WELCOME TO

COST ENGINEERING TRANING

PROGRAMME

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CONTENTS

INTRODUCTION
BASIC CONCEPTS
COST ENGINEERING
VALUE ENGINEERING
YIELD FACTOR
STANDARDISATION
COMMONIZATION
EXERCISE
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ASSUMPTIONS

SILENCE MEANS NON-INVOLVEMENT

WE ARE PEOPLE NOT RABBITS OR ALLIGATORS
THIS IS A CAN DO GROUP
UNIQUENESS IS AN OPPORTUNITY FOR CREATIVITY
EVERYONE PRESENT IS COMMITTED TO LEARNING HOW TO
IMPLEMENT COST ENGINEERING
SHOW ME IS A HEALTHY ATTITUDE
WE ARE ALL LEARNERS ( FACILITATOR INCLUDED)
WE ARE ALL RESPONSIBLE FOR OUR OWN LEARNING
LEARNING IS AN INTERACTIVE PROCESS
WE ARE OPEN TO NEW IDEAS
IMPLEMENTING COST ENGINEERING IS FUN
MAY BE IS ACKNOWLEDGING NEW THOUGHTS

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INTRODUCTION
DEFINATION OF COST ENGINEERING
ROLE OF COST ENGINEERING IN PRESENT
SCENARIO
ADVANTAGES OF COST ENGINEERING

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DEFINATION OF COST ENGINEERING

COST ENGINEERING IS COMBINATION OF TWO
WORDS COST +ENGINEERING, THAT MEANS TO
FIND OUT THE TOTAL COST OF THE JOB BY USING
ENGINEERING TECHNIQUES WHICH FURTHER
INVOLVE IN THE TIME MANAGEMENT ,PRODUCTION
PROCESS , VENDOR DEVELOPMENT ,
PURCHASING , QUALITY.

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ROLE OF COST
ENGINEERING
1.COST ENGINEERING WORKS AS BRIDGE BETWEEN NEW
DEVELOPMENTS & IMPLEMENTATIONS.
2. COST ENGINEERING ALSO WORKS AS MIRROR IN WHICH
REALSTICTOTAL COST OF THE JOB REFLECTS
3. COST ENGINEERING GIVES FORECAST TO ALL THE DEVELOPMENTS
CONDUCTEDBY DIFFERENT DEPARTMENTS OF THE ORGANIZATION
4. IT HELPS IN GETTING US REALSTIC COST PROPOSED DEVELOPED
JOB
5.COST ENGINEERING PATCHUPS BETWEEN THE REQUIREMENT OF
NEW DEVELOPMENTS & MARKET AVAILIABILITY.
6. COST ENGINEERING MAINTAINS RECORD OF MARKET PRICES OF
RAW MATERIAL
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CONTRIBUTION OF COST ENGINEERING

SUGESSITIONS TO IMPROVE QUALITY

SUGESSITIONS FOR COST REDUCTION
SUGESSITIONS FOR NEW DEVELOPMENTS
SUGESSITIONS FOR BETTER
COMMUNICATION
SUGESSITION FOR NEW DESIGNS TO
REDUCE WASTAGES

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BASIC CONCEPT

THERE ARE 3 MAIN ELEMENTS

MATERIAL COST
PROCESS COST
OTHER COST
_____________________________________________________

MATERIAL COST

[Format CS-STD: 1&2 (segment A & A2) & WT-STD: 31]

Material cost is defined as product of input weight and landed cost of raw material.
Input weight is sum of finish product weight + machining allowance weight +
wastages.
Input weight is calculated by studying the drawing & with the help of standard
formulas / auto CAD designing.
Detail of standard formulas is as under:
Weight = Volume * Density / 1000000
(Density of steel
= 7.85g/cm3)
(Density of Cast iron = 7.25g/cm3)
Where Volume is in mm3

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S.no.

Description

Volume

1.

Circle

/4* D2 * height
Where D = Dia in mm

2.

Triangle

Length*Height*Width / 2

3.

Square

Length2 *Thickness

4.

Rectangle

Length*Width*Thickness

5.

Bending length

The flat blank length can be calculated as follows:

L
= Flat blank length
a, b = Length of legs
R
= Bend radius
q
= Correction factor
s
= Material thickness
@
= Bend angle
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L= a + (R + q*s/ 2) *@/180+b+.....
Example:
Length of legs
: a = 40 mm, b = 166 mm, c = 56 mm
Bend Radius
: R1 = 6 , R2 = 20
Material thickness : s = 4 mm
Bend angle
: a1 = a2 = 900
Correction factor : q1 = 0.7, q2 = 1
L = a + (R1+q1*s/2) a1/180 + b+ (R2+q2*s/2)* *a2/180+c
= 40+11.618+166.0+34-54+56.0
= 308.15 mm straight unbent length
More commonly used tips for calculation of weight:SECTION
REFERENCE
WEIGHT KG / METER
1. Hexagonal
Width across flat 5
0.170
Width across flat 8
0.435
Width across flat 10
0.680
Width across flat 15
1.530

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2. Angle

20*20*4
1.10
25*25*4
1.40
30*30*4
1.80
30*30*5
2.20
35*35*4
2.10
35*35*5
2.60
40*40*4
2.40
40*40*5
3.00
40*40*6
3.50
50*50*4
3.00
50*50*5
3.80
50*50*6
4.50
60*60*6
5.40
60*60*8
7.00
60*60*10
8.60
Dimensional measurement of physical raw component (If available) is compared with
drawing considering minimum required machining allowances and recorded in Weight
Analysis of Component Sheet (WTSTD: 31) copy attached.
Input weight is derived after calculation considering appropriate machining allowance.
In case of forged component cut weight is calculated as per format (WT-STD: 31(A)
Copy attached.
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Recoverable scrap weight (95% in machined parts ,100% sheet metal parts, weight less
by burning loss in gas cutting components) is deducted from input weight(raw material
weight) Burning losses calculated as 3-5mm average width multiplied by the peripheral
length in mm * thickness in mm * density (7.85g/ cm3 ) divided by 10,00,000 ).

Wastage:
Fabrication components = +5% on raw weight of the component.
Alter method to calculate the wastage is to calculate the total weight of the plate
divided by the no. of pieces which can be sheared / gas cut.
In steel components 2% cutting wastage on raw weight.

&

PROCESS COST SEGMENT

[Format CT-STD: 16 & MR-STD: 201]
It is defined as product of cycle time & the respective machine hour rate.
2 (a) MACHINE HOUR RATE CALCULATION
[Format MR-STD: 201]
Machine hour rate is calculated after accessing the basic data like Cost of machine,
depreciation period, interests, consumable cost, labour cost, spares, electricity cost as
per the attached machine hour rate calculation format.
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2 (b) PROCESS OPERATION SEQUENCE CYCLE TIME STUDY

[Format CT-STD: 16]
Study of drawing w.r.t. tolerances of the component
Process sequence of component
2 (a) Process used in machining components are hacksaw cutting, centering &
facing, drilling, tapping, grooving, parting off, chamfering, milling, grinding etc.
2 (b) Process used in sheet metal components are shearing, blanking, bending,
piecering, deep-drawing, trimming, embossing etc.
2 (c) Process used in fabrication components are shearing / gas cutting / profile gas
cutting, bending / heating & bending, debburing, welding etc.
Selection of machine depending upon the operation i.e. for machining components
Hacksaw, Lathe , Milling , Drilling , Grinding m/c are used .For sheet metal & fabrication
components Presses ( ranges from 50 ton to 1000 ton ) , gas cutting , welding are used.
Selection of tools depends upon the machine & surface finish required by the drawing
.Tools generally used for machining components are blade, brazed tool, inserts, cutters,
drills, hole mill, reamers, grinding wheel. Dies are used in sheet metal & fabrication
components.

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Cycle time study i.e. clamping time in min., RPM, feed mm/min, cutting speed in m/min ,
length of cut in mm, handling time in min,no. of pass, setting time in min etc. All are
summed up to calculate in total manufacturing time on different machines.
Formulas for calculating the machining time:
Machining Time in min
= Length of cut / (Feed in mm/rev *RPM)
Length of cut
= Length travel by the tool on the component for
The particular operation & (In case of drilling
0.3D is added in the length of cut, where D=
Dia Of the drill)
No. of passes
= Depending upon the removal of material.
Maximum material removal in one cut is 3 mm
Feed in mm/min for Threading = Pitch * RPM
Machining time for milling
= Length of job +added table travel
Feed / tooth * no. of tooth of cutter * RPM

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Formulas for calculating the Press component time:

The total stroke time of a mechanical press is 21 sec.( approx) including handling time
Machining allowances consideration:
Casting components
1 (a) 3-4 mm per face
1 (b) 4-6 mm on diameter
1 (c) 5-7 mm on bore
Steel components
2(a) 3-5 mm on dia
2(b) 2-3 mm on face
Additional operations cost i.e. Tagging, welding ,assembly, finishing operation are
considered in sheet metal & fabrication category components as cost derived by
conducting practical trials . Detail as under
S.NO.OPERATION UOM
RATE / UNIT
REFERENCE
1 Gas cutting
Rs. / Meter
2 Mig welding
Rs. / Meter
3 Arc welding
Rs. / Meter
4 Tagging
Per Tag
5 Primer application Rs. / Sq Meter
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13.00
13.42
13.10
0.25
12.19

(6 D1.1)
(6D3.1)
(6D2.1)
(6D5.1)
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Machining time multiplied with respective machine hour rate to derive respective
operation cost.
Sum up of all operation cost is total process cost.
Standard parameters used for calculate the manufacturing time
STANDARD PARAMETERS
Parameter UOM
Formula
Lathe
Milling
Drilling
RPM
-Standard
90To 835 100To1400
90To710
C.S
M / min
3.14* Dia *RPM 60To90
100To300
10To22
/1000
Feed
mm / rev. Standard
0.05To0.2
0.2To0.5
0.05To0.2
OTHERS COST SEGMENT
[Format CT-STD: 1&2 (segment C)]
ICC @2% on material cost
REJ @2% on material cost
OVERHEADS @10% on process cost
PROFIT @10% on process cost.
.
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TOTAL COST OF THE COMPONENT

All the 3 cost segments Material cost segment from format CS-STD: 1&2 segment A,
Process cost segment from format CT-STD: 16, others cost segment from format
CS-STD: 1&2 segment C. are updated in the sheet named COST BREAK UP
(Format CS-STD: 1&2&3) to calculate the total cost of the component

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