My advocacy now is IEs must first concentrate on improving engineering elements and then move into productivity managerial elements and non-engineering areas. Machine work study or machine effort improvement, value engineering and design for manufacturing and assembly are major engineering based IE methods. All are available as existing methods.
It makes engineering changes to products and processes to increase their efficiency - increase their productivity which means reduction in costs.
In this connection the following modified explanation of industrial engineering given in the web site https://www.myaccountingcourse.com/accounting-dictionary/industrial-engineering-method is worth knowing.
What is the Industrial Engineering Method?
Definition: Industrial engineering method is a physical way of examining the relationship between cost drivers and costs by analyzing the inputs coming into the company, the outputs that are created, and the work that goes into the process. In other words, it is a detailed look at the entire production process and how that process affects the costs of an organization.
Summary Definition
Definition of Industrial Engineering Method: It is a way of comparing cost drivers and objects to see how the company can make its operations more efficient.
Receiving and Maintaining Product Designs and Process Plans
Receiving Cost Reports - Periodical Reports and Product Orderwise Reports, Productivity Reports
Preparing Process Charts and Product Charts based on Shop Observation and Study in standard IE Charts and Diagrams. Analyzing Cost Information and Productivity Reports
Product Industrial Engineering
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Industrial Engineering is System Efficiency Engineering. - Narayana Rao
It makes engineering changes to products and processes to increase their efficiency - increase their productivity which means reduction in costs.
In some defence related engineering/production organizations, industrial engineering department is given the responsibility of preparing cost estimates to support marketing activity also apart from preparing cost budgets for production departments and processes. It is a rational way of organizing and industrial engineering discipline has the required activities in place in theory to support cost estimation for marketing purposes. So, we can say industrial engineering departments have the necessary data and activities in place to support marketing related cost estimation and also production budget related cost estimation.
In this connection the following modified explanation of industrial engineering given in the web site https://www.myaccountingcourse.com/accounting-dictionary/industrial-engineering-method is worth knowing.
What is the Industrial Engineering Method?
Definition: Industrial engineering method is a physical way of examining the relationship between cost drivers and costs by analyzing the inputs coming into the company, the outputs that are created, and the work that goes into the process. In other words, it is a detailed look at the entire production process and how that process affects the costs of an organization.
What Does Industrial Engineering Method Mean?
What is the definition of industrial engineering method? Regardless of the specifics of a manufacturing process, units go in and outputs are created at a manufacturing company. When there is a physical relation between those inputs and outputs, analyzing that relationship can help managers to examine and control costs. Industrial engineering measurements related to productivity and cost help in this. Time taken by machines and men is directly related to productivity of resources and cost of output. Therefore time studies that measure how much direct machinery time and manpower time is needed to produce a certain amount of output are conducted by industrial engineers. Time study is also the basic measurement for efficiency improvement. Reducing the machine hours and labour hours based on engineering modifications is the focus of industrial engineering. Hence every industrial engineering project or study begins with a time study, cost study, and productivity study. When an industrial engineering project is completed, its benefits are indicated by once doing a time study, cost study and productivity study. As an intermediate stage, estimates of time, cost and productivity are made by industrial engineers.
The site gives the example of a large business that manufactures curtains with some being cloth, dye, thread, machine hours, and labor, and output being the finished curtain. Industrial engineering identifies the physical relationships between the inputs and the output. It will measure or determine how much of each input produces a certain amount of output (partial productivity of the input). For example, the finding that it takes two hours of direct labor to produce twenty square feet of curtain is a useful piece of information.
Summary Definition
Definition of Industrial Engineering Method: It is a way of comparing cost drivers and objects to see how the company can make its operations more efficient.
What are the Basic Steps for Industrial Engineering + Cost Estimation
Understanding Processes and Costs
Receiving and Maintaining Product Designs and Process Plans
Receiving Cost Reports - Periodical Reports and Product Orderwise Reports, Productivity Reports
Analyzing Processes and Costs
Preparing Process Charts and Product Charts based on Shop Observation and Study in standard IE Charts and Diagrams. Analyzing Cost Information and Productivity Reports
Product Improvement, Process Improvement and Cost Reduction
Product Improvement, Process Improvement
Product Industrial Engineering
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Design to Cost projects require multiple cost estimates. Each time a new alternative is created in the direction of reduced costs, a new estimate is to be made.
DFMA has cost modelling components.
DFMA Lessons - IE Online Line Course Notes.
Process Industrial Engineering
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Preparing new material requirement specifications and resource requirement specifications for products and processes and inputs. Time estimates or measurements prepared.
Preparing Cost estimates and doing Cost measurement after Improvement
Preparing Cost Estimates for Supporting Marketing Efforts/Quotations/Bids
Product Cost Estimates and Supporting Process Cost Estimates are done using the latest reduced costs. When feedback is given by marketing on these bids at various stages, they are studied and understood. The process repeats with the first step.
Engineering Cost Estimating
(http://acqnotes.com/acqnote/tasks/engineering-cost-estimating Defense acquisition made easy site)
The Engineering Cost Estimating method builds the overall cost estimate by summing detailed estimates done at lower levels of the Work Breakdown Structure (WBS). It’s a technique where the system being costed is broken down into lower-level components (such as parts or assemblies), each of which is costed separately for direct labor, direct material, and other costs. The estimates for direct labor hours are done using analyses of engineering drawings, standard time data and contractor or industry-wide standards.
Engineering estimates for direct material have to be made for raw materials and purchase parts based on drawings and "make or buy" decision. The remaining elements of cost (overheads including specific items such as quality control) may be expressed in terms of the direct labor and material costs. The cost estimates at lower component level are aggregated or totaled and hence the method is called “bottoms-up” estimate). The use of engineering estimates requires extensive knowledge of a system’s (and its components’) characteristics both product design and process plan, and lots of detailed time study and cost study data.
Because of the high level of detail, each step of the work flow should be identified, measured, and tracked, and the results for each outcome should be summed to make the point estimate.
The advantages to the Engineering Cost Estimating method include:
The estimator’s ability to determine exactly what the estimate includes and whether anything was overlooked,
That it gives good insight into major cost contributors, and
The details of one product can be transferred to other products.
To do engineering estimating, the product specification must be prepared at component level.
All product and process changes also must be communicated to IE department so that they are reflected in the estimate
More detailed are available in
Defense Acquisition Guidebook (DAG)
GAO Cost Estimating and Assessment Guide
NASA Cost Estimating Handbook – 2008
Cost Estimation
Process, Planning And Cost Estimation
R. Kesavan
New Age International, 2004 - Manufacturing processes - 258 pages
This Book Is An Attempt To Provide All Necessary Information About Process Planning And Cost Estimation. The Subject Matter Has Been Presented In A Simple And Systematic Way With Numerous Diagrams And Illustrations So As To Enable Thorough Understanding Of The Topics.
https://books.google.co.in/books/about/Process_Planning_And_Cost_Estimation.html?id=A9-ZXblNrPoC
Cost Estimating in Design for Manufacture and Assembly Books
Product Design for Manufacture and Assembly, Third Edition
Geoffrey Boothroyd, Peter Dewhurst, Winston A. Knight
CRC Press, 08-Dec-2010 - Technology & Engineering - 712 pages
https://books.google.co.in/books/about/Product_Design_for_Manufacture_and_Assem.html?id=W2FDCcVPBcAC
Note: It is important to read the books by Boothroyd to understand the full method of DFMA. The DFMA method is to be combined with Value Analysis and Engineering to do product industrial engineering.
https://www.degruyter.com/view/j/eng.2016.6.issue-1/eng-2016-0002/eng-2016-0002.xml
https://www.researchgate.net/publication/223817612_Cost_estimation_in_mechanical_production_The_Cost_Entity_approach_applied_to_integrated_product_engineering
https://onlinelibrary.wiley.com/doi/10.1002/9780470172339.ch88 Ch 88 of IE Handbook Salvendy
https://www.sciencedirect.com/science/article/abs/pii/S0925527305001465
https://hal.archives-ouvertes.fr/hal-00732117/document
http://journals.sfu.ca/ijietap/index.php/ijie/article/view/285/209
https://books.emeraldinsight.com/page/detail/Cost-Engineering-and-Pricing-in-Autonomous-Manufacturing-Systems/
https://books.google.co.in/books?id=6rK1UtCXk5cC&printsec=frontcover#v=onepage&q&f=false
Why Industrial Engineers Should Learn to Estimate Jobs
Cost Engineering Definition of AACE
Cost Engineering is the application of scientific principles and techniques to problems of estimation; cost control; business planning and management science; profitability analysis; project management; and planning and scheduling.Total Cost Management
Total cost management is that area of engineering practice where engineering judgment and experience are used in the application of scientific principles and techniques to problems of business and program planning; cost estimating; economic and financial analysis; cost engineering; program and project management; planning and scheduling; cost and schedule performance measurement, and change control.
Simply stated, it is a systematic approach to managing cost throughout the life cycle of any enterprise, program, facility, project, product, or service. This is accomplished through the application of cost engineering and cost management principles, proven methodologies, and the latest technology in support of the management process.
http://web.aacei.org/about-aace/what-is-cost-engineering
Cost Engineering: New Profession - https://www.jstor.org/stable/pdf/40225654.pdf
Estimating and Costing in Construction.
Updated on 4.5.2023, 14.1.2022, 30 Nov 2021, 4 July 2021, 23 September 2020.
27 November 2019
Such a nice writing. The style you have narrated is simple beautiful and well authored. The quality of writing can be seen from the beginning until the end.
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Kesavan's book on cost estimating - process planning.
ReplyDeletehttps://drive.google.com/file/d/0BzOdibkr6Q1geG00Q2hBaHVLZzA/view?resourcekey=0-lmNbj0kLvNRDopNGPYqpfw
Great looking web site. Assume you did a whole lot of your very own coding.. estimating company near me
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