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Session 2259

Intelligent Production Cost Allocation System

Michael L. Rioux, Dr. Bruce E. Segee University of Maine Department of Electrical and Computer Engineering Instrumentation Research Laboratory

Abstract

In the manufacture of machined products a large quantity of consumable tools are used. When simultaneously manufacturing a broad variety of products having different specifications, it is difficult to assign an accurate cost of tool usage to a specific product. What is often done is to assign a dollar value based on averages, however, this method does not meet a satisfactory level of accuracy. A system was developed by the University of Maine Instrumentation Research Laboratory comprised of a network of barcode scanners and decoders to solve this problem. Unique barcodes are assigned to operators, tools, operations, products etc. Information is gathered via a series of barcode scans as work is performed. This information is then translated, concatenated with a unique station ID, and transmitted to a PC via the network. We have designed a Visual Basic program designed to be a general-purpose data gathering application that runs on the PC. The application performs all the necessary data processing and, through the use of Open DataBase Connectivity (ODBC) drivers, is able to communicate with a variety of databases. Data queries can be run to determine all of the tools used on a specific product and a much more accurate dollar value can be placed on the manufacture of specific products. This system provides valuable information that can be used to reduce costs, improve productivity, and enhance competitiveness in a global economy.

Introduction: Statement of the Problem

In the manufacture of machined products, there are many contributors to cost of the final product. Figure 1 shows the major expenses and revenue associated with production. Arrows going into the machine shop represent expenses while the single arrow coming out represents the revenue generated by the finished product. Obviously, a company wants not only to maximize revenue, but also the ratio of revenue to expenses. In order to accurately control this ratio, a great deal of information must be examined. The more information used, the better the process can be understood. Monitoring monies spent on maintenance, energy, material, and labor in the production of a product is relatively straightforward. However, monitoring consumable tool expenses is surprisingly difficult. Since tooling cost may be a substantial expense, it would be beneficial to be able to

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Rioux, M. L., & Segee, B. (2000, June), Intelligent Production Cost Allocation System Paper presented at 2000 Annual Conference, St. Louis, Missouri. 10.18260/1-2--8485