Cost Modeling As A Design and Development Tool For Adhesives and Sealants

COST MODELING AS A DESIGN AND DEVELOPMENT TOOL
FOR ADHESIVES AND SEALANTS
INTRODUCTON
The ChemQuest Group has developed a new mathematical tool designed to assess the
economic costs of using adhesives in place of alternative fastener types. This innovative
tool is designed to benefit the managerial decision making process and provide better
focus for the product development community. Developed exclusively for the Adhesive
and Sealant Councils Building The Industry (BTI) Program, these cost models were
made available to the ASC and its 42 coalition member companies.
BACKGROUND
Intense industrial competitiveness in the global manufacturing arena is placing stringent
demands on R&D and product engineering disciplines. Materials engineers, production
engineers, product designers and scientists must all make key decisions on product
design, investments, personnel, market development, and pricing against the metric of
forecast profitability. These decisions are also constrained by a host of scientific and
technological boundaries that define the technical feasibility and business potential of a
given project.
Historically, R&D activities have been compartmentalized, especially in large companies,
and widely separated from the groups responsible for business development. Generally
R&D groups paid little attention to manufacturability and cost, which has rendered much
of the fundamental research quite remote from the long-range strategic goals of the
business. Such disconnected research has often fallen prey to cost-cutting measures.
Likewise, engineers have learned primarily on the job, as institutionalized knowledge has
been passed down from one generation to the next. Design tools to assist engineers in
selecting adhesives over other incumbent fasteners are scarce. These developments are
taking place in the face of key innovations increasingly utilizing the computer to provide
quick answers in a more cost effective manner.
Therefore, in conjunction with the Adhesive and Sealant Councils Building The Industry
(BTI) Program The ChemQuest Group has developed a comprehensive comparative cost
model to compare the total value in use cost of joining components or their subassemblies by structural adhesives, mechanical fasteners, or welding. The models output
is expressed in both $/per bond/joint assembled and also in aggregate on an annual basis.
In addition to the model a user manual gives detailed instructions on how to use the
model and provides detailed descriptions of all of the design components and
assumptions that make up the model.
THE COST MODEL

In its current form the model is designed to capture costs in a production line
environment, but it can be used for other production environments. Once a user has a
basic understanding of how the model works, it is somewhat intuitive as to how to
manipulate the definition of a bonding application to capture different non-production
environments, such as on site construction. As an example, The ChemQuest Group used
the model to estimate the value in use for numerous joining applications in the residential
remodeling market segments where production takes place on site. By defining the
number of bonding applications per year as the number of housing units where a
remodeling activity took place we could scale our inputs to the housing units across
different remodeling activities (decks, crown molding, drywall bonding, etc.) but had to
make sure to keep measuring units consistent through the activities.
The model can be used at either the strategic level to understand the cost of a particular
technique throughout an industry application, or at the customer level, as a way to show
how adhesives compare to either mechanical fastening or welding in use now.
A real appeal of using this model is that in gathering the necessary inputs for the model to
work it forces manufacturers and customers to examine and think through cost drivers of
competing joining/bonding processes, something that few customers currently measure or
understand.
HOW THE COST MODEL WORKS

The model is constructed in Microsoft Excel with a number of macros that allow it to
function properly. The cost model exists as an Excel workbook made up of four
worksheets, Read Me, Input Table, Assumption Table, and Cost Summary.
The models workbook takes the user inputs from the Input Table worksheet and
calculates a cost summary displayed on the Cost Summary worksheet. The cost
summary is based on user inputs and underlying assumptions from the Assumption Table
worksheet. Each of the worksheets, Input Table, Assumption Table, and Cost
Summary, contains sections in the user guide that describe their contents. Additionally,
the sheets have embedded comments in column headings to help guide the user.
The Input Table is the engine that drives the cost model. It is comprised of numerous
input columns into which the user must input data. These user input columns are
segmented into the following sections:
1
2
3
4
5
Descriptive and number/type of joining applications

Joining technique, Segment, Sub-Segment, Component, Number of
applications, Substrate, etc.
Part/Surface preparation
Cutting, Folding, Shaping, Cleaning, Coating Removal, etc.
Joining Process
Vary depending on type of joining process selected
Post Joining Processes
Autoclave, clamping, etc. (specific to adhesives)
Other Costs
Overhead, Square feet required, Annual Capex, Energy usage, etc.
To make the model manageable the input columns a user sees depends upon which button
is selected. Each button runs a macro that hides rows and columns that are not needed for
the type of bonding/joining method chosen.
Also, where possible the user input choices are from drop down boxes that allow the
user to choose from among a list of inputs. For example, one the of the user input
columns under the Adhesive & Sealant view is Technology. By choosing from the list of
formulations, the model fills in a specific gravity column from the assumption table. The
specific gravity value in turn is an input for calculating the grams of adhesive used per
bond, which in turn is used in calculating the cost of adhesive material used per bond.
CHEMQUESTS EXPERIENCE
As the ChemQuest Group conducted a cost analysis of the scores of joining applications
in seventeen market segments examined for ASCs Building The Industry (BTI) Program,
it became apparent that adhesives were rarely the cheapest bonding application in total
applied cost. The primary reason for this turned out to be the element of labor time
needed. Invariably, the amount of time to join a component through the use of adhesives
was longer than that of mechanical fasteners and had by far the largest impact on total
applied cost of any variable in the model. One of the few applications that turned out to
be considerably cheaper on an applied cost basis with adhesives was in bonding deck
flooring using adhesives versus the incumbent fastening technique with screws.
But, the value proposition for adhesives and sealants go well beyond applied cost.
Therefore, it is important for users to understand that the constraints of the model are
limited to existing processes. ChemQuest interviewed over 1000 participants in its
market research and conducted eight focus groups in three different industries
(transportation, construction, and product assembly) and amongst university academics.
We learned that adhesives and sealants provided a number of benefits that are difficult to
capture in a cost model.
Those benefits include:
Therefore, the value proposition for moving from mechanical fasteners to adhesives in
the structural markets evaluated is through value add opportunities, where new value is
enabled by adhesives and sealants that the customer will pay more for, as opposed to cost
reductions through the elimination of mechanical fasteners.
Authors:
Mr. Todd Muhleman- Sr. Analyst
Mr. Daniel Murad- President and CEO
The ChemQuest Group, Inc.
8150 Corporate Park Dr. Suite 250
Cincinnati, OH 45242
(513) 469-7555

Cost Modeling As A Design and Development Tool For Adhesives and Sealants

Uploaded by

Copyright:

Available Formats

Cost Modeling As A Design and Development Tool For Adhesives and Sealants

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Cost Modeling As A Design and Development Tool For Adhesives and Sealants

Uploaded by

Copyright:

Available Formats

COST MODELING AS A DESIGN AND DEVELOPMENT TOOL

FOR ADHESIVES AND SEALANTS

THE COST MODEL

HOW THE COST MODEL WORKS

Descriptive and number/type of joining applications

You might also like