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Prengle Principle - Scott Burns
Old 12-19-2008, 03:21 PM   #1
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Prengle Principle - Scott Burns

Credited to a metal worker in Rochester, Scott Burns offers a reminder that a loss in the book value of an asset might be more than offset by the "income" it brings. Income might be in the form of transportation, shelter, or money.

Nothing completely new here, but well said and timely.
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Old 12-19-2008, 03:39 PM   #2
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The story is just another way of saying that Southwest airlines does well by keeping its planes in the air. If they are on the ground, they ain't earning any value for the company.

In our company, we want the CNC mills in the machine shop to be running 24 hours a day since if they are idle overnight, then we are wasting the value of the capital equipment. So we have a day shift and a night shift. No need to buy a second CNC mill if we can hire someone to work overnight.
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Old 12-19-2008, 04:49 PM   #3
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I don't think Scott Burns will ever retire.

BTW having one employee running two CNCs may be cheaper than having two employees running one CNC. Heck, having two employees running two CNCs on the day shift may be a lot cheaper than creating an entire night shift to "supervise" the second employee.

I'm not picking nits with an analogy, just saying that it's important to analyze all the costs (direct & imputed) before begging for government bailouts spending on production.

I used to work with a couple machinery repairmen (the Navy's equivalent of machinists) who felt that CNCs were what people used when they couldn't train a "real" MR or figure out how to run a lathe... but then these guys routinely created miracles that would've cost us over $100K to replace. And I think the jury is still out on using CNCs to "recreate" classic surfboards.
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Old 12-19-2008, 06:56 PM   #4
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Quote:
Originally Posted by Rich_in_Tampa View Post
Credited to a metal worker in Rochester, Scott Burns offers a reminder that a loss in the book value of an asset might be more than offset by the "income" it brings. Income might be in the form of transportation, shelter, or money.

Nothing completely new here, but well said and timely.
I like the point that we need to be attuned to changes in value. The machinist would let his tools sit unused until the value of them suddenly increased, and then sell them at a tidy profit.

It seems to me that there's no point in ever living in one house for a long period of time. When the economy is really hot, it can be sold to lock in the appreciation, and during a decline, another, more expensive, piece of real estate can be purchased.
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Old 12-19-2008, 07:05 PM   #5
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It seems to me that there's no point in ever living in one house for a long period of time. When the economy is really hot, it can be sold to lock in the appreciation, and during a decline, another, more expensive, piece of real estate can be purchased.
I'd say this depends on how much someone values the hassles associated with moving.
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Old 12-19-2008, 09:52 PM   #6
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In my opinion it takes a good background with manual machines in order to correctly tool and program a CNC. Many CNC machines have "autosets" on speed, feed, depth of cut, etc. An experienced manual machinist would know when an override of an autoset might be needed on a particular operation.
A lot of long run production shops use a set up man to get the parts to specs and then turn it over to a machine operators to push the buttons.
Certain parts are just not cost effective to run on a CNC. I remember spending 30 to 45 minutes tooling and programming for a single part that had a total run time of 3 minutes......all of that because a manual machine I needed was tied up on something else.
On the other hand there are certain operations, like compound angles, that are very difficult without a CNC.
They both have their place. It really comes down to what the part is and/or how many parts a being made.
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Old 12-20-2008, 10:49 AM   #7
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Oh! I thought this was about stacking potato chips!

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