a designer spends on each type of task.
When examining the advantages of CADsystems to the development

45
Table
the
EHB
New
allows
relative
range,
of the
CADfacility
to be recognised.
importance of each
327
TABLE45
PROPORTION
OF TIME SPENTON DESIGNTASKS
Proportion
Function Analysis
0.46
and Transfer
Data Acquisition
e
of Design Time
0.23
Design Creation and Improvement
0.12
0.08
Draughting
0.06
Integrating
7.1
with overall
NPDprocess
0.05
Function Analysis
In their
basic form CADsystems are merely automated draughting
hence
do
have
the
data
and
systems
not
storage
capability
and
performing
the complex mathematical calculations
functional
and performance analysis
and can be included
modules are available
to allow advanced analytical
Unfortunately
engineering
for
However software
in the total
CADpackage
design to be performed.
the development of software in the mechanical
area has tended to be piecemeal in nature.
diversity
the
from
general
analytically
of designs.
required
of
predicting
of the topic
the overall
and the difficulty
This results
in
performance of a mechanical
the
its
in
terms
performance
of
of
system
individual
components.
In certain fields such as finite

element analysis(199) and
(200) "off-the-shelf"
However,
bearing design
software is available.
during the development of a new product there is often a need to
develop "customised"
software for specific
analytical
For example, the design of trim cages for controlling
of flow within gas valves

for four wheeled vehicles
(201)
requirements.
the velocity
and predicting stability
criteria
in the Railway Industry(202)
With respect to the New EHBdevelopment software would need to

be designed for:
rope twist
during lowering of hoist
(i)
Modelling
(ii)
Estimating
(iii)
Determining motor and brake sizes.
(iv)
Modelling
(v)
Determining rope diameters required.
drum tube thicknesses.
hoist deflection
under load.
However since such software would be useful

therefore
development
and
product
its
load.
infrequently
only during new

it
is doubtful
that
the
be
compared
with
when
present
manual
economic
would
use
methods used.
329
7.2
Data Acquisition
and Transfer
Since a major function

facilities
of CADsystems is to provide data storage

and transfer
the acquisition
be
to
be
greatly
expected
can
extensive data files
of data during the NPDprocess
improved, i. e. CADsystems allow
to be maintained and information
retrieved
rapidly.
-A wide variety
of data can be stored including:
product data,
(i)
existing
(ii)
competitive
(iii)
parts lists,
(iv)
material
(v)
details
component
product data,
specifications,
(e. g. material,
dimensions and
tolerances),
and
(vi)
manufacturing
(vii)
cost data,
(viii).
data,
component, assembly and product drawings.
The ability
to store and quickly
development of an effective
be
electronically
can
be filed.
This facility
retrieve
product design.
Since engineering
stored a complete definition

is of benefit
data aids in the

drawings
of a component can
since the capturing
by the
330
computer of the definition

instant
facilities
data transfer
for associated manufacturing
For example, the Autotrol
business operations.
package has the ability
used within
of a component at the design stage provides
a particular
to create a full
assembly.
The need to write
of the components
This information
when placed on
to the main frame computer

and product structure
out a parts list-remote
files.
from the drawing board and/or
into punchcards is therefore
transpose the parts
lists
Hence the interface
between the design function
established)
AD380 basic software
parts list
disc
be
transferred
tape
can
or
magnetic
Oe
handling such processes as stock control
and
unnecessary.
(where information
is
and the data processing department (where information
is processed) could be improved.
The amount of data stored on an engineering

significantly
increased producing benefits
Using manual methods, everything

occurs on a single
deal of information
written
drawing can be
to the engineering department.

or displayed
layer namely the sheet of paper.

which could be usefully
on a drawing
Hence a great
stored on the drawing has,
be
to
lack
stored using other means.
space,
of
because of
However the Autotrol

storing
utilised
layers of information.
different
by the designer,
designers.
Tool
and
engineers
AD380 system produces a total

layers
layer 5 could be made available
Layer 6 could then be allocated
to store data on production
information
of
Hence if
could then be compiled.
methods.
drawing by
1 to 4 were
to the Jig
to the production
A centralized
library
331
data it
To transfer
would be necessary to provide access to the
the
for
various
system
-CAD
that appropriate
functional
departments
involved
and to ensure
systems allow design changes to be made by
security
design personnel only.
functions
The manufacturing
it
individual
for
*take place
Presently
or a welder and a machinist,
information.
structured
However using the layering
technique,
drawing number system, 'it
is possible
drawings
at no extra
machining
and
also benefits
can be recalled
7,3
design.
of creativity
hence the
only
and an
to
to the designer.
machine tools
within
from CAD systems in that component geometry

of NC tapes.
and Improvement
is
design
essentially
Product
level
effort
controlled
for use in the preparation
Design Creation
to
and machining drawings or separate
The growing use of numerically

H. M. Ltd.
to
casting
drawings attempt to convey information
fabrication
produce separate
casting
the operations
or welder must search drawings and identify
machine operator
appropriate
from a CADsystem since
types of processes such as, welding,
both a founder and a machinist
relevant
benefit
to produce drawings reflecting
be
possible
could
and machining.
will
involved
process although the
is dependent on the innovativeness
The amount of creative
did
EHB
not represent
New
the
a creative
of the
design involved
in the development of
a major proportion
of design time since
332
the level
of product innovativeness
design is similar
a deliberate
was limited,
to that of several
policy
competitors
i. e. the New EHB

This was
products.
to enable development time to be reduced.
Design improvement also takes place primarily

synthesis although various optimization
by creative
techniques such as Linear
Programming(55) and Dynamic Programming(78) can also be used.

Indeed
it
difficulty
is through the use of optimization

in transferring
the creative
techniques
that the
element of design from a
be
illustrated.
task
to
task
can
computer
a
manual
'For example,
to the "assortment problem" (Section 2.3) indicated
the solution
that there are many subjective
involved
factors
into
be
taken
consideration
cannot
which
in the design process
when using optimization
techniques.
human
Masters(203)
to
creativity
According
design
in
projects
be
necessary
always
and judgement will
where:
(i)
the design work is not a mathematically
(ii)
there are many variables
and influencing
exact process,
factors
involved,
is difficult
to define when a design is "acceptable",
(iii)
it
(iv)
the number of decisions

intuition
to make are immense hence human
or judgement is necessary to solve a problem,
333
(v)
where the work being performed cannot logically
be
defined,
(vi)
where the problem in hand cannot be specified
to a
computer,
input
data
for problem specification
the
of
volume
when
(vii)
and
is large,
i. e. input specification
may be as great. a
task as producing the design manually.
Since the large proportion
of original
it
the
elements
above
one or more of
to contribute
little
Once a design solution
design problems contain
to the initial
can be seen that CADsystems have

creation
of design solutions.
is generated however computers are ideal tools
for design optimization providing

(204)
logically
be
can
and
correct
the optimization
procedure is
defined.
to CADsystems being of limited use to the creative

(205)
"the
that
Cooley
suggests
crude introduction
design process,
of
In addition
into
computers
the design activity
design
quality".
the
of
introducing
of
the
into
rate
to alter
in a deterioration
This argument is based on the known effects
high-capital
manufacturing
equipment with an increasing

environment.
the working conditions
high-capital
...
may result
of their
hours
24
per day.
equipment
design
the
impose
to
staff
on
seek
could
(205)) the following
conditions:
Bristol
Essentially
obsolescence
employers seek
workers in order to exploit

In consequence companies
(as occurred at Rolls Royce,
334
(i)
the acceptance of shift

capital
and
work in order to exploit
high
equipment,
(ii)
the acceptance of work-measurement techniques,
(iii)
the division
of work into basic elements and the setting
of times for these elements, such times to be compared

lle
with actual performance.
Overall
there would be a tendency for designers to become paced
by the machine and since CADsystems can produce quantitative
data at
designer
be
the
the
could
enormous.
on
high
stress
rate
a
Clearly
the conditions
environment
(206)
could
designer
a
a working
described
by Cooley(205)
in which factors
be generated.
level
that
would not provide
improve the creativity
These factors
are:
(i)
A designer's
(ii)
Adoption of a positive
(iii)
Adopting an open mind.
(iv)
Adopting an attitude
(v)
A designer having the courage of his own convictions.
of self
confidence.
attitude.
of constructive
discontent.
of
335
The use of sophisticated

detailed
functional
CADsystems capable of carrying
of designs could be expected to reduce
analysis
the design resources required to generate a design solution.

result
two strategies
resources required
are possible.
of the introduction
process the latter
strategy
can be reduced or the number

Given
would appear difficult
to achieve.
essentially
a data collection
this
of
the actual examination
a small proportion
of the total
development time available
analysis
of design work is
process with the relevant
by
the
appropriate
at
present
generated
departmental
data by the design function

design time.
restricts
In addition
the effectiveness
own cost,
Hence
represents
the limited
the number of design alternatives

marketing
that needs to be undertaken.
is the rate at which data can be generated that influences
Since it
to manipulate
analysis
data being
function.
hence
the
be
reducing
amount of cost,
generated
can
and manufacturing
their
the amount of design
of CADsystems on the creative
Cost, marketing and manufacturing
that
As a
generated could be increased.
the adverse effect
7.4
Either
during a NPDproject
design solutions
of alternative
out
of the design process, the ability
of a computer system
large amounts of data could allow designers to generate

marketing and manufacturing
delay to the design process.
data in order to avoid
336
system developed helps achieve this
The cost estimating
designers
with a powerful tool
providing
for generating
cost data for
designs as they evolve and hence enabling cost effective
their
to be more readily
involved
of manufacturing
data is difficult'since
the
The solution to the problem

(208)
is the establishment
and Coates, et. al.
are complex and varied.
Colding(207)
to
according
of manufacturing
designs
achieved.
The generation
factors
aim by
data bases or manuals.
The effectiveness
of data
bases would increase with the growing use of NC equipment since they
allow optimum manufacturing
"
The estimating
production
to be selected.
developed
by the author could form the basis
system
data base.
of a manufacturing
difficult
conditions
operations
be
removed.
avoid could
For instance,
the costing
that the manufacturing
the use of a particular
manufacturing
to be displayed.
times required
the display
wish to
department before
the product design.
In addition
appropriate
function
Format statements could then be inserted
the manufacturing
to
designer
consult
the
asking
stabilizing
equations for
costing
equation could cause
requirements and cost reduction
suggestions
For instance the use of an equation to estimate the

to bore a hole with tolerances
of such statements as:
of <0. lmm could initiate
337
(i)
Avoid blind
(ii)
Can these tolerances
The generation
holes.
be relaxed?
of manufacturing
data bases and their
a long term solution
designers is possibly
use by
to the problem of analysing
designs in'terms
of producibility.
More immediate solutions
the construction
of lists
"producibility
and the use of a "data file
designer(209)
layer"
to carry out the multi-disciplined
the ability
for a Value
analysis
of designs
Draughting
CADsystems are mechanical draughting

they relieve
creating
hatching
and creating
friendly
interactive
and accurately
manufacturing
symbols.
scaling,
dimensions, cross
and arrowheads, calculating
In addition
the user
graphics system enables drawings to be quickly
generated.
draughting
task
of
the
time.
systems in the sense that
the draughtsman of such tasks as dimensioning,
lead lines
effect
for the
design improvement effort.
during a co-ordinated
overall
tips"
The advantage of using a VE committee is
Engineering committee.
7.5
providing
would be
However during the design of the New EHB
represented a small proportion
of a designer's
Hence CADsystems could be expected to have a minor
in terms of reducing required
design time.
338
CADsystems are suitable
for designing small numbers of complex,
custom-designed products (e. g. heavy cranes) where design is

accomplished by using various arrangements of standard components
and assemblies.
In these circumstances the ability
to hold large amounts of component drawings in file

retrieve
addition
and quickly
them enables design time to be significantly

reduced.
a
storing cost and manufacturing data will allow other
For example, materials
departments to function.
In companies that
manufacture
during
CAD
system
the use of a
lead to the generation
if
may occur
files
both special
the design
can be purchased
created
of designs
for
for
and standard
of a standard
of ineffective
initially
development
in
the
used
In
schedules prepared.
and tenders and manufacturing
could
of CADsystems
product
say jobbing
higher
products
product
designs.
quantities
range
This
were
volume component
manufacture.
7.6
Integration
with Overall
The responsibility
that
of
NPDProcess
for co-ordinating
the designer and a multi-disciplined
NPD tasks at H.M. Ltd. is

NPDcommittee.
The
the
allows
effective
NPD
technical
system
control
of
management
present
but
level
be
the
to
achieved
of planning carried
development process
be
development
time
to
minimized.
does
enable
not
out
339
A CADsystem could improve this

effective
by allowing
situation
communication between departments.
more
Also the use of a project
design
the
technique
such
as
planning
scheduling method developed in
the present work would allow overall
The future
direction
development time to be minimized.
of CAD/Computer-Aided Manufacture integration
Knox(209),
be
directed
to
should, according
information
cohesive
Knox suggests that
corresponding
requirements
bills
system" for combining a series
of business tools.
for a company's products and the
a forecast
of material
should be used to create part
(Figure 61).
A Pareto cost analysis

fication
at developing a "coherent,
and segregation
both by a family
classi-
system and manufacturing polycodes should then be used to
determine both the type of manufacturing

tools
machine
to perform the work.
required
and the correct
340
FIGURE 61
INTEGRATED-INFORMATION
SYSTEM
Ref.
PRODUCT
BtU.
(209)
OF MATERIAL
341
CHAPTER8
DISCUSSION
342
8.0
Introduction
In recent years the increased action of competitors
development of manufacturing
technology have increased the rate at which
companies must undertake product development.
larger
increasingly
proportions
of the technical,
Therefore,
company.
of
a
resources
management
implementation
to actively
process and demands

financial
and
the managementand
development
of product
must change to reflect
the need
minimize development costs and improve the planning and
of the NPD process.
control
,,
The new product development
becoming a "continuous"
is gradually
process
-(NPD)
and the rapid
An important
projects
effect
of the increase in the rate at which NPD
is
the
be
need to consider a greater number of
undertaken
must
product design concepts.
alternative
has_shown that
the major obstacle
designs is not the synthesis

with which alternative
limiting
factor
generate quickly
required
The work carried
out at H.M. Ltd.
to the economical comparison of concept
of such designs but the generation of data
concepts can be compared.
is the inability
and economically
of conventional
In particular
estimating
a major
systems to
the large amounts of cost data
during the NPDprocess.
Two approaches are available

of alternative
for increasing
the economic number
design concepts that can be costed during NPD. Both
have been considered by the author and they are:

approaches
343
(i)
cost data, and
reduce the cost of generating
reduce the amount of cost data required to compare

designs.
In order to reduce the cost of generating cost data the existing

Ltd.
M.
H.
was examined using Nadler's(95)
at
estimating, -system
The examination revealed that the work measurement
system descriptors.
technique used to estimate manufacturing

the overall
seven
and estimating
effectiveness
times of components controlled

accuracy of an estimating
system.
the work measurement technique employed determines
In particular,
the type of personnel who could estimate manufacturing times.
Conventional
the
type
H.
M.
Ltd.
techniques
such
as
used
at
work measurement
(i. e.
synthetic
extensive
with
personnel
forms only
cost
for
duties.
The large
data.
detail
NPD and the extensive

costs
manufacturing
of an estimators
for
requests
during
required
Cost estimating
using
conventional
the NPD process
Hence the responsiveness
system is dependent on the priority
of an estimating
department's
part
require
background knowledge of the methods and processes
components.
used to manufacture
normally
derived algorithms)
time standards and empirically
given
to the design
data
amounts of cost
required
techniques
to estimate
exacerbates
this
situation.
It
system
design
be
greatly
can
evolves.
examined
adapted
how the responsiveness
has been explained
existing
for
measurement
improved when cost
In order
to achieve
this
of an estimating
data can be generated

objective
identify
to
work measurement systems
designers.
by
use
techniques
the present
those that
The examination
of existing
more fully
in Section
is discussed
as the
work
8.1.
work has
can be
344
system has been developed that reduces the time and
An estimating
cost of generating
develop costing
cost data.
The system has used regression
analysis
the manufacturing
equations capable of estimating
to
times
and hence labour and overhead costs of components for a wide variety
The system which can be used by designers is
processes.
of production
in Section 8.2.
discussed more fully
costs quickly
manufacturing
High cost items can therefore

exercises
and economically as the design evolves.

be quickly
In addition
initiated.
It is capable of estimating
identified
the estimating
types of cost data to be generated,
and cost reduction

system enables many
i. e. labour costs. of products,
assemblies and components, process and operation
costs,
the manual
for
manufacturing processes and costs arising
content
work
and machine
in individual
cost
Hence the cost data requirements
centres.
such as management accounting,

engineering
production
budgeting,
tendering,
control,
of H. M. Ltd. 's current
estimating
system
data
designs
component
cost
were often released for
generate
to quickly
had
before
been
they
costed.
manufacture
prototype
functions
can be satisfied.
and marketing
Because of the inability
production
for
This procedure was
development
delay
the
to
The
to
process.
prevent
ability
of
necessary
based
the
estimating system to cost designs
regression
designers using
therefore,
can,
as they evolve
design
that
changes
for
accounted
EHB range.
changes
that
It
arise
be expected to reduce the number of
in this
manner.
These design
13.7% of the resources
available
be argued that
reducing
cannot
take place during
amount of resources
required
for
designing
the New
the number of design
NPD would necessarily

to design
alterations
reduce the total
the New EHB range.
This
is
345
because the resources required to achieve acceptable manufacturing

for component designs cannot be accurately
dependent on such subjective
of the engineering
factors
scheduling
determined since they are
as the experience and ability

out the design work.
designers carrying
of design changes occurring
However the possibility
for designs are prevented from being draughted.

be effectively
fixture
frequently
departments
-loads on such
occur
the
can effect
of development tasks adversely since production
design cannot therefore
costs
drawings
Tasks such as jig
and
scheduled, and high work

due to the inability
of the
design' department to release component designs in a smooth flow of

finished
drawings.
Hence the reduction
would
take place as a result
that
in the level
of design changes
of using the estimating
be
to
by
the
significantly
can
expected
author
developed
scheduling
of development tasks with an overall
reduction
system
improve the
in lead time
to manufcture.
During the concept and detail
design phase of the NPDprocess cost
importance
to
that
not
only
ensure
manufacturing
is
paramount
of
data
costs are within
of decision
(i)
tools
pre-defined
but also to allow the economic use
such as:
buy
analysis,
or
make
value engineering,
(iii)
targets
determining
respective
and
the optimum number of standard units
and their
sizes to manufacture in a product range.
346
At H.M. Ltd. the extensive use of such design decision

at the present moment due to the inability
limited
system to quickly
estimating
The implementation
of the estimating
improve this
situation.
Design
to enable cost
designs to be developed.
effective
In particular,
increased use can be made of the model (Equation 7)
for
by
the
author
allowing
proposed
designers to carry out "make or buy"
The model which enables both the purchase and in-house
analyses.
manufacturing
costs of designs to be quickly
is discussed more fully
Value engineering
is by its
nature
a relatively
slow process.
numbers of components need to be examined during
large
process,
if
To avoid
design
of
wastage
a complex product
design changes arising

build
to the prototype
such as a crane hoist
resources
it
from value engineering
the NPD
is being developed.
is necessary
to enable
to be implemented prior
phase of the NPDprocess.
by
developed
the
that
author,
as
such
system
this
estimated by designers
in Section 8.3.
Normally
achieving
of the existing
system developed by the author
can then be used more extensively
tools
is
and economically generate cost data.
can be expected to significantly

decision
tools
A responsive estimating
is therefore
essential
in
objective.
Value engineering must be integrated

to enable cost effective
into the overall
designs to be developed.
of the VE function.
effective
control
(Equation
9) can be expected to assist
NPDprocess
This aim requires
The model developed by the author

in this
area by allowing
calculation
347
of the number of components that can be value analysed taking into account
the time and resources available
for the NPDprocess.
VE could then be selected on the basis, of their

importance to the overall
responsive estimating
Candidates for
relative
cost or
success of the product design.
system is essential
Again a
to the selection
of
candidates for value engineering.

/
During the present work it was observed that the rate at which
reduction
cost
exercises
could be accomplished was increased by taking
"experience
the
of
advantage
in Table 12 was selected
total
effect".
Each cost reduction method listed
in turn and then each component within
product design analysed with respect to a specific
the'experience
method.
the
Hence
gained through examining a previous component enables
be
to
more rapidly
components
subsequent
The alternative
analysed.
approach to the problem of increasing
the economic
be
that
during
design
NPD
the
can
considered
concepts
of
process
number
involves
data
the
of
amount
cost
necessary to compare product
reducing
designs.
The research carried
out by the author in this
for
forecasting
models
of
the development
designs.
(i)
costs of product
The basic methods examined for developing costing models were:
the determination
specifications
of electric
(ii)
the total
area involved
of relationships
such as hoist
between cost and design
capacity and the horse power
motors, and
the use of a small number of the high cost components of

design.
a product
348
The models forecast
the total
discussed in Section 8.4.

is not required,
costs of a product design are
Using these models detailed
hence the time and resources necessary for costing
be
to
be
significantly
expected
can
purposes
factor
is
major
a
since cost
knowledge of competitive
effecting
reduced.
This is of benefit
been shown to be suitable

market life
product costs through the ability
"turning
to quickly
techniques to be
to a company since causal techniques have

for forecasting
(PLC) of a product.
cycle
In addition,
price and sales demand, a
forecasting
these
would
enable
causal
costs
estimate
Used.
cost estimating
the decline
The ability
stage of the
to forecast
the
of the PLC of a product enables the optimum time,
points"
to be determined for developing a replacement or improved design

fora
demand
is
declining.
sales
product whose
The model developed using a modified Pareto distribution

the manufacturing
if
cost of competitive
product designs that would result
Ltd.
H.
M.
at
manufactured
was
the product
in manufacturing
products
of competitors
the NPDprocess.
competitors
The market price
into
the decision
not
enter
would
products
This is beneficial
product
development work.
product
does not always reflect
design.
'For example, marketing policy
be reduced artifically
market.
Hence only differences
's
H.
Ltd.
between
M.
and their
costs
initiate
to
be
used
would
estimates
to carry out
since the price of a
the manufacturing
costs of the product
may require
in order to capture a larger
product prices
share of the
to
349
The inability-of
current
forecasting
of the decline
predict the start
stage of the market life
period of time.
be
required.
may
resources
over the NPD process.

during
examined
development
of a new product
techniques
planning
Existing
the present
project
techniques
planning
have been
work and found to be inappropriate

The disadvantages
range.
to the
of such project
as PERT, MBO, PPBS and CPM are:
High cost of implementation.
(ii)
Inability
to integrate
the important factors
i.
e. optimizing
process,
The need to predict
of the NPD
product design.
the times required
development tasks prior
to carry out
to the design phase.
To allow a greater degree of planning and control

during
development
must be exercised
and control
(i)
(iii)
occurs to achieve an
However to minimize the required design
degree of planning
resources a'greater
If this
the NPDperiod additional
design
within
product
optimum
cycle of
in which new products must be
lead
to
a situation
can
a product
developed in a limited
techniques to accurately
to take place
by
developed
the
been
has
author to allow designers
NPDa method
to estimate
individual
times
development
of
the
components.
Hence the
design
the
through
the
process
with
objective
components
of
sequencing
In
development time required can be accomplished.
total
of minimizing
be
basis
the
allocated
on
can
of the
development resources
addition
to
the
importance
the
components
of
overall
success
of
or
cost
relative
through
design
to
sequence
components
and
The
allocate
ability
design.
limited
enables
development resources
effectively.
development resources to be used
350
to schedule design allows use of cost targets
'_Theability
to the reduction
a greater contribution
ment of a cost effective
design.
to make
of design time'and the develop-
For example, if
before
the allocated
for
a
component
reached
a cost target
was
resources had been expended
then the unused resources could be employed more effectively

If cost estimates for a new component design fail
elsewhere.
to meet pre-defined
then the size of the cost variance could be used to determine
targets
,
the appropriate
would indicate
to be taken.
action
High cost variances for example
that a value engineering
exercise was necessary whilst
the recovery of small cost variances would be the responsibility

The scheduling method developed by the author is
the designer.
,
of
discussed more fully
in Section 8.5.
In order to develop an optimum product design the tasks performed

by-the various
functional
integrated.
be properly
departments involved in the NPDprocess must

That is, all
sequenced with compatible objectives.
correctly
the integration
ment for
of the activities
barriers
the
of
is the removal
departmental
functions.
out must be
A fundamental require-
of the departmental functions
(interfaces)
An alternative
carried
to information
solution
flow between
which the cost
developed
by
the author achieves
systems
scheduling
and
estimating
information
for
the
need
is to remove
integration
interfaces.
The total
accomplished
using a CADsystem.
system,
activities
the opportunity
to flow across departmental
of the NPDprocess could be

Since H.M. Ltd. are installing
was taken of examining the contribution
a CAD
CAD
A
NPD
valuable part of this contribution
is
the
process.
the
to
makes
in
integration
the
CAD
the
departmental functions
aids
of
to
which
extent
in
this
is
discussed
The
out
area
work
carried
NPD.
more fully
during
in Section
8.6.
351
Comparison of Work Measurement Techniques
8.1
work measurement methods are concerned with the development
Existing
tasks with which to control
for
times
production
of standard
operations.
times are affected
Since production
the
is
estimation
performed,
which work
manufacturing
by the conditions
of standard manufacturing
under
times
development
the
and maintenance of standard working
must also consider
11
conditions.
It
is the level
of precision
standard working conditions
in the development and maintenance of
that is the limiting
be
that
can
obtained.
accuracy
of estimating
resources required
to the degree
factor
The high level of management
for precise planning and control
of a working environ-
in
low
volume,
multi-product
is
uneconomic
normally
ment
Ltd.
M.
H.
such as
Hence variability
out specific
listed
in the times required to carry
tasks.
The variation
out within
carried
in the working conditions
in variability
20
18
result
and
Tables
in
organisations
in the degree of planning of manufacturing methods

industry
has led to the development of a variety
of
These vary in the degree of methods planning
systems.
measurement
work
time standards.
to
estimate
required
to
estimate
used
the
Of
methods
synthesis
cannot
products
ignored
be
can
predict
during
during
manufacturing
the design
time standards,
the present
work since
time study
this
hence
is unsuitable
times and
phase.
technique
for
costing
352
PMTS systems such as MTMare accurate

detailed
but require
standards,
design of the working

slow and costly,
and of little
For example,
H. M. Ltd.
of PMTS systems,
family
including
methods planning,
These systems are therefore
area.
practical
use for
using MTMV, which

the time required
level
of resource
expenditure
MTM standards
unsuitable.
measurement systems
to estimate
(120,129).
the manufacturing
is clearly
function
work
the application
time
methods planning
Hence these systems would be unsuitable
required.
This
of computerised
However, although
at
of the MTM
4 man years.
estimating
form the basis
also
relatively
is the fastest
detailed
through
using
a
computer
reduced
is greatly
is still
on the cost
the detailed
cost estimating
be
EHB
New
the
would
approximately
range
of
costs
time
methods of estimating
for use by
designers.
Estimating
using synthetic
Ltd.
M.
H.
used at
is therefore
similar
This technique uses pre-specified

in application
for
synthetic
tasks
which
the work
related
specifically
a company.
time standards is the method currently
to the use of PMTSsystems.
synthetic
However
standard times are measured are
In addition
time standards and
activities
carried
out within
time standards are normally larger
PMT-standards.
The
level
than
basic
motions
of
work
of
aggregates
to estimate manufacturing times is
development
required
methods
lowered.
time
the
application
estimating
and
reduced
therefore
be
cost
estimates
can
prepared
using
which
at
the
rate
However,
synthetic
time standards is not sufficient
cost
data requirements.
NPD
In addition
to cope with the current

their
use requires
extensive
353
knowledge of manufacturing
in the production
to identify
the relevant
work tasks involved
of a component. This method cannot thus be used
by designers and the responsiveness of the estimating
directly
given by the estimating
is dependent on the priority
function
system
to
data.
for
cost
requests
1 -Category estimating,
although a work measurement technique
to low volume manufacturing
appropriate
systems, cannot be used to
designs
is
the
labour
the
of
product
since
costs
method
estimate
designed to provide acceptable estimating
statistically
The time standards for individual
components.
large
of
number
a
therefore
could
components
to determine the appropriate
It
accuracy over
be poor.
This method requires
estimators
time band (Figure 10) for a component.
is reasonable to assume that narrowing the time bands would improve
individual
of
the accuracy
allocated
the specific
However Fairhurst(125)
manufacturing
therefore
cannot
and
company
A suitable
manufacturing
allow
to each time band.
time and reduces system responsiveness.
Again category estimating

familiar
time allotted
components are
points out that narrowing the time band increases
application
the estimating
estimates since individual
requires
personnel (foreman, chargehands)
methods and processes used within
be used by designers.
method of estimating
time standards for a low volume
is
the use of work measurement algorithms.
system
developed
be
to
quickly
time standards
the causal relationship
and accurately
These
by expressing
task times and the factors
354
In addition,
those times.
that affect
work measurement algorithms
developing
level
both
the
the
of
cost
estimates
and
could reduce
subjective
judgement involved,
data files
of time standards.
of
and overcome the need to hold extensive
To achieve these benefits
the variables
used within
algorithms
must be easily
to designers.
accessible
be used by designers inaccessible
That is,
predictor
if the system is to
variables
such as machining
feeds, speeds and depths of cut must be avoided.
Four basic methods can be used to develop work measurement

algorithms:
Synthetic
c>>
Development - Humanjudgement is used to select
both the predictor
variables
and the method of combining
variables.
The obvious disadvantage with this method is the
possibility
of developing an algorithm
in its
development rather
actual
causal effect
predictor
variables.
to fit
than a model that expresses the
by the model (Equation 21)
developed by Mahmoud(138) for estimating
the actual
times and
This disadvantage of the synthetic
development technique is illustrated
components.
the data used
the costs of turning
The model employs a discontinuity
factor
(Nd)
value of which varies with component volume and
the form of the raw material

fabrication).
and
used (e. g. casting,
Nd is intended to represent
solid
bar
the probable
355
number of passes of the tool over. the machined surface and

therefore
the design complexity.
that design complexity
However it
is not always related
volume or the form of the raw material

is not causally
related
is obvious
to component
Hence Nd
used.
to manufacturing time and a variety
Nd are required to allow estimated

of methods of calculating
'Oeturning times to fit the
observed data. Therefore poor
estimating
(ii)
Empirically
conditions
individually
accuracy can result
as illustrated
in Table 25.
Derived Equations - are developed under laboratory

hence the predictor
controlled
to be assessed.
variables
the effect
allowing
Empirical
examined can be
of each variable
techniques are normally used to
develop machining time algorithms
such as Equations 22 to 26,
which could provide rapid estimating
facilities.
Usually
however the many parameters (Figure 12) used to estimate

be
times
cannot
causally
machining
to
construct
necessary
27.
in
Table
shown
related,
hence it
is
standard parameter tables of the form
The use of such tables reduces the speed
be
can
prepared and prevents designers
estimates
with which
since familiarization
using the algorithms

is
needed.
methods
In addition
empirically
the
conditions
under
only
are useful
constructed.
Hence the variability
with machining
derived models
from which they were

in working conditions
low
lead
volume
manufacturing
systems
with
could
associated
to variances
between the estimated and actual manufacturing
times for components.
356
(iii)
Research Techniques - are capable of developing
Operational
work measurement algorithms:

(a)
Simulation. - This method is basically
a synthetic
development procedure although the use of a computer

allows the examination of a large number of potential
However since models are synthetically
models.
developed it
is possible
ing predictor
variables
to obtain a model containthat are not causally
to the independent variable

(b)
related
being estimated.
Queueing Theory -This method has been used to estimate

the waiting
time involved
in fabricating
crane sub-
is
interference
useful
when
and
assemblies(122)
occurs between manufacturing operations.
(c)
Linear
Programming - This
linear
models that
develops
method
it
important
regression
of equations
(iv)
cost
is an expensive
during
similar
equations
in terms of computing
tool
specific
optimize
linear
by multiple
method can be used to develop
because LP is an optimization
This factor
work since a large
is
number
needed to be developed.
between dependent and predictor
The method employs partial

the coefficients
However,
analysis.
Regression Analysis - is a statistical

relationships
to those developed
alternative.
the present
The
objectives.
differentiation
of predictor
variables
variables.
to determine
(Equation 28)
357
that minimizes the sum of the squares of the differences

between estimated and observed values of the dependent
The technique therefore
variable.
constructs
between a dependent
that expresses the relationship
Hence
variables.
and any number of predictor
variable
a model
time standards can be
individual
large
of
number
a
into simple formulae.
transformed
it
is possible to use data
Using regression
analysis
from an existing
system without the need to isolate
effects
of each predictor
variable
the
involved under laboratory
conditions.
"
Although
investigators
by chance,
predictor
variables
requires
naturally
manufacturing
cannot distinguish
between variables
(158,159,162,160)
effect
causal
an actual
if
technique
the regression
and one that
have shown that
the use of personnel familiar
tasks being examined) effective

In addition
They are however essential
experienced
in maintaining
should manufacturing
several
based estimating
models:
models.
a model's
conditions
alter.
An examination of previous research(153,156,157)

factors
with the
estimating
personnel are not required when using estimating
important
occurs
are chosen with care (i. e. which
developed.
be
can
models
applicability
between
highlighted
to consider when developing regression
358
Although the estimating
(a)
accuracy of models can be
improved by reducing the data variability

in Figure 15, additional
illustrated
necessary to enable the total

covered.
range, as
models are
data range to be
Hence the estimating
complex and less responsive.
system becomes more

Accuracy must therefore
be balanced with estimating

(b)
It
regression
to an estimating
equations are applicable
data range used in their
predictor
variables
other predictor
variables
System Development
The development
of a cost
to identify
equations
estimating
the
only within
development.
that are inter-correlated
Cost Estimating
centres)
model since
The complexity of equations can be reduced by removing
(c)
models requires
time and cost.
is necessary to define the manufacturing tasks and
data range appropriate
8.2-'
application
the definition
estimating
the relevant
are valid.
equations
in a model.
system that
to which the estimating
models apply
equations
In addition,
within
used
are
equations
numbers of
since
a classification
this
(termed cost
allows
estimators
under which these

system must allow
particularly
a system.
employs regression
tasks
and the conditions
to be accessed rapidly
with
when large
359
The number of equations required for a system is dependent on

the range of manufacturing
tasks that need to be costed and must often
be increased in order to improve the estimating
accuracy of individual
decreasing
the
factors
i.
number
of
e.
equations,
considered variables
within an equation
requires additional
(whilst
improving estimating
models to be developed.
the present work is to balance estimating
accuracy) 'naturally
The objective
during
accuracy with system size
costs.
and application
The development of an estimating

types of predictor
variables
system must also consider the
used and ensure they are accessible
to
In this respect
designers, hence maximizing system responsiveness.
.
factors such as machining speeds and feeds, depths of cut and number
from
the
be
estimating
excluded
must
of cuts
In addition,
equations.
a system must enable cost data to be estimated on a
that allows designers to carry out detailed
level
design solutions,
alternative
design features
comparisons of
hence cost data is required for individual
such as splines
An examination of existing
and gear teeth.
component coding and classification
indicated
Opitz(164)
Brisch(165)
VUOSO(163),
these
and
as
such:
systems
the
to
they
designed
present
work
since
are
applicable
systems were not
(165)
is
design
It
Gombinski
by
than
costing.
pointed
out
other
for purposes
that
their
supports
be
for
may
purposes
not
costing
possible.
adaption
this
conclusion
since he abandoned the use of existing
the development of a computerised estimating

during
systems
.
system.
Blore(91)
coding
and planning
360
to the designer is associated with the manufacturing
Data inaccessible
task and variability
input to the estimating
of this
type of data was
found to be caused by:
The process being carried
(i)
out, e. g. machining, welding
and assembly.
(ii)
The operation
being performed, e. g. turning,
boring and
drilling.
(iii)
The size and power of the machine used.

The manual work content
(v)
The tolerances
(vi)
The material
involved.
and surface
finish
being processed.
The removal of manufacturing variables

of processes and operations
identification
initially
required the
(Table 28) carried
of developing estimating
the
objective
Ltd.
with
M.
H.
process/operation
required.
out at
models for each
combination.
Since the variability
of machine process criteria
arises due to
it
the
develop
to
used
machines
was
of
necessary
power
the size and
estimating
basic
type
for
each
of machine used at H.M. Ltd.
equations
General
of
In the case
Machining
operations
Hence it
types.
machine
of
range
wide
a
on
a method
appropriate
(Table
47, Appendix
II)
of enabling
for
components.
machine
a component could be processed

was also necessary
designers
to select
to develop
the
361
Allowing the manual work content involved in machining operations

to be calculated
separately
from the machine content could both improve
estimating accuracy and allow the cost estimating

in areas other than design costing.
system to be useful
For example, cost comparisons
could be made between manual and automated machining systems since

the manual work content saved by automating a. process could be
e
specifically
determined.
The method of estimating

(135)
involved estimating
Stout
time.
the
process
machine
of
since
unsuitable
manual task times as a direct
a tool
time,
proportion
However this method was considered
manual task times are dependent on factors
than the machine process

distance
the
on
manual task times adopted by Halevi and
e. g. tool
manipulation
is moved between machining
other
times depend
operations.
involved
the
in estimating manual
To
of
number
equations
reduce
,:
the
in
overcome
addition,
times
need for detailed methods
and
task
planning
being required,
to Blore(91),
individual
i. e. load/unload
manual tasks were grouped according
machine, machine manipulation
and machine
During the present work an additional manual task group

(92)
by
inspection)
Knott
is considered an
recognised
(gauging and/or
tasks.
set-UP
integral
often
part of machine manipulation
difficult
manipulating
location
to separate.
a tool
tasks since the two types are
For example during horizontal
to the required position
are often carried
out simultaneously.
boring,
and measuring tool
362
Although the type of dimensional tolerances

affects
machining operation
depths
of cut,
and
speeds
Henceestimating
required from a
machine process variables

this variation
such as feeds,
is normally a step function.
equations had only to be developed for two tolerance
bands, i. e. <+0.01mmand !O.Olmm). For dimensional tolerances=<0.05mm

an additional
operation was necessary for which a grinding
grinding
allowance (+0.1) had to be left
times are influenced
Since machining
materials
it
be
machined
can
factor
define
or measure machinability
rate
effect
it
available
classified
obtained
equations
(Table
The collection
involved
(i)
used to
the index of "metal

This
measure.
is constant.
30) according
removal
index, measures the
on machining
time since
Materials
were therefore
machinability
using data
(14 4)
Factor
Group
and Material
to their
from the P-E Consulting

included
a "machinability"
at which metal can be removed when the
rate
horsepower
machine
which
of the common criteria
machinability
relative
the
relative
measures
to include
identified
as a suitable
of a material's
by the ease with
was necessary
An examination
in the system.
per horsepower"
on the component.
in the estimating
system.
develop
to
from
data
estimating
which
of
equations
two basic tasks:
Choosing the predictor

had to be primarily
to use the system.
variables,
design criteria
i. e. these by necessity
to allow designers
363
(ii)
of the predictor
Collection
variable
and corresponding dependent
data from a suitable
With respect to choosing predictor

bear in mind that the regression
source.
variables
it was important
to
procedure could not distinguish
between variables and a

between an actual causal relationship
Of
by
Hence
the
to
that
chance.
occurs
need
choose
relationship
predictor
literature
with care required
variables
the examination of relevant
and the use of personnel familiar
tasks under examination.
various types and combinations of predictor
In addition
to
in
obtain
effective
order
examined
were
dependent variable.
When small differences
levels
accuracy
of alternative
standardization
of predictor
simplify
the overall
estimating
estimating
models for each
(E-<0.05) existed in the
equations consideration
variables
variables
was given to the
between equations in order to
system.
(MTM
V standards,
data
sources
Several
synthetic
time standards
time
programme)
were
examined
study
and
considered
planned
a
and
library
the
of
use
an
with
existing
extensive
compared
when
unsuitable
M.
Ltd.
With
H.
held
to
data
respect
sawing,
at
spline
time
study
of
data
time
study
was not available.
operations,
shearing
cutting'and
that
the
it
considered
standard
was
production
operations
these
For
times
floor
to
the
issued
shop
(STT's)
source,
relatively
particularly
low.
could represent a suitable
data
since the times associated with these tasks are
364
An existing
times' for steel
procedure (Table 31) for developing flame cutting
Since no loss of estimating
accuracy over the existing
the equations did not require
incurred,
loss of estimating
plate was adapted without
such as chamfers, circlip
grooves and radii

The arithmetic
exhibited
adequate accuracy
for
developing
data issued
by the Welding
personnel
(Equation
factor"
arc time"
estimating
"basic
used since
to total
the approach
times
welding
arc times"
and (ii)
Institute(171)9
the affects
to estimate
for
to estimate
equations
to convert
was therefore
tasks were inaccurate
welding
equations
(i)developing
"basic
a machine type.
within
could be obtained(155).
levels
Since STT values

for
adopted
variability
mean of each operation
method was
validation.
The times taken to machine features

little
accuracy.
using
developing
time using
welding
of variables
involved
standard
equations
experienced
on the welding
"operating
31).
Since a large number of estimating
equations needed to be developed
the
to
Hence
actual
regression
perform
analysis.
used
was
a computer
therefore
avoided
and
possible
was
errors
eliminated.
effort
tedious
much
The regression
package(176) available
at the Loughborough University
during
it
the
present
work
since
Centre
used
was
Computer
supporting
of
range
wide
statistical
data (Table 33) with which to
of the estimating
determine
the quality
addition,
the regression
provided a
equations developed.
package could recursively
construct
In
prediction
365
equations using stepwise regression

maximumestimating
procedures.
accuracy to be obtained using the minimum number
variables.
of predictor
The package also has the facility

for inter-correlation
from the final
This enabled the
to test predictor
and when necessary remove correlated
The data handling facilities
is
part)
procedure
regression
of the SPSSsystem (of which the
enabled data to be held in sub-files
be
developed
individual
for
that
could
equations
such
in a single
This facility
regression
enabled estimating
run for individual
equation
an
when
reduced
accuracy
for
equations to be developed
the system could be
a group of machines gave acceptable
results.
Since the regression
technique has been used when the exact
relationship
between dependent and predictor
is essential
that the accuracy of the estimating
within
or combinations
or combinations of machine
'Hence the number of equations within
sizes.
variables
model.
estimating
of sub-files.
variables
the current
accuracy limits
required
The commonplacemethods (R, R2, F-test,
.
Variability)
of
inappropriate
of indicating
is unknown it
variables
models proved to be
by H.M. Ltd.
t-test
and the Coefficient
formula accuracy have been shown to be
to the measurement of a model's estimating
direct
a
not
they
are
since
measure of the difference
accuracy,
between actual
366
(i.
e. residuals).
values
and estimated
The present work supports this
18
16
to
Figures
show that R,
opinion since
of Variability
are unrelated
directly
determined
is
which
F-value and the Coefficient
to Average Proportional
from residual
Error
values.
1-e where e is
Cochran(155) proposed the use of the quantity

determined using Equation 33 but states a limitation
of dependent variable
data is involved.
when narrow ranges
In these circumstances the

accuracy since it
1-e is a poor measure of estimating
quantity
(Equation 36)
fails
to consider that a narrow base of experience could be an unreliable

future
foundation for projecting

when'using regression
results.
However a basic limitation
models is the fact that models are only applicable
derived.
from
they
data
were
which
range
over the
Hence Cochran's
to the use of 1-e is not valid.
limitation
The present objection

an equations estimating
to the use of l-e and a further
accuracy proposed by Cochran the Association
inclusion
is
the
34)
Index (Equation
in the indices
measure of
"completely"
being
not
y
term
the
since this
of
directly
related
results
to residual
values.
index of the estimating accuracy of models provided

(174) is
Standard
Error
Ratio
(Equation
the
35).
It
Fox
and
A suitable
by Ezekiel
requires
indicates
the
size of residuals
only
for its
determination
and therefore
the closeness with which estimated values may be expected
to approximate
to the true but unknown actual values.
individual
the
of
accuracy
the
of
range
of
a measure
It is therefore
estimates.
367
A measure of the estimating

the proportional
errors yi-xi
accuracy of a model needs to consider
since the accuracy of cost estimates
yi
is presently measured in this manner.
an improved measure of the estimating
By using the index E (Equation 36)

accuracy of models is obtained
since this value is a measure of the average proportional

arises through using an estimating
Unfortunately
equation.
the conventional
regression
the sum of the squares of the residuals

the value of E, as illustrated
effective
estimating
conventional
procedure of minimizing
does not necessarily
minimize
in Table. 54, so that the most
equation is not always developed.
regression
that
error
procedure is suitable
However the
for use in the present
work since:
(i)
.
The low volume manufacturing environment at H.M. Ltd.

prevents proportional
errors
being magnified into large
cost variances.
/
Analysis
of product manufacturing
distribution
Pareto
a
exists
costs indicated
(See Section 5.2).
that
A small
high
cost components accounted for the majority
of
number
of a product's
total
manufacturing costs.
use of the conventional
regression
because the technique effectively

high
of
cost components.
accuracy
In this
way the
procedure is suitable
improves the estimate
368
For high volume manufacturing systems in which the reduction

average proportional
error
estimating
Appendix VI also illustrates
errors.
manufacturing
/
individual
of
range
errors
the average error
proportion
equation and does not therefore
errors
that could arise.
arising
from
indicate
the
The range of individual
that could arise from an equation is indicated
Deviation
Standard
the
is
which
of proportional
The values of E and S (and R2, F-value,

descriptive
are normally
errors
Student t-test,
measures of a model's estimating
times examined are normally distributed.
manufacturing
form a negative exponential
times usually
intervals
of confidence
calculation
a simple statistical
distribution
not practicable
cannot therefore,
1-e and AI)
accuracy and
when the
However labour
(122,123).
The
be achieved using
package such as SPSS. They could however be obtained
a
sophisticated
more
using
error
distribution
by S
(Equation 37).
can only be used to provide confidence limits(213)
therefore
routine
how the relative
accuracy.
the use of an estimating
skew
regression
volumes of components can be allowed to influence
The value E indicates
estimating
the conventional
(Appendix VI) to minimize proportional
procedure can be modified

estimating
is important,
in
package such as GLIM(214) and specifying
such as Log Normal.
since the proposed estimating
However this
approach is
method is intended for
industry.
in
use
E
the
and S were obtained using new data (i. e. time
of
values
Since
the
to
it
is acceptable
estimating
construct
model)
used
data
not
study
by
judge
to
the
which
as
norms
values
estimating accuracy
these
to use
of equations.
369
Examination of the equations that failed
(i. e. the acceptance levels were set at H.M. Ltd. 's
'acceptance criteria
estimating
current
accuracy limits
of E=0.096
that the prime causes of poor estimating
(i)
control
were:
Variation
in operator experience.
Variation
in the quality
and dimensional accuracy of the
are characteristic
systems since economics require
although
have
to
poor estimating
appear
equations
the
affects
minimize
would
within
for
of predictor
In the latter
variable
outside
variables.
below which estimated operation
errors
therefore
of negative coefficients
To overcome this
problem
times could not fall.
tasks in
Hence
low
data
the
the
end
of
at
range of a dependent
accuracy
improved
be
whilst
could
this
type
in negative labour costs being generated
times (Table 35) were allocated
the estimating
on the
accuracy (i. e. incorrect
and estimating
case the inclusion
low values of predictor
question
they
and the use of negative predictor
variables
were corrected
an equation resulted
operation
accuracy levels
in working conditions
of variations
causes of poor estimating
coefficients)
reduced.
Hence
of task times.
variability
variable
of management
to be exercised over working conditions.
planning
and combination
of low volume manu-
a low level
and control
Additional
from lack of
used.
However these conditions
inherent
indicated
over work methods used.
raw materials
facturing
and S=0.314)
in machine process data arising
Variation
(iii)
to meet the accuracy
area.
not influencing
the accuracy levels
370
The frequency distributions
for the E and S values of the equations
developed (Figures 21 and 22) indicate
labour costs of a component, as illustrated
to estimate the total
from each equation were "additive"
create large estimating
therefore
errors.
H.M. Ltd. components and these total

Sales Target Times (STT's).
lie
The comparisons (Figures 29 to 46) indicated
on or near the 450 lines which indicate
direct
a
manner
i. e. 11.
the probability
relationships
exists
to compensate for this.
between design criteria
the use of a relatively

The resultant
of the regression
then
In
and the manu-
working conditions.
assembly
large number of predictor
model (Equation 38) indicated

procedure finding
increase
increasing
to
with
appears
variables.
Hence it was beneficial
into-groups
the
number of variables
reduced
which
tasks.
accuracy.
time standards and the
develop
to
equations for estimating
attempts
involved
times
task
variables,
link
can be altered
time standards used to control
Initial
perfect
consider* these standards over estimated,
function
the equation coefficients
facturing
times for existing
times compared with the corresponding
If equations are used to develop manufacturing
this
and would
accuracy could be achieved since a large proportion
that good estimating
manufacturing
in
Hence the estimating
determine
the
to
used
manufacturing
were
equations
of the points
required
was necessary to determine whether the individual
it
errors
estimating
of the equations
However since more than one equation is usually
are acceptable.
Appendix II,
that the majority
to classify
that
non-existent
number of predictor
manufacturing
influencing
operations
manufacturing
371
in estimating
A reduction
time of approximately
's
Ltd.
M.
H.
current
compared with
regression
based estimating
estimating
methods, by using the
The response of the estimating
system.
be
to
be
much greater
expected
system can
time is involved
(i. e. cost estimating
since little
le
own cost
their
the estimation
data.
the lack
In addition
"queuing"
for the design fynction
departments)
loads
the
of
other
work
on
reliant
70% was observed
when designers generate
of a subjective
of design costs reduces the risk
is not
in
element
of "user bias" entering
into the process.
Although the estimating system can be used manually (Appendix II)

(177)
to allow a computer to carry out the
developed
been
has
software
improves
This
the
involved.
rate at which estimates
tedious calculations
the'occurrence
of
computational
developed
reduces
and
be
can
errors.
large
is
of
a
number of equations,
the
composed
system
Since
method of retrieving
appropriate
machine
classification
converted
cost rates
at H.M. Ltd.
for the particular
number which,
each equation
centre
type since this
to costs by application
Equations within
grinding
equations from the data file
was
The obvious method was to group equations according to the
required.
centre
the appropriate
corresponded with the existing

Manufacturing
of appropriate
times were easily

overhead and labour
cost centres.
a cost centre were then allocated
in conjunction
cost
an identification
with the cost centre classification,
to be individually
retrieved.
With cylindrical
allows
and surface
(i. e. cost centre 216) and the NC bar and chuck lathes
identical
had
258) processes
cost centre classifications.
(i. e. cost
372
were included in the system operating
Hence instructions
to enable users to retrieve
(Appendix III)
procedure
the appropriate
group of
equations.
Since the computer program had to be interactive

data needs to be input)
variable
carried
i
those
by
the
and
users
out
was necessary
Hence it
predictor
In this
to allow
users to identify
that
respect
sharing"
the relevant
the appropriate
input
could be obtained from a component's engineering drawing prior

program.
the'computer
avoids delay arising
variables
predictor
Using Appendix IV, therefore,

whilst
An advantage of using design criteria
departments within
To fully
transfer
dimensional
procedure
variable
of predictor
estimating
to identify
for estimating
manufacturing
available
to all
In this
system would require
the direct
data from component drawings to the cost
respect the ability
in CADsystems to retrieve
data from stored component drawings could enable the estimating

to be partially
of the estimating
predictor
these equations.
computerised.
system would require
the
relevant
to enable
organize
to using
an organisation.
computerise the estimating
module.
data
using the program.
of cost data being freely
is
the
possibility
costs
it
the computer
on a "time
were obtained
in order
involved
variables
by the computer.
department
was necessary
was necessary to determine the tasks
use of the computer since
to make effective
of the design
facilities
basis.
it
(i. e: predictor
estimating
variable
To complete the computerisation
additional
software developing
equations to be identified
data in the correct
and
form and order for
373
8.3

The decision
outside supplier
to manufacture "in-house" or to purchase-from an

(the make or buy decision)
development of a product since all
is fundamental to the
components need to be examined in
this manner.
A model (Equation 7) has been developed during the present work

that allows designers to cost designs and therefore
of alternative
design solutions.
involved
buy
elements
make and
to compare the costs
Since the equation includes both the

in a component's manufacture (i. e.
include
both
designs
often
an
element
of
make and buy),
component
involving
practical
decisions
facturing
can be undertaken.
included
since tool
a significant
the economical amount of "in-house"

In addition,
a tooling
(which
include capital
costs
influence
manu-
cost element is
equipment costs) have
on the economics of alternative
design
solutions.
The model has been adapted from the classical

determining
for
used
manufacturing
the variable
of alternative
batch
sizes
economic
costs involved
batch sizes.
stock control
models
in stock holding and
The affect
(under various manufacturing
of adopting
situations
such
or,
occur
when
simultaneous
costs
manufacture
and
shortage
when
as,
the
design
economics
of
alternative
is
solutions
applicable)on
usage
be
In
this
taken
determining
respect,
care
must
when
be
examined.
can
since purchase and manufacturing
batch
sizes
economic
differ.
batch sizes can
374
The use of Equation

costs highlighted
7 to compare the New EHB rope guide assembly
the influence
design
on the economics of alternative
expected varying
rope guide designs.
Table 11) but tooling
of the tools
for H.M. Ltd. this
As can be
the relative
The choice of which
department therefore
the cheapest
is chosen (Alternative
period is 3 years,
III,
then the initial
cost
the cheapest design solution
(Alternative
term
chosen
were
the short
need to decide if
V, Table 11).
the higher costs are acceptable
is
sales
growth
required)
rapid
the market and
will
If an increase in price is not advisable

profit
to
reduced
be
a
accept
would
In this
investment costs can be more easily
In addition
to
be reduced.
an alternative
solution
margin during the investment cost
manner. production
the purchasing policy
over
The marketing
(at
the
is
introduced
a
when
period
product
sales
product
recovery period.
costs
costs recovered over the company's normal payback
higher
be
if
than
could
of a product
capital
11).
rope guide assemblies as examples, if
design over the nominal life
or if
(Table
solutions
tooling
to adopt could then become a marketing decision.
Using the alternative
period,
for
the tool cost recovery period influences
economics of alternative
design solution
of the payback period
technology requiring
introduced
high
into a company.
of a company towards production
introduction
its
long
until
period
maximum
a
utilization
with
equipment
benefit from this type of investment policy.
also
could
was achieved
include
industrial
would
robots where a previous
This type of equipment
(122) indicated
that
a considerable amount of redesign
the
by
author
study
before the maximumbenefits could
fabrications
was
necessary
of existing
from
arc
welding
continuous
robot.
a
be achieved
375
Equation 7 can also be used to determine the effect
of alternative
systems on the economics of design solutions.

(62)
Period
Control
Batch
basis
is
the
the
of
systems
example,
For
production control
determination
of a manufacturing "cycle"
be a'function
of both the time required to manufacture the component
with the longest production
the analysis
time and the forecast
sales demand. The
batch sizes (which are equal under PBC systems)
purchase and manufacturing
from these two factors
be
calculated
can
time for a product which can
of the alternative
and as illustrated
by
rope guide assemblies can be reduced
Reducing batch sizes increases the labour and purchasing costs
in size.
tooling
per component whilst
and investment costs per component remain
i. e. these cost items are not dependent on batch sizes but
constant,
The outcome of this
change in costs
on annual quantities
manufactured.
therefore,
be,
would
an improvement in the chances of adopting design
that require
solutions
tooling
and investment costs.
design
a
product
of
could not take place until
Accurate costing
manufacturing
be
designs
could
not
costed until
product
therefore,
design
and manufacturing
to identify
estimators
time.
throughput
arrangement
required
batch
known.
Under
sizes
are
a PBCsystem,
purchasing
and
planning had taken place to enable cost
the component with the longest individual
This would present difficulties
drawings.
to identify
detail
sufficient
In addition
in costing
the sequence of detail
the component with the longest
the
be
with
overall
compatible
not
may
time
put
general
design
individual
through-
development plan.
376
-Normally
order quantity
when costing
not considered.
these quantities
to determine
design
minimum costs
solutions
7, however,
total
could
the effects
of varying
on manufacturing
designers
requires
manufacturing
costs.
be compared at their
which occur at the optimum values
and manufacturing
8.4.
batch sizes
and manufacturing
Using Equation
alternative
designs,
product
costs
are
to use
Hence
respective
of order
quantity
batch size.
Cost Forecasting
The regression
work-allows
based estimating
system developed in the present
designers to estimate component labour costs from general
drawings.
arrangement
However during the concept design stage of the
NPDprocess (particularly
if
design concepts are
several alternative
being compared) the need to develop general arrangement drawings in

determine
manufacturing
to
order
determine product manufacturing
costs is undesirable.
costs without
The ability
the need for such design
drawings would:
(, )
enable unattractive
early
design alternatives
to be abandoned
in the design process and therefore
allow design
be
to
used effectively,
resources
(ii)
increase the number of design alternatives
that could be
analysed,
(iii)
design
decisions
fundamental
allow
(e. g. the "assortment"
be
taken, and
to
problem)
-(iv)
allow a greater
to be costed.
to
number of competitive
product designs
377
An obvious method of cost "forecasting"

identify
is
to
product range
the cost/design
specification
hence knowing the design specification
that exist,
cost could be found.
the appropriate
(e. g. capacity,
in determining
has been used to construct
the technique
relationships
size)
In the present work since regression
has been shown to be effective
analysis
when developing a new
cost/design
causal relationships
specification
models.
To ensure model estimating

to
be
construct
used
costs must
the smallest
means that
costed.
depends on the order
during
to enable early
in preference
launch of a limited
models.
in a product
units
in which product
range of product
specification
to develop
the New EHB project
were developed
units
and largest
sizes
effective
costing
costing
the 0.8 tonne,
This
range must be
are developed.
for
however are not always suitable
schedules
example,
cost/design
way the ability
In this
the total
accuracy
models
Development
For
purposes.
1.6 tonne and 3.2 tonne
to the 5.0 tonne and 8.0 tonne units
product range for which the greatest
forecast.
was
market share
Although during the present work cost relationships

in the optimization
disadvantage
(e.
designs
g. drum tube assembly) their
of
total
to
estimate
used
when
detailed
to
carry out
need
product design costs is the
This need limits
hence
the
be
estimating
and
costed
can
respect
to the minimization
of individual
initially
designer
to
for
a
advantage
an
relationships
basic
design and costing of those product sizes
the
develop
models.
to
cost
used
that
have been useful
the number of products
accuracy of models.
With
product design costs it
is
identify
the existence
between the various assemblies of a product.
of cost
Representing
378
these
in a table of the form shown in
cost relationships
a useful
provides
design aid.
Figure 48
For example when the drum tube assembly
designed,
being
Figure
48
EHB
New
provided a quick reference
the
was
of
to the assembly cost relationships
order
to enable total
that needed to be determined in
product manufacturing
costs to be minimized.
As might be expected examination of a wide range of products

indicated
Ltd.
H.
H.
at
manufactured
that when cumulative
costs were
distribution
Pareto
the
number
of
components
a
cumulative
compared with
is
Although the form of the curves varied between products it
formed.
could
be expected that for each product the curve is log-linear.

both cumulative cost and number of components to their
Converting
form (Equation 45) would produce a straight
logarithmic
If
line
curve.
(which
highest
the
cost
components
are
easily
of
number
a small
since they form the basis of the conceptual design of a
identifiable
product)
the whole straight
to
then
extrapolate
used
are
the constants
f and g (Equation 43) required
line
to determine total
curve,
product
that
found
small
be
only
a
number
of
components
would
so
could
costs
The
detail.
in
costing
of
products
also
requires
a
be
to
costed
need
total
the
knowledge of
number of components within
this
which
with
the accuracy
the relative
rapidly
contribution
increasing
with
figure
a product although
is determined need not be high since
to the cumulative
product costs decreases
number of components.
form
in
Equation
43
the
shown
of
were used
However, when models
these
's
models
grossly
Ltd.
products
M.
H.
to cost
actual
product costs.
The over costing
effect
over estimated the
can be explained with
379
out by Swan and Worrall(183).
reference to the work carried
by these researchers indicated
curves established
that the slope of the
Nu-axis.
distance
the
decreases
along
a
at
curve
by
constructing
confirmed
log-log
Log-log
This explanation
was
cost curves (Figure 52) for several
's
Ltd.
M.
H.
products.
of
0
Increasing
the number of components used to determine the values
total
50%
the
(up
to
of
f
and g
of
accuracy of cost models to an acceptable
did not improve the estimating
i. e. to the accuracy of H.M. Ltd. 's existing
level,
greater
Using proportions
be an effective
method of improving estimating
required
estimating
From visual
system.
to determine total
observation
accuracy since this
reduce the amount of detailed
cost
product costs.
of the relative
values of the variables
to
it
43
reasonable
assume that they were related
was
Equation
form
the
changes.
slope
which
at
the
point
to
test
to
used
their
estimating
than 50%was not considered by the author to
significantly
not
would
procedure
that
number'of components was examined)
this
logarithmic
theory since conversion of the variable

form ensured that they were, if
Although significantly
initial
the
developed
accurate
(i)
estimates.
Hence regression
analysis
was
values to
at all, linearly
related.
improving the accuracy of the estimates
models developed did not provide sufficiently

Poor estimating
accuracy was found to be caused by:
Not using a commoncomponent structure

both component and assembly costs.
level,
i. e. using
380
(ii)
Using items classed as consumables (e. g. washers) in the

determination
of the total
number of components within
a product.
(iii)
Not using the actual value of f to determine product costs.
the input data the new model developed, Equation 47,
Upon,correcting
accuracy, i. e. E= -0.015 and
was found to give an acceptable estimating

S=0.096.
8.5
Design Scheduling
When the time available
to develop a new product is restricted
in
to
tasks
development
order
minimize
overall
of
scheduling
time is important.
In addition
the efficient
allocation
the
development
of design
i.
be
be
to
to
e.
resources
considered,
need
allocated
needs
resources
importance
tasks
to
the
the
of
to
overall success
relative
in relation
design.
of a product
Existing
network analysis
be
to
unsuitable
found
planning techniques have been
project
for controlling
the development of a new product
range since:
(i)
They are expensive to implement (PERT implementation

for
17,000
is
a project
cost
of similar
size to that
development)
inferior
EHB
New
the
and
are
an
of
for the expenditure
of development funds when compared
with the equal cost opportunity

staff.
choice
of increasing
the design
381
(ii)
To construct
a network diagram requires
identifiable
tasks.
a series of
Due to the creative
nature of the
design
process the remaining tasks required
new product
to develop a component cannot be accurately
until
le
In addition
the design process is complete.
project
existing
task whereas when limited
Since
should
design
major
such that
constraints
scheduled
(i)
through
allocation
are initially
is here that
That is,
begin.
stage
on effective
it
(PERT, CPM) are
a planning technique
of the available
created
resources.
at the design
of development
the scheduling
overall
the design
development
the sequence with

process
is minimized.
time
stage
work
be
to
sequenced through
need
components
influencing
The order
techniques
design time is available
component designs
NPD
the
process
of
planning
the time required to perform a development
determining
concerned with
should concentrate
identified
the
The
which components are
are:
in which products are developed which can
be dependent on marketing or financial
considerations.
For example, H.M. Ltd. need to market a "mini-product

be
to
to
obtained quickly.
revenue
enable
range"
(ii)
The length of the prototype

considerably
testing
period which is often
longer than the sum of the remaining project
task times particularly

needs to be undertaken.
if
long term reliability
testing
382
Although these constraints
determined the order in which sub-
it
be
developed
to
are
assemblies
design of each component within
is necessary to sequence the detail

In this'respect
each sub-assembly.
scheduling components through the design phase is considered in the

present research analogous to the scheduling of operations within
batch manufacturing
system.
For the design process the main steps are:
(; )
Specifying
the objective
schedules
can be judged.
departmental
the various
product
development
of a single
increasing
(29)
a new product
(ii)
Sequencing
the interactions
it
project
difficult,
time during
importance
that
exist
project
success of
the obvious choice.

In this
the time required

tasks
for
respect
to carry
it
out
each component and
between development
involved
of
components
are
number
tasks.
in the New EHB
is essential that designers are able themselves to estimate
functional
present
the importance
the present
delay
in
the
to
times
task
avoid
acquisition
development
other
in the new
to the ultimate
makes this
development
the individual
aims of
could make the specification
criterion
to determine
the conflicting
involved
the design of components.
is necessary
Since a*large
functions
development
of minimizing
and its
Although
process
objective
by which alternative
criterion
departments.
research related
design criteria
In order to achieve this
development activities
and developed a check list
of data from
situation
and activity
of activity
the
times to
times (Table 42).
333
Using the two types of task interactions

development (precedence and simultaneous)
to develop individual
required
that arise during product
the interactions
between tasks
components were identified
This table used in conjunction
(Section 6.2.3).
with the NPDnetwork diagram (Figure 56)
for a component allows a designer to determine the interactions

tasks and hence calculate
component
within
between
development time for each
the overall
a sub-assembly.
of the method established'for
The validity
estimating
component
development times when tested against actual components from the New EHB
(Figure 59) indicated
project
that close agreement existed between
development
times.
estimated
and
actual
The cumulative
distribution
of development times estimated for
found
form
typical
to
were
a
unit
each standard
Pareto curve (Figure 60)
indicating
the possibility
of reducing the level
resources
by concentrating
on the small proportion
of components with
long development times.

"length
the
in order of
updating
isolate
time.
this
list
In addition,
maintaining
a list
of development time required"
of components
and constantly
(as design proceeds) enables designers to quickly
those components that could affect

The construction
of such a list
the overall
development
could remove the need to develop
diagram.
update
a network
and
When limited
the conventional
design
design solutions
cannot
development time is limited.
Under
design resources are available
creating
of
methodology
be
undertaken,
always
and comparing alternative

particularly
if
384
these circumstances an appropriate

to create an initial
solution
improvement of this
solution.
on the relative
design resources for the
and allocate
Allocation
of resources could be based
to be gained from the overall
contribution
the product design.
design methodology to adopt would be
If the initial
cannot be improved
solution
by the designer then it must be the value engineering
sufficiently
to create alternative
teams responsibility
design solutions.
importance of alternative
Pleasuring the relative
PPBSproject
planning techniques illustrates
design
use of additional
the NPD process
resources
additional
although
since
is an increase
by which this
of routes
the overall
is
easily
always
not
route
of each
The effect
to be gained
The effect
there
are a variety
on profitability
could therefore
to a
be used as a
Design
therefore
would
resources
basis
measurement.
of
common
allocated
respect
the relative
cost of a component or assembly.
the potential
for cost reduction.
for
the
allocation
is also convenient
regression
be
In this
cost of components would-be used to allocate
resources on the reasonable assumption that the greater

cost the greater
from
quantified.
This factor
on the relative
to
applies
of manufacturing cost changes can be related
profitability.
product's
benefit
also
in profitability
can. be achieved.
in
obtained from the
This difficulty
resources.
with introducing
the problems involved
benefits
basis
the
of
measuring
a common
finding
design solutions
difficulties
basis
The
of
measurement.
a common
requires
success of
based estimating
the initial
Manufacturing
cost
of design resources since the
system developed in the present work allows
385
designers to generate cost data rapidly
and therefore
enables design
as the design process proceeds.
resources to be allocated
In addition
as new designs are created cost comparisons can be made with existing
of design resources carried
components and re-allocation
out when
necessary.
oof
To allocate
resources
therefore
of a Pareto distribution
the construction
a simple method would involve
curve for component costs and
cumulative cost axis to cumulative design improvement time,
the
convert
design
design time to be obtained as a direct
hence allowing
measure of
component costs.
Since cost is but one of several important product characteristics
the allocation
of design improvement time based on relative

the need to improve other characteristics
be weighed against
increase
8.6
the overall
which
worth of a product.
CAD
Through the installation
have the use of a sophisticated

designing
parts,
cost needs to
custom-specified
and extension
Engineering
of the Autotrol
system(194) H.M. Ltd. will
Computer-Aided-Draughting
system for
products assembled from existing
standard
into the Computer-Aided Planning and Computer-Aided
(e.
NC
part programming and stock control).
g.
areas
The initial
introduction
of DCL's EUCLIDsystem(195) can be
low cost through a time sharing facility

at
accomplished
hardware
digital
as
expensive
such
a
to
purchase
the need
which overcomes
plotter.
Hence
386
both the experience gained and the initial

using this
system will
preparation
of data files
enable the payback period for the more expensive
system to be reduced.
Autotrol
Since Autotrol
the system in its
is essentially
an automated draughting
basic form has numerous limitations
system,
when used to
NPD
the
design
the
process.
of
phase
aid
In order to assess the
of these limitations
an examination of the
significance
relative
tasks involved
design of the New EHBwas undertaken.
in the original
This examination identified
design tasks and determined the
devoted
designer
to the accomplishment of each task
time
a
of
proportion
during the preparation

the results
of a product design.
It must be recognised that
(Table
45)
the
particularly
examination
of
the proportion
task
to
the
design
to
devoted
New
the
EHB
applies
each
only
time
of
of
between
types.
vary
product
would
and
product
design
require
could
product
For example, an innovative
a higher proportion
of creative
design
design
New
the
the
EHB
of
with
range since
compared
when
effort
based
is
those
design
's
on
of competitive
Ltd.
M.
H.
In determining
the applicability
of the Autotrol
EHB
New
the
the
contribution
development
of
the
involved
products.
system in aiding
of CADto each activity
in the design process has been examined.
387
(i)
Function Analysis
basic form CAD systems are merely automated draughting
In their
therefore
data
systems
and
storage
and
require additional
software modules in order to carry out the functional

analysis
designs.
of product
types
within
product
of
nature
is possible
Because of the diverse

the mechanical engineering
that a wide range of functional
industry
it
analysis
software packages for such applications
design and stress analysis

design of wire-rope
hoist
would be applicable
blocks,
as gearbox
to the
and would be available
"off-the-shelf".
In those cases where "off-the-shelf"
software is not avail-
developing
depends
the
software
on the
of
economics
able
of the analysis
complexity
its
Since new product ranges are developed at H.M. Ltd.
use.
intervals
at infrequent
analysis
required and the frequency of
it
is unlikely
that functional
software would be an economic alternative
involve
that
methods
manual
present
calculators
and scaled models.
to the
using desk top
However use of software
that could be applied to heavy, custom-designed cranes

(which represent
the major portion
of the design work carried
be
in
)
terms
Ltd.
H.
M.
economic
more easily
could
out at
justified.
It would be of benefit,
the functional
analysis
therefore,
to examine
requirements for the complete range
in
H.
M.
Ltd.
identify
to
at
order
manufactured
of products
be
that
economically
would
packages
software
viable.
388
(ii)
and Transfer
Data Acquisition
of CADsystems to hold large quantities
The ability
design data (including
of
a complete component definition)

of data by the design
and transfer
enables the acquisition

department to be greatly
improved.
The advantages of a CAD
include:
would
system
(a)
An increase in the amount of data stored on an

drawing.
engineering
data transfer
(b)
Instant
(c)
The possibility
to produce drawings
The ability
for
of preparing NC part programmes
from the CADsystem.
directly
(d)
facilities.
individual
manufacturing
Since the design process relies
on the acquisition
CAD systems can be expected to be useful
large quantities
by the various
to limit
of cost
of data it
functional
the present
data using
of data
in the NPDprocess,
in the development
However although CADsystems can store
the usefulness
For example,
information
operations.
departments involved
from other functional
designs.
optimum
of
hold
that
is the generation
departments
that
of this
could
be expected
of CAD systems to the design

research
has shown that
H. M. Ltd. 's present
estimating
data
process.
the generation
system is
389
slow and cannot provide the amounts of cost data required

by the design process.
Hence the development of the
system in the present work could be considered
estimating
to the economics of CADsystems when used to aid
helpful
the NPDdesign process, in that the time delay involved

in data acquisition
e Linking
eliminate
interaction
was not required would then completely
the time delay between data acquisition
Design Creation
have an adverse effect
could
arise
work.
of shift
CAD systems could

of design
solutions
in the
These changes,
work and measured work
from the need of a company to quickly
the high investment
cost of purchasing
The present author considers

original
that
would take place
under which designers
such as the introduction
recover
(205)
on the creation
because of the changes that

conditions
and use.
and Improvement
There are reasons to suppose
rates,
reduced.
system to a CADsystem such that
the estimating
operator
(iii)
could be significantly
it doubtful
CAD systems.
that effective
design would take place at a CADterminal

is an unpredictable
since
the creation
of designs
incompatible
with the types of tasks such as, draughting
normally carried
it
out at visual
display
units.
process and
In addition
has been shown that a relaxed atmosphere aids the creation
of design solutions
possible
which is an environment normally not
at man/machine interfaces.
390
Conventional techniques for creating

are also incompatible
solutions
with the use of CAD.
for example, requires
Brainstorming(206)
as many design solutions
the creation
to-their
as possible prior
it
To carry out the technique effectively

quickly
design
alternative
of
analysis.
is necessary to
sketch design ideas then concentrate on generating
'Of
design
i.
flow
ideas.
to
ideas,
e.
create
a
of
more
Hence
the need to record using a keyboard(which requires
translat-
ing design ideas to the input language of a CADsystem)

would constantly
interrupt
Although having no direct
flow.
input to the creation
of design
the use of CADcould be expected to increase the
solutions
proportion
tasks.
the creative
of time a designer allocates
That is,
to the creative
the increase in speed with which designs
design
be
could
more
allow
solutions
analysed
could
to be
considered.
The use of CAD systems"to
by the subjective
nature
actually
of design
create
In addition
specify
decisions
of
to be made can be sufficiently
design solutions
time it
large
the number
that
could be generated manually in the same
takes to develop software to specify
to the computer.
is limited
problems and the ability
to logically
requirements.
designs
the problem
391
(iv)

At the present moment the major difficulty
in carrying
out the cost, marketing and manufacturing analysis

product design is the need to obtain relevant
the other departments in the NPDprocess.
involved
are usually
of a
data from
The departments
not designed to generate the large
amounts of data required
during product development.
This is a major reason for the development of the

based cost estimating
regression
the "day-to-day"
tasks,
In addition
system.
such as production
scheduling
out by these departments, often
and purchasing carried
over requests for data by the design
have priority
department.
of CAD systems to this
The contribution
process
when systems are developed
arise
will
designers
to quickly
facturing
data.
estimating
area of the design
generate
cost,
The development
system is a significant
marketing
estimating
with
the CAD software
extracting
and manu-
of the regression
contribution.
system to the CAD system will
this
to allow
based
Linking
be possible
data from the stored
drawing of a component and transferring
data to the estimating
module.
The eventual generation
of manufacturing
data by the designer
lists
the
construction
of
of producibility
around
centres
(207,208)
(209)
that are developed for
and data bases
tips
use by designers.
An alternative
would be the allocation
392
layer to a VE team, who could then analyse
of a data file
the manufacturing elements of a design and propose changes

be implemented to the original
that could quickly

(v)
design.
Draughting
Since CADsystems can include mechanised draughting
f
be expected
they could
design
to have a significant
However, the time a designer
process.
ideas to paper is not a significant
committing
design
of the total
impact on the draughting

only
activities,
(763 hours)
60110
is
CAD
approximately
of
spends
proportion
CAD
in terms of their
solely
since
of the total
Hence the maximum saving
expended.
on the
For the New EHB project
activity.
not be justified
systems could
represented
effect
systems
possible
these tasks
design
through
time
use
8,000.
of using CADto reduce the time required
The feasibility
to
is
drawings
dependent
design
the
on
engineering
prepare
of the product since this
complexity
detailed
functions.
design customer specified
This makes the use of CADto

heavy cranes economically feasible.
with the overall
Integration
of design
The integration
primarily
the amount of
design work necessary to prepare drawings for the
manufacturing
(vi)
affects
NPDProcess
with
the remaining
a problem of data generation
departments.
The contribution
limited
be
would
if
departments
NPD tasks
and transfer
of CAD systems in this

are unable
to quickly
is
between
area
393
generate cost, manufacturing and marketing data with which

to progress the development of a new product.
contribution
to the integration
of the overall
An effective
NPDprocess
if CADsystems were developed
could be made, therefore,
to aid the generation of product design data.
The transfer
of data between departments can already be effectively

I-eaccomplished using CADsystems.
In addition
to aiding the generation of NPDdata it
important
considered
by the present author,
is also
that CADsystems
must be expanded to enable:

(a)
A coherent,
developed
tools
information
cohesive
that
allows
Programming,
(e. g. Linear
Make or Buy models)

this
information
a series
optimization
(b)
this
of design
optimization
Dynamic Programming,
to be combined.
The basis
system would be the analysis
common data requirements

to transfer
system to be
and the development
data to specific
of
of the
of software
decision-making
and
tools.
The planning and control
(including
the allocation
of
design resources) of the design process using an

appropriate
planning technique.
project
such a system would be the necessity

to generate their
The basis of
to allow designers
own planning and control
data.
Hence
the importance of the scheduling technique developed

in the present work.
394
(c)
A system that ensures successful
product designs will
be developed.
is likely
At H.M. Ltd. this
to be
achieved by an expansion of the existing Quality

(215)
Assurance scheme
since product quality is but
one important design characteristic
The draft
of a product.
guide to design managementprocedures for
the assurance of quality issued by the British Standards

(216)
lists with respect to quality assurance
Institute
the important factors
department.
These procedures could be expanded to
include other essential

a product.
to be considered by the design
design characteristics
of
395
CHAPTER9
CONCLUSIONS
396
1.
system has been developed and is currently
An estimating
used at H.M. Ltd. that enables designers to quickly

designs as they are created,
designer.
using data readily
The system therefore
which are within
the current
cost product
to the
available
allows estimates
accuracy levels
being
(the accuracy of
of H.M. Ltd. ) to be
design
during
the
process, hence cost data can be used
generated
to greater
for:
effect
(i)
developing minimum cost designs,
(ii)
design
the
of
number
changes that occur after
reducing
the prototype
build phase has begun and so reducing the
design resources needed to develop a product,

(iii)
allocating
limited
design resources based on the relative
cost of designs,
(iv)
allowing
the designer to maximize product worth, and
(v)
allowing
the greater use of design optimization
techniques.
Methods have been proposed for modifying the conventional
regression
in
to:
order
procedure
(i)
Minimize the sum of the squares of "residual"

measured as proportions
This modification
values.
calculating
corresponding
"observed"
(which enables the method of
the accuracy of estimates and the objectives
of the regression
suited
of their
values when
procedure to be made compatible)
to high volume manufacturing
H.
M.
batch
Ltd.
of
environment
small
is more
systems than to the
397
Enable the volumes of individual
(ii)
the accuracy of their

is again suitable
it
where
magnified
components to influence
This procedure
cost estimates.
for high volume manufacturing systems
can help avoid errors
in cost estimates being
into large cost variances due to the volume of
components involved.
i
2.
A model, which allows the total

from the product's
by modifying
ten highest cost components, has been developed
the equation for the Pareto distribution.
3.
the need to prepare general arrangement drawings.
A check list
of development task times has been constructed
which the time required
to develop individual
The check list
estimated.
lie
that
would
components
to construct
with the data
allows designers to identify
on the critical
path without
be constantly
costs of alternative
classical
manufacturing
has. been constructed
using
EOQtheory.
to
to
be
apply
a variety
modified
The model can
situations,
Planning
updated as design proceeds.
A model which allows designers to compare the variable

design solutions
those
the need
the whole task network for the NPDproject.
therefore,
can,
schedules
from
components can be
when used in conjunction
interactions
task
on
provided
4.
Product
costed at the concept design stage
designs can be accurately

without
cost of a product to be estimated
of manufacturing
e. g. simultaneous purchasing and usage, when shortage
398
Period
Batch
Control
the
using
and
costs apply
control
technique.
facturing
In addition
that minimizes total
(PBC) production
the amount of in-house manumanufacturing costs can be
determined for a product design.
5.
A method of improving the rate at which the manufacturing costs

design can be reduced has been proposed.
of a'product
technique takes advantage of the "learning

requiring
all
6.
cost reduction
components within
The
curve" effect
methods to be applied
by
individually
to
a product design.
The tasks required to allow H.M. Ltd. to develop a method of

forecasting
the need for new product development have been described.
The development of such a forecasting
technique at H.M. Ltd. is
by
lack
data
the
the
moment
of
present
on past
at
prevented
development projects.
7.
The cost effectiveness
of using CADsystems to aid new product
development at H.M. Ltd. has been found to be dependent on:
(i)
the amount of draughting
(ii)
the availability
analysis
(iii)
involved,
of software for performing functional
of designs, and
the innovativeness
of the new product design.
399
In addition
it
adversely effect
is considered that the use of a CADsystem could

the creative
design process but would benefit
the NPDprocess by enabling effective

the various
departments involved.
of integration,
data transfer
between
This would improve the level
planning and co-ordination
achieved between
hence
improve
tasks
development
the
and
chances of
product
marketing a successful
product.
400
10
CHAPTER
FORFURTHER
WORK
RECOMMENDATIONS
401
work should include:
In the short term further
1.
Extension of the range of processes and operations

area work is presently
In this
costed.
Polytechnic
Leicester
that can be
being carried
to develop regression
out at
based models for
the cost of cast components.
estimating
i
2.
Aggregation of individual
to estimate the manufacturing
required
estimating
as sales quotes and tendering.
data base for
necessary
to identify
attribute
(reliability,
carried
out,
quality
costing
during
operation
in use, tolerances
type of material
the estimating
the design
the design
as type of design
be
to
considered.
needs
This data must

feature,
required
process
of
and
The use of a particular
from
the estimating
equation
a list
data that
type and size
finishes
and surface
being processed.
display
to
be
used
then
and product
process.
being performed,
system into
Research is
process.
and serviceability)
to such factors
then be related
for
the type of manufacturing
be
to
considered
needs
equipment
developed
of the software
a comprehensive
being
Hence
system could be developed for use by sales personnel
for such functions
Expansion
costs of designs.
to estimate costs would be reduced and an
the time required
3.
The objectives
equations.
area would be to reduce the number of design variables
in this
"
estimating
system developed could
of relevant
In particular
this
design data that

concept could be
402
designers
to
with relevant
provide
used
Additionally
containing
manufacturing data.
coding of design features would enable data files

software for the analysis
of functional
and solution
design problems to be referenced.
work would include:
In the medium term further

le
1.
The development of a comprehensive cost and design optimization

design
the
for
process.
system
for
the
available
software
This would involve writing
cost optimization,
resource allocation
the
development
techniques
design
and
of a common
scheduling
and
data base.
would be to allow designers to
The objectives
data into the system and call-up
input
relevant
and
prepare
appropriate
scheduling
optimization
The cost forecasting
tools.
and design
techniques developed in the present work would
in
included
be
such
a
system
whilst
undoubtedly
the estimating
data and transfer

both
developed
cost
generate
could
system
this
2.
data to a suitable
data file.
link
to
development
software
of
The
developed to a CADsystem.
CAD system to retrieve
engineering
estimating
presently
The objective
relevant
drawing and transfer

system.
the cost estimating
the time required
would be to allow the
design variable
data from an
this data directly
Hence removing the interactive
the
to
estimating
use
required
system
to the
element
system and reducing
to develop cost estimates.
403
In the long term further

of all
functions
to remove all
involved
current
work would need to consider the integration
in the NPDprocess.
barriers
would be
to the development and transference
data between departmental functions.
area by allowing
to be stored and quickly
retrieved
large
by all
departments.
In addition, a scheme would need to be developed for
co-ordinating
the activities
objective
of
A computer-aided engineering
in
important
this
role
an
play
system would
information
of
amounts
The objectives
of departmental functions
with the
design
is
the
that
success
of
a
product
new
of ensuring
considered at all
stages during the NPDprocess.
be
of
existing
extension
an
undoubtedly
Quality
Such a scheme would

Assurance methodology.
404
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BAKER, R. J. and NELDER, J. A.

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3, December 1974.
Assurance
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the Assurance of Quality",

79/62358 DC, May 1979.
for
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Draft
for
Public
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429
APPENDIXI
OF THE NEWEHB RANGE

DEVELOPMENT
430
an electric
the hoist
Ropemaster hoist concept was designed as
the existing
Initially
hoist
unit
block for runway duty.
During this
period the UK market was supplied from a large number
holding
Ltd.
H.
M.
the
predominant market
with
manufacturers
as suppliers
originally
entering
type
the
1960's European competitors
with units
enter the market seriously
their
strategy.
In the late 1950's/early
share.
1950's
then in production was adapted for use on cranes in an
endeavour to match competitors
of local
However in the early
the crane field
penetration
crane.
began to
designed to FEMstandards(180)
blocks to end users but gradually
of hoist
through minor manufacturers and increasing
because of the competitiveness
The Ropemaster during
this
period
of the hoist block

was modified
to increase
5.5
to
10
tonnes
tonnes
from
a
maximum
of
of
maximum
a
range
lifting
capacity.
's
Universal
Ltd.
M.
H.
The success of
this
of
the acceptance
increase
type of crane within
in crane capacities
Crane range launched in 1962,

the market and the gradual
and spans resulted
in further
extensions
in
1969,
4-Fall
10-tonne
that
a
standard
unit
so
Ropemaster
range
the
of
20
to
tonnes
stretched
capacity.
subsequently
was
which
introduced
was
increase
in
the
1960-1974
from
an
market
showed
The period
requirement
for electric
hoists
so that whilst
the market share of
imports,
high
foreign
by
volumes
being
were
eroded
Ltd.
was
H. M.
1300
levels
in
1969,1200
in
1970,
of
order
being sustained with
431
900 in 1971,900
due. to production
customers turning
in 1972 and 1250 in 1973.

constraints
during this
to other suppliers
Extended delivery
period resulted
to meet their
Since 1974 Ropemaster sales have declined

sold for runway applications)
of "hoist
700 per annum. The ratio

"blocks
with current
constraints
requirements.
(particularly
sales levels
for units
being approximately
crane" is approximately
created market acceptability
their
the
due
to
of
concept
which
in regular
blocks sold for runway duty" to
Universal
of
a
as
part
sold
The delivery
times
1.5: 1.
for competitors
design H.M. Ltd. have subsequently
been unable to overcome.
The delivery
constraints
arose due to:
methods being used.
(i)
Complex production
(ii)
Poor component supply.
(iii)
Lack of priority
given to the manufacture of the
Ropemaster.
Thus, whilst
in the early 1970's 40% of the machine shop capacity
Ropemaster
production,
with
occupied
was
22%.
this
is currently
running at
432
Traditional
home orientated,
markets, predominently
have shrunk
and due to the Ropemasters design philosophy H.M. Ltd. have been unable
by export sales.
to replace this
The design is labour intensive
coupled with the low volume is uncompetitive

hoist.
a straight
identified
but, whilst
still
acceptable in the home market the price content of the
technically
within
the crane necessitates
selling
led to a change in the hoist
concept within
is now an essential
Ropemaster unit
EHB product
and not a secondary

cranes
through
extend
the capacity
at a lower profit
of the Ropemaster as a straight
The uncompetitiveness
hoist
has
The
crane philosophy
The development
is again emphasising
of the current
margin.
the organisation.
of the total
part
range.
market acceptance
be
stretched
cannot
Ropemaster
It
in the market place as
Whenused on a crane, the cost of the hoist unit
to the customer is not separately
hoist
and
of hoist
block
the need to
However, the
range of cranes.
to meet these objectives.
is not possible to increase hoist
sales volumes appreciably
design
is
longer
Ropemaster
the
no
to
acceptable
present
other
since
distributors
crane
and assemblers who form the major portion
and export markets.

by
clients
commitment
unit
must effectively
The design philosophy means either

or alternatively
be built
long delivery
to contract.
a high stock
times since each
Current design parameters
do not allow a ready change of suspension method, lifting

extras such as speed variations.
re-reeving
or any optional
be readily
by
accommodated competitors
obsolete
products.
capacity
by
These can.
It is therefore
design, expensive to produce and inadaptable
demands.
market
of home
an
to meet current
433
Since the hoist
block is an integral
part of the Universal
crane
that H.M. Ltd. continue to market such a product.
it was important
This would also enable the company to retain

decades)
as materials
several
up over
Four options existed,
its market image (built
handling experts.
each of which could allow H.M. Ltd. to
hoist
block.
to
a
market
continue
Option 1
To factor
complete units
from another manufacturer.
have been achieved by buying low cost hoist units

Kone (UK) Ltd.
current
price
selling
structure
prices but with reduced profit
margins.
their
However, the
of Kone (UK) Ltd. represented a "dumping exercise"
up of their
This eventually
own manufacturing
facilities
's
Ltd.
in
H.
M.
decrease
crane sales.
to a gradual
limited
from the distributor
This would have allowed H.M. Ltd. to maintain
the
to
market.
them
penetrate
enable
the setting
This could
could result
to
in
which could lead

This option also
H.M. Ltd. 's export potential.
The decision
not to manufacture a hoist
following
the
produce
(a)
problems:
Since the machine tool
investment
1200,000 over the last
6 years
at improving
majority
block range would also
programme involving
has been primarily
Ropemaster manufacturing
of this
capital
expenditure
productivity
aimed
the
would be wasted.
434
(b)
Approximately 37% of the machine shop operatives

need to be made redundant.
the flexibility
would
The redundancy would lower
facilities
across
the company's whole product range and prevent a quick

response to unusual market demands.
(c) ' Redundancy on such a scale could have a repercussive
effect
on the workforce in other areas with a consequent

in performance generally.
fall-off
(d)
The other product groups would need to absorb the

remaining manufacturing expenses and would become less
profitable
(e)
as a result.
There are many components commonto the Ropemaster and

other product ranges.
materials
(f)
Inevitably
therefore
the cost of
would increase due to the reduction
The profitability
of the spares division
in volumes.
would be
lowered.
(g)
Increased stock holding costs would be incurred.
(h)
Market reaction
place continuing
product.
foreign
direct.
could be unfavourable
since many customers
business simply because it
These customers may be reluctant
is an H.M. Ltd.
to purchase a
block through H.M. Ltd. and may prefer

This attitude
to purchase
could also extend into the Universal
Crane business with consequent reduction
in order input.
435
Option 2
To obtain a licensing
This is not feasible
manufacturer.
since all
foreign
current
manufacturers
due to a down turn in the world market and are therefore
are suffering
in-house manufacturing
seeking to increase their
at the present time in this
not interested
levels
and hence are
type of arrangement.
Option
Collaborative
with
whom to collaborate
revealed
to hoist
respect
Consequently
An examination
manufacturer.
another
with
of a composite
manufacture
with
place
agreement from a suitable
that
of possible
manufacturers
many were strong
block manufacture
any deals would give
range in conjunction
and design
them minimum advantages
in the market
expertise.
and a strong
hand in any negotiations.
However one company Swerre Munck A/S (Munck) of Norway showed

greater
potential
a difficult
financial
in this
position
difficulties
area, since they themselves appeared to be in
in terms of a rapidly reduced turnover and recent

(210).
Numerous discussions were held with
to
establish
Munck management
existed.
the extent to which mutual advantages
However, although there were many advantages to be gained
(i. e. reduction
in the new product range introduction
time due to
developed
having
a new product range, reduction
part
Munck already
the
extension
of
a
possible
product range
and
development
cost
in
through joint
8.0
tonne unit)
an
of
manufacturing
division
the
be
of
reached
not
amount of royalty
work carried
agreement could
of the in-house work content and the
paid by H.M. Ltd. for the previous development
out by Munck.
436
Option 4
The fourth
the only feasible
choice to
i. e. to develop and manufacture a new range of wire rope
follow,
This option would then give maximumutilization
hoists.
plant,
option was therefore
maximumoverhead recovery,
conform to the company's image as
in-house manufacturers of the total
range of crane products,
in export markets and future
interests
is retained
of existing
protect
growth and ensure that control
of own manufacturing costs and selling
prices.
However the disadvantages are long development time, current

low sales volumes of company's products negating capital
investment of the technical
limited
a
on
compromise
design
and a possible
range.
From the detailed

basic
resource at the expense of other areas,
design
block
hoist
in
philosophy
experience
limited
investment,
market survey
specifications
for
carried
out in 1977(26)
the
the New EHB range were considered
to
be:
(i)
The hoist
block should be cylindrical
standard flange mounted squirrel

driving
reduction
through a central
drive
in shape with a
cage motor at one end,

shaft
gearbox at the other end.
to a triple
The gearbox is a
separate module making assembly and replacement easy.

(ii)
A standard failsafe
brake is required,
back-end of the gearbox and therefore

by removal of a weatherproof
cover.
mounted at the
easily
accessible
437
(iii)
The construction
of the frame must be open for ease of
assembly of the rope and rope guide and to lend itself
to
varying drum lengths with the minimum of components.
The
design of theframe must allow units

to either
to be easily
normal or low headroom monorail units,
versions or fixed suspension units,
converted
crab
as illustrated
in
Figure 62.
-(iv)
The unit must be designed to be easily

single
(v)
to two or four rope fall
convertable
from
versions.
The units must conform to FEM Ib(180) and BS 2573 Part 2

M3(211) standards.
(vi)
The range of capacities,
heights of lift
and lifting
follows:
are
as
required
speeds
Safe Working Load (SWL)

(tonnes) 1 Fall of Rope
Height of Lift
(Metres)
Speed of Lift
0.8
10
20
1.6
11
20
3.2
12
20
5.0
12
20
8.0
12
20
(Metres/min)
This is to allow the range to be extended as illustrated

Figure 63 to other FEMgroups at lower capacities.
in
438
FIGURE 62
SCHEMATICDIAGRAMOF THE NEWEHB CONCEPT

Ref.
1,/'
(26)
h:
1,
439
FIGURE 63
OF THE NEWEHB RANGE

LOAD SPECTRUM
(26)
Ref.
\\`11\. \
operating
in
dai
wcrkiny
Light
Medium
<1
1I1
411
i
>16
1-2 ; 2-4
4-8
8-16 f >1t
1
4-B
>9
160
320
640
200
40 0j__
800
250
500
Hill
Ivv
II
a
I6
640
1000
-
---
1250
800
00
IT
__
-j i
2000
1000
2000
L500
3200
4000
v
^\
O;
6400
5000
6400
8000
W
i
8000
4000
"5000
!nj'.
20000
6300
12500
8000
16000
32000
10000
20000
4-'
25000
j 'J
Ji
/
K,
itc
n.
xc
IN
'
--- ---- -
..
----___----1'
;:
I
v
:,
Y.
iti
I ---
2500
10000
ist
10000
5000
..
1600
.:
50 vO
3200
i:
%941
Z;
4000
2 500
1250
*
-L.
71c
3 2OO
1 2000
2500
1250
1000
-4
kg
k9
320
8-16
pa it y
Hoisf
kg
F E.M
roup
p? r
I4-8
2-4
0.5
0-5-1
<
Heavy
211
time
hours
Average
Lcad
Spectrum
440
(vii)
For ease of service

design feature)
(which is intended to be a particular
standard proprietary
motors and brakes
must be used as well as metric bearings,
oilseals
and
threaded components to meet export requirements.

From H.M. Ltd. 's marketing department a forecast
(viii)
e
future
sales of the hoist
of the
are:
Sales Forecast
(ix)
SWL
Market
1st
2nd
3rd
(tonnes)
Demand
Year
Year
Year
0.8
37 %
259
444
740
1.6
34 %
238
408
680
3.2
19 %
133
228
380
5.0
8%
56
96
160
8.0
2%
14
24
40
The unit must be designed for economic manufacture and

designing
by
on a modular principle.
assembly
The
be
to
motor, gearbox, wire-rope
are
modules
drum tube,
frame, suspension unit,

block (hook arrangement).
brake, rope guide and bottom
I
441
APPENDIXII
ESTIMATING SYSTEM: MANUALMETHODDESCRIPTION
442
The sequence of tasks
in estimating
labour
using the example of the 30 tonne Goliath
illustrated
spur gear
involved
(Drawing Number 4/14162/2)
costs
is
Crane idler
which is machined from an
EN24T forging:
()
(Figure
From the component drawing

machining
operations
required
64) identify
to manufacture
the
the part.
These are:
(2)
Turn outside
(b)
Face both flange
(c)
Face both boss faces
faces
Bore centre
(e)
Grind centre
(f)
Grind outside
(g)
Cut gear teeth
(Tols. )O.
lmm)
(Tols. > O. lmm)

(Tols. )O. lmm)
hole
(d)
Determine
(To1s.,: ; O. lmm)
diameter
(a)
hole
diameter
the appropriate
cost
centres
using
Table 46.
443
FIRST IDLER MT SPURWHEEL
FIGURE 64
A
A
il
i'
1
a
i,
i
;
i,
i;
i
1
139.70
O
Ql
O
co
co
CO
O
O
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00
Q1
aM
co
i
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nfl
I
I
I
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I
92.10
Depth
Tooth
Module
All
14.29mm
Number of Teeth
= 45
6.35
Machining
= +0.40mm
dimensions
Material
EN24T
in mm's
(unless
Annual
Limits
otherwise
Quantity
stated)
= 50
444
PROCESSCOST CENTRES
TABLE 46
Pre-, Special and Post Machining
General Machining
Cost
Processes
Machine Type
Cost
Centre
Centre
Flame Cut
248
Bar Lathes
201
Saw
236
Bar Capstans
202
Shear
238
Chuck Lathes
203
Weld
239
Chuck Capstans
204
Gear Gutting
217
Centre Lathes
206
Milling
214
Vertical
210
216
Horizontal
Borers
(Prismatic
Operations)
(Cylindrical)
Grinding
216
(Surface)
Grinding
Borers
209
Spline
Cutting
270
NC Bar Lathe
258
Radial
Drilling
211
NC Chuck Lathe
258
227
Copy Lathes
219
Assembly
(3)
If general machining operations

appropriate
are carried
out and the
machine on which the component is processed is
determine
the
known,
relevant
not
is
extracted
which
cost centre using Table 47,
from Appendix V and shown here for
convenience.
The user initially
chooses the correct
depending on whether
It
is then necessary
centre
or not a boring
section
operation
of the table
is required.
to move down the columns until
is found where all
conditions
a cost
(i. e. component diameter,
445
RULES FOR DETERMININGGENERALMACHINING
TABLE 47
COSTCENTRE
ComponentVariables
Diameter (mm)
e
..
<
<
Length (mm)
Input Code
Boring Operation Required

51
152
70
0,203
92
305
70
0,201
Cost
Centre
es
76
152
-e1000
NC Bar
1,258Lathe
92
305
ie1000
0,201
394
178
Z 70
0,204
686
305
70
0,202 *
610
229
z1000
K
Chuc
NC
0,258
Lathe
686
305
,ei 000
0,202
<1778
610
191000
0,210
< 914
<5639
191000
0,206
No Boring
Annual Quantity
Operation
Required
51
178
70
0,203
92
610
70
0,201
NC Bar
258Lathe
76
e 254
21000
92
610
21000
0,201
394
178
70
0,204
686
305
70
0,202
NC Chuc1c
0,258 Lathe ,
610
279
21000
686
305
1000
0,202
21829
2 762
1000
0,210
22134
t5639
21000
0,206
General machining
cost centre
for
the spur gear
446
length and annual quantity)
reference to the spur gear the first
cost centre that can
machine a component 396.0mm in diameter,

and with an annual quantity
Hence with
are satisfied.
92.1cm in length
of 50 is 202.
Cost centres for machining the spur gear are:

Cost Centre
Operations
le
(4)
a-d
202
e-f
216
217
For operations
the relevant
abstract
carried
predictor
from this
out on machine group 202 identify

variables
appendix
for
using Appendix
cost
centre
IV.
An
202 is shown
in Table 48.
(5)
From the component drawing determine the values of predictor

variables:
(i)
Turn (Tols.
!o. lmm)Trurned lengths

Depths of cut
= 92.1mm
= 5. omm
No. Turned Diameters =1
(ii)-
(iii)
FTool
Face (Tols. sO.lmm)
Travel Lengths
No. of Facing Ops.

(iv)
Bore (Tols.
Flange
Flange
Boss
Side 1
Side 2
Side 1 Side 2 Total
28.6
28.6
23.6
Boss
28.6
11114
EBored
lmm).
Lengths
!O.
= 92.1 nn
57Bored Diameters = 88.9 mm
.
9o. of Bored Holes =1
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448
(6)
Insert
the coefficients
(Table 49, Appendix V) in the relevant

extract
from this
equations.
An
appendix for cost centre 202 is shown
here for convenience.

Equation Code
i
20201 (0.113 x 92.1)
+ (0.041 x 5.0) -(2.24
x 1)
20203 (0.058 x 114.4) - (0.18 x 4)

20206 (0.049 x 92.1)
+ (0.037 x 88.9)-(2.09
x 1)
Total
TABLE49
8.37
5.92
5.71
20.00 mins.
VARIABLECOEFFICIENTSFORCOSTCENTRE202
PREDICTOR
111:
COSTCENTRE202 - CHUCKING
COMBINATIONS
112:
113:
114: 20201
0.113
0.041
-2.24
0.00
0.00
0.0
115: 20202
0.147
0.041
-5.77
0.013
0.0
0.0
116: 20203
0.058
-0.18
0.00
0.00
0.00
0.0
117: 20204
0.081
-0.68
0.00
0.00
0.00
0.0
118: 20205
0.032
0.065
-0.92
0.0
0.0
0.0
119: 20206
0.049
0.037
-2.09
0.0
0.0
0.0
120: 20207
0.095
0.032
-1.81
0.0
0.0
0.0
121: 20208
0.50
0.00
0.00
0.0
0.0
0.0
122: 20209
0.147
0.041
0.013
0.0
0.0
0.0
123: 20210
1.00
0.00
0.00
0.0
0.0
0.0
449
TABLE49 (Cont'd)
124: 20211
0.00
0.0
0.0
0.0
0.0
0.0
125: 20212
0.50
0.00
0.00
0.00
0.00
0.00
126: 20213
0.095
0.037
-2.09
0.0
0.0
0.0
127: 20214
0.00
0.00
0.00
0.0
0.0
0.00
20215
128:
0.0
0.0
0.0
0.0
0.0
0.0
129: 20216
1.10
1.00
1.00
1.00
0.36
0.0
130: 20217
0.003
0.016
-0.10
0.0
0.0
1.2
131: 20218
0.002
-0.009
0.95
0.14
0.0
-0.88
0.00
0.00
0.0
0.0
0.49
132: 20219
(7)
14.08
Multiply
(Equation
appropriate
The total
machining
1.1
20.00
x
=
time for
consideration
group.
the spur gear
22.00 mins.
To estimate the "floor
to floor"
for machine set-up,
and machine manipulation

the relevant
Factor
Material
into
Factor
Use Table 30 to
of the material.
determine
required
Material
Code 20216, Table 49) to take
the machinability
(8)
time by the relevant
machining
time (FTF) time, the time
loading/unloading
tasks must be calculated
equations and predictor
from Tables 48 and 49.
components
variable
using
coefficients
450
(i)
Load/Unload Machine
Equation Code 20217
Max. A Dimension
396.0mm
=
Max. C Dimension
92.1mm
Total
Ops
=6
Load/Unload time. =
(0.003 x 396.0)+(0.016
x 92.1)-(0. l x 6)
+ 1.2
(ii)
3.26 mins
Equation Code 20218
396.0mm
=
Max. C Dimension
Total Ops.
=6
Machine Time
x 92.1)+(0.95
+ (0.14 'x 22.0) - 0.88
22.00 mins
x 6)
7.86 mins
Machine Set-up
Equation Code 20219
Set-up time
No. of main ops.
=3
Batch Size
= 20
(14.08 x 3) + 0.49
20
Total Manual Task Time =

(9)
92.1mm
Time =
(0.002 x 396.0)-(0.009
(iii)
Max. A Dimension
The total
2.14 mins
13.26 mins
FTF time for the general machining of the spur
is:
gear
Machining Time
22.00
=
Manual Task Time
= 13.26
Total Machining Time = 35.26 mins
451
To estimate the labour and overhead costs the total
(10)
time must be multiplied
by the appropriate
overhead rates for cost centre 202.
FTF
labour and
Labour and overhead

in Table 50,
cost rates for all
cost centres are listed
which is extracted
from Appendix V and shown here for
convenience.
35.26 x 2.60
60
(i)
Labour Cost
(ii)
Manufacturing Overheads = 1.53 x 8.25 =
(iii)
Administrative
=1.53
Overheads =
(1.54 + 12.61) x 0.2
=12.83
Total Labour + Overhead Costs
TABLE 50
12.61
16.97
LABOURAND OVERHEADCOST RATES (f's/Hr)
Cost
Labour
Manufacturing
Administration
Centre
Rate
Overhead Rate
Overhead Rate
248
2.55
6.70
0.20
236
1.30
8.25
0.20
238
2.60
7.00
0.20
239
2.60
8.25
0.20
201
2.60
8.25
0.20
202
2.60
8.25
0.20
203
2.60
8.25
0.20
204
2.60
8.25
0.20
452
TABLE 50 (Cont'd)
Cost
Labour
Manufacturing
Administration
Centre
Rate
Overhead Rate
Overhead Rate
206
2.60
8.25
0.20
209
2.60
8.25
0.20
210`
2.60
8.25
0.20
219
2.60
8.25
0.20
258
2.60
8.25
0.20
214
2.60
8.25
0.20
216
2.60
8.25
0.20
215
2.60
8.25
0.20
270
2.60
8.25
0.20
211
2.60
8.25
0.20
217
0.85
7.00
0.20
227
2.25
4.90
0.20
(11)
Stages 1-
10 are then repeated
and overhead costs

operations.
for
to determine
the grinding
the labour
and gear cutting
453
APPENDIX III
(DESCOSTIMATE):
DESIGN COST ESTIMATING PROGRAM
LISTING
OPERATIONNOTESAND PROGRAM
454
Introduction
A. 3.0
of the program is to allow both the time. and cost of
The function
manufacturing
a component to be estimated.
the time and cost for each individual
by calculating
building
and
a
component
on
performed
times and costs.
appropriate
out this
function
machining operation
these into total
floor-to-floor
Machining costs are then determined using the
labour and overhead cost rates.
to be carried
The manufacturing operations

be analysed in the following
(i)
It carries
Initially
order:
the total
machining
Machining
be calculated.
out on a component must
time per cost
centre
must
can be analysed
operations
in
any order.
(ii)
The total
machining time calculated
must then be input as
a variable
into the "Material
correction
to be made for the type of material
Factor"
equation to allow a
being
machined.
(iii)
If Load/Unload and Machine Manipulation
times/costs
these must be carried
the total
required
out after
are
have
been
times
adjusted using the Material
machining
Factor equations.
To enable the estimating

filed
are
type,
under their
appropriate
i. e. Pre-Machining,
accessed they
works cost centre number and process
General Machining, Special Machining and
455
The cost centre that the component is to be machined
Post Machining.
be
determine
known
input
to
the
code that allows access to
must
under
the relevant
equations.
estimating
However, General Machining operations
can be carried
out on a range of cost centres.
fore available
to select
the correct
A sub-program is there-
input code if
Operation times and costs can be calculated
not already
known.
for each operation
for
the
the
total
to
component
and
manufacture
used
number of operations
used.
The information
(i)
required to run the program is:
The cost centre or machine type if

identification
relevant
(ii)
known.
The cost centre
forms part of the input code for retrieving
estimating
equations from the data file.
If the cost centre is unknown, i. e. for General Machining

only,
the component diameter,
length and number of components
machined per year.

(iii)
The operations
(iv)
The design variables
and costs required
to be estimated.
for the relevant
estimating
equations
in
the
which values for these variables
order
and
into
the program
entered
Many design variables

However to simplify
is available
variable
must be
(See Appendix IV).
are commonto a range of estimating

identification
a variable
in Appendix IV for each cost centre.
equations.
description
To gain the full
sheet
456
(and
the
reduce computer costs)
system
of
benefit
a standard form has
been prepared (Figure 47) to allow the values for the relevant
variables
to using the program.
to be recorded prior
Unless indicated
to the contrary
all
component dimensions are
in
mm's.
measured
r
The equations for each machining cost centre can be used to calculate
total
floor-to-floor
times and costs and machine set-up times and costs.
Manipulation
Machine
Load/Unload
the
or
Where
small proportion
floor-to-floor
of the total
included,
been
have
not
separate equations
for
calculating
the
equation
of
A. 3.1
times represent only a

time of the component,
i. e. these times form part
machining times.
Running Procedure
The system flow chart
'form the operating
(Figure 65) and the following
instructions
"Descostimate".
'computer program
for the estimating
procedure
of costs using the
The example used to illustrate
illustrate
to
the
is
that
used
component
of
procedure
II.
Appendix
in
estimating method
the manual
the
457
FLOWCHARTFOR DESCOSTIMATE
FIGURE 65
START
2
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APPENDIXIV
DESCRIPTIONSOF VARIABLES
483
A. 4.0
Introduction
purposes design variables
For description
have been placed into
four main sections:
A. 4.1
Variable Description
Notes for Individual
I'll This section contains for all
list
Cost Centres
cost centres: '
(i)
an individual
(ii)
the order in which values for predictor
of predictor
variables,
variables
should be entered into the computer program and,

the equation codes for each estimating
(iii)
for specific
In addition
variables
A. 4.2
Those variable
A. 4.4
CommonVariables
alphabetical
costs in more
used to estimate manufacturing

In this
than one cost centre.
section variables
are listed
order.
Applicable
Variables
Variables
cost
section.
of
not present can be found in Sections A. 4.2 -
Variables
A. 4.3
cost centres descriptions
can also be found in this
descriptions
equation.
centres.
that
are specifically
Variables
centre
number.
A. 4.4
Illustrations
are listed
related
in their
of Welding Positions
to individual
particular
cost
in
484
lf
A. 4.1
Variable
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Cost Centres
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506
A. 4.2
Common`Variables
If a particular
"variable"
type of operation
is carried
on a component more than once (e. g. turning

diameters,
>
the
out
several
boring more than one diameter hole) then

sign indicates
that the sum of the
variable values for the operation must be input.
Where i=
e. g.
I =n
out, i. e. i=1,2,3,4
carried
>(Variable)
number of times a type of operation
is
n.
...
i-1
The difference
DEPTHSOF CUT
between the initial
and machined radii
of a component.
MACHININGTIME
The time calculated

after
It
inserting
should
for
the machining
operations
in the MATERIAL FACTOR

equation.
not include
UNLOAD/LOA&M/C MANIPULATION
or SET-UP times.
MATERIALFACTOR See Table 30 for a full
list
of material
groups.
DIAMETERS
NO. OF TURNED
NO. OF FACINGOPS
The total
number of each type of
operation
carried
NO. OF DRILLEDHOLES
NO. OF BOREDHOLES.
HOLES
NO. OF RECESSED
OPS
NO. OF THREADING
out on a component.
507
MAX. A DIMENSION
MAX. B DIMENSION
MAX. C DIMENSION
Componentrotating,
tool
stationary
fi
C
A
Tool
Axis
Component stationary,
tool
rotating
Tool
Axis
fi
pq
A
B
For round components the MAX. A DIMENSIONand MAX. B DIMENSION

represent
the diameter of the component.
For non-circular
components the MAX. B DIMENSIONis the maximum
dimension of the component at 900 from the MAX. A DIMENSION.
508
No.
MAIN OPS
Total number of major operations
(i. e. Bore,
Face, Turn, Recess, Thread, Ream, Groove) to

be performed on the component.
(0) No "Operation"
is not performed
If the type of "operation"

on the component input 0.
(1)
"Operation"
If
is performed
the type of "operation"
on
the component one or more times input 1.
"Operation"
DIAMETER
The machined diameter
for
the particular
"Operation".
"Operation"
LENGTH
The machined length
for
the particular
"operation".
TOOLTRAVELLENGTH
The difference
radii
TOTALOPS
between the maximumand minimum
of a facing operation.
The total
number of operations
carried
out on
a component. This variable
includes the
number of chamfers, circlip
grooves and
tapping operations.
509
A. 4.3
Variables Applicable
202 GROOVE
(a)
Max. groove width =w
(b)
Groove depth =d
(c)
Groove Diameter
14-- 4J
--
=D
206 ROPEGROOVE
This
is a specific
equation
(Rope Diameter - 1.27mm)
for
grooving
Diameter
of wire
of the wire
rope drum tubes.

rope diameter
less 1.27mm
Groove Pitch
N (Variable)
=PP
This indicates
that the variable
enclosed in the brackets should firstly

be multiplied
machined (N).
by the number of grooves
510
ILLUSTRATIONSOF WELDINGPOSITIONS
A. 4.4
(171))
(Ref.
WELDINGPOSITIONS- BUTTJOINTS
Flat
9
8= 60; f= 3211i;g= 32 in,
9=5 0"; f= ;Wa; g4? 16in.
Horizontal vertical
-1
-
_-r
9f
--
-e
V/
990
--
fir4Tth
ris
in.
g=0
9= 1132in.
Vertical
--j-r-
I32 In.
---"1 t'-
I16in.
L9j'J
9=60"
8_50"
Overhead
-'1 i'-9
g= O
I/tsin.
g=
511
WELDINGPOSITIONS- FILLET JOINTS

Ref.
(171)
Horizontal
vertical
Flat
\VOOI*
E
B
1
,I
C
,
2-
2
0
12'
II
--*
-h
LEG LENGTH
512
APPENDIX V
DATA FILE FOR THE
DESIGN COST ESTIMATING PROGRAM
513
CCSi
FL Ei GItlr
, 1+. FILE
LSTII
fI"CC%Af"
A'iIi"C
1: EE'SIi. I. CAic. % 19-2-81

FF<rrr
ESTIt'ATIfG
Ai"i.
CGE"T
FCFCLSICI
DATA
2;
3: TABLE
DAJA FILE FOR DETERMININGGENERALF"ACNIMItiG INPUT
LE'i"t
ESI.
iV
, tr
u"
DIAI. ETEk(M)
7;
ltf"GTH(tt,
It'IFI; T
CODES
IvO-.I EA 1EAr,
ECF E=1
9:
10:
1-;
13:
144
15:
16:
17:
18:
19;
Ei-FE=2
20:
0,203
0. 01
254
1OJ -"
178
305
279
z05
70
70
10:
10. '
10 25
201
09204
0,202
0,258
00 02
10
10:
0,210
0r206
92
178
b1 0
76'
92
3014
683
610
686
23;
TABLE 52
3t}: M/C
35: CCCc
36:
37: 24301
38 2+80'
392l+803
40 : 248U4
11: 24305
42: 24306
u.3: 24807
24aoa
4-:
', 5: 24809
70
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20603
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20608
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20610
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209Q9
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COST CENTRE 210-% ERTICAL
227:
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231:
232:
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235:
236:
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274:
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---25801
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25803
25804
25805
25806
25807
25808
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25810
25811
25812
25313
25814
25815
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295 :
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LATHES
CCST CENTRE 219-CCFY
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CC-ST CENTF:E 258-CHI. FCHILL
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TABLE 53 DATAFILE FORLABOUR
ANDOVERHEAD
467:
COSTRATES
468:
wI tl'-L- t, AItZ:
(GACFE) 1-5-81)
CEItiTcF', LA6l, F.(./i-f )
%EF HEADS
469:
ADMIt.
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248
7.. 70
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1.2Q
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9.25
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1.. 20
2.60
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8.00
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219
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258
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214
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1.20
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521
APPENDIX VI
MODIFYINGTHE REGRESSIONPROCEDURE
522
To reduce proportional
errors the conventional
estimating
regression procedure can be modified to minimize the sum of the

squares of the residual
the multiple
linear
variables
predictor
proportions
regression
(Figure 66).
The solution
to
procedure for two independent
then becomes:
(i)
The equation that minimizes the sum of the squares

of the residual
is obtained by determining
proportions
the values of A, B and C that minimize Equation 48.
1=ci
i=N
(Pi)2
(Yi -A=
BX1i- CX21)2
(48)
Yi
i=1
i=
Where:
Pi
The
proportional
=
difference
between the ith
estimated (i. e. using the expression

A+ BXl + CX2) and observed values of the
dependent variable
Yi
Y.
dependent
the
Y.
ith
of
value
variable
observed
=
N=
Number of observations.
Xli, X2i
ith values of the predictor
A, B, C=
The coefficients
minimizes
(Pi)?
variables
of the estimating
Xl and X2.
equation that
523
OBJECTIVE
THE MODIFIEDREGRESSION
FIGURE66
a.
.0
(0
aI
0
Predictor Variable (X)
Objective
of the Modified Regression Technique

i=m
Pi
(')
Minimize
Yi
i=1
i=1,2,3,
...
524
(ii)
Transforming Equation 48 and dropping the subscripts

the notation
simplify
to
the expression becomes:.
yp2
=
(iii)
(49)
(1 - AY-1 - BX1Y-1 - CX2Y-1)2
The minimization
of
P2 is accomplished by the partial
of Equation 49 with respect to A, B and
differentiation
C and allowing
the partial
derivatives
to equal zero,
i. e. Equations 50 to 52.
2=
aFP
-2
Y-1 (1 - AY-1 - BX1Y-1-CX2Y-1) =0
(50)
-2
X1Y-1 (1 - AY-1 - BX1Y-1 - CX2Y-1) =0
(51)
= -2
X2Y-1 (1 - AY-1 - BX1Y-1 - CXZY-1) =0
(52)
aA
2=
82P
aB
ayP2
ac
(iv)
Dividing
Equations 50 to 52 by -2, applying
operator
(2: ) to the terms inside the brackets and replacing
the subscripts
the solution
the summation
a set of simultaneous equations are formed

of which yields
the values of A, B and C that
minimize the sum of the squares of the residual

i. e. Equations 53 to 55.
proportions,
525
i=N
EXliyi-2
i=N
Tyi-2
i=N
Yi-1 =A
i=N
i=1
i=1
i=1
i=1
ALXl
iY i-1 =
i=1
i=1 ,e
iY i-2
i=N
i=1
of modifying
the regression
the
in
the
manner
estimating
above
procedure
obtained using the modified
2Y1-2
X21
+C2:
i=1
the effectiveness
regression
accuracy
equations was
developed
that
of.
equations
using the
with
compared
conventional
The results
(i)
regression
of this
procedure.
comparison (Table 54) indicated
In general the modified

the average estimating
the Average Proportional
reductions
(54)
i=1
X1iX2iYi-2
+B2:
i=1
To test
XliX2iY 1-2
+C
i-N
X2iYi-1 =A
i=1
2Yi-2
i=1
i=N
ZX2iYi-2
i=N
i=N
Xl
+B
(53)
'
i=N
i=N
i=N
T-Xl
X2iYi_2
+C
+B
that:
procedure improves
regression
accuracy (when measured using

Error)
in average estimating
although small
accuracy can
for
(e.
estimating
equations
g.
occur
gear cutting
times for T>65, M<3; T>65, M>3<4 and T<65, M<3).
(55)
526
(ii)
The modified regression

improves the variation
procedure significantly
in proportional
estimating
errors.
(iii)
The minimization
conventional
technique effectively
regression
in high proportional
errors
improves the estimating
(iii)
arising
range.
of the modified regression
equations in this
values by the
of absolute residual
results
at the low end

Hence the use
technique effectively
accuracy of estimating
range.
By improving the estimating

accuracy for low'values

the modified
regression
procedure helps to avoid negative time standards

being estimated in this
variable
equations.
coefficients
area when negative
predictor
are present in the estimating
t
i
527
COMPARISON
OF THE ACCURACYOF CONVENTIONAL
AND
TABLE 54
MODIFIED REGRESSIONPROCEDURES
CONVENTIONAL
MODIFIED
REGRESSION
PROCEDURE
REGRESSION
PROCEDURE
VARIABLE
DEPENDENT
ESES
loe
Gear Cutting Times (T>65, P1<3)
-0.050
0.255
-0.004
0.133
(T>65,M>4)
0.066
0.108
'(T<65,M>3)
0.030
0.202'
-0.036
0.188
(T<65,M>3)
0.019
0.143
0.012
0.133
Sawing Times (Bar)
0.158
0.416
-0.090
0.285
Facing Times (Bar Lathes)
0.718
1.348
-0.272
0.446
-0.112
1.251
-0.177
0.462
It
11
11
'
11
11
11
It
11
(T>65, P9>3<4)
(Vertical
Borers)
T=
number of gear teeth
M=
module size
Consideration
0.066
0.190
-0.018
0.129
-0.012
0.098
of Manufacturing Volume
The individual
time standard observations
equations using the regression

various types of components.
manufactured within
used to develop estimating
technique are normally associated with

Since the volume of individual
a company can vary considerably
components
it would be useful
528
to weight the accuracy of an estimating
equation with respect to
component volumes, i. e. the higher the component volumes manufactured

the greater the accuracy of the time standard estimates obtained from
a regression model.
In order to achieve this

the conventional
objective
it
is again possible
to modify
regression procedure to take account of the relative
volumes of the components used to develop the estimating
models.
Equation 48 would need to contain a term for the volume of components

manufactured as shown in Equation 56.
_2
(P; )2
v1
Yi -A-
BX,
CX2i
i -
(56
Yi
Where:
Vi
= The volume manufactured of the component that

,
represents the ith observation
The solution
to Equation 56 is carried
of Y.
out in an identical
to that of Equation 48, i. e. a set of simultaneous equations

57 to 59) are obtained the solution
of predictor
variable
coefficients.
to which yields
manner
(Equations
the required
values
529
v1Y1-2 +B
V1X11Y1-2 +C
AT iX1iYi-2
+B
LviXli2Yi-2
A7 ViX2iYi_2
1Y1-1 = A\
iX1iYi-1
ViX2iYi_1
B)
v1X2'Y1-2
+ CL ViX1iX21Y1-2 (58)
viXliX2iYi_2
CT ViX2i2Yi-2
Although modifying the regression

enable the estimating
estimating
relative
procedure in this
manner would
accuracy of high volume components to be improved,
equations would need to be redeveloped
volumes of various
components 'occurred.
(57)
if
changes in the
(59)

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Loughborough University

Improving the new product

A Doctoral Thesis. Submitted in partial fulllment of the requirements

for the award of Doctor of Philosophy of Loughborough University.

Please cite the published version.

This item is held in Loughborough Universitys Institutional Repository

For the full text of this licence, please go to:

by D.J. Stockton (1983)

to thank Mr. J. Middle for the

help, advice and encouragement given throughout the period of the

my thanks are due to the Design and Production

to the Science Research Council for financial

support and to Mrs. J. Morley for the efficient

thesis was typed.

to thank Herbert Morris Ltd. for

allowing me to carry out the research at their

company and for

measure the relationship

The system uses multiple

of a component and the factors

between the production time

times can then be converted to cost using appropriate

overhead cost rates.

The system uses design features

only for predictor

Hence designers with little

manufacturing methods can use the system to cost designs as they

has been developed

form the basis

and compute the production

can be used directly

time data used to develop

provides designers with a powerful

times and costs

designers to estimate the development times

components and assemblies has been developed.

enables the design process to be scheduled such that the

new product development time could be minimized.

scheduling method is the ability

between components to be designed on the basis of relative

success of the project.

Models have been developed that allow :

cost of a product to be estimated within

ten highest cost components.

the need for product development.

to consider when developing a prescriptive

methods of solving the "assortment"

the optimum number and specification

standard sizes to manufacture).

of Value Engineering into the new product

The use of cost/design

generation of minimum cost designs.

Computer-Aided Draughting and

Design systems to the new product development and original

Nomenclature included in Text

The New Product Development Process

Chapter 2 Aspects of the Design Process

The Make or-Buy Decision

The Assortment Problem

Design Planning and Control

Costing Product Designs

Total Manufacturing Costs

A Doctoral Thesis. Submitted in partial fulllment of the requirements