This article summarizes the methods and research related to predicting engineering design costs. Another for an FPGA twice the size took 600 hours. Why it's hard to Estimate Time for Engineering Projects. Things work out a lot better for everybody if you start with a good estimate. The later would be challenged to report current status without talking to a dozen engineers first, projects were regularly late and/or overbudget despite generous padding, and the culture sucked. With clients that want flexibility to make changes, agree on a time and materials … (annual salary ÷ number of weeks in a year) ÷ hours worked per week = hourly rate. 2. But it had better be there. Note: EVM helps in measuring current performance and forecast future performance of a project. Look up how much was spent on those tasks. I've had employers with excellent and terrible project management depts. if you are using a subcontractor for the first time, you will have to match their engineering effort hour for hour. Shouldn't be bad. A factor would then be applied for the difficulty of the task, and the level of the engineer working it. And some companies love them. A couple comments on granularity of estimates. This method is used to coax engineering firms into accepting a task that has so much risk it cannot be accurately estimated (a least that is the positive view). Not to sound like a millennial hugger but professionals need more than 9 to 5 and a pay cheque, they need to see the bigger picture, believe they are really contributing to something and feel supported. Nobody buys something if they don't know what it costs, or is likely to cost. Engineering documents are normally categorized drawings, specifications, requisitions and information documents. After estimation, this login page will require: 13.25 man-hours: 2 man-hour project manager time, 9 man-hours developers time and 2.25 man-hour QA engineer time. Divide the number of hours calculated in the paragraph above by the number of sheets and voilà you have an estimate of the average number of hours you can afford to spend per sheet and still make a profit. Please let us know here why this post is inappropriate. 1. You can estimate a job this way - X is full time, y is half time, etc. Otherwise, the industry involvement is an additional requirement). I have never seen estimating hours work out, either because of padding as mentioned or because the engineer becomes annoyed at the person doing the estimating's lack of understanding or lack of appreciation of the value of what they do. But this implies that the effort depends on the personnel available, and other factors (schedule, functionality) are dependent variables. We have already explained this in a previous blog post. There are several reasons, which are freely admitted amongst freelancers and web agencies, as to why web projects are so commonly underestimated - they include: 1. One path is liable to degenerate into padding, the other into mutual assured destruction, or padding, if everyone does the wink-wink. As a health and safety personnel you need to understand how to calculate man-hour since it is necessary for determining the health and Safety performance. Clearly, this was too much for one person (I know that now!). Very good point GeoEnvGuy about providing a vision and senior guidance. You are estimating an FPGA somewhere in between, so 400 hours should be reasonable. The rule of thumb for Subcontractor Management Expenditure used by Grumman, Lockheed, and Boeing is: So if you are having a battery pack modified by a new contractor, and they are going to use 40 of their engineering hours to do it, you will have to expend 40 engineering hours managing them. Microsoft Project is very good for this, and allows you to assess other aspects of completion while you do it, but spreadsheets work just about as well. How to calculate Man hours. Bottoms-up estimating is a commonly use method of calculating the projected cost or labor hours associated with a project. Your CPD records must document a minimum of 150 hours of structured CPD over a three-year period*. All that stuff adds up, and is all in the wrong direction. Engineering estimates for direct material may be based on discrete raw material and purchase part requirements. Still, this contract is at least nominally based on an estimate of the expected effort. Developing sensible estimates of engineering hours requires familiarity with the work and with the customer. In this environment, accurate engineering cost estimates are critical to making those bids profitable and to successfully manage and financially control the project. Customers could be internal, e.g., your boss, or external, a client. Chartered Professional Engineers, Chartered Engineering Technologists and Chartered Engineering Associates should be aware of the obligation to meet the Continuing Professional Development Policy. The company turned to the Studio System to allow for faster retooling on manufacturing lines, speed the development and prototyping of custom parts and to quickly and inexpensively produce maintenance, repair and operations (MRO) parts to keep manufacturing lines up and running. The purpose of this section is to provide historical man-hour data to compile accurate piping estimates. Login. This is fully correlated with the project scope ( no of equipment, plot size, area of building, etc) and can be quite accurate. of Docs. For very small efforts, the skill of the individual and exact conditions may render actuals pretty useless. This is how you should bid it. An important aspect of any project is to estimate how much it will cost. On big jobs, this didn't always work. Reasons such as off-topic, duplicates, flames, illegal, vulgar, or students posting their homework. Protocol modified during development by standards committee. Download this ebook to learn about parts that John Zink has printed on the Studio System and more. The direct man-hours of Page & Nations were determined by gathering hundreds of time and method studies coupled with actual cost of various operations, both in the shop and field on many piping jobs located on projects in the US. Accuracy improvement for front end engineering design. The usual way we do it is to derive an accurate list of engineering deliverable ( stress reports,P&IDs, data sheets, study reports...). A quantitative way to estimate for risk is to include estimates for the risks involved with probabilities and impacts to others. Risk funding should be placed back in a general risk budget when the contract is awarded, either at the top level, or with the Cost Account Managers. This can be done, but is very time consuming to estimate. When a task is assigned, the engineer is asked for an estimate, which is captured by the tool. Use: For doing an estimation of engineering and software man-hours in a control system. This is typical for standard products, developed by experts, in resource constrained environments. This article summarizes the methods and research related to predicting engineering design costs. *Eng-Tips's functionality depends on members receiving e-mail. Ideal Time & Elapsed Time technique is based on the assumption that instead of working an “ideal” 8-hour day, most of the engineers will spend about 6 hours a day fully focused on the task. But don't overlook this, this is a hard metric that has been verified many, many times. All estimating results should be captured and organized so the result can be assessed and understood, for comparison with actuals and other estimates, and preparation for the turn on of the effort. all total labor hours 100 % remarks: hrs/iso= hrs/iso = piping engineering and design __ summary of home office labor and cost estimate & final report please note only the yellow boxes are for data entry Specification is technically a draft. Understanding the overall complexity of the project 3. By Tim Daycounter. What's the difference? For small things, use Task/Method. They then apply a learning curve to the estimate to take into account that operator becomes more facile and the time required for each step drops to some minimum value. place right hand 12 inches in front of left shoulder. Once the budgets are determined (Bogies), they are provided to the functional managers to determine if the spec can be met given the funding available. You can do this by performing the following procedure: Sign in|Recent Site Activity|Report Abuse|Print Page|Powered By Google Sites. Not really an estimating technique but rather a method strictly used for estimating direct labor in man-hours. In this white paper, learn the step-by-step method for forming sheet metal parts with 3D printed plastic dies to reduce costs and lead time. As we know with the cost of man-hours, it is easy to calculate how the labor force contributes to the unit cost and the profitability of the product line. ETC is used for forecasting future performance of a project. All the risks are summed into a general budget, and applied in quantum lumps as the problems appear. It matches the project plan that we created so you can use the two in tandem.. Download the template and use it as you follow along with the rest of this guide. Develop a timeline, and determine who will do the independent cost estimate. Minimum requirement. But that tolerance can be controlled if you use the methods below properly. Engineering Design, Cost Estimates, and Cost Risk Analysis Brazos Island Harbor, Texas Channel Improvement Project Cameron County, Texas U.S. Army Corps of Engineers, Galveston District 2000 Fort Point Road Galveston, Texas 77550 December 2013 . Assuming a 10% profit, the total MEP fee for this project would be $499,444 or $500,000. The customer was delighted at our plan and estimates, and kept adding lots of functionality and other goodies. In fact, one of the things that got me into management was considering who would do the estimate if I didn't! Cost Plus contracts also may specify exact individuals, percentages of time spent on the job, and other conditions. I can do absolutely anything. TTFN (ta ta for now) Some agencies mandate that multi-million dollar projects perform a value engineering review, prior to finalizing the design or commencing the bidding process. Meetings, reviews, telecons, metrics, tool training and other administrative actions need to be included as tasks using this estimate method. Be sure to account for how your company loads external activities and contractors. Therefore, productivity is equal to 800/900 = 0.89 units per hour. I was recently listening to "Beyond the Goal" by Eliyahu Goldratt famously know for his work with TOC in manufacturing systems, and made the following observations about why it's difficult to predict how long an engineering … There is no set formulae to calculate man power required to weld 100 tons of steel, for there are many variables: 1) Process of Welding, 2) Thickness or weight per foot of work piece 3) Design of Weld joints, 4) Type of filler metal, 5) Position of Welding 6) Design of structure and whether any thermal treatment to work piece or weld is required. But you will see it in heavily. You need this to determine manloading, and negotiate the fee. Next, divide the number of hours by the number of 8-hour workdays within the amount of time you have to complete the project. Learn how to estimate project time and resources in 2 unique ways and decide which one will be best for your next project! TOTAL MAN-HOURS: DESIGN: DRAWING: DESIGN: DRAWING: GENERAL ENGINEERING: PLOT PLAN: AREA DEVELOPMENT PLANS Some estimate sheets require an actual from a similar task to be listed,  so it can be examined during an independent review (commonly known as Fact Finding). When I was a manager of departments, I always estimated and managed to 10% of the effort of the people who reported to me. There is some discretion there, but it is not has hard as it sounds. Contingency cost, Cost of the Equipment, Direct materials, Engineering, Estimating, Examples, Financial Costs, How to Estimate… The fact finding process is not kind to a general risk budget, never mind that this is a common practice. Also, these are estimates, with risks - not Bids. This is easy to bid - duration of the job times the percentage of the day someone spends on it. are in drawing category. Ranging in cost from $ 50,000 to $ 20,000,000. Next, divide the number of hours by the number of 8-hour workdays within the amount of time you have to complete the project. When the task is completed, the data is logged into the tool. Example: You locate actuals for designing and testing a similar FPGA to be ready for integration. Set up a tool to carefully catalog the time required for each step. To calculate man-hours, start by dividing your project into separate components, like excavation, construction, and plumbing. Simulations of the project are then run to project the probability of outcome, given dependencies, resource availabilities, etc. Any task estimate above 200 hours using this method should be suspect, and checked against one of the other methods in this article. Take that number and divide it by 52 (number of working weeks), then again by 40 (number of hours in each week). (If the industry involvement satisfies the other CPD criteria, it may be included as part of the submitted CPD hours. By joining you are opting in to receive e-mail. Or the job won't happen. For example, let’s say I wanted to make a gross salary of $60,000 per year. A track record for the engineer is built. Availability of valid data 4. Select Chapter 3 - Oil refinery. I can tell you from my personal experience that the EAC calculation questions you may get during your PMP® examination can be quite confusing. I'm an expert! How to use it: Enter inputs / outputs of PLC or control system, amount of equipment and control loops, and other data. It also allows for evaluating team member skills at particular tasks and stages. The managers then respond with a plan to do it for that, if it is possible. The PMBOK® Guide clearly states how to calculate Estimate at Completion (EAC) in different situations. CONCLUSION. The former could very accurately, very efficiently plan 90% of a large project and keep engineers working at max efficiency without being stressed and working overtime. Actuals are billed to the customer, and a fixed fee is paid based on successful completion of defined milestones. Just remember, it could change when you dig into the actual work. This is also known as Cost-Reimbursable. If you've got those two datasets then the boss should easily be able to evaluate individual team members and hold their feet to the fire. They just put a value in the main proposal during original bid to get the main project. Note that it should be the team doing the actual work, not the project managers, that participate in the planning poker. You would ask for the actuals on XYZ project, listed by task, or by the engineer type, or a name run of hours expended. But I never really verified this to any extent. … What is the Difference Between an Estimate and a Bid? *For engineering academics and teachers: in addition to the 150 hours, practitioners must demonstrate at least 40 hours industry involvement in any three-year period. Clear identification of tasks 2. It also may include inconsistent time reporting, so be sure to review it to make sure the data is usable. The one above is scalable and easily understood, and also folds well into risk management plans. It is hard. The direct man-hours of Page & Nations were determined by gathering hundreds of time and method studies coupled with actual cost of various operations, both in the shop and field on many piping jobs located on projects in the US. Don't forget you would have to manage them. So you get estimates, and probabilities of meeting those estimates, with distribution. Costs for these services are then generated using rates contained within look up tables which are periodically updated. If the Program Management task had been bid at 10% of the engineering effort, it would have been clear that help would be necessary at the very start, and it would have made things much easier. And metrics need to be based on your organizations actual performance, not on external measurements - unless you emulate the conditions that created those metrics exactly. Copyright © 1998-2021 engineering.com, Inc. All rights reserved.Unauthorized reproduction or linking forbidden without expressed written permission. It turns out that the simple opinion of a skilled technician is preferred over complex methods such as using industrial engineering standards or methods such as averaging past job performance. Therefore, productivity is equal to 800/900 = 0.89 units per hour. To keep things simple, we’ll say you work 35 hours per week and earn £20,000 per annum. Sum all the hours, and all the probabilities. ... My own opinion is that the task hours estimating is wasted time in sprint planning. This is just another sample form in Microsoft Excel spreadsheet form that you can download for free. And when it comes to functional prototypes, 3D printing is rewriting the rules of what’s possible. In a typical project, engineering progress is measured as level 2 (phase wise) and level 3 (engineering discipline wise) and level 4 (document wise). They provide this number to the proposal manager. Managers will be trying to try to work to their budgets, in the case above, the original 100 hours. Gener ally , for elabor ation of the man hours f or er ection/installation of process equipment, project manager for developing the fully-funded costs. Not likely. It includes errors and rework. P&ID drawings, isometric drawings, pump GA, foundation drawings, etc. The Estimating Procedure . This is to help you pick the right tool for the job. For instance, if a project estimate is 12,000 hours (7 - 8 people), and then a full-time project manager (1800 hours) is needed. Globally it worked, and I believe it is common practice. Then use this data to project the overall scope of the effort, including classical factors for learning. However, many agile task tracking tools use these hours to generate burndown, so we need something in there. It turns out that the simple opinion of a skilled technician is preferred over complex methods such as using industrial engineering standards or methods such as averaging past job performance. The chore of estimating labor hours for a job is a serious planning issue. 15. The standard man-hours can be set up on a computerized estimating system and the piping man-hours are calculated using the unit quantity method. The most complete implementation of this is. By applying the expected manloading to the tasks, and their interaction by linking dependent tasks, schedule probabilities can also be calculated by running simulations. PMBOK calls out a similar method, and there are probably many more ways of quantifying risk. I never met a sales guy that thought a product development should cost more than $50k, and I have never seen a product developed for $50k that customers found attractive for more than a few months. This is also necessary because some of the work may be eliminated during negotiations, and the risk budget should go with it. of docs. Therefore, the estimator should be aware of this factor early in the process. Refer to the following procedure to calculate engineering progress, For instance, if you know who did the PWB design, then you can use a name run by project to see how many hours were expended doing the various designs. You can read more about reserves in this article: The Paradox of the Reserve. Imagine being given a dart, then being blindfolded, pointed in the general direction of the dart board and told that the reported success or failure of a team of workers rest on your ability to hit the bull's eye. Estimating engineering hours is a quantification of the activity hours. Task/Method is. Or it could be completed or stopped after $10k, and you get your $20k fee. To estimate the cost of this engineering, it is not only necessary to consider the hours of the specialists, designers, and draftsmen, etc., but it is also necessary to take … This is the goal all of the engineers should be working towards- it is why you did the training, bought the software packages, added the server, etc. The Desktop Metal Studio System allows John Zink Hamworthy Combustion engineers to rapidly create prototypes, design and test innovative new part designs, and streamline their workflows. & Press Total } ( Actual Program is available in Super Civil CD) DESCRIPTION: UNIT MAN-HOURS: NO. This is estimated on a calendar basis, like rental of a parking spot or a staffing a bank teller. Prototyping to produce an manhour estimate probably sounds a little strange to an engineer, but operations people do it all the time. This model is used to predict the engineers ability to estimate and execute what he says he will. Already a member? But it is a holy grail they all strive for. Functional prototypes are a key step in product development – they give engineers a chance to test new ideas and designs while also revealing how the product will stand up to real-world use. Example. Note that this method knows nothing about the work to be performed - only what the developers original assessment is, and what the developers track record has been. For large efforts, use Actuals. Sheet metal forming is the most cost-effective forming procedure today for manufacturing parts at large quantities. This method also implicitly follows how financial data is tracked by your system. Design is melding many requirements into one result. The So if an engineer is found to typically estimate one week short, +/-50%, the program will use this to build a model for the engineer. Thank you for helping keep Eng-Tips Forums free from inappropriate posts.The Eng-Tips staff will check this out and take appropriate action. When you prepare an estimate it's good practice to give the customer a written copy, including a full breakdown of costs. Not really an estimating technique but rather a method strictly used for estimating direct labor in man-hours. Broad participation in preparing estimates 3. If the awarded project has its origin in an unreliable budget, the contractor will have financial difficulties. Project Engineers (each): 250 hours (total of 3 project engineers) Design Engineers (each): 750 hours (total of 3 design engineers) CADD operators (each): 1500 hours (total of 2 CADD operators) Administrative: 250 hours; The staff costs would total $449,500. Specific requirements It is an important Earned Value Management (EVM) metric, which is used for forecasting the money needed for the remaining project work. Estimating 6 working hours per day, the total man hours is obtained from multiplying the following: 15 x 10 x 6 = 900 hours.