Cost Justification Form

	Satelite Plus^Ž provides manufacturers with many benefits. Some are apparent in smoother factory operations, while others translate directly into tangible cost avoidance and increased profitability.
	Top 10 Satelite Plus Quantifiable Benefits	This is a list of the ten most common quantifiable cost/profit improvement benefits obtained from installing Satelite Plus.
	Satelite Plus Qualitative Benefits	This list details the benefits of Satelite Plus for which the exact value may be difficult to assess, but which are no less real to your factory.
	Satelite Plus Cost Justification Input Form	These inputs come directly from you. They provide us with each input variable that will be used by our cost analysis procedure to project the magnitude of potential cost savings for your factory using only the quantifiable benefits.
	Top of Page

Top 10 Quantifiable Benefits
	Cost avoidance and increased profitability are usually recognized where labor is eliminated or reduced, waste is lessened, or production is increased without associated indirect costs. Users have documented some or all of the following benefits to their Satelite Plus system:
	Decrease excess labor costs by 10 to 20%. Increase operator productivity by 5 to 20%. Reduce payroll overpayment by 1 to 4%. Reduce work-in-process by 10 to 35%. Eliminate the cost of gummed sheets. Reduce the cost of gross payroll calculations. Reduce the cost of bundle ticket printing. Reduce the cost of producing the net payroll. Reduce bundle handling costs 0.2 to 0.5 minutes/bundle. Eliminate lost time at time-clocks 5 to 10 minutes/employee/day.
	Top of Page

Satelite Plus Qualitative Benefits
	Not all of the advantages of using real-time shop floor control systems are evident and easy to assess quantitatively. Typically these involve things which are very important to the ultimate success of the business, but for which it may be difficult to assign a monetary value, e.g. customer satisfaction, on-time deliveries, better quality and greater employee enthusiasm. Rather than relate cost savings which are complex to estimate, we have included some of these more subjective areas, and leave further evaluation to you.
	Improved Managers Supervisors and managers can have up-to-the- minute information which helps them be better at their jobs. Supervisors will learn of potential problems before they actually affect line balance and earnings. They can act rather than react. Supervisors will spend their time MANAGING, not performing clerical duties. All managers will have a tool which will help them be better at their jobs.
	Improved Customer Relations With Leadtec's planning systems helping to properly load the factory and Satelite Plus to track the minute-by-minute movement of work-in-process and line balance, "on-time" shipments without shortages can become routine. Customers will ask fewer questions and when they do, answers will be more accurate and to their liking. This can translate into larger orders, higher prices and lower production costs.
	Better Pricing Satelite Plus provides a painless way of determining the exact production cost of products. No longer must you "assume" that standard costs are complete, or the excess costs are equally distributed across all products. Satelite Plus tells you exactly what labor costs have been spent by style, cut and right down to the operation. Now all products can be evaluated based on their actual contribution to profit. Losing products and order can be isolated and dealt with meaningfully.
	Better Quality Satelite Plus keeps track of the operators which performed each operation on every bundle. The result is complete accountability which enables quality problems to be tracked to the source and corrected immediately. The result is lower production costs (fewer problems are created) and increased product acceptance. With fewer problems created, fewer defects will get shipped to your customers.
	Improved Employee Morale Errors in piecework payroll can be virtually eliminated. Sewing supervisors can be freed of the drudgery of production counts, work-in-process tracking and piecework calculations. Operators are given their own terminals to help them improve earnings. They no longer have to line-up at the time-clock or go find a supervisor to initiate an off-standard request. Engineers can be relieved of the painstaking maintenance of rate manuals and duplicate rate development. They will have the advantage of looking at actual operator performance for each operator and rate. The result is happier, more productive and cooperative employees and lower production costs.
	Top of Page

Satelite Plus Cost Justification Input
	The information provided on the input form below will allow Leadtec to provide you with a Satelite Plus cost justification analysis showing how your company can start benefiting from Satelite Plus as so many others have.
	Top of Page

Your Name	Required
Company	Required
Address
Telephone	Required
Fax
E-mail

Payroll Calculation and Ticket Printing Variables:

are the number of admin. people used to compute gross payroll.
is the average hourly pay rate for payroll clerks.
are the number of people printing bundle tickets.
is the average hourly pay rate for bundle ticket clerks.
is the average number of gummed sheets per employee per day.
is the average cost of 1,000 gummed sheets.
is the average number of coupons per employee per day.

Production Variables:

is the average plant overall efficiency percentage.
is the plant base rate per hour.
is the average excess labor cost as a percent of earned labor.
is the average number of piecerate employees.
is the average time to produce 1 unit (SAH/unit).

Production Benefits:

is the average minutes lost per day at time-clocks for each employee, e.g., 5-10 minutes.
is the average savings in coupon handling time per bundle, e.g.,
0.2-0.5 minutes.
is the expected reduction in excess labor, e.g., 5%-20%.
is the productivity increase percent expected from pacing and motivational operator feedback, e.g., 5%-20%.
is the expected reduction payroll computational errors, e.g., 1%-4%.

Factory Variables:

is the fringe benefit percent. This includes state and other disability, federal and state unemployment, medical insurance, sick pay, life insurance, holiday pay, vacation pay, etc. The typical range is 30%-45%.
are the number of plant hours worked per day.
are the average number of plant days worked per year.
is the average burden on each direct labor dollar. This is the percentage of direct labor dollars that is normally added to the direct labor dollars for pricing purposes. Each additional direct labor dollar generated from increased productivity provides your company with additional revenue to over-absorb fixed-burden and/or increase profitability. The normal range is 150-200%.

The information that you have entered will be analyzed and we will get back to you as soon as possible with the Cost Justification results.

Thank You!