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  Comparing Apples and Apples vs. Apples and Oranges

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Author Topic:   Comparing Apples and Apples vs. Apples and Oranges
Dan De Yarman
Forum Contributor

Posts: 67
From:Milwaukee, WI, U.S.A.
Registered: Aug 1999

posted 17 April 2001 11:38 AM     Click Here to See the Profile for Dan De Yarman   Click Here to Email Dan De Yarman     Edit/Delete Message   Reply w/Quote
A question for those of you dealing with R&M figures of merit.

What can we do when we are required to build machines with MTTR, MTBF, and Availability as goals to achieve when the Customers don't supply us with the information? If we ask for the information we may, or may not recieve it. If we do receive it we can quote to it. The problem is when we submit our quote to the Customer. We are submitting oranges while our competition is submitting apples. This results from our asking the Customer what they expect for MTTR, MTBF, and Availability of the machine and receiving it; and the Customer not requiring our competition to quote to the same figures of merit. If this was in there spec's. that would be different, but we are going to have to ask for the information, while our competition won't even have to worry about it.

Since the buyers are now accountants not engineers, they will give the job to the lowest bidder. Our prices will always be high because of the additional MTTR, MTBF, and Availability we are required to take into account.

We are requiring ourselves to get this information from the Customers in our procedures, because if I take it out I know it will never be done. I guess I'm looking for some support of a waiver from the Customer or some inventive way of wording the procedure so that we aren't shooting ourself in the foot when the Customer doesn't have or isn't willing to the share the information on MTTR, MTBF, or Availability.

What have the rest of you done about this?

Dan

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Michael Busha
unregistered
posted 18 April 2001 06:46 AM           Edit/Delete Message   Reply w/Quote
Good advice. Our procedures also state that the 20-hour run "is to be 20 hours continous running, unless modified by the customer". This came about because one of our customers insisted on being present but refused to pay their people the overtime. During meetings, we all agreed that the runoff test could be done over two days with all other requirements staying the same, i.e. failures requiring root cause analysis, documentation and a start over, etc. The procedures should reflect (and make room for) the way your company actually operates. As we know, the customer mostly dictates that. The same goes for the R&M activities matrix. How often can you obtain the information you need from the customer engineer, in a timely manner? Our procedures state that we get the info from the customer if possible. If not, we use our expertise and experience to come up with the matrix (with customer input whenever possible in the form of specs, contract ,etc).

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Dan De Yarman
Forum Contributor

Posts: 67
From:Milwaukee, WI, U.S.A.
Registered: Aug 1999

posted 18 April 2001 09:01 AM     Click Here to See the Profile for Dan De Yarman   Click Here to Email Dan De Yarman     Edit/Delete Message   Reply w/Quote
Michael,

I appreciate your suggestion, but that still doesn't answer my question. We are looking at pricing ourselves out of work because of the added cost (read hours) to do R&M. Whether we get the information by asking the Customer or come up with it ourselves doesn't matter if our competition isn't quoting to those same requirements. The problem is when we ask or recommend MTTR, MTBF, and Availability figures of merit. Unless the Customer tells all of us bidding on a project what those figures are suppose to be, we are quoting oranges and our competition is quoting apples (they won't include the time it takes to perform R&M). We will always be higher in price because of the added cost (hours) it takes to perform the R&M activities. And we all know that means no order.

So the question is, should we get the Customer to sign off on an agreement stating that MTBF, MTTR, and Availability are not required figures of merit (or something similar to that) so we are at least on the same playing field as our competitors? Is this acceptable? I'm very leary about changing the procedures to read "only if required" or something like that, becuase then it will never get done. People will constantly tell me "it wasn't required" when it actually was required, and then we get burned on the tail end of a job.

Perhaps I'm looking for the impossible, keeping the procedure (and intent) in tact while documenting what actually happens in our industry.

Dan

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Dan De Yarman
Forum Contributor

Posts: 67
From:Milwaukee, WI, U.S.A.
Registered: Aug 1999

posted 20 April 2001 09:02 AM     Click Here to See the Profile for Dan De Yarman   Click Here to Email Dan De Yarman     Edit/Delete Message   Reply w/Quote
Does anyone else have any suggestions?

Should we put some kind of a disclaimer in our quote stating that no MTBF, MTTR, or Availability is required from this particular Customer? And then go on to say that acceptance of the quote releases us of any responsibility in terms of MTBF, MTTR, or Availability on this project.

Please, I need some additional feedback from you guys and gals.

Thanks in advance,

Dan

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louie
Forum Contributor

Posts: 19
From:Rochester Hills, MI
Registered: Feb 2000

posted 10 May 2001 10:42 AM     Click Here to See the Profile for louie     Edit/Delete Message   Reply w/Quote
My solution would be to show evidence of this information being requested (minimally 3 times) from the customer. If the customer fails to respond, I would quote without the MTTR, etc. to be competitive. I'd add a notation stating that we'd be happy to requote with MTTR, etc. once the information is received from the customer. I'd give them a matrix to complete of needed info, so there would be no further delay. Many of our customers do not require all of the QS9000 TE requirements. All we do is document our attempts (date, who we spoke with/or left msg for, etc.) to meet the intent of the standard (our procedures)- so far our auditors (from two different registrars) have not had a problem with this.

We do have a LCC and R&M module, that we complete for each machine / detail that we do get information on / or can access information on from the suppliers. These modules are simply excel worksheets in which we have listed the components and entered the formulas to automatically calculate LCC, etc. depending on the hours / cycles we stipulate.

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Jim Evans
Forum Contributor

Posts: 45
From:Union City, MI, USA
Registered: Jul 2000

posted 11 May 2001 09:35 AM     Click Here to See the Profile for Jim Evans   Click Here to Email Jim Evans     Edit/Delete Message   Reply w/Quote
Dan,

There is something I don't quite understand. Doesn't your customer set out the specs at the opening of the bid process? I mean that they wish to purchase a machine that performs at "X" level under "Y" conditions etc. Then all suppliers quote under the same condition. Be that as it may I will offer some ideas.

Perhaps you have a history of the same machine or a similar ones at other customers sites that you have some history on. One thing we are starting to do is send our sales reps into the plants on a periodic basis to gather data on why our products went out of service, what was done to repair, how long it took etc.

Fortunately for us, we were able to get waivers on MTBF and MTTR because our customers finally understood that those concepts were meaningless for our comodity (material handling racks). The main reason our products go out of service is because someone runs into one of our racks with a forklift. We simply can't predict when that will happen or how long it might sit before they take it to the repair shop. Instead we were allowed to use tracking of failure types (bent cross bar or broken pivot arm). It is acceptable to our auditors too.

Jim Evans

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Laura M
Forum Contributor

Posts: 299
From:Rochester, NY US
Registered: Aug 1999

posted 11 May 2001 11:32 AM     Click Here to See the Profile for Laura M   Click Here to Email Laura M     Edit/Delete Message   Reply w/Quote
If you have guys going on warranty calls, maybe they can get "maintenance logs" when they're there. Typically the customer maintains what they can and calls for help when its something major. I think if you establish a relationship it may work. I'm working with a client setting up a process, hasn't matured as yet. I would say you have no chance with past sales, but for new sales you can make arrangements.

Afterall, the customer wrote the standard - should they realize that is what it is going to take to meet their own requirement?

[This message has been edited by Laura M (edited 11 May 2001).]

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Tom Goetzinger
Forum Contributor

Posts: 123
From:Milwaukee, WI USA
Registered: Mar 99

posted 15 May 2001 02:13 PM     Click Here to See the Profile for Tom Goetzinger   Click Here to Email Tom Goetzinger     Edit/Delete Message   Reply w/Quote
Dan,
Like you, we manufacture custom equipment. We quote and build to meet customer requirements, and do not quote MTTR or MTBR numbers. We do track what information we can accumulate during the warrenty period, when we are usually called in for problems.
We have statements at both the Quality Manual and Procedure level indicating that we do not have any customers who are prepared to give us all the information we need to accurately develop Total Life Cycle Costs; until they do, we cannot do it. This is reviewed annually with Sales and Engineering to see if any customers are ready to fully participate. When they are, we will fully comply; until that time, we can't.
I've been told that in time, the automotive industry will buy based on lower LCC and not initial cost, but that day is not here yet.

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Tom Goetzinger

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John Swartz
Lurker (<10 Posts)

Posts: 2
From:Crystal Lake, IL USA
Registered: Nov 2000

posted 25 May 2001 12:49 PM     Click Here to See the Profile for John Swartz   Click Here to Email John Swartz     Edit/Delete Message   Reply w/Quote
My company has just completed a large paint shop for Ford, a needless to say the R&M was extremely costly, ~2700 MH. The bulk of that time was spent developing FMEAs. However, Ford pressed us for MTBF and MTTR values, they did not specify the numbers, we had to come up with them.
We immediately pressed our OEM suppliers for data and if they could not produce it we discussed MTBF and MTTR with their Tech Support personnel with the notion that we could ascertain some sembelence of MTBF and MTTR.
With our equipment, we used the experience garnered from our field personnel, spare parts sales, and customer maintenance people. Although some hard figures were unavailable, we used our best engineering judgement. When these numbers were presented to the customer we also included a caveat stating the fact that these numbers may have been determined using engineering assessment.
Fortunately, with the next Ford project before us we were able to reduce the R&M budget figure because the majority of documentation was already prepared, just a matter of a few simple revisions.
The initial R&M "bow wave" tends to diminish as experiance is gained and documentation is collected.
Good Luck

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