Cost Reduction

In the modern competitive business world it is absolutely essential that costs are managed effectively and efficiently in order to maximize Return on Investment. In terms of product development it is imperative that this cost reduction work is done at the Design stage. Any savings made at this stage will be valid for the rest of the product lifecycle. It is much more difficult to reduce product cost at later stages of the product lifecycle. By then the product will have been tested and qualified and any further changes will have to be validated at great expense.

There are techniques which can be deployed in order to reduce product material cost at the design stage and also to reduce manufacturing cost at the volume manufacturing stage. These techniques come under the general banner of D.F.M (Design for Manufacture) and the general principles are:-

1. Simplify the design and reduce the number of parts.

It may seem obvious but the more complex the design, the more parts and sub assemblies used, the greater the chance of error during manufacture. Also, the greater the number of parts the higher the cost of sourcing and storing those parts. The product should be designed so that it is "fit for purpose" and meets the customers product spec. It is absolutely essential that the product spec is agreed and finalized with the customer before the design stage is complete. There is always a danger of spec "creep" if this is not the case.

2. Standardize & use common parts and materials.

Wherever possible re-use existing designs which are already proven and qualified. This will minimize the costs associated with sourcing and stocking parts and reduce the costs of qualifying the new design.

3. Design for ease of fabrication.

The product should be designed using the principles of poka-yoke (mistake proofing) to eliminate any sources of error during the manufacturing process.

4. Design within process capabilities.

The manufacturing processes need to be understood in terms of their statistical capability and the product should be designed within this capability otherwise failure is guaranteed. Designing within manufacturing capability ensures yield and minimizes loss.

5. Minimize flexible and flimsy parts.

Design should be robust to eliminate possible assembly errors.

6. Design for ease of assembly & easy joining and fastening.

Again, errors will be minimized during the assembly process.

7. Automate where possible.

Reduce error by eliminating manual handling where possible.

These techniques combined with DFMEA (Design Failure Modes Effect Analysis) & Risk Management techniques will minimize product costs throughout the product lifecycle and maximize Return on Investment.

If you need help reducing your product costs using the techniques described above please contact us and we will be pleased to help.


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