Estimation of labor cost in the disassembly stage in the reconditioning of electrical motor in General Electric

Project principle investigators: Ibrahim Al-Furaih, Fahad Al-Youesf, Khaled Al-Ghufaili, Mahmoud Ajaimi

Course: ISE-304 Principles of Industrial Costing

Institution: King Fahd University of Petroleum and Minerals

Introduction

Reconditioning electric motors is a well-known process. The purpose of reconditioning is to regain the motor’s full power after consumption. Almost all motor-companies around the world offer this service to provide their customers with a fully charged motor without the need to purchase a new motor. Take for example, General Electric, the world's 3rd largest company. It is one of the leading companies in this area, and luckily, a branch has been established in Dammam, Saudi Arabia. Our group chose to take a visit to the company in order to observe the process of reconditioning an electrical motor including all stages of the process starting from the minute the motor enters the workshop until completing the process for the customer.

Therefore, we decided to study and analyze one of the stages of the reconditioning process in order to estimate the associated labor cost along with a recommendation concerning this aspect. Our group has done a detailed time study for the testing and disassembly stage and will be mentioned further.

Stages of Reconditioning

First, we receive the motor that has been carried out by a truck in the receiving area and it takes one hour for unloading it to the ground. For the next hour they will check all the parts, take photos and record all the missing and damaged parts. After that, they move the motor to the disassembly / assembly area for about an hour. They disassemble it and apply two electrical tests on it; one for the stator part and the other for router. After that we will transfer each part: router, stator, small and big parts to its next stage. For the stator and router they will apply a test that is called “High Voltage Test”.

Next, they will take the stator and router to a steam cleaner machine for cleaning and that takes around 6 hours. After that they will take both parts to the oven in order to dry it, and that takes around 12 hours. When we finish drying them, the router will go to a special router testing area and the stator will go back to the high voltage area again and both will be tested again. And for last testing step, they will take the router to the mechanical testing area and apply some mechanical tests.

At the end they will return all the parts again to the assembly / disassembly area, assemble it again and do a run test just to make sure that the quality standards are maintained. We selected the Testing and Assembly Stage for our case study because it has a quite number of elements and time can be taken at this stage easily.

Testing and Disassembly Stage:

This stage consists of the following elements:

Dismantling components for inspection
Testing router electrically
Testing stator electrically
Transferring big parts
Transferring small parts
Transferring router
Transferring stator.

Data and Analysis

First, we will calculate the labor cost depending on the data given by the company (wages and times for elements) and then we will use the data we have observed in the workshop by ourselves and conduct a time study in order to compute the labor cost associated with our data. Finally, we will make a comparison between the two costs.

Types of workers and their wages:

Types of workers	Wages per hour
Assembler	38 riyals
Tester	38 riyals
Helper	20 riyals

Operation elements

Elements		Types and Number of workers	Standard Time (Hour)
1	Dismantling completely for inspection	3 Assembler	10
2	Testing router electrically	2 Tester	2
3	Testing stator electrically	2 Tester	3
4	Transferring big parts	2 Helper	0.367
5	Transferring small parts	2 Helper	0.167
6	Transferring router	2 Helper	0.5
7	Transferring stator	2 Helper	0.5

Now calculate labor cost depending on their Data:

Element number	Standard time (hour)	Types & number of worker	Wages (riyals /hour)	Labor cost (riyals)
1	10	3	38	10 x 3 x 38 = 1140
2	2	2	38	2 x 2 x 38 = 152
3	3	2	38	3 x 2 x 38 = 228
4	0.367	2	20	0.367 x 2 x 20 = 14.67
5	0.167	2	20	0.167 x 2 x 20 = 6.67
6	0.5	2	20	0.5 x 2 x 20 = 20
7	0.5	2	20	0.5 x 2 x 20 = 20

Total standard time for this stage = 16.53 hours

Total labor cost for this stage = 1581.34 riyals

Now we calculate the labor cost using our data:

	Observed Time (hours)
Operation Number	1	2	3	4	Average	Number Of workers	Rate	Normal time	Allowance	Standard time
1	8.5	6.3	6.5	7	7.075	3	110%	7.782	10%	8.56
2	2	1.33	1.33	1.15	1.454	2	110%	1.6	10%	1.76
3	2	2.33	3	1.76	2.272	2	110%	2.5	10%	2.75
4	0.16	0.233	0.25	0.25	0.225	2	115%	0.258	10%	0.284
5	0.16	0.116	0.116	0.116	0.129	2	100%	0.129	10%	0.141
6	0.35	0.33	0.33	0.30	0.329	2	120%	0.394	10%	0.434
7	0.42	0.33	0.33	0.33	0.354	2	120%	0.424	10%	0.467

Total standard time = 14.40 hours

Total Labor cost =3*38*8.56+2*38*1.76+2.75+2*20*0.2846+0.1419+0.4342+0.467= 1371.71 riyals

Conclusion

The time calculated for labor and the associated labor cost is much less than what the company pays their workers. By using standard times, the cost associated with labor can be reduced.

تقدير كلفة العمالة في مرحلة التفكيك في إعادة المحركات الكهربائية في شركة جنرال الكتريك
الباحثين الاساسيين: ابراهيم الفريح، فهد اليوسف، خالد الغفيلي، محمود عجيمي
المشرف: الدكتور محمد السلامة
المادة: مبادئ حساب التكاليف الصناعية
المؤسسة التعليمية: جامعة الملك فهد للبترول والمعادن