Other Dimensions: Add It All Up!

October 1, 2004
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In-house calibration may cost more than it initially appears.

Editor's note: This installment in a multipart series focuses on manufacturers doing their own calibration. The series looks at the reasons why a manufacturer might make this choice, as well as some of the considerations that must be taken into account when embarking on this course of action.

If a manufacturer considers bringing calibration in house because of the potential for cost savings, he may be surprised, especially if all the costs aren't accounted for or known. Most manufacturers look at what an outside lab charges for a given calibration and then start thinking, "I can get our staff to do this work. At their wage rate, if they take 1 hour to calibrate a plug gage, I'll be saving big time!" Unfortunately, there's more to calibration costs than hourly wage rates. An hourly wage rate per hour is only part of the total cost; elements such as benefits can raise that hourly rate by 20% or more.

In addition to wages and the human cost, in-house calibration has overhead costs associated with it. For someone to sit at a bench calibrating measurement tools and gages, the manufacturer has to pay for heat, light, building maintenance, property taxes, etc. The hourly wage rate becomes petty cash compared to the actual total cost to the manufacturer. It is in this area of overhead cost where company accountants can help. They can tell a manufacturer, on a square foot basis, the amount of overhead cost associated with in-house calibration. They also can advise how new equipment should be costed out or the cost for facility changes that may be required for a calibration laboratory.



Now we come to the serious money: facility upgrades and calibration equipment. Let's leave the facility arrangements as the subject of another column and focus on equipment. Calibration equipment is where a manufacturer can end up with junk from sales reps who don't know what they're selling or talking about. So, a manufacturer had better know what he needs for his calibration laboratory and not rely on equipment vendors as the sole authority.

Equipment costs fluctuate depending on what is needed for the variety, size and accuracy of the tools to be calibrated. The equation is simple: the greater the variety, the larger the size and the greater degree of accuracy required of gages and tools a manufacturer calibrates, the more expensive the equipment needed. Many companies keep equipment costs down by leaving the highest accuracy work for outside laboratories.

Once equipment is purchased, a manufacturer is obliged to maintain it. This also costs money. For example, gage blocks must be calibrated at regular intervals, and there will be a cost associated with this work whether done internally, sent to an outside lab or sent to NIST. The same applies to other masters, such as setting rings and discs, setting plugs for thread ring gages, etc. The tools a manufacturer uses to do calibration work also must be calibrated on a regular basis. There are costs associated with these activities, and those can be quite expensive in relation to the amount of work done with the equipment.

On the equipment side of costing, the optional extras can be killers when they've been left out of a budget. Avoid this by jotting down a rough procedure for each tool that will be calibrated, listing all the tools and accessories that will be needed. This includes such items as thread measuring wires, setting discs or blocks, and other masters. Have this list before buying anything.

Another overlooked cost in calibration is the cost of accreditation. There are basic fees involved plus those costs associated with having an auditor visit for the on-site assessment. Accreditation costs can be high initially if a manufacturer doesn't have all his quality practices correctly documented and available. Reduce these initial costs by ensuring the quality manual, calibration procedures and uncertainty budgets are all in order.

Like any other quality system, a consultant can help get things in order, but that adds to the costs. If the manufacturing staff doesn't have enough training or experience in this field, a trainer will need to be hired or the staff sent to off-site seminars. Both of these options add cost.

Options, such as computer programs to track equipment and maintain calibration records, can be considered by a manufacturer as well. In the end, for a manufacturer to get an accurate idea of what in-house calibration will cost, take the budget and increase it 5% for price increases over the year it will take to get approval, and then add 5 to 10% for items that have been forgotten.

It's funny how the dollars add up faster than the errors in an uncertainty budget.

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