For optimum profitability when developing a product, particularly at volume, the total cost of its design and manufacture must be clearly established. With the Design to Cost process, these costs are analysed at the design and development stages, much earlier than the traditional post-production approach. By adopting a rigorous approach that fully breaks down all cost drivers to understand their impact and identifies areas for improvement, costs become integral to the product lifecycle from the outset.
By combining our industry knowledge with our cost and value engineering expertise we support our clients in placing cost at the core of their design process – creating a comprehensive understanding of all the cost drivers in their products’ lifecycle and optimising the opportunities to maximise ROI and achieve sustained profitability.
Using our multi-disciplinary consulting expertise and proprietary digital platform, our cost and value engineers implement a 5-stage Design to Cost process. This process aims to fully explore customers’ expectations alongside part or assembly costs to provide a complete understanding of the cost drivers involved and how they align and function, then create an action plan that delivers significant cost savings.
The five phases detailed below are underpinned by our cost and value engineering toolbox, which includes strategies in should costing, VA/VE and make versus buy, as well as financial modelling, value stream mapping and strategic sourcing.
Voice of the customer
Understanding the target market’s expectations is the crucial first phase in the Design to Cost process. By conducting interviews and workshops with clients, we seek to understand the value customers attribute to specific characteristics or functions of our clients’ products.
Using the hierarchy of identified customer requirements, our consultants create cost targets at the system, subsystem and component levels. At this point, we also investigate internal benchmarks and carry out gap analyses, where appropriate.
To establish different scenario possibilities, uncover their potential cost impact and generate ideas, we work with our clients to run cross-functional workshops with major stakeholders, including key customers and suppliers. These ideas are then prioritised.
In order to prepare an implementation plan, we first establish a concise set of trade-offs. These trade-offs are comprehensively evaluated to factor in timing, resource and approval requirements, technical implications and the potential cost impacts of the design and development process.
Our consultants leverage the detailed knowledge of the cost impact of different materials, designs and manufacturing methods, and the costs incurred in the supply chain, to create a Design to Cost implementation plan. This action plan supports Design to Value (DTV) decisions, delivering a product that meets customers’ expectations while optimising costs for the business.
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The benefits of best practice
By collaborating closely with our clients and leveraging our deep industry and operational expertise, we can gain an in-depth appreciation of the unique costs and cost drivers throughout their design and manufacturing processes. With this knowledge, we are able to deliver strategies that ensure long-term, quantifiable benefits for our clients’ businesses. Three specific benefits delivered via our approach to Design to Cost are:
By meticulously evaluating and managing costs, we create healthy margins for our clients’ products. However, we also ensure these costs are aligned intelligently with functionality to ensure the market’s expectation is met, sales targets are consistently achieved, and profitability is improved.
Design and development improvements
In gaining a greater understanding of market expectation and facilitating dynamic modelling, we support our clients in making improvements to the design, development and manufacture of their products. With an enhanced product, customer needs are better met at a cost that delivers improved ROI for the business.
Wider use of best practice
Much of the best practice modelled across the five phases of the Design to Cost process applies to wider areas of the business, especially where understanding market need and cost drivers is a priority. By rolling best practice out across their departments, clients can make business-wide improvements to their strategy and operations.
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While calculating carbon emissions can be fairly simple at a site level it can be difficult to get a full breakdown of the carbon content of products.