The basic formula for estimating an operations cost isCycle Time Per Piece(Handling Time + Run Time)Under many situations there is a one-to-one relationship between the run time and the handling time.ExamplesLet’s say you are fabricating 1000 widgets. Each widget must go through the step of forming, which is basically bending the material. If it takes an employee 30 seconds to form each widget, the estimated run time would be 30 seconds per piece. The handling time is in direct correlation to the run time because you are forming a single widget at a time. In this situation you include the handling time into the run time or keep it separate for more accurate reporting.Now let’s assume that widget A is very large and it takes a forklift to move each piece into the forming machine. In this situation the run time may be 30 seconds because that is the time it takes to form widget A once it’s in the machine. The difference is the handling time is much larger because it may take 5 minutes to setup and remove widget A from the machine. Separating the handling time and run time out in this situation becomes a bit more valuable because the handling time is takes such a large portion of the actual cycle time.Last example is you are having widget A that needs to be cut on a laser. A laser machine in my example is a machine where you put a sheet of raw material onto it which then the laser can cut out 1 or more widget A's on a single sheet. Let’s say to cut widget A the run time is 3 minutes per part. Each widget A takes the same amount of time to cut but in this situation is the handling time is not one to one with each widget A. The reason for this is the laser cuts multiple pieces of parts out of a single sheet. The handling time is actually the time it takes to load the sheet into the machine and then the time to remove the widgets from the sheet and machine when the widgets have been cut. Handling time is actually the time it takes to load the sheet divided by the number of parts a sheet makes.The new cycle time formula isCycle Time Per Piece((Handling Time / Quantity Manufactured Per Handling Time) + Run Time)Estimating your cycle times is a critical area for any manufacturer to be profitable. Cost estimating MIE Solutions provides software to help you do this calculations as efficiently as possible through their MRP and ERP systems quoting package. Machine shops and sheet metal shops use these types of forumulas every day to improve their estimating and quoting process.
Source: https://www.mie-solutions.com/founders-blog/estimating/estimating-handling-time
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