The world of budgeting and financial reporting for manufacturing companies is extremely complex. How you report or budget for a new software purchase is an important detail that should not be overlooked. Every purchase must be categorized and reported. Each category has specific requirements that must be met to follow legal accounting requirements and report accurate results to stakeholders. On top of all of that, most companies operate within divisional or departmental budgets so finding a proper source of funds to pay for T-SIM software can be a difficult endeavor considering there are several departments that can benefit from T-SIM software.
Let’s first look at our current purchase options for T-SIM Software:
Software Subscription or Subscription Licensing is our most popular option. We have single licenses starting at $750/mo and ranging up to $4,495/mo for unlimited use with all features. Enterprise pricing plans are also available to share multiple licenses across different facilities/plants.
We also offer pricing based on usage where there is a base monthly cost with each new project having a small additional fee associated with it. This option allows users to start slowly and gently transition into a full-time T-SIM user role.
In addition to our standard subscription packages, we are a full service, custom software development company so we also offer a variety of software customizations and purchase options including an outright purchase of customized T-SIM Software (Primary License Charge and Annual License Charge) and even “Lease to Own” packages.
Whatever your preferred means for budgeting T-SIM Software, we can help you create a plan that works best for you and your organization.
Now that you know we can customize a plan to fit your organization’s needs, let’s figure out where the budget should come from.
When budgeting for T-SIM Software, it is important to consider how it will be used and what departments will benefit from using it.
Let’s look at some common departmental budgets that pay for T-SIM Software
I know this doesn’t seem like it would be a good fit, but T-SIM software is most often paid for directly by the executive management team. T-SIM is a tool that provides real data to make critical decisions that affect all departments and most importantly, those decisions affect the bottom line (and bonuses).
Should we purchase this new equipment? We need to reduce overtime hours at this plant! Are we able to take all 5 of these takeover jobs? This press is nearing capacity, and we have two new jobs coming in a month!
While management has access to T-SIM software, they typically assign someone in the engineering or production department to use T-SIM daily. As management’s priorities change, they assign specific presses or specific jobs to load into T-SIM and review the data.
If you already have a budget for continuous improvement, this is often the easiest and fastest way to show a quick return on investment. Optimize existing tools already running production and see SPM increases between 18-45%, averaging around 40%.
If you do not have a continuous improvement budget, we suggest you complete a small study of 3-5 existing tools using our service department. Use the study to determine some average increases, and then factor in reduced manufacturing cost and increased press capacity to determine a starter budget to create for continuous improvement.
New tooling budgets are typically made up of new tool design, automation design/build and launch support. If you are a company ahead of the curve, you may already have a kinematic simulation budget with new transfer tools. Others use a set of established “starter curves”. Both of these are a great place to start and help prevent crashes and clearance issues in new tooling, but it is not where you want to end. It goes without saying, you need the die to be free and clear, but if you want to be as efficient as possible, you also need the transfer curve to be optimized for the specific die design. Optimized curve provides a smoother curve at a higher stroke rate meaning there are significant benefits for new tooling. Because of this, new tooling departments are typically a company’s first thought for using T-SIM. Most new tooling budgets are specific to each job and simulation costs can be added per job by simply adding it to your company standards.
Several of our customers that use T-SIM software internally for optimizing existing tooling still require in their standards that all new transfer tool designs be delivered with the T-SIM Job & Settings File. T-SIM Software is easy to learn and use, so many suppliers choose to use T-SIM themselves. Or they can send their designs to T-SIM's service department and coordinate with them to make sure the tooling is clear and can achieve the quoted SPM. When the supplier (or T-SIM Service) delivers the T-SIM Job & Settings File to the stamper, they have the option to make any changes, adjust settings, or determine if a project can be moved to another press or facility. This provides the ultimate flexibility as a stamper.
Additionally, if you use T-SIM throughout the new tooling lifecycle, starting at the process stage, you will nearly eliminate all wasted back and forth time in design review meetings, improve your automation design time, reduce cost, launch tools in less than 4 hours, and run at the highest possible SPM on day one. Even a small trial (3-5 tools) using T-SIM can provide more than enough data to make a business case to include it into your new tooling budget for any upcoming programs.
Yes, we have customers that have paid for T-SIM software through CapEx budgets. While T-SIM software does have purchase options which can be capitalized and depreciated, in this instance they used T-SIM to better understand their equipment needs by using it as a tool to evaluate current and proposed equipment.
One stamper originally used T-SIM software to create a “new equipment study” to help determine the ideal transfer specifications to upgrade the transfer system. This was for a specific press that was near capacity, and they believed the problem was the older transfer system on the press. They started by setting up all the jobs in T-SIM software, optimized each one in the current equipment, and without upgrading the system, increased press capacity by over 1,500 hours of production time annually. Then they looked at what could be gained by upgrading the equipment and determined an additional 1,000 hours of production could be gained each year. When the study was completed, the department decided to postpone the equipment upgrade until they had booked additional new dies for this press. They also knew what capacity they would have available when an opportunity presented itself.
Also, with the jobs set up in T-SIM, they could easily move some or all of those jobs into different presses (a few minutes per job to create the new recipe and confirm automation). This would help to keep production going while new equipment was being installed. The best part... once installation is complete, they already have new T-SIM recipes based on the equipment spec study, so they can get the tooling up and running FAST.
In addition to making the right equipment buying choices, T-SIM software averages a 40% increase in production speeds. For every 3 transfer presses that are optimized, capacity is increased so much, it’s like getting a 4th transfer press added to your plant.
Maintenance departments are probably the most overlooked source of funding for T-SIM software, and yet T-SIM has a very large impact on their day-to-day lives. Not just the time they now have to perform regular maintenance (by opening up capacity through optimization), but the overall wear and tear on the equipment is exponentially reduced when using T-SIM optimized curves. Unscheduled downtime is nearly gone, and replacing burned out servo motors is a thing of the past. Think of how much a single servo motor costs you to replace... and consider the number of hours lost to downtime when one goes out.
We have many T-SIM customers that would tell you that using T-SIM optimized curves for the purpose of reducing equipment wear and tear is one of the largest contributing factors to the overall smoothness of their plant’s daily operations.
R&D is always a solid option for paying for T-SIM software. If you are looking for better data to solve bottlenecks and improve processes, T-SIM will get you what you need. You can put just about anything into motion using T-SIM software, and prove it out in the virtual world before trying it in the real world.
It would make the most sense to just share the cost across multiple departments depending on who will be using the software and who will benefit from the software getting used but as we know, that can be complicated. We understand that every situation is unique and if you are able to get us in front of the right people, we are happy to discuss and figure out a solution that works for you.
If you would like a T-SIM Representative to work directly with your team to create a business case and provide a sample set of existing tool optimizations, click here to schedule a call.
Please Note: The content on this page is not accounting advice and should not be taken as such. This is only meant to be used as discussion points when executive management teams (CEO, CFO. CTO, Plant managers, etc.) meet with their qualified accounting professionals (Accountants, CPA’s, CMA’s. etc.). Thank you!