Technical Production Cost Analysis
Do you manage a manufacturing company and want to optimize costs in various areas of your business? You’ve come to the right place!
Luqam’s team of specialists will help you optimize costs in your enterprise. Technical Production Cost (TPC) analysis is a tool that brings tangible benefits in the area of reducing production costs. With detailed verification of production-related costs and supporting tools (Value Stream Mapping), we are able to identify the elements of the production process and the factors that affect the total cost of producing a product. Extensive TPC analysis identifies key areas that will reduce production costs.
Are you interested? Ask for details!
Expert Support
Luqam’s experts have extensive experience in production costs analysis. In addition, access to advanced methods and tools that allow for detailed analysis of the process makes cooperation with Luqam simply worth it!
Economic benefits
The TPC analysis in cooperation with Luqam brings tangible economic benefits related to reducing production costs. As part of the analysis, Luqam Experts take measurements, use appropriate tools (such as Value Stream Mapping) and analyze the processes included in the TPC structure. Particularly the manufacturing part is verified. The costs of material and energy consumption, wage costs, production-related direct costs (e.g., third-party processing, tools and equipment) and indirect production costs are analyzed.
Value Stream Analysis
For the production part, Experts conduct a Value Stream Analysis on a cost basis. They pay attention to the actual duration of operations compared to the assumed ones, the logistics and warehouse part of the process, processing and quality control operations, elements supporting and managing the production process, such as scheduling, billing, etc. We are able to see the value stream, but no longer captioned only by the duration of the operation, or the quantities of material, but above all by the amount of money we lose with each operation and activity in the manufacturing area.
Map of current and future state
Moving forward – similarly to VSM – we create a map of the current state of TPC and a map after implementing potential savings. The key parameter becomes our impact on reducing TPC and the calculated profit for the organization. The final element of the program is the preparation of a proposal plan for changes and improvements generating savings in TPC with recommendations and a proposal for the course of the optimization project.
Schedule a call and find out more about the project
Optimization project
TPC analysis is a very good option for companies that want to see their process here and now, not only looking at basic indicators of productivity, timeliness, or quality, but especially at the cost view. The strength of Luqam’s offer is TPC’s cost plan for the future and cost optimization, with a calculation of how much money is gained for a given product range, as well as a ready proposal for an optimization project to be launched.
Use of simulation environment during TPC analysis
In TPC analysis, Luqam often uses a simulation environment. After creating a model of a production line, an entire plant, or even a single production cell, it is possible to accurately measure all machines and operators. This makes it possible to carry out precise Technical Production Cost analysis.
TPC analysis with Luqam allows you to include the cost of basic and auxiliary materials required to produce a piece of a given product. Next, it is possible to add operator wages and bonuses. In the next step, the costs of individual utilities, such as electricity, water and compressed air, are taken into account.
Calculating the Technical Production Cost in the simulation environment allows the addition of TPM periodic inspection costs, such as labor costs for additional people, tooling costs or additional resources. The simulation program also takes into account costs related to failure rates, defect production and changeover costs.
After the simulation, the program shows us the entire cost structure, taking into account different types of costs from the input data, such as firmwide and departmental costs as well as depreciation. This way we know what generates what cost and how it affects TPC. It also allows us to see how a change in a given cost will affect the Technical Production Cost.
It is possible, for example, to simulate TPC in terms of how TPC is affected by how many operators work on the line, how many machines are used, how many logisticians or warehousemen work on a given shift, how many quality inspections we perform, the speed at which internal logistics operations take place, or what production sequence we plan production in. We can also simulate additional costs associated with production, such as the cost of downtime, machine changeovers, and count how this affects the TPC of the product. The program gives us the opportunity to test different scenarios and allows us to find the optimal one, in which the production cost is the lowest.