The correct and punctual assessment of the manufacturing costs represents a critical step within the overall set of LSB processes. In fact, the negotiation with the handicraft workshops is based on such costs, as well as it determines the distribution of the workload between the company and the external laboratories.
Moreover, this process represents a necessary gate within the production cycle. Any delay within this cycle will inevitably lead to not complete the order gathering, thus increasing the uncertainty of the purchase budget, typically driving the company to conservative decisions.
In LSB, the evaluation of the manufacturing cost is carried out by the Time Study Engineer in two stages: the assignment of a specific code to each shoe component and the subsequent assignment of the cost to each codified component.
Being that the involved information is extremely structured, one should expect that this process is fully automated. On the contrary, a large part of the activity is performed manually. In fact, before calculating the overall cost of a shoe starting from the cost of each component, the Time Study Engineer has to check the consistency and completeness of the coding itself. This activity is necessary because of the procedure driving the process of the model manufacturing. Once the designer has finished the first prototype, data regarding the parts of which it is composed are:
archived in the database of the production notes, which is provided also to the commercial agents as reference for the products specifications; and
written on the bill of materials, a paper document accompanying the prototype along all the manufacturing process.
However, while the bill of materials is continuously updated according to the modifications occurring during the further development of the model, the database is seldom updated accordingly.
Therefore, the Time Study Engineer is required to compare data archived in the information system with the bills of materials. Whenever a discrepancy is revealed, he should ring all the roles dealing with the development of the model in order to trace back the route of the shoe and to identify possible changes of its components.
Obviously, such a procedure does not avoid oversights. Besides, often it is not possible to find complete information about a model. In these cases, the Time Study Engineer has no choice but to make use of the data regarding the component that is the most similar to the one actually existing in the model.