33 Analysis of Manufacturing Costs for Powder Metallurgy (PM) …
485
33.7.3 Increase in Energy Price
Given the increase importance of sustainability issues and future associated risks
to manufacturing, it is important to view these results through the lens of possible
future sustainability related challenges in order to ascertain if this case study can
shed light on possible future outcomes. There is a clear link between energy issues
with sustainability as the climate change challenge is inter linked with carbon heavy
energy sources, which must be phased out, and replaced with greener alternatives.
This means that the already volatile energy market is likely to become even more
volatile in the years to come, so any simulations of the effects of energy costs are
pertinent to those managing manufacturing sites.
It should be noted that, the cost increases calculated in this paper (see Sect. 33.5.3)
due to inflated energy costs show only the direct energy costs associated with the
manufacturing of the part in question. If energy prices increase in the manufacturing
location and also in other areas of the parts value chain, then it is safe to assume
that there will be knock on effects to the raw material (e.g. metal powders) costs as
the production of the raw material is also from an energy intensive industry and the
production companies are likely to increase the sales price of their raw material in
order to absorb the costs associated with the energy increase. This effect could also
be mirrored in each and every supplier in the value chain e.g. transportation costs,
logistics costs, inventory and storage costs.
33.8 Conclusion and Outlook
This study addresses the gap in PM gear manufacturing cost assessment (Kianian
2019; Kianian and Andersson 2017; Kruzhanov and Arnhold 2012) with providing
in-depth manufacturing cost analysis of a PM gear. Previous studies quantified the
material and energy consumptions of PM processes but failed to detail the associated costs (Kruzhanov and Arnhold 2012; Zapf and Dalal 1983; Bocchini 1983;
Kaufman 1980; Azevedo et al. 2018). This is due to the fact that, PM transmission
gear manufacturing is not industrially adopted largely; hence, the data collection
for the cost analysis was assembled from multiple industrial sources. This study
shows the capability of the PPC model to analyse a complete set of cost drivers,
showing the cost for each process step from powder to finished gear, see Fig. 33.3.
The scenario capability is utilized to analyse two different improvement scenarios
and a scenario of increased energy price. The conclusion drawn from these analyses
are that automation can be cost efficient if the performance is not affected negatively
and that OEE has a substantial impact on manufacturing cost, see Fig. 33.8.
As mentioned earlier (see Sect. 33.5.3) PM industry has been regarded as energy
and material efficient by many studies, which have sought for alternative sustainable
production processes (Zapf and Dalal 1983; Bocchini 1983; Kaufman 1980). This
approbation is still verified by more recent studies (Kruzhanov 2018; Kruzhanov
485
33.7.3 Increase in Energy Price
Given the increase importance of sustainability issues and future associated risks
to manufacturing, it is important to view these results through the lens of possible
future sustainability related challenges in order to ascertain if this case study can
shed light on possible future outcomes. There is a clear link between energy issues
with sustainability as the climate change challenge is inter linked with carbon heavy
energy sources, which must be phased out, and replaced with greener alternatives.
This means that the already volatile energy market is likely to become even more
volatile in the years to come, so any simulations of the effects of energy costs are
pertinent to those managing manufacturing sites.
It should be noted that, the cost increases calculated in this paper (see Sect. 33.5.3)
due to inflated energy costs show only the direct energy costs associated with the
manufacturing of the part in question. If energy prices increase in the manufacturing
location and also in other areas of the parts value chain, then it is safe to assume
that there will be knock on effects to the raw material (e.g. metal powders) costs as
the production of the raw material is also from an energy intensive industry and the
production companies are likely to increase the sales price of their raw material in
order to absorb the costs associated with the energy increase. This effect could also
be mirrored in each and every supplier in the value chain e.g. transportation costs,
logistics costs, inventory and storage costs.
33.8 Conclusion and Outlook
This study addresses the gap in PM gear manufacturing cost assessment (Kianian
2019; Kianian and Andersson 2017; Kruzhanov and Arnhold 2012) with providing
in-depth manufacturing cost analysis of a PM gear. Previous studies quantified the
material and energy consumptions of PM processes but failed to detail the associated costs (Kruzhanov and Arnhold 2012; Zapf and Dalal 1983; Bocchini 1983;
Kaufman 1980; Azevedo et al. 2018). This is due to the fact that, PM transmission
gear manufacturing is not industrially adopted largely; hence, the data collection
for the cost analysis was assembled from multiple industrial sources. This study
shows the capability of the PPC model to analyse a complete set of cost drivers,
showing the cost for each process step from powder to finished gear, see Fig. 33.3.
The scenario capability is utilized to analyse two different improvement scenarios
and a scenario of increased energy price. The conclusion drawn from these analyses
are that automation can be cost efficient if the performance is not affected negatively
and that OEE has a substantial impact on manufacturing cost, see Fig. 33.8.
As mentioned earlier (see Sect. 33.5.3) PM industry has been regarded as energy
and material efficient by many studies, which have sought for alternative sustainable
production processes (Zapf and Dalal 1983; Bocchini 1983; Kaufman 1980). This
approbation is still verified by more recent studies (Kruzhanov 2018; Kruzhanov