Page 4: Labour costs
The planned method of manufacture, known as the process and mini statement of work, will form the basis of the labour cost. It will initially be generated in man-hours. This activity is undertaken via the Work Measurement Group who are part of the Production Engineering Department. Their task is to measure in man hours, the length of time required to complete the activity identified in each of the planned operations. Each of the operation times will conform to British Standards, thereby making sure that the values are accurate and consistent and this will be done for all of the parts within the assembly.
The measurement system used to generate these man-hours is based on the development of synthetics. Synthetics are tables and formulae derived from the analysis of accumulated work measurement data, arranged in a form suitable for building up standard time, machine processing times etc. by syntheses. Syntheses are a technique for establishing the time for a job, at a defined level of performance by totalling individual element times. These element times being obtained from time studies on other similar jobs. Pre-determined motion time system (PMTS) is a work measurement technique whereby times are established for a job at a defined level of performance. The advantage of such a system is the consistency of the output irrespective of the aircraft project being measured.
Man-hour estimates are derived and presented in terms of run and set-up times providing the basic values. Set time relates to a one off cost associated with the manufacture of a quantity of the same component known as the batch size. For example, the prime machine used for the manufacture of the Wing Rib will require the tooling specific to that part and the tooling carousel loaded with the cutters prior to the loading of the first component billet.
The batch size is linked to the customer delivery programme. The availability of the facility is balanced against other projects, but the batch should be of a size that is cost efficient. The run time relates to the repetitive activity performed for each component in the batch.
Converting data into a Cost
Performance is effectively the variance between the measured theoretical time and recorded actuals. The decision to apply performance and at what level, depends upon the activity being undertaken. For example, an automated process is far more likely to achieve 100% of the theoretical target, than a labour intensive process. Therefore, the manufacturing process and the component design are critical to the performance decision making process considerations.
The standard time man-hour value represents the application of techniques designed to establish time for a qualified worker to carry out a specified job at a defined level of performance. The motivated operator would be familiar with the task being performed and have all the necessary tools, equipment and components readily available at the work station. Whilst the application of a performance to standard times can bring reality to the value for some of the above criteria, another allowance has to be added to account for learning. This is done by application of learning curves.
These are widely used in industries where the typical number of units manufactured in a products life cycle is between 5 and 1000; typically shipbuilding, special electronic equipment and of course the aerospace industry. It is difficult to decide whether learning curves are invented or discovered. In the 1930s, philosophers investigating how people learnt, conducted laboratory experiments which recorded how the length of time to complete a task reduced with the number of repetitions of that task. They noticed a mathematical relationship between the results and without going into the maths, the time taken reduced by a fixed percentage every time the total number of repetitions doubled.
Generally speaking, in the aircraft industry, learning curves are in the range of 75% to 95%. The value of the curve varies depending on a number of factors including:
- build rate at which units are made;
- level of skill required to perform tasks;
- organisational experience in managing this type of work;
- level of automation involved;
- levels of planned investment to update production equipment with new technologies;
- standard of special tooling/jigging and fixturing.
We have now established within the costing process:
- material costs;
- a learning curve.