Automation Costs

Automation Costs - The Most Important Aspect of Project Management

Establishing and keeping accurate track, of automation costs, is essential, to a project's success or failure. We have tried many systems, over the years, and spent, not an inconsiderable amount, on various software programs, but have yet to find one that has all the features, we consider essential. Especially when we consider a project, like a complex, automated system.

As the owner of a Systems Integration Company, I had to find, or develop such a system. It was decided, that Microsoft Excel, would work best. (Actually the first spreadsheets used were Lotus  -but that just shows how long we have been in this business!)

The Requirements We Used Are as Follows:

1. Initial use, was to generate a budget, so as a price could be arrived at, for the quotation.
    
2. Rows would be designated as various categories of internal costs listed in approximately the correct sequence. I.E. Engineering - Mechanical, would be first, followed by Engineering - Electrical, Programming etc, followed by all the internal tasks required to complete a project. In total this used up a total of 15 rows. The next 3 rows were assigned to Outside Manufacturing, Outside Fabrication and Outside Panel Build. This completed the first part, of the spreadsheet, and as you can see, it covers all the internal costs.
   These costs could all be entered, as a" dollar" amount, and the program, was capable of calculating, and recording, the number of hours assigned to each task. The next 28 rows, are used for various types of purchased goods, i.e. Robots, Pick and Place units, Conveyors, LTS, Welding Equipment, etc, etc.
    
3. Columns would be assigned to all the Stations used, in the system.
   It can be visualized, that if rows are totalled,we have a total cost for each category and if each column is totalled,we have a total cost per station.
    

Furthermore, by adding all the categories, and all the stations, we have a total cost for the project, and a check. Hopefully the 2 totals match! (If not, it is possible the problem lies with data entry.)

If another template is used to keep track of actual automation-costs, as they occur, and the budget is compared to the actual costs, then this part of project, is being managed well. If these actual costs, are accurately recorded, then future budget generation, is greatly simplified, and is sure to be of greater accuracy.

To give us some idea, of the ratio, of the various costs, we have looked at a recent project (a 12 station, Dial Indexer) and found the following -

Engineering-Mechanical - 10%

Engineering-Electrical - 5%

Assembly-mechanical - 6%

Assembly-Electrical - 5%

Manufacturing - 13%

Purchasing - 61%

Automation costs can thus be used, to manage a project, from start to finish.

To return from Automation Costs to Automation Management click here
 

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To find out more about how to track and record your Automation Costs, please feel free to contact us.

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