Date of Submission
Fall 12-2-2024
Project Type
Senior Design
Major
Industrial and Systems Engineering
Committee Chair/First Advisor
Dr. Robert Keyser
Abstract
Great south Metals (GSM), a steel processing company based in Acworth, GA, has partnered with the Kennesaw State University (KSU) Industrial and System Engineering (ISYE) department to optimize its costing model. Currently, GSM uses a flat pricing structure for GSM-owned materials and estimates costs for toll processing. However, this approach has led to inaccuracies in pricing and challenges in tracking profitability. GSM seeks to transition to a more systematic and data-driven costing model that will improve both internal and external quoting while ensuring competitiveness in the market.
To address these challenges, the project focused on developing separate costing matrices for GSM-owned and toll-processing materials. The team conducted time studies to assess various factors, such as material condition, coil weight, number of cuts, and packaging type, impact processing time and cost. This analysis provided critical insights into the true costs of processing different materials. Additionally, the team incorporated competitive market data to ensure that GSM’s pricing was aligned with industry standards and competitive within the steel processing market. The final objective was to recommend an optimized costing matrix that would provide GSM with more accurate and transparent pricing for both internal cost tracking and customer quotes.
The project involved categorizing the key factors influencing cost and analyzing them using distribution models to identify trends. From there, average processing times and corresponding prices were calculated for each tier, based on the categories identified. Each tier was calculated from distribution models from the time studies and other data collections. These results were then integrated into a refined costing matrix, which was used to replace the company’s previous flat costing model. The new costing matrix is now a more accurate tool for GSM to improve profitability and operational efficiency.
The revised costing model aligns with GSM’s strategic goals of improving operational efficiency, enhancing profitability, and strengthening its position in the steel processing industry. By shifting from a flat pricing structure to a data-driven, tiered approach, GSM can now more accurately assess the costs of processing materials, quote more competitively, and better track profitability, ultimately positioning the company for greater success in the market.
Included in
Industrial Engineering Commons, Other Operations Research, Systems Engineering and Industrial Engineering Commons
Comments
Industry Advisors at Great South Metals: