Cost modeling is a crucial piece of the puzzle to support the cost, schedule, and quality requirements for high-tech construction in the manufacturing environment. That’s why AM Technical Solutions (AM) has developed a full cost modeling suite and developed specific expertise that enables us to deliver on all three project deliverables for our clients.
The Need for Cost Models in Manufacturing
Our proven approach to cost modeling helps address primary project concerns. The typical manufacturing startup or expansion requires a capacity study and cost model to establish toolset, facility space, staffing, and material requirements. These need to be rolled up as product costs and overall project budget.
Additionally, the typical research center needs to determine both start-up and operating costs for the center, including facilities and campus services, equipment, consumables, and personnel.
Not every project is the same, which is why we use metrics to analyze product and project costs for various manufacturing scenarios. This allows users to determine scale-up strategies for the required resources.
Metrics can also be used to analyze the income and expenses for research centers, how to use these analyses to make decisions on design, construction, and operational strategies, and how to determine hourly recharge rates. This approach creates clear benefits:
- Ability to review options
- Understanding of variables
- Capital planning support
- Staff planning support
- Properly size a facility
- Forecast spending
- Forecast cost per unit (such as wafers)
To help clients realize the full benefits of cost modeling, we focus on matching the right model with each project to deliver a right-sized solution.
3 Types of Cost Models We Utilize
We utilize three types of cost models that address specific needs as projects increase in complexity.
- Basic Model (e.g. CARME – cost analysis for university and R&D labs).
- Mid-Level Model (e.g. PLUTO – plan leading up to operations).
- Complex Model (e.g. JUPITER – capacity and cost model).
– The Basic model takes into account the equipment set, tool list, total square footage of the facility, materials to be used during a given period, the total headcount for the project, and user hours per period.
To develop the model, we perform preliminary research, set up a simple database, and focus on minimal time investment to create a high-level operation plan.
– The Mid-Level model introduces custom algorithms for critical cost or capacity analysis. We utilize this model to assess existing vs. required tools and equipment, set up basic process flows and yields, determine projected costs, anticipate expected costs per unit, and introduce process steps.
We help set up a clear process flow, identify large cost drivers and major constraints that could slow down manufacturing, and minimize the time investment before manufacturing can begin.
– The Complex model supports large scale projects that require extensive research and the development of a large database to track each project input.
Some of the key items we look for are operational capacity, cost per unit, tools and equipment requirements, and potential bottlenecks that could create constraints. This helps us bring all stakeholders together to develop the right recipe for success.
Let Us Support Your Project Through Cost Modeling
We believe that cost models are useful as part of a planning process to help clients proactively identify and address cost factors before the work begins:
- Clearly analyze bottlenecks and how to break them.
- Establish / benchmark recharge rates.
- Justify and propose complex staff and equipment funding plans over time.
- Respond to capacity / cost inquiries from potential users.
- Create an annual operating budget and modify it based on measured results.
“Our collaborative approach to cost modeling is a key factor in our ability to deliver on all three for every client, every time,” says Abbie Gregg, AM Chief Technology Officer. “We have invested considerable resources into developing these models so that we can implement a flexible solution that scales to each client’s needs.”
– We encourage you to reach out to us to discuss how we can implement the right cost model to support your specific manufacturing needs.
– View our portfolio of award-winning high-tech construction projects supporting clients in the manufacturing space.