SMC, RRIM, GMT Manufacturing Costs

1. SMC, RRIM, GMT Manufacturing Costs Professor Joe Greene CSU, CHICO Copyright Joseph Greene 2004

2. Objectives • Part Costs Review • SMC Bumper Costs • GMT Bumper Costs • SMC Fender Costs • RRIM Fender Costs • Plastic Fender Costs Copyright Joseph Greene 2004

3. Compression Molding Costs • Many methods are used to determine the cost of compression molded part • rough estimates based upon rules of thumb or experience • extremely detailed analysis based on costs for numerous plant functions • spreadsheet based analysis, IBIS and Associates • Costs are broken into the following areas • Material costs including additives • Part costs including scrap rate • Tooling costs • Machine costs including labor rate • Secondary operations costs for trimming, sanding, painting, bonding • Purchased items costs including fasteners, inserts, and others • Packaging and shipping costs • Overhead costs from company • Marketing and profit Copyright Joseph Greene 2004

4. Compression Molding Costs • Part 1: Resins and Additives Costs • Type and grade of material, e.g., bumper beam is SMC (stuctural) • Cost of material depending upon quantity, e.g., pounds per year required • Additives cost, e.g., mold release, profile additives. • Total Material Cost = (resin cost)*(resin fraction) + (additives cost)* (additives fraction) • Example, Total Cost = $1.50 * 10 (SMC pounds) + $3.00 * 0.5 (additives pounds) per part = $16.50 per part • Part 2: Part Costs • Part costs = material costs plus factory costs • Material cost is materials plus scrap from trim and part rejects. • Example: bumper weighs 10.5 pounds. The edge trim and mounting holes scrap is 1%. Scrap rate for parts is 9% Total material uses is 10.5*(0.1) = 1.2 pounds • Scrap Cost = $1.5 * 1.2 = $1.8 per part Copyright Joseph Greene 2004

5. Compression Molding Costs • Part 3: Tooling Costs • Type of tooling material, e.g. steel, aluminum, kirksite. • Complexity of tool • Number of slides or lifters in a tool to mold parts that have an internal flange or under cut. • Number of years the tool is amortized for tool life, e.g., payoff tool in 1 year, 3 years, or five years. (Every company has different accounting practices. • Internal (In-House) tool construction versus External (Outside) tool construction. Internal is usually less expensive per tool but has more overhead, thus need many jobs to reduce overhead costs. • Chrome plating or not. Chrome plate last about 100,000 cycles. • Number of years tooling is amortized. GM amortized in 1 year. • Example, bumper beam with 150,000 parts per year for 4 years. • $300,000 per tool • Cost per part is $300,000/ 150,000parts = $ 2 per part • Comparison steel stamping bumper beam costs $1.5 million • Per part cost is 1,500,000/150,000 = $10 per part Copyright Joseph Greene 2004

6. Compression Molding Costs • Part 4: Machine Costs • Cost of machine is dependent upon the time the machine is in use to make parts and whether the machine has an operator or not. • The number of machines required to keep up with production demand of 150,000 • Rates are determined from • Original cost of machine • Ongoing operations costs • Special equipment costs for particular jobs, e.g., special controllers or chillers • Cycle time • Example, bumper beam • Cycle time is 60 seconds yields 60 parts per hour, 480 parts per shift, 480 parts per day (for 1 shift), 2400 parts per week, 115,200 parts per year (for 48 weeks). Can ramp up to 1.5 shifts to reach 172,000 parts per year. • Hourly rate is $20 for operator • Machine rates are $60 per hour • Bumper example • Cost = $60 per hour / 60 parts per hour = $1 per part Copyright Joseph Greene 2004

7. Compression Molding Costs • Part 5: Secondary Operations Costs • Many parts are subject to other operations costs after molding • placed or glued into an assembly, drilling of holes or attachments • Rates are determined from some rate and cycle time • Rate costs are dependent upon the type of machine used, $ per hour • Cycle time, parts per hour • Deflashing part is not considered secondary operations since the flash is removed at the press after molding. • Example, bumper • Punching out the holes for the rail mounts • Cycle time is 10 seconds yields 60 parts per hour • Cost = $10 per hour / 60 parts per hour = $0.1667 per part • Part 6: Purchase Items Costs • Many items are purchased and included in assembly • Example, bumper has the bolts and metal bracket piece for the rails • Cost of bolts = $0.1 x 4 = $0.40 per part • Cost of metal bracket = $0.1 x 1 = $0.10 per part Copyright Joseph Greene 2004

8. Compression Molding Costs • Part 7: Packaging and Shipping Costs • Costs for shipping cartons, bags, blister packages, foam materials • Costs for transportation can be included • Example, bumper • Costs for bumper = $50 per 100 parts • Cost of cardboard box = $1 per box that holds 100 parts • Total Factory Costs per part = $22.08 • General Administration Costs = 10% = $2.208 • Marketing and Profit = 20% = $4.42 • Total Cost per part =$28.68 per bumper for SMC and weighs 15 pounds (for Corvette) • Comparison versus Steel bumper • Piece cost: $18 steel versus $28 for SMC ... Net loss of ($10) per part • Weight: 25 pounds (steel) versus 15 pounds (SMC)…Net savings 15 pounds • Tooling cost: $1.5M steel versus $300,000 (SMC) … Net savings $1.2 Million Copyright Joseph Greene 2004

9. Part Costs- Example • Bumper beam for Chevy Camaro-Firebird • Given • Volume is 150,000 cars per year • Car weight is 3750 pounds curb weight (with 4 occupants and luggage) • Current production Steel beam • Weight is 18 pounds and costs $14 for in-house manufacturing • Tooling costs for steel beam is $1.5 million or $10 per part for amortized • Total costs for steel beam is $24 per part • Performance required • 5 mph pendulum impact between 15” to 21” from the ground • 2.5 mph pendulum impact between 15” to 21” from the ground on the corner • 5 mph barrier impact at room temperature and at –20°C • Bumper must survive two pendulum impacts and a barrier impact and not break. • System deflection must be less than 4 inches and a bumper deflection of less than 1 inch • Static test loading of 9,000 pounds at 1 inch deflection. • Mass reduction is desired • Composite material options • SMC versus GMT • What are the costs assuming equal performance Copyright Joseph Greene 2004

10. Static Test Setup with a Pendulum Face Moving at a Constant Speed into a Rigidly Mounted Beam Copyright Joseph Greene 2004

11. SMC Bumper Beam Costs- Example • Part costs are quoted from suppliers. • The suppliers typically design the bumper beam with their material • The suppliers then quote a part price based upon part weight and volume per year. • Costs are broken into the following areas • Material costs • SMC is $1.50 per pound for structural SMC from Ashland Chemical Company. • Part weight in SMC is 12 pounds (Density of structural SMC is 2.0 g/cc) and Part thickness is 0.250 inches. • Material part cost is $18 per part. • Part costs including scrap rate • SMC scrap rate is 10% • Scrap rate cost is $1.80 per part. • Tooling costs • SMC tooling costs for bumper beam is $300,000 for 500,000 parts total. • Amortized tooling costs in 1 year for 150,000 parts. • Tooling part cost is $300,000/150,000 parts = $2 per part Copyright Joseph Greene 2004

12. SMC Bumper Beam Costs- Example • Costs (Continued) • Machine costs including labor rate (Cold SMC is heated in mold) • Machine costs for compression press are $60 per hour. • SMC cycle time is 2 minutes per part or 30 parts per hour. • Machine part costs are $60/30 parts per hour = $2 per part. • Secondary operations costs for trimming and punching holes • Secondary rates are $12 per hour • Secondary cycle time is 60 seconds per part or 60 parts per hour. • Secondary part costs are $12/60 parts per hour = $0.20 per part • Total manufacturing costs of SMC bumper is sum of all above costs. • $18 + $1.80 + $2 + $2 + $0.20 = $24 compared with $14 per part for steel beam. Cost is $10 per bumper beam or $1.5 million per year (150K parts) • Weight savings is 18 pounds for steel – 12 pounds SMC = 6 pounds. Copyright Joseph Greene 2004

13. SMC Bumper Beam Costs- Example • Costs (Continued). These are similar for steel and SMC • Purchased items costs including mounting bolts and foam pad for energy absorber. • Mounting bolts and bracket = $1 per assembly in a part • Foam pad weighs 2 pounds and costs $2 per pound = $4 per part • Packaging and shipping costs- typically by weight and ability to stack parts. Bumpers stack very well. • Packaging and shipping costs are $0.50 per part • Overhead costs from company- typically 10% of manufactured costs • Overhead costs = 0.10 x $24 = $2.40 • Marketing and profit- typically 10-20% of manufactured costs • Profit costs = 0.20 x $24 = $4.80 • Total costs • $24 + $4 + $0.50 + $2.40 + $4.80 = $35.70 per part for 150,000 parts per year or $5.355 million per year • Some suppliers may not provide hardware or foam pad and may not charge for overhead or profit and instead try and get a cheaper price on the SMC material and reduce cycle time and scrap rate. • Cost of weight savings is $11.70/6 pounds = $1.95 per pound saved Copyright Joseph Greene 2004

14. GMT Bumper Beam Costs- Example • Part costs are quoted from suppliers. • The suppliers typically design the bumper beam with their material • The suppliers then quote a part price based upon part weight and volume per year. • Costs are broken into the following areas • Material costs (less than SMC) • GMT is $1.5 per pound for GMT from General Electric. • Part weight in GMT is 10 pounds (Density of structural GMT is 1.19 g/cc) and Part thickness is 0.300 inches. • Material part cost is $15 per part. • Part costs including scrap rate (less than SMC) • GMT scrap rate is 5% • Scrap rate cost is $0.75 per part. • Tooling costs (same as SMC) • GMT tooling costs for bumper beam is $300,000 for 500,000 parts total. • Amortized tooling costs in 1 year for 150,000 parts. • Tooling part cost is $300,000/150,000 parts = $2 per part Copyright Joseph Greene 2004

15. SMC Bumper Beam Costs- Example • Costs (Continued) • Machine costs including labor rate (Hot GMT is cooled in mold) • Machine costs for compression press are $60 per hour. • GMT cycle time is 2 minutes per part or 30 parts per hour. • Machine part costs are $60/30 parts per hour = $2 per part. • Secondary operations costs for trimming and punching holes • Secondary rates are $12 per hour • Secondary cycle time is 30 seconds per part or 120 parts per hour. • Secondary part costs are $12/120 parts per hour = $0.10 per part • Total manufacturing costs of GMT bumper is sum of all above costs. • $15 + $0.75 + $2 + $2 + $0.10 = $19.85 compared with $14 per part for steel beam. Cost is $5.85 per bumper beam or $0.8775 million per year (150K parts) • Weight savings is 18 pounds for steel – 10 pounds SMC = 8 pounds. Copyright Joseph Greene 2004

16. SMC Bumper Beam Costs- Example • Costs (Continued). These are similar for steel and GMT • Purchased items costs including mounting bolts and foam pad for energy absorber. • Mounting bolts and bracket = $1 per assembly in a part • Foam pad weighs 2 pounds and costs $2 per pound = $4 per part • Packaging and shipping costs- typically by weight and ability to stack parts. Bumpers stack very well. • Packaging and shipping costs are $0.50 per part • Overhead costs from company- typically 10% of manufactured costs • Overhead costs = 0.10 x $24 = $2.40 • Marketing and profit- typically 10-20% of manufactured costs • Profit costs = 0.20 x $24 = $4.80 • Total costs • $19.85+ $4 + $0.50 + $2.40 + $4.80 = $31.55 per part for 150,000 parts per year or $4.733 million per year • Some suppliers may not provide hardware or foam pad and may not charge for overhead or profit and instead try and get a cheaper price on the GMT material and reduce cycle time and scrap rate. • Cost of weight savings is $7.55/8 pounds = $0.94 per pound saved Copyright Joseph Greene 2004

17. Part Costs- Fender Example • Composite Fender for Corvette • Given • Volume is 30,000 cars per year • Car weight is 3,750 pounds curb weight (with 4 occupants and luggage) • Steel fender comparison • Weight is 6 pounds and costs $10 for in-house manufacturing (40% off-all scrap) • Tooling costs for steel fender is $1 million or $33 per part for amortized • Total costs for fender is $43 per part • Performance required • Dimensional accurate • Minimum warping • Gloss level and Distinctness of Image (DOI) • Offline paint-able and not elpo paint process (for steel components of 380°F) • Composite material options • SMC versus RRIM versus injection molding • What are the costs assuming equal performance Copyright Joseph Greene 2004

18. Composite or Plastic Fender • Fender is separate piece from hood • Fender can be made • SMC • RRIM urethane • Injection molded • Fender has opening for wheel and light • Fender must not appear wavy • Fender painted off line not with body. Copyright Joseph Greene 2004

19. SMC Fender Costs- Example • Part costs are quoted from suppliers. • The suppliers typically design the bumper beam with their material • The suppliers then quote a part price based upon part weight and volume per year. • Costs are broken into the following areas • Material costs • SMC is $1.50 per pound for phase epsilon (body panel) SMC from Ashland Chemical Company. • Part weight in SMC is 3 pounds (Density of SMC is 1.8 g/cc) and Part thickness is 0.125 inches. • Material part cost is $4.50 per part. • Part costs including scrap rate • SMC scrap rate is 10% • Scrap rate cost is $0.45 per part. • Tooling costs • SMC tooling costs for fender is $250,000 for 500,000 parts total. • Amortized tooling costs in 1 year for 30,000 parts. • Tooling part cost is $250,000/30,000 parts = $8.33 per part Copyright Joseph Greene 2004

20. SMC Fender Costs- Example • Costs (Continued) • Machine costs including labor rate (Cold SMC is heated in mold) • Machine costs for compression press are $60 per hour. • SMC cycle time is 1 minute per part or 60 parts per hour. • Machine part costs are $60/60 parts per hour = $1 per part. • Secondary operations costs for trimming and punching holes • Secondary rates are $12 per hour • Secondary cycle time is 60 seconds per part or 60 parts per hour. • Secondary part costs are $12/60 parts per hour = $0.20 per part • Painting costs are needed because of offline paint • Fender is supported in paint buck and then painted in group of 10 • Paint costs are for paint buck tooling, paint, cycle time = $1 per part • Total manufacturing costs of SMC bumper is sum of all above costs. • $4.50 + $0.45 + $8.33 + $1 + $0.20+ $1 = $16.48 compared with $44 per part for steel fender. Cost is cheaper for SMC • Weight savings is 6 pounds for steel – 3 pounds SMC = 3 pounds. Copyright Joseph Greene 2004

21. SMC Bumper Beam Costs- Example • Costs (Continued). These are similar for steel and SMC • Purchased items costs including mounting bolts and foam pad for energy absorber. • Mounting bolts and bracket = $1 per assembly in a part • Packaging and shipping costs- typically by weight and ability to stack parts. Fenders do not stack very well. • Packaging and shipping costs are $1 per part • Overhead costs from company- typically 10% of manufactured costs • Overhead costs = 0.10 x $16.48 = $1.65 • Marketing and profit- typically 10-20% of manufactured costs • Profit costs = 0.20 x $16.48 = $3.40 • Total costs • $16.48 + $1+ $1.65 + $3.40 = $22.53 per part for 30,000 parts per year or $0.676 million per year • Some suppliers may not charge for overhead or profit and instead try and get a cheaper price on the SMC material and reduce cycle time and scrap rate. • SMC fender is cheaper and lighter for volumes less than 100,000 per year Copyright Joseph Greene 2004

22. RRIM Fender Costs- Example • Part costs are quoted from suppliers. • The suppliers typically design the bumper beam with their material • The suppliers then quote a part price based upon part weight and volume per year. • Costs are broken into the following areas • Material costs • RRIM is $1.30 per pound for Mica filled polyurethane from Dow Chemical • Part weight in RRIM is 2.5 pounds (Density of RRIM is 1.2 g/cc) and Part thickness is 0.200 inches. • Material part cost is $3.25 per part. • Part costs including scrap rate • RRIM scrap rate is 10% • Scrap rate cost is $0.325 per part. • Tooling costs • RRIM tooling costs for fender is $200,000 for 500,000 parts total. • Amortized tooling costs in 1 year for 30,000 parts. • Tooling part cost is $200,000/30,000 parts = $6.67 per part Copyright Joseph Greene 2004

23. RRIM Fender Costs- Example • Costs (Continued) • Machine costs including labor rate (Cold RRIM is heated in mold) • Machine costs for compression press are $60 per hour. • RRIM cycle time is 1 minute per part or 60 parts per hour. • Machine part costs are $60/60 parts per hour = $1 per part. • Secondary operations costs for trimming and punching holes • Secondary rates are $12 per hour • Secondary cycle time is 60 seconds per part or 60 parts per hour. • Secondary part costs are $12/60 parts per hour = $0.20 per part • Painting costs are needed because of offline paint • Fender is supported in paint buck and then painted in group of 10 • Paint costs are for paint buck tooling, paint, cycle time = $1 per part • Total manufacturing costs of RRIM fender is sum of all above costs. • $3.25 + $0.325 + $6.67 + $1 + $0.20+ $1 = $12.45 compared with $44 per part for steel fender. Cost is cheaper for RRIM than SMC or Steel • Weight savings is 6 pounds for steel – 2.5 pounds RRIM = 3.5 pounds. Copyright Joseph Greene 2004

24. RRIM Fender Costs- Example • Costs (Continued). These are similar for steel and SMC • Purchased items costs including mounting bolts and foam pad for energy absorber. • Mounting bolts and bracket = $1 per assembly in a part • Packaging and shipping costs- typically by weight and ability to stack parts. Fenders do not stack very well. • Packaging and shipping costs are $1 per part • Overhead costs from company- typically 10% of manufactured costs • Overhead costs = 0.10 x $12.45 = $1.25 • Marketing and profit- typically 10-20% of manufactured costs • Profit costs = 0.20 x $12.45 = $2.50 • Total costs • $12.45 + $1+ $1.25 + $2.50 = $17.20 per part for 30,000 parts per year or $0.516million per year • Some suppliers may not charge for overhead or profit and instead try and get a cheaper price on the RRIM material and reduce cycle time and scrap rate. • RRIM fender is cheaper and lighter for volumes less than 100,000 per year than steel. • RRIM is used on Corvette and Viper in 2005 Copyright Joseph Greene 2004

25. Plastic PC/ABS Fender Costs- Example • Part costs are quoted from suppliers. • The suppliers typically design the bumper beam with their material • The suppliers then quote a part price based upon part weight and volume per year. • Costs are broken into the following areas • Material costs • PC/ABS is $1.50 per pound for PC/ABS blend from Dow Chemical • Part weight in PC/ABS is 2.25 pounds (Density of PC/ABS is 1.12 g/cc) and Part thickness is 0.200 inches. • Material part cost is $3.375 per part. • Part costs including scrap rate • Injection molding scrap rate is 1% • Scrap rate cost is $0.0375 per part. • Tooling costs • Injection molding tooling costs for fender is $400,000 for 500,000 parts total. • Amortized tooling costs in 1 year for 30,000 parts. • Tooling part cost is $400,000/30,000 parts = $13.33 per part Copyright Joseph Greene 2004

26. Plastic PC/ABS Fender Costs- Example • Costs (Continued) • Machine costs including labor rate • Machine costs for injection press are $60 per hour. • Injection Molding cycle time is 1 minute per part or 60 parts per hour. • Machine part costs are $60/60 parts per hour = $1 per part. • Secondary operations costs for trimming and punching holes • Secondary rates are $12 per hour • Secondary operations are not needed with injection molding • Secondary part costs are $0.0 per part • Painting costs are needed because of offline paint • Fender is supported in paint buck and then painted in group of 10 • Paint costs are for paint buck tooling, paint, cycle time = $1 per part • Total manufacturing costs of plastic fender is sum of all above costs. • $3.375 + $0.0375 + $13.33 + $1 + $1 = $18.75 compared with $44 per part for steel fender. Cost is cheaper than Steel • Weight savings is 6 pounds for steel – 2.25 pounds = 3.75 pounds. Copyright Joseph Greene 2004

27. Plastic PC/ABS Costs- Example • Costs (Continued). These are similar for steel and SMC and RRIM • Purchased items costs including mounting bolts and foam pad for energy absorber. • Mounting bolts and bracket = $1 per assembly in a part • Packaging and shipping costs- typically by weight and ability to stack parts. Fenders do not stack very well. • Packaging and shipping costs are $1 per part • Overhead costs from company- typically 10% of manufactured costs • Overhead costs = 0.10 x $18.75 = $1.88 • Marketing and profit- typically 10-20% of manufactured costs • Profit costs = 0.20 x $18.75 = $3.76 • Total costs • $18.75 + $1+ $1.88 + $3.76 = $25.39 per part for 30,000 parts per year or $0.762 million per year • Some suppliers may not charge for overhead or profit and instead try and get a cheaper price on the plastic material and reduce cycle time and scrap rate. • Plastic fender is cheaper and lighter for volumes less than 100,000 per year than steel. • Plastic fender is used on Saturn cars in 2005 Copyright Joseph Greene 2004

28. Fender Costs- Example versus volume • Costs depend upon the total volume of parts per year. • Tooling costs are divided by the volume of parts. • As volume goes up the influence of tooling goes down. Steel PC/ABS SMC RRIM Copyright Joseph Greene 2004

29. Quality Issues • RRIM Fender for 2005 Corvette • Poor mixing of mica (reinforcement) causes blisters • Made in Mexico City, Mexico • SMC door for 2005 Corvette • Made in Monterey Mexico • SMC is too thick on bottom and too thin on top of door causing door to crack. • Cause was lack of parallelism in press causing uneven thickness • Solution- shim the mold so that is closes the same until press is fixed. • SMC door for 2005 Corvette • Door does not bond inner and outer. It breaks apart in assembly plant. • Cause • Ashland adhesive is applied robotically but the operator waits 8 minutes to put two pieces together. • The adhesive has already partially cured and has gelled so that is doesn’t flow. • Biggest problem is lack of processing knowledge on operators but they are the cheapest source. Copyright Joseph Greene 2004