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K

#9195

Cost per placement measure | 4 October, 1999

I am working on trying to define a cost per placement measure in our SMT assembly operations.

Does anyone know where I might find a published industry average that we may compare to?

I�ve heard it stated that an industry average is less than $0.01 per placement, but have never seen anything published.

Does anyone have data that they can share?

We are looking at a fully burdened cost measurement that includes: � Direct Labor � Indirect Labor � Variable overhead � Equipment amortization over 5 year period.

Our assembly operation is high mix, low to medium volume.

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Karlin

#9196

Re: Cost per placement measure | 5 October, 1999

| I am working on trying to define a cost per placement measure in our SMT assembly operations. | | Does anyone know where I might find a published industry average that we may compare to? | | I�ve heard it stated that an industry average is less than $0.01 per placement, but have never seen anything published. | | Does anyone have data that they can share?

It is | | We are looking at a fully burdened cost measurement that includes: | � Direct Labor | � Indirect Labor | � Variable overhead | � Equipment amortization over 5 year period. | | Our assembly operation is high mix, low to medium volume. | | Hi,

I am not sure whether I actually answer your question but But I will try.

There is no "standard" average industrial cost per placement.

To give you some feel of what I means, just check the direct labor cost, it varies from one place to another. Asia labor rate is about 1/3 (just estimate rough figure not obtained from accounting) of US rate and Europe labor rate is about 4X of Asia rate.

For high mix low volumn board, it suffer a deficiency in machine utilization and it has more burden in overhead compare to high volume low mixed model. Beside, a board with 2000 component and ubove would have better efficiency then a board with only 10 component...etc. Therefore,the average of 1 cent per component, could means anything and it is a very bad index to used as reference.

One more precuation is that average is a very bad index to used in Activity Based Costing (ABC) as it is very much depends on the tail effects. E.g average of 1,1,1 and 19,19,19 is 10. This average 10 has not much meaning as it does not represent much of the actual data. Used the mode istead if possible.

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#9197

Re: Cost per placement measure | 5 October, 1999

|hello morris

type in quoting smt in archives and you will get some good insight. i had the same question at one time.

wayne

I am working on trying to define a cost per placement measure in our SMT assembly operations. | | Does anyone know where I might find a published industry average that we may compare to? | | I�ve heard it stated that an industry average is less than $0.01 per placement, but have never seen anything published. | | Does anyone have data that they can share? | | We are looking at a fully burdened cost measurement that includes: | � Direct Labor | � Indirect Labor | � Variable overhead | � Equipment amortization over 5 year period. | | Our assembly operation is high mix, low to medium volume. | |

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Paul Gerits

#9198

Re: Cost per placement measure | 13 October, 1999

Hi Morris,

I work as a technical consultant, application specialist for Philips EMT (SMT machine suplier).

For cost per placement complex calculation can be made. To make a easy one just to hav an idea you can use following.

Information needed: Production hours per year, Components placed per hour (net!), changeovers made per week per shift, enrgy costs, breaks per day per shift, intrest rate, years of depreciation, costs per square meter floor space, number of opperators, engineers, supervisors per shift, investment costs.

If you have all of this following calculation can be made:

Usage Costs per Placement Calculation customer: 0 contact: 0 date: 13-okt-1999 Machine Qty Machine EURO Auto Loader 1 NT 110 LL 21.348 Screenprinter 1 DEK 265 GSX 159.730 Chip shooter 1 FCM II 821.693 Feeders 96 Feeders 8-12mm 73.056 Trolley's 4 Feeder trolley 40.180 Finepitch placer1 ACM 249.872 Feeders 40 Feeders 8-44mm 41.453 Trolley's 4 Tray&feeder Trolley's 125.947 Oven 1 Hereaus Oven 80.532 Inspection conveyors 3 NT510ICL 1000mm 18.134 Auto Unloader 1 NT 110 ULL 25.203 Software 1 0 Installation 1 13.114 Training 1 27.000 Total investment cost 1.697.263 Investment/year 5,00 year depreciation 339.453 Interest 6,00% 101.836 Operational Services 91.401 Operators 1,00 50.000 Supervisors 1,00 40.000 Energy 59,60 KW 8.344 Squaremeters 89,40 m2 8.940 Update training 6.750 Total cost/year 646.723 Total SMD's placed/year 71.270.144 factory efficiency calculated 71,3% Costs per Placement 0,009074!! Hours/year 2000 Number of Operators/Shift 1,00 Comp/Hour netto (from PPS) 50000 Cost/squaremeter/year 100 Changeovers /week: A: Same carrier set 2 B: Other carrier set 1 Operator 25 Maintenance engineer 30 Energy costs/KWh 0,07 Required placements/year 100000000 Breaks/day in hours 0,5 Interest rate in % 6 Years depreciation 5

Note prices are in Euro and examples!!

In this overview a lot more is in underneath like service contracts, machine efficiancy, training, updatetraining etc. etc. To make a calculation like this is very complex and concumes a lot of effort and time. I hope it helps you. If you provide me with the information then maby I can make a calculation for you.

Regards,

Paul Gerits.

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Bill Haynes

#9199

Re: Cost per placement measure | 13 October, 1999

Hello Morris, I hope that my superiors don't see your message or they might have me go through all of that to calculate my cost per part mounted. One of the things that has helped me out considerably is an Accounting report that gives me all of that information in one spreadsheet. I made up an Excel spreadsheet that has all of the formulas(took about 3 hours) and all i have to do is enter the data from the Accounting report and i have a cost of what it takes to mount one part. This may not be an exact science but it works out pretty close. Since we are running 5 lines i had to divide the indirect labor up for each indirect person and assign some of their time to a line. If you can get your cost per part mounted at $0.01 for the high mix, low to medium volume please get in touch with me so I can try to do the same. I have one line that is at about $0.01 but it runs that same product all of the time. The higest cost machine i have is at about $0.045 and it is old(Rh2) and we are leasing it. good luck!

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