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Job Shop Estimating Introduction Setup and Lag Time
Job shop estimating is not just throwing a dart at a dartboard and hoping the buyer likes the price. Estimating is giving a precise calculation of the cost and sell price to the buyer in order to win business.
Staging Time
The time required to gather materials, dies or any other equipment required to get the machine running. Staging can potentially be performed during the running of another job through the machine because it may not actually require the machine to be available. A simple definition is time spent on a machine or process prior to a manufacturing run.
Setup Time
The time required to bring this production batch quantity to an actionable state.
Transit Time
Transit time is the time to move a particular batch quantity to another step in the process.
Tear Down Time
The time required to remove all the equipment that was required to be setup on the machine making it ready for the next process. A job may continue to the next operation during the tear down time because this time does not affect the actual job, only the machine. A simple definition is the time to take down a machine or process after a manufacturing run.
Quoting and ERP packages should provide the capability for these setup time variations in order to allow your estimating , costing and even scheduling to be as accurate as possible.
Consideration of Lag Time
The four areas of setup time actually add costs to the manufacturing of the item. Lag time does not add costs to an actual estimate under most circumstances.
When there are dependencies between operations, delays in handling, transportation, transmission or thinking time, etc. between operation steps we refer to this as lag time. Lag time does not usually add costs to a operation step because there is no activity actually being performed except for taking up space on the manufacturing shop floor. If there were large lag times you may consider putting a dollar value on the floor space but this may be overkill during the quoting and estimating process.
On the other hand lag time is a critical factor during scheduling of a job shop. This lag time is critical in ERP/MRP systems in order to properly handle dependencies between operation steps. The objective is to minimize the time a job is sitting idle with no work being performed. Reducing cycle time by decreasing the queue time between manufacturing steps is a basic principle of lean manufacturing to reduce work in process inventory.
Quoting and Estimating is not an area where lag time is usually considered because there are direct costs that could be attributed. As prepare your estimate keep in mind lag time because it will be used in scheduling the job shop.
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