2.810 Cost Adventureweb.mit.edu/2.810/www/files/lectures/lec20-cost-2019.pdfBudget Issues •Retail...

2.810 Cost AdventureJohn Lewandowski

Assumptions/constraints

- Must keep holes/locations- Must achieve approximately same strength- Cost will include material/tooling/production

How does our manufacturing process, design, and cost per part change as our company grows in size and sells higher quantity?

L-bracket LLC

First prototype: L-bracket by 3D printing

Additive X

Additive Y

Additive Z

Let’s separate production levels

• Prototyping: QTY 1-10• Demo units (design changes needed)

• Lead time: days

• Short-term manufacturing: QTY 10-1,000• Products for first-customers (functional)

• Lead time: weeks

• High-quantity production: QTY 1,000-1,000,000• Scaled mass manufacturing (throughput)

• Lead time: months

L-bracket via extrusion and machining

L-bracket by 3D printing (less material)Additive

Additive X

Additive Y

Additive Z

L-bracket via sheet metal forming or waterjet

L-bracket

Fill Pressure OK.

1,000 psi.

Number of Gates: 1.

Gate Type: Tab.

Part is too big for a multi cavity mold in a standard sized machine

L-bracket by injection molding

L-bracket via casting

Assuming each part is optimizedBreakeven between die casting and machining is at ~20,000 unitsInjection molding becomes cost effective at under ~1000 unitsMachining/waterjet/sheet metal are very competitive for low qtyAdditive has no scaling advantage, only useful for a few parts

$-

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

1 10 100 1000 10000 100000 1000000

Cavity trade-offs

1 Cavity 2 Cavity 4 Cavity 8 Cavity

Break even points

2 Cavity ~50004 Cavity ~100008 Cavity ~25000

Takeaways

• Think about the sensitivity analysis and risk: what if wages increase, material changes (quality, cost), design/function changes (more holes in the bracket, thicker part)

• Even the simplest part can have significant trade-offs between manufacturing cost and functionality

• There will be multiple iterations for every process

• All departments/skills should be involved in the discussion

• Let’s see a real life example of when not everybody was involved in the decision-making process…

Apple has machined

Aluminum, let’s cast our

computer out of magnesium

Go tell marketing to announce a magnesium

laptop

Then go talk to engineering to design it, we’re taking over this

industry

Laptop Enclosure Manufacturing Cost and Process Breakdown

Top Cover

Keyset Cover

Raw MaterialExtruded Mg billet

Anti-Corrosion TreatmentCeramic anti-corrosion coating

Top Cover

Keyset Cover

PaintSpray + Conveyor

CNC Milling7 operations, 98.3 minutes total

Step 3

80.5

min

Step 2

10.5

min

Ste

p 6

7.5

mi

n

CNC Milling6 operations, 105.3 minutes total

Step 5

16.1

min

Step 2

23.8

min

Step 3

48.1

min

Raw MaterialExtruded Mg billet

MgC

Line

Anti-Corrosion TreatmentCeramic anti-corrosion coating

MgC

Line

Logo SubassemblyAssembly + Inspection

Laser

Paint

Ablation

Logo

Inspect

ion

Secondary OperationsLaser etching + Paint touch-up

Vent Hole

Micro-

spray

Laser

Etch

PaintSpray + Conveyor

Paint

Line

Paint

Line

Post-CNC Robot deburr and wash

Was

h

LineRob

ot

Deb

urr

Wash

Line

Post-CNC Robot deburr and wash

Was

h

LineRob

ot

Deb

urr

Wash

Line

Secondary OperationsLaser etching + inspection

Laser

Inspecti

on

Logo

Asse

mbly

Material/mechanical properties

Magnesium

• Cost: $2.10/lb.

• Strength:

• Density:

• Specific strength: 158 kN*m/kg

• Embodied energy:

• Specific energy:

Aluminum

• Cost: $0.72/lb.

• Strength:

• Density:

• Specific strength: 115 kN*m/kg

• Embodied energy:

• Specific energy:

Laptop Top Cover Mfg ProcessStarting Weight: 1165 g Final Weight: 115 gMaterial Waste: 90.1%

Laptop Top Cover Cost Breakdown

Top Cover Process StepsProjected

Yield %

Raw Material Billet (Mg) 100%

CNC Milling 92%

Deburr 99%

Cleaning 99%

Anti-corrosion Treatment 98%

Painting 90%

Secondary Operations 99%

Logo Subassembly 98%

Packing and Logistics /

TOTAL 77%

Top Cover Cost Structure

Total Cost: $33.73Material + Machining: $18.21

Cost (w/ defect): $43.80

Laptop Keyset Cover Mfg ProcessStarting Weight: 1225 g Final Weight: 176 gMaterial Waste: 85.6%

Laptop Keyset Cover Cost Breakdown

Keyset Process StepsProjected

Yield %

Raw Material Billet (Mg) 100%

CNC Milling 91%

Deburr 99%

Cleaning 99%

Anti-corrosion Treatment 98%

Painting 90%

Secondary Operations 96%

Packing and Logistics /

TOTAL 75%

Keyset Cost Structure

Total Cost: $37.80Material + Machining: $21.55

Cost (w/ defect): $50.40

Budget Issues• Retail Cost: $1000 (assuming 50% markup to customer)

• Wholesale Cost: $500 (assuming 50% markup to Best Buy)

• Cost out the door: $250 (all-in cost)

• Laptop cover + Keyboard cover: $43.80 + $50.40 = $94.20

• …

• Max budget for the rest of the computer: $155.80

• Already burned ~40% of the budget on two parts of the BOM

• Think about how many computers they make and sell (1M/year)

• Production rate also becomes an issue, at 90 minutes on the CNC per part, this would mean they would have to buy >100 CNC’s and run 24/7

• Total disaster: Laptop discontinued

This is a long time for each part to be on the CNC!

The interior finishing and vents make up ~70%

Look at all the tool changes

So many side vent holes

Just these 5 features make up 25% of the of the total CNC timeHow important are those, really?

This design is in big trouble, not even that much opportunity for cycle time reduction, only 10-15 minutes each

What about material savings? Or energy savings?

Takeaways

• Design + Engineering + Marketing + Management

• Build a process plan before making decisions

• Think about both cost as well as production rate issues

• Consider sensitivities as well as opportunities for cost optimization

Poly board pre-cast concrete

BAAM pre-cast concrete mold

What if the tool was ½ or ¼ of the size?

What if material rates for plastic doubled/tripled?

What if labor costs decreased by ¼?

Summary

• The additional benefits of the technique will always maintain

• Shipping costs ½ for long hauls

• Higher qty, getting 4 parts for every 3 of the lay-up method

• Every part will be different (size, material) but immune to labor changes

Mat: $24.65Tool:Prod:



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