PLC Brownout

[kamenges]

Mike-

I understand that you recommended the surge suppresion. And I also understand that you can put together protection for less money than the Sola unit costs that is just as effective. But I'm in Ron's camp on this, especially for the 'casual', one-time user.

I don't know what you use for an internal engineering rate for pricing. But I would suspect the OEM average is about $100/hr. This means anything over 2 hours of time on this and the Sola unit is cheaper. Like I said above, if you will use this all the time and you can justify buying bulk on all the components so you don't have to order them every time AND you can spread your development and learing time over multiple projects then it may make sense to roll your own. But if you are only going to do this once I would say go off the shelf.

Another downfall of engineering evaluation is many of us don't properly cost-account for our time, me included. Peter Nachtway often brings this up with motion control. People look at a $3000 motion controller and get sticker shock. But how many of us could embed motion controller functionality in ANY platform in under 30 hours? Using the OEM cost model I tossed out above, that's what you would have to do. Now, if you could reuse the stuff you developed just once, you cut your per-unit cost in half. So if you do ANYTHING multiple times its inherent cost decreases.

Some might say I'm comparing apples and oranges, but its more like sheds and houses. My two examples are only different scales of the same issue. If you sting enough of the small items together the costs add up.

Keith

 

[elevmike]

Keith,

Of course I'm not going to build my own PLC, relays, power supplies, etc.. but I think this issue is a little different...

It wont cost, or take anymore brain work to draw, select, order, and install an MOV then it will the Sola box unit. Yes we do buy in bulk and use them like mad. But it really is'nt complicated. All of our techs carry a selection of MOVs with them and install them all over the place. Regarding the other "features" of the Sola unit, I'm not at all sure what they are, and couldnt glean this from the documents provided on Sola's site. I can only assume that the relay, and led is nothing more then a power indicator, and has nothing to do with indicating, or tripping, on an expierenced surge.

Actually were jumping topics here, and I'm refering to the project in the "Learning by Doing" thread. In regards to that project, it is an OSHA requirement that the type of machine that Paula is building is equiped with power drop-out protection. All of the ready made protection devices I have seen have built in surge protetion also. So from the perspective of the wire feed/cut machine, I see no need for the Sola surge protector.

Like I said: "I'm sure I'm gonna get some disagreement on this one..."

IMO....Mike.

 

[pstephens]

What's in a PLC that it should cost $600? Whats in a drive that it should cost $500?

As engineers we often fall into the trap of evaluating things purely on the basis of what it physically is as opposed to what it can do for us. This is mostly because we can. The population as a whole doesn't generally evaluate items based on parts cost but on capability.

Hi Keith,

I'm not questioning the value of this item. Just by purchasing it, I've already established its minimum value to me. I'm questioning its cost. Not based on what it's worth to me, or what it can do, but what exactly it cost the manufacturer to make it.

The manufacturer can't simply use the argument that, "Well, look how much it would cost you to replace all the electronics in your control system if it gets fried by a voltage spike." If that was a valid means of establishing cost, then why can't smoke alarm manufacturers get away with charging millions of dollars for their product? What are your life, and the lives of your family worth to you?

What's in auto insurance that I should pay $600/year for it?

Interesting question, but I don't see how it's relevant to this discussion. I have seen surge supressors that include an insurance policy, of sorts. It provides compensation for the loss of equipment damaged by the failure of the supressor to perform its intended function. And this represents a legitimate cost for the manufacurer. As far as I know, the Sola unit includes no such provision.

We seem to have established that the components used in this item would cost me, maybe, several dollars (they probably cost Sola much less). What about the assembly labor? Well, it's made in Mexico, and I'm assuming that they are not building them one at a time. What about engineering and design costs? Is there anything especially unique or proprietary about the design of this item? Not that I can see. The principles involved have been well-established for years, and are used by many manufacturers.

What's in your shear that it should cost what what you are charging your the customer?

Obviously, the cost of desingning and developing a manufactured item needs to be included in the price. In the case of the machine I'm designing, since it's likely to be the only one sold, the design cost has to be recovered in that sale. In the case of a mass-produced item, the indirect costs are amortized over the quantity of units sold.

All I'm saying is that I don't understand why this thing is priced so high for what it is. If the answer is simply, "Because they can", then why aren't there other manufacturers out there lining up to sell them more cheaply? In the absence of some kind of outside regulating influence (or, perhaps, mass-ignorance?), I would think that the cost of this item would tend to be based on the actual cost to manufacture it, plus a reasonable profit.

I'm not necessarily saying they are doing anything wrong. It's just that -- seeing what's there -- I don't understand the basis for the cost.

Paula

 

[Steve Bailey]

I can think of several reasons why the product costs what it does.

1. It has features that are not available anywhere else. (Lack of competition). From the discussion thus far, that doesn't seem likely.

2. Sola doesn't make it, they buy it from somebody else who puts the Sola label on it. Now you're paying two companies profit margins.

3. Sola has some other product that offers similar features. They would rather sell the other product, so they price this one artificially high to discourage sales. This happens all the time as manufacturers phase out legacy products.

4. Given the fact that the product doesn't match the specs on the data sheet, you may have been sent the wrong product, even if the label says it's what you ordered. Mislabeled stuff can get past QC.

Those are just the first reasons that came to mind. I'm sure there are others.

 

[kamenges]

Paula-

I now understand your point.

So...

Originally posed by pstephens:

All I'm saying is that I don't understand why this thing is priced so high for what it is. If the answer is simply, "Because they can", then why aren't there other manufacturers out there lining up to sell them more cheaply? In the absence of some kind of outside regulating influence (or, perhaps, mass-ignorance?), I would think that the cost of this item would tend to be based on the actual cost to manufacture it, plus a reasonable profit.

To a large degree the 'Because they can' point is the winner. There are a few manufacturers of devices like this but not that many. So there is no siginifcant competition to regulate the price. So you are left simply with 'What will the mnarket accept?' as a pricing mechanism. This is based just as much on perception of value as it is on perceived cost of manufacture.

Your point about pricing based on cost of manufacture plus a reasonable profit is used to define a MINIMUM cost. However most companies will price based on what the market will accept until that number gets below the cost of manufacture + reasonable profit minimum. At that point they either re-evaluate their minimum desired profit, increase manufaturing efficiency or they bail out of the market.

My insurance example was pretty opaque. I was only referring to something else that provides somewhat intangible benefits (until you use it, that is). If I were to pay for insurance based simply on what it cost the supplier to support ME I would pay about $50/year. As it is I pay for the somewhat intangible benefit of what it might get me if I ever need it. The cost means nothing purely in terms of what it cost the supplier to provide it.

You could use the PC sales model with this and cut the price to a point just above manufacturing and distribution costs in the hope that everyone will buy one just because they are so cheap. You simply trade profits per unit for shear number of units. But that works only if you are convinced that most people aren't buying them simply because the cost is too high. I don't see that as the norm in the automation world yet, although Automation Direct is pushing the trend that way. I know I don't include surge suppressors in my designs just because I have never seen the need for them. I haven't seen enough things cooked by voltage spikes yet, I guess. So for the low cost model to work you need to convince everyone they need this item, or any item other for that matter.

I must admit I have an OEM bias here. I've seen way too many customers who say something like:
This machine has four motors and drives and a plc. That costs X dollars. And you want me to pay Y dollars. Are you out of your gourd?!
This with no consideration of what the technical challanges might be or what a functioning copy of this machine will ultimately return in profit. If I didn't have to eat my response would be:
OK, go build it yourself and let me know what it cost.

Mike (elevmike) takes the correct line on this. He believes he can produce this function himself with just as much functionality for less money so he does. But for the typical maintenance manager who needs a single something to ward off a 2AM call without having to worry about design $185 is a bargain.

Keith

 

[elevmike]

Paula,

Presumend converstation at the manufacture...

Customer.. Is my power supply equipped with surge protection?
Cust support: Geze.. I donno..
Engineer: OOPS!..Well all we have to do is add an MOV to the design.
Production Manager: No way, the product is already in production.
Accounting: No way, to redesign and get another UL lable etc will cost $$$
Marketing: I've got it!! Lets make another product and call it a surge suppressor.
Engineer: What??? How do I package an MOV?
Production Manager, Accounting, and Marketing: Just add some "features", and put it in a big box with a status light.
Engineer: But..But...
Managemnt: Just do it!!
Engineer: Here it is. Whadya think.
Marketing: Put it in a bigger box, after all were going to charge up the wazzoo for this..
Accounting: Yea..$$$$
Stockholders: Ha Ha Ha Ha! Good job fella's...ca-ching!!

Ok so the botton line is: for somebody else (like Keith said) the $185.00 may be a bargin, (if they dont know better), but for your wire feed machine it's not. What you really should do here is get the power drop out protector and all is mute because it has a MOV built into it.

I dont see any response to the power drop off protector, so let me explain: The purpose of this device is to prevent the machinery from restarting unexpectedly after a power loss. Picture this: Wire feed is running a job and power is lost to the unit. (like maybe a blown fuse, or even a blackout). So somebody goes and starts poking their fingers into the machine and tugging on the wire etc.. and suddenly the power comes back on...OUCH!!!. The power drop out will keep power off the macine untill its intentionally reset.

My last say on the subject...Best regards to all. Mike.