INTRODUCTION TO COMPONENT INTEGRATION HIDDEN COSTS IN EVERY COMPONENT
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COMPONENT INTEGRATION USING HIGH INTEGRITY PROCESSES
quantification is oversimplified and leaves out much of the true financial burden. From a total-cost standpoint, the life cycle of a
component is as follows:
Designed Drafted
Quoted Sourced to an internal or external supplier
Tooled Approved
Manufactured Packaged
Inventoried Shipped
Received Handled
Assembled into the final product
Although all of these points contribute to the total cost of a com- ponent, the attachment of a price tag to each point is difficult to
ascertain. One major automotive company has estimated the ad- ministrative burden to maintain one part at 50,000. This may
seem unreasonable, but the estimate includes the time to prepare and detail a drawing, approval of the design, distribution of the
detailed print, cataloging the part into a worldwide database, scan- ning the part’s drawing into a global computer site, tracking
changes or updates to the drawing, and much more.
Once a product is no longer being manufactured, the financial burden continues. One must consider the servicing of products in
the field. Service parts must be packaged and warehoused, some- times for years, before they are shipped to customers.
From a quality standpoint, every component adds risk. Fewer parts means fewer things can go wrong during manufacturing, and
fewer things can go wrong once the product is in the field. Every quality issue or problem carries a financial burden whether it is
fixed or not.
8.4 COMPONENT INTEGRATION IN DIE CASTING PROCESSES
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When determining the cost of a product, one must remember to look beyond the material cost. The total financial burden of
every component is made up of much more.