Working group
The production director leads the project. A core team has one economics, engineering and design specialist, supported by shop heads. The original first-stage estimate is 3–6 months; the actual schedule depends on the pilot scope.
01
The initial challenge
Consider a full-cycle manufacturer of explosion-protected lamps, luminaires and control cabinets for mines. When costing misses real operations and resource use, pricing, margins and capacity become difficult to manage.
The scope includes aluminium casting, fasteners, stamped covers, cable glands, machining and assembly. The original scenario has two economics specialists, three production engineers, three design engineers and a production director. These are the scenario resources, not the ITPM team headcount.
Move from pooled costs to production stages, operations and responsibility centres. Engineering supplies actual routes and standards; economics calculates costs; design supports technical changes. This page presents a method, not a claim of completed implementation or achieved savings.
02
Three complementary costing methods
Costing by production stage
Costs accumulate as the product moves through production, making major losses visible. Detailed input standards must be collected across departments.
| Stage | Cost components | Responsible |
|---|---|---|
| Aluminium casting | Charge, energy, labour and furnace depreciation | Engineering + economics |
| Machining | Standard hours, tools and cutting fluids | Engineering |
| Stamping | Metal use, die life and energy | Engineering |
| Fasteners | Bar, wire and machine hours | Engineering |
| Cable glands | Components and assembly | Engineering |
| Assembly | Labour, tests and packaging | Engineering + design |
| Certification and inspection | Tests, Ex marking and inspection | Design + economics |
Standard costing by operation
Record the operation code and name, equipment, duration in minutes, skill grade, machine-hour rate and material cost.
Operation cost
(Time in minutes ÷ 60) × machine-hour rate + materials + piecework wages + contributions
Machine-hour rate
(Depreciation + energy + repairs + tools + setup labour) ÷ equipment hours
Use consistent time units and accounting periods. Define the rate composition first: never count the same wage, energy or tool cost both in the rate and again as a separate charge.
Cost centres
Casting, machining, stamping, fastener, assembly and testing areas have fixed and variable budgets. Products accumulate costs along their routes. A pilot can use spreadsheets or the existing accounting system; buying MES is not a required first step.
03
Seven implementation steps
Pilot products
Select one lamp and one cabinet: high-volume or low-margin products. Trial the method, data sources and responsibilities on a limited range.
Operation inventory
Engineering and design map the full route. For each operation record a work-area photo, actual duration, equipment, skill grade and material.
Cost recalculation
Economics calculates equipment rates, material norms, piecework wages and contributions. Allocate overhead to cost centres using explicit drivers.
Bottlenecks
Compare calculated and actual cost with market references. Check casting waste, energy, defects, machine utilisation, machining standards and assembly movement.
Process changes
Review workstation layout, transport distances, measured time standards and combining operations. Engineering and production confirm technical feasibility.
Rollout and monitoring
Approve standards and review planned versus actual costs every month. The original plan includes another review after three months.
Casting → Roughing → Turning → Milling → Drilling → Stamping → Fasteners → Assembly → Testing → Ex marking → Packaging
Images illustrate operation types, not a recommended workstation arrangement. Credits and licenses are on the sources page.
04
Responsibilities
| Task | Owner | Output |
|---|---|---|
| Primary data | Production engineering: 3 specialists | Routes, time studies, standards |
| Equipment rates | Economics: 1 specialist | Machine-hour model |
| Materials | Economics: 1 specialist | Costing based on engineering norms |
| Overhead | Economics: 2 specialists | Allocation by cost centre |
| Design simplification | Design office: 3 specialists | Part and range proposals |
| Workstation relocation | Production director | Agreed change plan |
Economics must receive prepared data, not collect every fact in the shops. Its two specialists focus on calculation and analysis; engineers and production own route and norm quality.
05
Where AI helps
Collection and recognition
Computer vision can recognise parts and components. Assembly monitoring needs suitable cameras, labelled data and recognition quality checks.
Draft process route
A multimodal model can suggest a sequence from photos. An engineer verifies it: hidden operations and requirements cannot reliably be recovered from images alone.
Flow maps and bottlenecks
Add operation, movement and waiting times to photos. Build a flow map and test organisational improvement hypotheses.
Example: cover → wire → plug → assembly. Staff photograph the assembly stages. AI supports a draft map and instruction; monitoring may check component presence and visible actions. Measure each operation and transfer time before assessing layout changes.
Stage and cost-centre accounting remain the foundation. Specialised models may assist recognition, deviation detection, route analysis, cutting or forecasting from historical data.
The original brief lists Spanflug MAKE, Fabera, up2parts, HERGES, Shinsung E&G, Consinee, 1C:ERP, Global ERP, SPRUT-OKP and Sebestoimost.PRO as research references. They are not confirmed suppliers. Availability, functionality, Russian usage conditions and integrations require separate evaluation; third-party results are not our guarantees.
06
Starting a pilot
At the start
Issue the project order, form the team and choose one lamp and cabinet. Agree data and calculation rules.
First two weeks
Engineering prepares routes and time studies. Economics gathers equipment rates and material data based on standards.
First review
Compare the model with actuals, identify the three largest loss sources and decide changes to technology, standards and materials.
Deliverables: pilot route cards with owners; equipment, material, labour and overhead models; stage and cost-centre calculations; a measured flow map with improvement hypotheses; a change plan and regular variance reviews.
The outcome is a manageable costing process. AI supports data gathering and analysis; the project team makes engineering decisions.