You have to estimate an engineering task, in man-hours. Factors to account for level difficulty, or familiarity can be applied to further adjust each deliverable man-hours. The purpose of this section is to provide historical man-hour data to compile accurate piping estimates. About 40-80 hours per task is the largest number using this method. Definitive estimates are the most accurate and reliable and are used to create bids, tenders, and cost baselines. 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. Understanding the scope of work. The sales people have a pretty good idea of what their customers will pay for something, at the top level. Bear in mind that this is not bid per requirement, except maybe in a very large software effort. Level of effort is usually how these are estimated. Don't be shy about finding out what a contractor would charge for the effort, this is valuable information to put your estimate into perspective. Also, these are estimates, with risks - not Bids. After fact finding, the Program Managers will go to negotiation. Bottoms-up estimating is a commonly use method of calculating the projected cost or labor hours associated with a project. Look, Estimating Engineering Effort - Several Methods. Globally it worked, and I believe it is common practice. 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. Of course, the reason you are subcontracting this effort is that if you did it yourself, it would cost much more, since they have a design basis and you don't. 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. 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. The methods described in this article all have their advantages and disadvantages. 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. Project planning is a soft science, so the results will always have a sizable tolerance. In this environment, accurate engineering cost estimates are critical to making those bids profitable and to successfully manage and financially control the project. I've had employers with excellent and terrible project management depts. Estimate the number of hours required for each task; Identify how many iterations may be required; Calculate the total hours required for completion; As shown in the figure below, list out the various activities and consider the amount of energy and costs each activity will take. If you don't change the statement of work. Usually this is run by the financial people, and the estimators are brought in for questions. This is also known as Cost-Reimbursable. Or it could be completed or stopped after $10k, and you get your $20k fee. If you estimate your projects based on units—whether it be weeks, days, or hours—using a WBS will help you understand very quickly if your project estimate will exceed the intended budget. This varies from company to company, and could include the subcontract management effort, causing you to double book this cost accidentally. Put another way, the United States Government Accountability Officedefines cost estimation as “the summation of individual cost elements, using established methods and valid data, to estimate the future costs of a program, based on what is known today.” It further defines the basic characteristics of credible cost estimation as including: 1. RE: man-hours estimate for piping & equipment design Hagedoorn (Mechanical) 9 Mar 05 06:19 You can use a factor for calculating the engineering work out of the total construction cost (10% and 35% for example)(12% till 15% for petroplant grass … What is the Difference Between an Estimate and a Bid? For very small efforts, the skill of the individual and exact conditions may render actuals pretty useless. Actually, there is a science to this. 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. pipe material control pipe stress engr. To calculate your consulting hourly rate, determine what salary you’d like to make. An example is at 75% completion, you are required to develop and deliver an estimate at completion, given the current requested tasks. Sometimes this just a rule of thumb. For small things, use Task/Method. 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. Are all engineering bids just wild ass guesses (WAGs)? Project Estimate Template. You do not know how these risk hours will be allocated. It also allows for evaluating team member skills at particular tasks and stages. This is very applicable for bug fixes in large applications, but if you have a combination of new methods, new people, and new product concepts, you really shouldn't base your estimate on actuals. Still, this contract is at least nominally based on an estimate of the expected effort. This may be improved by using a laser pointer, or a white board and marker. It also may include inconsistent time reporting, so be sure to review it to make sure the data is usable. 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. This is fully correlated with the project scope ( no of equipment, plot size, area of building, etc) and can be quite accurate. Calculate Man Hours - How to Estimate a Project Budget. So the plan was very fluid, and discipline was difficult. 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. Given the repetitive nature of ethical engineering, a decently experienced engineering manager should be able to SWAG an overall project timeline and cost accurately within ~10%, usually enough for initial customer contact and quoting purposes. They just put a value in the main proposal during original bid to get the main project. All estimates include some accounting for the unknown. Task/Method is. FAQ731-376: Eng-Tips.com Forum Policies forum1529: Translation Assistance for Engineers Entire Forum list http://www.eng-tips.com/forumlist.cfm. P2-370840 - BRAZOS ISLAND HARBOR, TEXAS CHANNEL IMPROVEMENT PROJECT FEASIBILITY STUDY LOCATION AND DESCRIPTION: Port of … For example, if you are doing 10 protocols with 10% probability of one of them not working out, then you better have a budget to do one of them over. Therefore, the estimator should be aware of this factor early in the process. (annual salary ÷ number of weeks in a year) ÷ hours worked per week = hourly rate. 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. ETC is used for forecasting future performance of a project. Or the job won't happen. It includes errors and rework. This actual data will include more than the man-hours. Is the sole purpose of this activity to rate the effectiveness of the engineering team? 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. This can be done, but is very time consuming to estimate. Once a mathematical model is suc-cessful, it will be stable for a long time. All the risks are summed into a general budget, and applied in quantum lumps as the problems appear. I've done these in private industry and evaluated them in government as a Program Manager. And you do it for the high level features of the software project that you will deliver. Protocol modified during development by standards committee. 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. I'm an expert! You won't find something of exactly the same complexity, so you probably have to apply a factor to it. Managers will be trying to try to work to their budgets, in the case above, the original 100 hours. You can do this by performing the following procedure: Sign in|Recent Site Activity|Report Abuse|Print Page|Powered By Google Sites. Something like, "It has a 93% probability of being done by August 15". How to use it: Enter inputs / outputs of PLC or control system, amount of equipment and control loops, and other data. It should also include the level of engineer used, the external requirements, and the type of program. are in drawing category. TTFN (ta ta for now) 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. Join your peers on the Internet's largest technical engineering professional community.It's easy to join and it's free. 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 … In the business that I work in, this results in what is called a Basis of Estimate or BOE for short. a 30 hour task can be estimated at 40 hours because traditionally you know the engineer has 10 hours of coffee breaks, IT issues, interruptions from other engineers, etc. 2: Beware Unit Cost Estimating Guides. When bidding on a government contract, the proposed vendor has to be able to show how they arrived at the cost figure that they'e proposed. 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. In a typical project, engineering progress is measured as level 2 (phase wise) and level 3 (engineering discipline wise) and level 4 (document wise). By the way, any work that is performed by your organization is inherently cost plus. While unit cost estimating can be a faster way of estimating cost, it is not the most accurate option. Things work out a lot better for everybody if you start with a good estimate. Project Engineering/Program Management:  When I started in engineering, the Project Engineer/Program Manager (the guy who made sure the product met the spec) was simply as a fixed level of effort. An important aspect of any project is to estimate how much it will cost. I always hated cost plus contracts - it was difficult to have an intelligent conversation over whether or not to do something (won't they pay us anyway?). For instance, if a project estimate is 12,000 hours (7 - 8 people), and then a full-time project manager (1800 hours) is needed. The one above is scalable and easily understood, and also folds well into risk management plans. It shows 250 hours total. Note that it should be the team doing the actual work, not the project managers, that participate in the planning poker. Not likely. And when it comes to functional prototypes, 3D printing is rewriting the rules of what’s possible. Definitive estimates: Drafted when a project’s scope and constituent tasks are almost fully defined, a definitive estimate makes full use of deterministic estimating techniques, such as bottom-up estimating. The usual way we do it is to derive an accurate list of engineering deliverable ( stress reports,P&IDs, data sheets, study reports...). For large efforts, use Actuals. 2. She would be on the job full time from day one to delivery. But it had better be there. This is for functional management. 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). A quantitative way to estimate for risk is to include estimates for the risks involved with probabilities and impacts to others. Bidding a job using the finance system work divisions shows respect for that department and will make you friends you will probably need. Don't forget you would have to manage them. … OF DOCS. This has many advantages - it automatically factors in all sorts of influences of your organization and personnel, it includes stuff like reviews and meetings and travel and other stuff that is easily left out, and also includes the design quality of your organization - because any backtracking is included too. Thanks for all your input guys I really appreciate it! When the task is completed, the data is logged into the tool. A track record for the engineer is built. Set up a tool to carefully catalog the time required for each step. Understanding the overall complexity of the project 3. Minimum requirement. 15. You can estimate a job this way - X is full time, y is half time, etc. ACTUAL LABOR HOURS BUDGET LABOR HOURS PIPING ENGINEERING SUB TOTAL TECHNICAL LABOR HRS = LPE, DEPT. Why it's hard to Estimate Time for Engineering Projects. What started as a good sized (10 engineer) job ended up as 20 equivalent engineers full time on the job, the name run hit over 40 its peak. You can also go out for competitive bids, to see what a subcontractor would charge. You can look at this as the market cost of the task. Engineering project management general discussion Forum, https://www.youtube.com/watch?v=BKorP55Aqvg, forum1529: Translation Assistance for Engineers, eBook - Functional Prototyping Using Metal 3D Printing, Case Study - Eaton Corporation: Rapid Tooling and MRO Parts for an Automotive Supplier, eBook - John Zink Hamworthy: Printing Complex Burner Tips and On-Demand Shop Floor Tools, White Paper - Sheet Metal Forming with 3D Printed Dies. This is pretty hard do do when estimating engineering, because the industry and techniques change so much. When working with progress calculation, you should know the level of reporting. In this environment, accurate engineering cost estimates are critical to making those bids profitable and to successfully manage and financially control the project. Then use this data to project the overall scope of the effort, including classical factors for learning. This is just another sample form in Microsoft Excel spreadsheet form that you can download for free. This is how you should bid it. The PMP® exam assesses your ability to understand the concept of EAC as well as the correct application of EAC in each project—so you need … Estimating based on unit cost or order of magnitude per square foot can be a bad choice for accurate estimating due to the many variables specific to your project. The discussion will eventually lead to an estimate comparative to a previous work done, which can then be translated into man hours or similar by the project manager. Contingency So, let’s put in some figures and calculate an example. The PMBOK® Guide clearly states how to calculate Estimate at Completion (EAC) in different situations. Software Engineering Meta your communities . Use you knowledge of the company to find similar tasks to the one you are anticipating. As the description implies, a bottoms-up estimate starts by defining all tasks required for a project, and building up a total, top-level estimate based on the individual pieces of work. Or you will have to do it over. How to calculate Man hours. CONCLUSION. Availability of valid data 4. They measure the time required to perform each step of a manufacturing operation, examining the efficiency of each step as they go. By summing the various pieces, a total number of hours can be computed. But it is a holy grail they all strive for. Close this window and log in. You need this to determine manloading, and negotiate the fee. So a $100k job with a $20k fee could balloon into a $900k job with a $20k fee. So in this case, the estimate is given to the managers, for them to see if they can do the job for that. I can do absolutely anything. 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. ... My own opinion is that the task hours estimating is wasted time in sprint planning. 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. 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. The proposal manager then breaks it down into costs for each of the elements, using judgement as what the percentages should be. Define Estimate’s Purpose: Determine the purpose of the estimate, the level of detail which is required, who receives the estimate and the overall scope of the estimate. 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. 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. This is estimated on a calendar basis, like rental of a parking spot or a staffing a bank teller. But don't overlook this, this is a hard metric that has been verified many, many times. PMBOK calls out a similar method, and there are probably many more ways of quantifying risk. You would ask for the actuals on XYZ project, listed by task, or by the engineer type, or a name run of hours expended. And there are. Engineering and construction man hours are factored on the basis of these quantities. One path is liable to degenerate into padding, the other into mutual assured destruction, or padding, if everyone does the wink-wink. Costs estimation is at the heart of the software development process. Therefore, productivity is equal to 800/900 = 0.89 units per hour. Sheet metal forming is the most cost-effective forming procedure today for manufacturing parts at large quantities. However, many agile task tracking tools use these hours to generate burndown, so we need something in there. The managers then respond with a plan to do it for that, if it is possible. 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. 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 . If the awarded project has its origin in an unreliable budget, the contractor will have financial difficulties. Develop Estimating Plan: Assemble a cost-estimating team, and outline their approach. Note that it should be the team doing the actual work, not the project managers, that participate in the planning poker. At the start of a project you still need to make a rough estimate of how many hours something is going to take. I recall an interesting paper I stumbled upon several years ago which proposed a methodology for estimating engineering effort based on material quantities and labor hours for a project - likely more suited for an EPC type of project, but I believe it fits the discussion here. This is about creating estimates, not bids. Who gets to scope the hours; the person doing the work, or someone else? Estimating 6 working hours per day, the total man hours is obtained from multiplying the following: 15 x 10 x 6 = 900 hours. & Press Total } ( Actual Program is available in Super Civil CD) DESCRIPTION: UNIT MAN-HOURS: NO. The risk budgets are then quantitative. Multiplication of estimated design effort, Ê, using the parametric model times the average cost per man-hour, AC, gives an estimate for total manpower cost, TC. *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. What's the difference? This article summarizes the methods and research related to predicting engineering design costs. Weight factor calculation for engineering document is required to calculate engineering progress for each discipline. But you will see it in heavily. A couple comments on granularity of estimates. Since labor costs make up the majority of If you bid the risk properly. The estimate is prepared in accordance with ER 1110-2-1302 Civil Works Cost Engineering, dated 15 Sep 08. To calculate man-hours, start by dividing your project into separate components, like excavation, construction, and plumbing. There is some discretion there, but it is not has hard as it sounds. Develop a timeline, and determine who will do the independent cost estimate. The costs are escalated in accordance with the above Engineering Regulation and EM 1110-2-1304 Civil Works Construction Cost Index System (CWCCIS), dated 31 Mar 2013. This is why some Program Managers prefer to go outside for everything, where it is "fixed price". So you get estimates, and probabilities of meeting those estimates, with distribution. Divide the whole complex projects into simple m… Without an approved SOW it is not possible to develop a Labor Hour Estimate because there is no … Sum all the hours, and all the probabilities. You should at least us two methods, one for calculation, one for verification. Very good point GeoEnvGuy about providing a vision and senior guidance. Let’s just sum up the main steps in few bullet points when going through estimation process. When I was a manager of departments, I always estimated and managed to 10% of the effort of the people who reported to me. The customer was delighted at our plan and estimates, and kept adding lots of functionality and other goodies. And some companies love them. 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. if you are using a subcontractor for the first time, you will have to match their engineering effort hour for hour. Sometimes there are incentives. As was pointed out above, some sheets will require less hours than the average and some will require more hours than the average. Clearly, this was too much for one person (I know that now!). Sometimes it is called "fat", or "padding", or more neutrally, "contingency". Abstract. & STAFF E F Supervision Model Reviews Piping (Home Office) Labor Hour Estimating Introduction The Prerequisite for the use of this tool is a completed and approved Scope of Work (SOW). move left hand to 12 inches in front of your left shoulder, move left hand to 12 inches in front of your rightshoulder, Repeat the above until everyone agrees with your estimate. Not really an estimating technique but rather a method strictly used for estimating direct labor in man-hours. Note: EVM helps in measuring current performance and forecast future performance of a project. Estimates then look like this, using a software task as an example: So the base estimate is 100 hrs, the worst case is 210 hrs, and summing the probabilities adds a reserve of 15 hours. One of the principles of effective planning involves how best to estimate the labor hours for a job plan. hours piping design pipe material engr. Meetings, reviews, telecons, metrics, tool training and other administrative actions need to be included as tasks using this estimate method. In this method, you estimate tasks. 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. Poor estimates can be traced to either the quantity of deliverables not being correct or the manhours per deliverable not being correct, which can be used as a feedback for future project estimates. Clear identification of tasks 2. project manager for developing the fully-funded costs. ENGINEERING DESIGN & DRAWING MAN-HOUR ESTIMATION { Enter No. Of course, there are 52 weeks in each … In any event, the output must integrate with the financial system, so be sure that your method produces the right categories for the financial people to run their numbers. Contingency cost, Cost of the Equipment, Direct materials, Engineering, Estimating, Examples, Financial Costs, How to Estimate… Click Here to join Eng-Tips and talk with other members! Chartered Professional Engineers, Chartered Engineering Technologists and Chartered Engineering Associates should be aware of the obligation to meet the Continuing Professional Development Policy. Already a Member? Unless you can estimate very very accurately then it is just not fair on the team. So if something goes wrong, theoretically, the PM already has a budget to cover that. Try it. A power supply or memory system may have few or many requirements, but the tasks to develop the system are more dependent on the difficulty of combining (at times contradictory) requirements than the total number or difficulty of any specific requirement. But I never really verified this to any extent. There was always a day of reckoning, and it was never pretty. https://www.youtube.com/watch?v=BKorP55Aqvg Thank you for helping keep Eng-Tips Forums free from inappropriate posts.The Eng-Tips staff will check this out and take appropriate action. Provisions for program uncert… *Eng-Tips's functionality depends on members receiving e-mail. Someone will do an estimate. It also works much better when you have many, similar tasks worked in similar situations. On big jobs, this didn't always work. This is a flag for others to include this risk in their estimate. In order to make an accurate estimation and get how to provide estimates for software development, it is important to understand the scope of work. Don't expect estimates of this type to do well during Fact Finding. Gener ally , for elabor ation of the man hours f or er ection/installation of process equipment, 16. This is typical for standard products, developed by experts, in resource constrained environments. You can read more about reserves in this article: The Paradox of the Reserve. Your CPD records must document a minimum of 150 hours of structured CPD over a three-year period*. This model is used to predict the engineers ability to estimate and execute what he says he will. Sign up or log in to customize your list. Engineering estimates for direct labor hours may be based on analyses of engineering drawings and contractor or industry-wide standards. This is a bit of work, but most functional managers do this for the process anyway, and will pretty much have this. It is not the why or how of what engineers do. Look up how much was spent on those tasks. 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. 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. This way, the estimated man-hours can always be reviewed at each stage of the project and can adjusted as scope changes as well as used to monitor performance. 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.