In a recent market test, the company sent out a request for quote for six parts to five different suppliers. A comparison between Value Engineering estimates and the average of quotes from suppliers revealed that Lam's purchased part cost estimate was 6.2 percent below the suppliers' average. This is a fairly consistent, flat curve, giving a linear result across all order quantities. There are several reasons for the difference. When a job shop initially sets up MSE, it checks actual machine times against those provided in the MSE databases.
Actual times can replace original database values whenever the two differ.
Lam uses the speeds and feeds provided with MSE, but will occasionally update them with information from published data and from suppliers. Another is the manufacturing method used in the estimates. When Lam's value engineers prepare an estimate, they select what is believed to be the best method to manufacture a part, such as a high-end machining. We will estimate with a standard method. However, we will try to stay toward the high-end method to give our suppliers an incentive to move in that direction.