Defining manufacturing operations and calculating production costs
Routing defines the sequence of manufacturing operations required to produce a part. Each operation specifies where the work is done (Work Center), who does it (Labor Class), and how long it takes (Run Hours and Setup Hours). The system uses these inputs to calculate the total manufacturing cost of each part.
The distinction between Run and Setup hours matters for accurate per-unit costing:
| Run Hours | Setup Hours | |
|---|---|---|
| What it represents | Active production time per unit | One-time preparation per batch |
| Scales with quantity? | Yes — multiplied by qty ordered | No — fixed regardless of quantity |
| Per-unit cost | Full run rate applied | Divided by lot size (amortized) |
| Assembly example | 0.5 hrs to assemble each unit | 0.25 hrs to stage parts and fixtures before starting |
| Machining example | 1.5 hrs to machine each part | 0.5 hrs to set up the CNC and load the program |
Note: Setup hours are always billed to labor at the labor class rate (plus the work center's setup rate for the machine), and are shared across the entire lot rather than charged per unit. Run hours are billed to the machine for the whole run, and to labor only for the Attended Run % share of it. A machine that runs unattended therefore costs machine rate × run hours and nothing else, while the person who sets it up and programs it is still paid for through the setup hours.
For each routing operation, the system calculates the following cost components:
Setup time is always a person's time. Run time is a person's time for the attended share only: at the default 100% it is the full run, at 0% there is no run labor. With 100% the formula is the same as before this field existed.
The routing view shows two cost views side by side:
The Standard Lot Size is set on the part record. For example, if you typically build 10 units at a time and setup takes 0.5 hrs at $25/hr, the per-unit setup cost is $25 × 0.5 / 10 = $1.25 rather than $12.50.
A sub-assembly with a BOM has two routing operations:
| Op # | Operation | Work Center | Labor Class | Run Hrs | Setup Hrs |
|---|---|---|---|---|---|
| 10 | Stage and kit materials | ASSY | Assembler | 0.00 | 0.25 |
| 20 | Final assembly | ASSY | Assembler | 0.50 | 0.00 |
With Assembler at $25/hr, 40% MOH, Assembly machine rate $0.00, and a standard lot size of 5:
| Op | Labor Cost | Machine Cost | MOH | Total (qty=1) | Lot-Adjusted (÷5) |
|---|---|---|---|---|---|
| 10 — Stage & kit | $6.25 | $0.00 | $2.50 | $8.75 | $1.75 |
| 20 — Final assembly | $12.50 | $0.00 | $5.00 | $17.50 | $17.50 |
| Total | $18.75 | $0.00 | $7.50 | $26.25 | $19.25 |
Op 10 has only setup hours so its lot-adjusted cost is $8.75 / 5 = $1.75 per unit. Op 20 has only run hours so it is unchanged.
A 3D printer work center has a machine rate of $20/hr, a setup rate of $0, and an Attended Run % of 0. A part prints for 4 hours after 0.5 hours of setup and slicing, in a lot of 1, with a labor class of $40/hr:
| Component | Calculation | Cost |
|---|---|---|
| Machine run | $20 × 4.0 hrs | $80.00 |
| Machine setup | $0 × 0.5 hrs | $0.00 |
| Labor | $40 × (4.0 × 0% + 0.5) | $20.00 |
| Total (before MOH) | $100.00 |
The 4 hours of printing cost only the machine rate, and the person's half hour of setup is the only labor. If a print needs no setup at all, set Setup Hrs to 0 and the operation is fully unattended: it has no labor class and no labor cost.
When a part is revised, the new revision starts with no routing. If the previous revision had routing operations defined, a Copy from Previous Revision button appears on the routing page. This copies all operations from the previous revision to the current one, giving you a starting point to modify rather than re-entering everything from scratch.
Note: The copy only runs if the current revision has no existing operations — it will not overwrite operations you have already added.
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