Duration 3 days – 21 hrs
Overview
This standard training equips participants with a practical, step-by-step approach to raw cost estimation for manufacturing—covering assembly, production processes, parts/materials, and labor costing. The program focuses on building defensible cost estimates using BOM-based material/parts rollups, process routing and cycle-time costing, and standard cost build-up methods commonly used in bus and truck body manufacturing. Participants will leave with a structured costing method they can apply to new builds, modifications, and ongoing production costing.
Objectives
- Explain cost estimation concepts, terminology, and when to use different estimating methods.
- Build a raw cost estimate structure covering materials/parts, labor, and manufacturing process costs.
- Estimate parts/material cost using BOM rollups, unit-of-measure conversions, and cost assumptions.
- Convert manufacturing and assembly steps into cost using routing, cycle time, and labor rates.
- Apply realistic allowances for scrap, yield loss, rework, and efficiency factors.
- Include basic manufacturing cost drivers (setup, indirect labor, overhead drivers) in a controlled manner.
- Document assumptions clearly and produce a defensible cost estimate summary for review/approval.
Audience
- Cost engineers / cost analysts
- Manufacturing / production engineers
- Assembly leaders / supervisors / team leads
- Planning and scheduling personnel
- Purchasing / supply chain / parts costing support
- Finance / cost accounting / controlling (supporting standard costing)
Pre- requisites
- Basic understanding of manufacturing/assembly operations
- Familiarity with parts lists/BOM is helpful (not required)
- Basic Excel skills (tables, formulas, simple computations)
Course Content
Day 1 — Cost Estimation Fundamentals + Raw Materials & Parts Costing
Module 1: Cost Estimation Foundations
- What “raw cost estimation” means and when it is used
- Cost types: raw/should-cost, standard cost, actual cost (high-level)
- Cost structure: Materials/Parts + Labor + Process/Overhead drivers
- Common errors: double-counting, missing yield, uncontrolled buffers
Module 2: Parts & Materials Cost Estimating (BOM-Based)
- Building a BOM cost roll-up (direct materials and purchased parts)
- UOM conversions and costing accuracy
- Cost inputs: price lists, supplier quotes, historical costs (how to choose)
- Handling alternates and substitutions
Module 3: Bus/Truck Body Materials Raw Cost Estimation (Manufacturing Scope)
- Estimating body materials (e.g., sheets/panels/sections, fasteners, consumables)
- Raw estimation logic: size/weight/quantity basis
- Allowances: scrap %, yield loss, cut loss, nesting loss
Workshop 1: Raw Material + Parts Cost Build-Up
- Create a simple BOM roll-up and apply yield/scrap rules
- Produce “Material/Parts Cost Summary”
Day 2 — Assembly & Production Costing (Routing, Time, Labor)
Module 4: Process-Based Estimation for Production/Assembly
- Manufacturing process mapping and routing basics
- Turning process steps into cost: cycle time + rate
- Setup vs run time, batch size effects
- Productivity and efficiency factors (standard approach)
Module 5: Labor Cost Estimation (Direct + Indirect)
- Direct labor vs indirect labor (QC, material handling, supervision)
- Labor rate components and how to standardize rates
- Allowances: fatigue, delays, learning curve (controlled use)
Workshop 2: Assembly/Production Labor Costing
- Build a routing for a sample assembly process
- Compute cost per step and total labor cost
- Identify top cost drivers and improvement opportunities
Day 3 — Overhead Drivers, Assumptions Control, and Full Raw Cost Estimate Build-Up
Module 6: Manufacturing Cost Drivers (Simple Overhead Approach)
- Overhead options: rate-based drivers (labor hours, machine hours, units)
- Setup/changeover cost treatment
- Quality and rework cost: when to include and how to cap
Module 7: Defensible Estimates (Governance & Documentation)
- Assumptions log, version control, estimate checklist
- Sensitivity analysis (top variables: material price, scrap, labor rate, cycle time)
- Presenting an estimate for approval (summary format)
Capstone Workshop: End-to-End Raw Cost Estimate
- Combine: materials/parts + labor + process drivers
- Produce:
- Raw Costing Sheet
- Assumptions register
- Sensitivity table (what changes cost the most)
Module 8: Standard Templates and Next-Step Implementation
- Recommended standard template pack (structure):
- BOM/Parts Cost Roll-up
- Materials Take-off + Scrap/Yield table
- Routing & Labor Cost sheet
- Estimate Summary + Assumptions Log
- Review/QA checklist
