Benefits of Implementing Automated Costing in a Small Machine Shop: A Case Study

Abstract

Knowledge based cost estimating systems are available, but is there a lower limit to their applicability in an industrial environment?  This paper answers this question by examining a knowledge based cost estimating expert system application in a small machine shop.  Differences between the traditional experienced-based system currently employed and the automated system are studied.  Data is gathered to analyze time effectiveness, accuracy, and payback of the software.  Data from seventy part models is recorded to study the time experiment and data from fifty part models is used to study accuracy and consistency.The results indicate that the software is faster than traditional quoting systems; however, the payback point is high. Also, results show that the software has a smaller average time to manufacture percent difference between the automated system and the actual time to manufacture (TTM) compared to the percentage difference between the traditional TTM and actual TTM. Standard deviation for the automation is also less, implying better consistency.  As a result, the attractiveness of the automated system in the limiting case of a small machine shop rests with significantly improved accuracy and consistency rather than payback.