What you should know about Keeping Historical Data

Gary Bases, president, BRIL inc.

The metalcasting industry is only as good as the historical data it keeps, data on all the operational components of a plant. Without historical data, OEMs and construction companies lose the ability to improve equipment designs and labor productivity. Most important, they lose the ability to establish accurate cost, budgets, or bids, and to lower their operations' profitability.

Refractory is an integral to most of the key equipment used in metalcasting, as a lining material inside furnaces, cupolas, and ladles. But refractory is overlooked, because it is one of the smallest costs for such operations, even though it has been proven that properly designed and installed refractory materials can reduce fuel costs 5-7% and save on equipment maintenance.

In today's competitive market, now is the time to increase the level of understanding of an operation's equipment and human resources, and how historical data reveals the ways they perform together. Good, up-to-date historical data is needed on core components, such as brick, refractory, insulation, and lagging (bril), in order to keep that equipment operating.

Only about 20 years ago, most metalcasting organizations kept an specialist on staff to support and monitor bril material requirements. These designated experts recorded bril information, from the proposal stage through to contract completion. They understood that bril historical data involves calculating and compiling quantitative bril material take-offs that can be used to generate labor and material-cost estimates. It was their policy to compile these take-offs along with the cost estimates, whether the bril work was to be done by their own labor or outsourced. They also used those same take-offs and cost estimates to help monitor material procurement, man-hours, labor productivity and inefficiencies (see below), and design changes or flaws. These companies knew the importance of bril materials and their impact on their furnace and equipment designs, company profitability, and project scheduling.

Now, companies generally outsource their bril material requirements, continue to cut back on human resources and expertise, and ignore the value of keeping historical data. The lost practice of keeping historical bril data includes the calculation of quantitative take-offs, and establishing labor and material cost estimates that now are outsourced.

Keeping historical data helps improve furnace and equipment designs, correct design flaws, document labor variances by region or country, improve labor productivity, and establish better cost/budgets/bids by building "con-bed estimating data."

Con-bed, or "construction-based estimating data," is an estimating data system (sometimes called "voodoo estimating") that uses historical data from actual contract material take-off quantities, material costs, and labor man-hours as a tool for bidding new projects of similarly designed equipment or systems.

Most furnaces and equipment used in metalcasting, regardless of manufacturer, have designs similar to previously designed and sold systems (except, perhaps, for the physical dimensions and capacity.) This duplication of design helps reduce engineering costs and improve shop fabrication costs. The brick, refractory, and insulation designs do not vary, either.

For example, if you wanted to create a bril con-bed estimating data base for an electric arc furnace, you would:

1. Develop actual contract quantitative material take-offs of the furnace.
2. Calculate material and labor cost estimates, labor man-hours, and expected productivity using the quantitative takeoffs developed (see Step 1, above).
3. Establish a standard envelope, or "E," number value that will be directly related to the physical dimensions of the furnace proper (see Step 1, above), i.e. E = 3.142 × diameter × height.
4. Divide the cost estimates and labor man-hours established in Step 2 (above) by the fixed number values established in Step 3 (above). This will establish the con-bed base estimating cost and man-hour values for each bril component.
5. Divide the material quantitative take-off amounts (cubic feet of refractory, quantity of brick, square foot of furnace, etc.) as established in Step 1 (above) by the fixed number values established in Step 3 above. This will establish the con-bed base quantitative take-off values for each bril component.

With this new con-bed estimating and take-off database you can:

Calculate material and labor cost for upcoming repair work, which can be used as a purchasing tool to compare outside pricing with your internal cost estimates, and to establish future budgets and allowances.

Calculate material quantitative take-offs for future repair projects, which also can be used for soliciting outside pricing and as scope definition.

Unfortunately, once a company stops keeping historical data, ultimately the end-user suffers. For example:

It is only a matter of time until metalcasters will be required, like power utilities, to reduce NOx, SO₂, CO₂, and mercury emissions. This involves installing very expensive air-pollution controls (i.e., Selective Catalytic Reactors [SCR], Selective Non Catalytic Reactors [SNCR], and scrubbers). Unfortunately, most pollution-control manufacturers design equipment without consideration for the cost or impact their external stiffener designs have on the insulation and lagging that will be required later in the project. Historical data would have supported and confirmed that using large stiffeners taller than 7 in. is detrimental to the longevity and integrity of the insulation and lagging systems. This has cost utilities million of dollars, reworking the insulation and lagging installed at their facilities. Metalcasters cannot afford to waste money; they must get the designs right the first time.

Understanding the computation of labor and the difference of work schedules can eliminate or avoid cost and schedule overruns. Labor adjustments occur when the "schedule of work" affects the productivity of the labor force and the amount of time required to perform the required work, such as "schedule of work." Labor costs calibrations are based on adjustments to the number of hours and days worked during a given week. The "schedule of work" dictates any adjustments to man-hours and labor cost. (The chart on p 32 demonstrates some common work schedules.)

Based on this chart, a longer work schedule, more hours worked, and more shifts required will adversely affect the total project cost, and could impact the construction work schedule. Historical data would support the inefficiency factors listed above and/or show when those factors should or should not be used.

For metalcasters, keeping historical data will reduce cost overruns and improve profitability. Keeping good historical data is a habit that everyone should adopt, and a principle that everyone must understand and uphold — operators, equipment manufactures, installers, or suppliers. Knowledge is everything, and historical data is the key to a successful, healthy, and vibrant metalcasting industry.