Design for Cost 210

“Design for Cost 210” introduces the Design for Cost methodology and its application to manufacturing processes. Design for Cost and other Design for X methods are systematic approaches to product and process design that focus on developing products at the lowest cost and highest quality. Design for Cost simplifies and standardizes manufacturing processes so products reach the market more efficiently.

A primary advantage of Design for Cost is that designs are developed early and account for the total cost of a product. Total cost is the entire cost of a product, including reported and overhead costs, and the cost of all actions associated with product development. This approach avoids harmful cost-cutting that weakens quality and introduces further problems, while also avoiding future redesigns and quality issues. After taking this class, users will understand the methodologies of Design for Cost and the development processes and benefits of cost reduction.

Class Details

Class Name:
Design for Cost 210
Difficulty:
Intermediate
Number of Lessons:
13

Class Outline

  • Design for Cost
  • Harmful Cost Reduction Approaches
  • Direct and Indirect Costs
  • Total Cost
  • Review: Cost and Design for Cost
  • Designing for Cost
  • Implementation of Design for Cost
  • Lean Manufacturing
  • Standardization and Product Rationalization
  • Supply Chain Costs
  • Quality Costs
  • Analysis Tools
  • Final Review

Objectives

  • Describe Design for Cost and its relationship to DFX.
  • Describe the ways traditional cost-cutting can harm a design, product, and company.
  • Distinguish between direct costs and indirect costs.
  • Describe total cost and tools for tracking total cost.
  • Describe the concept of designing for cost.
  • Describe the implementation of Design for Cost processes.
  • Describe the role of lean manufacturing in Design for Cost.
  • Describe part standardization and rationalization for Design for Cost.
  • Describe cost reduction for supply chain costs.
  • Describe methods for quality cost reduction.
  • Describe various analysis tools.

Job Roles

Certifications

Glossary

Vocabulary Term Definition
Activity-Based Costing ABC. A method of accounting for a product’s total cost that accounts for the sum of activities that go into development and production. Activity-Based Costing prioritizes accurate estimates over the attempt to be overly precise.
batch-level cost drivers Factors that change product expense each time one product is made but do not relate to the number of products made in a batch. Batch-level cost drivers include setup times.
computer-aided design CAD. A computer software program that aids in the automated design and drawing of a part, product, process, or building. Computer-aided design programs allow designers to access standard part and component drawings to evaluate how they can be used in a particular system.
concurrent engineering Cooperative design among multiple departments, disciplines, backgrounds, and skill sets within a company. Concurrent engineering, also known as Integrated Product and Process Development (IPPD), is fundamental to Design for X.
cost drivers An expense that has a disproportionately larger cost as compared to other costs. Cost drivers include the subcategories of unit-level, batch level, and product-level.
cost-cutting The process of making late-stage changes to a product or process to reduce overall price. Cost-cutting leads to weakened quality and sometimes even results in higher costs due to complications.
Design for Assembly DFA. A form of Integrated Product and Process Development (IPPD) that focuses on simplifying and streamlining assembly processes. Design for Assembly minimizes the total product cost by targeting assembly time, part cost, and the assembly process at the design stage of the product development cycle.
Design for Cost A form of concurrent engineering that focuses on reducing a product’s total cost and lifecycle cost. Design for Cost is the iterative design of a product that seeks to increase system performance while reducing cost.
Design for Manufacturing DFM. A form of Integrated Product and Process Development (IPPD) that focuses on designing, manufacturing, testing, and creating a part that functions correctly and is easy to manufacture. Design for Manufacturing involves considering part functionality and the limits of the manufacturing process.
Design for Quality Control DFQC. A quality-driven form of Integrated Product and Process Development (IPPD). Design for Quality Control focuses on developing the product quality, improving the product quality, and improving the system to bring forth and sustain the product quality.
Design for X DFX. A methodology that requires all decisions related to products, processes, costs, and constraints be made early on in the development process. Design for X encompasses many areas and processes of design, including Design for Manufacturing.
DFX Design for X. A methodology that requires all decisions related to products, processes, costs, and constraints be made early on in the development process. DFX encompasses many areas and processes of design, including Design for Manufacturing.
direct costs Expenses that can be directly linked to the production of a product and the resources used to make it. Direct costs include labor, parts, and materials.
hidden costs Expenses not included or looked over in the price of a product or part. Hidden costs can include maintenance and upgrades to equipment.
indirect costs Expenses not directly attributed to creating a product. Indirect costs include finance, marketing, maintenance, and consumable tooling costs.
Integrated Product and Process Development IPPD. Cooperative design among multiple departments, disciplines, backgrounds, and skill sets within a company. Integrated Product and Process Development, also known as concurrent engineering, is fundamental to Design for X.
Integrated Product and Process Team IPPT. A multi-disciplinary group of employees focused on concurrent engineering and product design. The Integrated Product and Process Team is a term used by government institutions.
iterative Repeating actions and steps in processes. Iterative design is an important aspect of Design for X because it allows for constant and quick redesigns during initial stages.
lead time The amount of time it takes from the beginning of a project to the completion of a finished product. Lead time can also be the length of time from the customer's order to shipment.
lean manufacturing An approach to manufacturing that seeks to reduce the cycle time of processes, increase flexibility, and improve quality. Lean manufacturing seeks to eliminate waste in all its forms.
legacy parts Parts related to previous technology. Legacy parts are typically archived or obsolete.
lifecycle The series of stages a product goes through from conception to the end of its useful life. The product lifecycle includes design, production, distribution, and end-use by the customer.
modular designs Independent parts with standardized interfaces that allow for interchangeability and use across many projects. Modular designs provide greater efficiency.
overhead costs Expenses not directly attributed to creating a product. Overhead costs are also called indirect costs.
poka-yoke A Japanese term meaning mistake proofing. Poka-yoke is an error prevention method that eliminates operator errors in production or assembly.
portfolio A series of products that a company offers. Portfolio consolidation helps streamline production for Design for Cost.
procurement The process of acquiring a product or service. Procurement can involve the payment for and delivery of a product, or awarding contracts to provide continued flows of products and services.
product-level cost drivers Factors that change product expenses regardless of how many batches or units of product are produced. Product-level cost drivers include engineering changes.
profitability The ability to yield a financial gain after paying out expenses. Profit is an important measure of the business unit's success.
Pugh matrix A analysis and decision-making tool that scores design ideas and design decisions based on set criteria. The Pugh Matrix allows for more important criteria to be weighted higher, which gives those criteria greater importance when scoring design decisions.
QFD Quality function deployment. A tool for translating customer needs into product designs. QFD uses a graph with customer needs listed as inputs and design specifications and resources listed as outputs.
Quality function deployment QFD. A tool for translating customer needs into product designs. Quality function deployment uses a graph with customer needs listed as inputs and design specifications and resources listed as outputs.
relationship matrix Part of the quality function deployment House of Quality that compares engineering specifications and their effectiveness to meet customer needs. A relationship matrix compares engineering specifications and customer needs to get an output of successful design specifications.
risk and opportunity analysis A tool used to evaluate uncertainty and the positive and negative impacts of those uncertainties. Risk and opportunity analysis may use a risk and opportunity matrix to plot uncertainty based on probability and positive or negative impact.
risk and opportunity matrix A tool used to measure and analyze the positive and negative effects of design decisions. The risk and opportunity matrix is a fundamental tool for risk and opportunity analysis.
standardization Developing something universally recognized and used. Standardized parts can be used in future product designs to save time and money.
standardized Universally recognized and used. Standardized parts can be used for different products to lower costs.
Statistical Process Control SPC. The use of statistics and control charts to measure key quality characteristics and to control the related process. Statistical process control separates special causes of variation from common causes.
statistical tolerancing The process of using statistics to assign tolerances for mating parts of an assembly. Statistical tolerancing uses Statistical Process Control (SPC) to measure and track variation.
supply chain A network of companies that exchange resources such as materials and information to deliver products to customers. Supply chains consist of a company, its suppliers, its distributors, and its customers.
synergy The interaction or cooperation of two or more products, parts, or substances to produce a combined effect. Synergy among parts increases efficiency.
time-to-market The length of time it takes from a product being conceived until it is available for sale. Quick time-to-market is a benefit of Design for Cost.
tolerance An acceptable deviation from a desired dimension that still meets part specifications. Tolerances indicate the allowable difference between a physical feature and its intended design.
total cost Combined expenses for all parts, labor, and overhead. Total cost is the best way to account for the entire cost of a product and guides Design for Cost strategies.
uncertainty The measurement range in which the true value of a measurement, such as cost, is expected to lie. Uncertainty is an estimation of error.
unit-level cost drivers Factors that change the expense as the number of products made increases. Unit-level cost drivers include production hours.
variable data Data that can be measured on a scale and compared with other data. Variable data can be added to or subtracted from other variable data sets.