Manufacturing Cost Estimating 



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Basic Assumptions

There are several other basic assumptions behind the approach to simplifying systems that must be accepted.

1.    The software was purchased because of its conceptual foundations and should be operated as it was originally conceived.

2.    Manufacturing systems should help a company set good plans and then execute them.

3.    The systems should become the communication device for these plans and their execution, not a redundant set of information separate from the real communication flow.

4.    There was a logical strategy that made sense behind the original implementation of these systems.

5.    In manufacturing, the systems do not determine the process, the process determines the systems.


As a rule simple systems provide better results then complex ones. Complexity causes users, management, and designers to lose sight of the objectives because they must focus on the technicalities. It becomes difficult to maintain training and preparedness levels. Complex systems are difficult to update. Most important, they are hard to operate, require unnecessary effort, and seldom satisfy their users. Complexity is easy to define. It is the existence of bureaucratic steps, non-value added activities, over structured data, reports and data that no one uses or needs, levels of precision that are irrelevant to the decision making process, and tools that do not fit the manufacturing process.

Simplicity is more difficult to define. Oversimplification can lead to systems that do not get the job done, but are convenient because they demand little maintenance. Our objective is to have quality systems to aid our planning and execution, so they must contain all the necessary function­ality and information. Perhaps the best way to define simplicity for our purposes is "the absence of complexity." Most companies have systems that were built following a logical concept and containing the right tools. The complex­ity is in the application or the design. So, in our approach to simplifying, we will search for complexity and remove it.

What to Look for...

As mentioned above, there are a number of forms complex­ity can take. These must be identified in an evaluation process as candidates for simplification.

1. Bureaucratic steps

These are steps that can be eliminated, but may exist because they were needed at one time, or are politically motivated.

Example: One company has established a buyer-planner position in Purchasing, but has not eliminated the step of having a material planner in P&IC review the orders and generate requisitions in the system to the buyer-planner.

Example: Another company that has improved its quality with in-process controls has not eliminated the official quality control approvals from its routings even though they are no longer actually done by QC. The reason for this is that QC management feels that their "turf" is being invaded and refuses to give up officially what they have already given up in reality. Unfortunately, since the sys­tem was set up to transact these approvals, QC people must go through the motions of reporting just to satisfy the system's requirements. In addition, the manufacturing orders cannot be closed until all the QC approvals have been transacted, so many completed orders remain open when QC delays performing this low priority task.

2. Non-value-added activities

These include reporting data or generating reports that no one uses, manual entry or transfer of data between parts of the systems that could be done automatically, multiple entries of the same data resulting from multiple data bases, applications that reflect yesterday's manufacturing flows, and generation of information to "cast blame" elsewhere.

Example: During an evaluation of a manufacturer's sys­tems, it came to light that there were over 150 different capacity planning reports that had been created by differ­ent users through a report generator. When it was time to meet and make capacity decisions, each user brought his or her own information to the table. Very few decisions were made in these meetings because most of the time was spent arguing about whose information was correct.



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