Estimation

July 2, 2018

Chompworks and I were discussing on Twitter about making 3D versions of their logos. The thought came around to how the Chompworks logo could be made from welded stainless steel sheet.

I’d also been reading about Mentors for Makers and that had got me thinking about estimation. I suggested that estimating making up the sign would be a good exercise.

Why are you estimating?

The “why” is important for estimating as it will allow you to determine how much detail you need to record and how accurate the estimate should be. Note that if you keep your estimate in a spreadsheet then it is possible to provide different levels of detail from the same numbers. Past performance may be a bad way of looking at stocks and shares but it’s a great way to look at estimates. Look for commonality between things you have already done and the new project. This can also be a good way to identify issues that might crop up. If you are estimating as part of a proposal then things like a CAD drawing or sketch might help both the proposal and the estimate.

What?

There are several factors to include when thinking about an estimate for a maker project. These roughly breakdown into Materials, Time and Shared costs. As a general principle if you break down your project into parts and think about estimating each of those. If you still can’t estimate them, then break them down further still. You can always roll them back up later. Don’t forget the sundries when estimating materials, how much glue, welding rod, wire, nuts and bolts will be needed. For some projects these can really add up and can be more than the main material.

Time

Time often has two factors, effort spent and time elapsed. For example, if there is a long lead time (time from ordering to deliver) for a part then there could be a long elapsed time for a project but only a short amount of effort.

Materials

Materials are often the first thing people think of when estimating, although they might not be the most significant factor.
When estimating materials one key thing to factor in is standard sizes. Have a look at the supplier’s website to see what sizes and shapes are stocked. If you can keep to stock sizes then you can end up with less waste. Also, don’t forget VAT and delivery costs. Particularly when ordering metal you might find ordering for several projects at once will be more cost-effective, although this will affect your cash flow.

Shared Costs

Shared costs for a project are often lumped into the category of “overheads” so things like heating, lighting and other services. Although these might not be explicitly mentioned in your estimate they should be included. Pro-rating this against the amount of time spent could be one way to attribute the costs. Also think about costs of your time such as deliveries, materials handling, cleaning and tidying, maintenance etc.

Training / Research

If there are uncertainties in a project then you might need to complete some research, looking at suppliers or techniques. You may even have to complete some training to do some practicing to complete the task. Think about if this is closely linked to the project or if it has more general use. If it is specific then link it to the estimate, if general then bundle into the overheads to be spread across many projects.

Example

So for this project, the key material is stainless steel sheet. The standard sizes for this material are 0.7mm, 0.9mm and 1.2mm. For the suppliers I checked, the price increments with thickness. But watch out because this may not always be the case. As an aside, I spotted I had some stainless sheet in stock in a 0.5mm size from Noggin End Metals. It’s always a good idea to document where you get specialist materials from as it might be some time before you get your next one. I did some quick calculations and concluded that if I could keep the radius under 110mm then piece that wrapped around the outside could be made from 2 strips from a 300mm sheet. So roughtly I could make the whole thing from 2 x 300mm square. Current price from one supplier is £18.

For estimating the welding wire used, I’d go for an approximate sum of all the measurements. I bought my stainless steel welding wire some time back but it should come in at not more than a couple of quid for that.

To estimate the time we break the task down into steps.
1) Design / marking out = 1hr
2) Cutting out and finishing = 1hr
3) Curling the outer rim = 0.5hr
4) Welding the outer rim = 1hr
5) Welding the smaller parts = 2hrs
6) Eye detail = 1hr
7) Finishing and polishing = 1hr

So in total, we are looking at around 7.5hrs work. Multiply this by an hourly or daily rate to work out the total cost. I’ve picked £40/hr as a rate including overheads although I don’t normally charge myself out per hour. I don’t need any training to complete this task but if say it was made from a thicker metal then I might choose to cut it out with a plasma cutter and I’d need to get some training for that.

Materials £20
Labour £300

So the significant point here is that the labour is the bulk of the cost. So perhaps a bigger logo could be created for not much more and the client would then think they were getting a better deal?

Finally, don’t forget to include the delivery costs to get the finished goods to the customer.

By Andy from Workshopshed One Comment

  Posted in: Business Tags: cost, estimation, time and materals