Data & Information in Cost Estimating

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Data Information in Cost Estimating
Petros Souchoroukov, Dr. Rajkumar Roy Keren
Mishra p.souchoroukov_at_cranfield.ac.uk
r.roy_at_cranfield.ac.uk
k.mishra_at_cranfield.ac.uk Cranfield University, UK
SCEA 2002 Phoenix (Scottsdale), Arizona, USA,
11th 14th June 2002
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Agenda

• ICOST Introduction
• Cost_at_Cranfield
• Data Information Presentation
• Research problem
• Cranfield Approach
• Results
• Observations

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Developing An Integrated Costing Approach For
Conceptual Design Evaluation
ICOST
July 2000 - Oct 2003
Petros Souchoroukov Keren Mishra
Research Assistant
Research
Assistant Contactp.souchoroukov_at_cranfield.ac.uk
Contact k.mishra_at_cranfield.ac.uk
Principle Investigator Dr. Rajkumar Roy
Contact r.roy_at_cranfield.ac.uk
Department of
Enterprise Integration, School of Industrial and
Manufacturing Science
Cranfield University, Cranfield,
Bedford MK43 0AL Tel [phone] Fax 01234
750852
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ICOST AIM

• The ICOST Project is about the integration of
  internal Costing practices within industry,
  primarily
• Commercial Cost Estimation and Technical Cost
  Estimating

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Identification of Challenge

• The manufacturing industries are currently not
  fully utilizing their costing expertise.
• This is due to lack of communication
• Lack of costing interaction
• Lack of common terminology
• Lack of knowledge with regards to each others role

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Project Introduction
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ICOST Objectives

• Develop A Framework
  for the lateral transfer of costing knowledge to
  enhance communication and understanding between
  the disciplines
• Develop Common Information Model a
  framework which is generic and holistic to align
  technical cost estimating with commercial cost
  estimating.

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Cost Engineering _at_ Cranfield

• cost_at_cranfield.ac.uk

A Complete Package for Industry
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Cost Engineering at Cranfield
Quantitative and Qualitative Knowledge Capture
for Cost Modelling EPSRC, BAE SYSTEMS Duration
Oct 1999 - Sept 2002 Integrated Costing Approach
for Conceptual Design (ICOST) EPSRC, BAE SYSTEMS,
Ford, XR Associates Duration July 2000 - July
2003 Integrating Cost Estimating and ERP
(ICERP) PhD Project Duration 2001-2004
Research
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Integrating Qualitative and Quantitative
Knowledge for Cost Modelling
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INTEGRATING COST ESTIMATING and ERP (ICERP)
Project Aim To integrate ERP and Cost
Estimating Systems, so as to reduce Lead Time
and derive accurate Cost Estimations for New
Product Development.
Research Objectives
- ERP Systems Analysis - Cost Estimating Systems
Analysis - Commonalties and Differences
Identification - Integration Factors
Identification - Development of Integration
Framework
Research Methodology - Industry Survey -
Software Engineering - Data Mapping and mining
- Database Organisation and Administration -
Networking and Application Integration
Techniques
Persons Involved
Dr. Victor Taratoukhine v.v.taratoukhine_at_cranfield
.ac.uk Tel [phone] (ext. 2008)
Dr. Rajkumar Roy r.roy_at_cranfield.ac.uk Tel (44)
01234-750111 (ext. 2423)
Nikos Giannopoulos, PhD Student
n.giannopoulos_at_cranfield.ac.uk
Tel [phone]
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TrainingIndustrial Masters Programme with Ford
Motor Company and Ministry of Defense
MSc by Research (part time) for Two Years
Specialising in Cost Engineering Costing
strategy for a new technology intensive product
(Just completed) Scott Colmer Methodology to
evaluate true cost of Engineering Prototype (Just
completed) Gareth Jones Full Service Supplier
Cost Modelling ((Just completed) Vince
Baker Developing Cost Estimating techniques for
Nuclear Plant Decommissioning George Amos Cost
Engineering Knowledge Capture and Reuse Stuart
Blackwell Tool Cost Estimating Knowledge Capture
and Reuse Mathew Harrison Development of
Software Estimating Sizing Methodologies Riaz
Yusaf
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Developing A Systematic And Consistent Approach
To Engineering Prototype Cost Estimating.
OBJECTIVES
KEY ISSUES
Identify Generic Cost Drivers Across Industry.
Establish the Boundaries of a Prototype Cost
Model.
INDUSTRIAL SPONSOR
Mr. T.Griggs
Implement Best Practice Prototype Costing Model.
Identify Specific Cost Drivers Across Industry
Email tgriggs_at_ford.com
CRANFIELD SUPERVISOR
DELIVERABLES
Dr. R. Roy Email r.roy_at_cranfield.ac.uk
Compare And Contrast Existing Low Volume OR
Prototype Cost Models.
RESEARCH CONTACT
Validate The Adoption of a Cost Model To Cross
Between Engineering Disciplines.
Mr. G. Jones Email gjones18_at_ford.com
Duration January 2000 January 2002
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Estimating Techniques For Decommissioning Nuclear
Facilities
Comprehensive literature survey to determine
state of the art in Nuclear decommissioning
estimate procedures
Analysis of Nuclear decommissioning projects to
determine main cost risk drivers
Identify suitable cost modeling techniques
Apply research findings within a cost model for
future use in estimating Decommissioning projects
Academic supervisors Dr Rajkumar Roy
(r.roy_at_cranfield.ac.uk) Dr. Tracy Bhamra
(t.bhamra_at_cranfield.ac.uk)
Msc Student George Amos (SPS-P23e1_at_dpa.mod.uk)
Industrial supervisor Mr N. Buttrick
(SPS-P23_at_dpa.mod.uk)
To optimize data gained from several years
experience in the nuclear industry
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Short Course on Cost Engineering
24-28 July 2000, Basildon, UK
As a response to industrial requirements for
education in the subject, the first of a series
of Short Courses on Cost Engineering was
recently offered by Cranfield University, and
hosted by Ford Motor Company. The course is a
result of close collaboration between the two
organisations and is a part of an Industrial
Masters research programme with Ford. The course
was held during 24-28th July at Trafford House,
Basildon, and was attended by cost estimators
from Ford, from the Ministry of Defense (MoD) and
from Rolls Royce.
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Cranfield offers bespoke Cost Engineering Course
for the UK MoD Specialist Procurement Services
10-14th September 2001, Cranfield, UK
As a response to industrial requirements for
education in the subject, the first of a series
of Short Courses on Cost Engineering was
recently designed for Specialist Procurement
Services (SPS), who are part of the Defence
Procurement Agency within the Ministry of Defence
and offered by Cranfield University. The course
is a result of close collaboration between the
two organisations and is a part of an Industrial
Masters research programme with SPS. The course
was attended by cost engineers from the MoD and a
representative from one of our major Defence
Contractors, Alvis Vehicles.
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Presentation Objectives
Introduce the research area

• Discuss
• Activities Within Cost Estimating
• XPat
• IDEF3 Modelling

Common data infrastructure across Automotive and
Aerospace
Present a data infrastructure To improve level of
detail and cohesion
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Research Problem

• Cost Estimating is a Black Art
• A cost estimate is as good as its data
• Visited 13 companies in automotive aerospace
  industry.
• Different Terminologies
• Different Standards
• Data infrastructure (Type and Detail of data)
• ABC Rates
• Customers Management require greater detail of
  information

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The Cranfield Approach
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Commercial Activities

• The purpose of commercial activities in cost
  estimating is to provide key business information
  for decision-making in a top-down fashion.

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Engineering Activities

• The engineering activities in cost estimating try
  to model the design to manufacturing cost in a
  bottom-up approach for establishing relative
  costs for different solutions, and methods.

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The Cranfield Approach

• Questionnaire
• Interviews
• Activity Capture Categorisation
• XPat
• IDEF3

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List of Companies Visited

• BAE SYSTEMS
• Ford Motor Company
• Lotus Engineering
• Nissan
• Rolls Royce
• Alstec

• AIRBUS
• GKN Helicopters
• Terminal 5 (BAA)
• Cognition
• MoD
• Jaguar
• Land Rover

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Questionnaire
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• Process Knowledge Capture Tool

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eXpert Process Knowledge Analysis Tool (Xpat)
Benjamin Adesola and Rajkumar Roy

• Knowledge elicitation
• Based on IDEF modelling techniques
• Process driven methodology

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The Xpat process

• Identify the problem
• Collect and interpret the data
• Analyse data

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Xpat - Process Knowledge Capture Framework
TOP LEVEL VIEW
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INPUT PROCESS
OUTPUT
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INTERNAL EXTERNAL
1
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Xpat - Process Knowledge Capture Framework
TOP LEVEL VIEW
OUTPUT
1.1
1.2
1.3
1.3
Physical Outputs Results Information Deliverables
Products, States Non-Physical Outputs Phonecalls
Destination of Outputs Person Equipment
Frequency of Outputs Hourly Daily,
Weekly Monthly Yearly As and When
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Xpat - Output Probe Questions
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IDEF3

• Provides a mechanism for collecting and
  documenting processes.
• It uses three essential types of constructs to
  describe processes
• UOB
• Junction boxes
• Links
• Limitations
• Different ending statuses of a process step are
  not modelled.
• Time is not incorporated. Therefore model is not
  suitable for simulation but remains descriptive.

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Results

• Most Common Techniques
• Parametric Bottom-up detailed Cost estimating.
• For most activities Bottom-up was recognised as
  the Unit Measure.
• Materials
• Bough out parts
• Labour
• Machine Processes Specification
• Overhead Cost Elements
• Standards Legislations

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IDEF3
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Activity Categorisation
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Activity Categorisation
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Data Infrastructure
Cost Estimate
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Data Infrastructure
Cost Estimate
Overhead
Labour
Material
Bought Out
Machine
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Data Infrastructure
Cost Estimate
Overhead
Labour
Material
Bought Out
Machine
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Data Infrastructure
Cost Estimate
Overhead
Labour
Material
Bought Out
Machine
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Data Infrastructure
Cost Estimate
Overhead
Labour
Material
Bought Out
Machine
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Data Infrastructure
Cost Estimate
Overhead
Labour
Material
Bought Out
Machine
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Data Infrastructure
Cost Estimate
Overhead
Labour
Material
Bought Out
Machine
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Category of Ferrous Materials

• Alloy steel bar
• Carbon steel bar High Temperature steel bar
• Stainless Steel Bar
• Cast Iron
• Cast Steel
• Powdered Metal Ferrous
• Sheet steel

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Further Details of Ferrous metals

• Country of origin
• Trade discount
• Thermal conductivity
• Currency
• Reclaim Scrap
• Melt temperature
• Melt uplift

• Economic Level Freight
• Lock pressure
• Mould Uplift
• Basic value
• Net value
• No-flow temperature

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Machine Data
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Machine Data
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Category of Overheads

• Plant supervisor
• Plant administrator
• Plant engineer
• Quality control
• Production control
• Laboratory
• Health department
• Maintenance

• Work safety
• Plant security
• Fire protection department
• Canteen kitchen
• Indirect workers (cleaner, driver, setter)
• Internal transport

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Observations

• Market conditions trends difficult to quantify
• Risk analysis, assumptions exclusions
• Activities not covered
• Risks Opportunities
• Target Setting
• Assumptions Exclusions
• Parametric Estimating
• Differences in data requirements
• Standards Specifications
• Legislations
• Unique Processes

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Observations

• Common data infrastructure (CIM) validated
  through companies
• Recognised as a step forward
• CIM could be utilised by other disciplines.
• ABC rates require such level of detail
  information.

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Concluding Remarks

• The research identified data information
  requirements for cost estimating across
  automotive aerospace.
• Formalised the data requirements.
• Provide direction for future acquisition of data

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Contact Dr Rajkumar Roy Senior Lecturer Course
Director for IT for Product Realisation Departmen
t of Enterprise Integration School of Industrial
and Manufacturing Science Building 53, Cranfield
University Cranfield, Bedfordshire MK43 0AL,
UK Tel [phone] Fax [phone]
750852 Website www.cranfield.ac.uk/sims/cost
cost_at_cranfield.ac.uk or r.roy_at_cranfield.ac.uk
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The end

• Questions?
• www.cranfield.ac.uk/sims/cost