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Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
Verhaert Innovation Day 2012 –  Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies
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Verhaert Innovation Day 2012 – Ann Van Mele (VERHAERT) - Drastically increase your bottom line from powerful design to cost strategies

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Speaker of Verhaert at the 9th edition of our Innovation Day on October 26th 2012.

Speaker of Verhaert at the 9th edition of our Innovation Day on October 26th 2012.

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  • 1. CONFIDENTIAL COST REDUCTION Ann Van Mele Business Development Key Accounts ann.vanmele@verhaert.com26.10.2012 Slide 1
  • 2. CONFIDENTIAL Cost Reduction Agenda • Introduction • Drivers? • Where? • Cost reduction program • Cost Planning • What? • Why? • How? • Cost estimation Top-down • Cost estimation Bottom-up • Cost Reduction Approaches • Value Eng. • Portfolio rationalisation • DUE • Design for manufacuring • Conclusion26.10.2012 Slide 2
  • 3. CONFIDENTIAL Introduction - Drivers • Globalisation • Low-cost country production • More important for mature products • Increased product changes - Product differentiation26.10.2012 Slide 3
  • 4. CONFIDENTIAL Introduction – Where? Number of uncertanties Intended level of learning Cost of changes Why most corporate actions lead to marginal Uncontrolled learning cost reduction? Front end NPD NPI Progress in development Fundamental cost reduction26.10.2012 Slide 4
  • 5. CONFIDENTIAL Introduction – Where? Product cost26.10.2012 Slide 5
  • 6. CONFIDENTIAL Introduction - Cost Reduction Program 3 fold engagement Perfor- mance Risk manage ment Planning Price26.10.2012 Slide 6
  • 7. CONFIDENTIAL Introduction - Cost Reduction Program Re- engineering Requirement setting Benchmarking New Product Detailed concepts Requirement setting Benchmarking Product concept Cost planning System concept Strategic architecture Strategic architecture System concept Cost planning Product concept Detailed concepts26.10.2012 Slide 7
  • 8. CONFIDENTIAL Cost Reduction Program Business Strategy Positioning Discount Usability Eng. Portfolio Rationalisation Tactical Value Architecture & system Eng. Operational Design for manufacturing Technical Detailed concepts26.10.2012 Slide 8
  • 9. CONFIDENTIAL Cost Planning26.10.2012 Slide 9
  • 10. CONFIDENTIAL Cost Planning - What? “You can’t manage what you don’t measure” Ed. Deming26.10.2012 Slide 10
  • 11. CONFIDENTIAL Cost Planning - Why? • By the end of the concept phase 60% of total cost is fixed • To know the cost drivers • To set the right priorities • Highest freedom to find alternatives • Quantify the consequences of design decisions26.10.2012 Slide 11
  • 12. CONFIDENTIAL Cost Estimation - Top Down Target Costing • From the market (set objective) • Market research • Margin structure • Competition • Translate to technical cost price • Monitor the target cost during the development trajectory26.10.2012 Slide 12
  • 13. CONFIDENTIAL Cost Estimation – Bottom up26.10.2012 Slide 13
  • 14. CONFIDENTIAL Cost Estimation – Bottom up Need to estimate the product cost in an early stage Design knowledge freedom Development cycle No data available26.10.2012 Slide 14
  • 15. CONFIDENTIAL Cost Estimation – How? Function tree • E.g. Design Function Deployment • Excel sheet26.10.2012 Slide 15
  • 16. CONFIDENTIAL Cost Estimation – How? • Generative method (production process & material) • Estimate amount of material & manufacture time • Parametrical method (simulation models) • Relations between different design parameters- related costs • Data verification of previous development processes • Variant based method • Find similarity between new and existing product • Hybrid method (combination) • Standard components (generative, variant-based) • Innovative components (parametric) • …26.10.2012 Slide 16
  • 17. CONFIDENTIAL Cost reduction in the development process Approaches26.10.2012 Slide 17
  • 18. CONFIDENTIAL Cost Reduction Program Business Strategy Positioning Discount Usability Eng. Portfolio Rationalisation Tactical Value Architecture & system Eng. Operational Design for manufacturing Technical Detailed concepts26.10.2012 Slide 18
  • 19. CONFIDENTIAL 1 .Value Engineering Cost Reduction by evaluation function/user value • Function analysis • Functionality & Physical process • Function/value for user • Creative phase • Idea generation- alternatives • Evaluation phase structured evaluation process • Cost price verification process • Development phase (concept) • New-value proposition26.10.2012 Slide 19
  • 20. CONFIDENTIAL Cost Reduction Program Business Strategy Positioning Discount Usability Eng. Portfolio Rationalisation Tactical Value Architecture & system Eng. Operational Design for manufacturing Technical Detailed concepts26.10.2012 Slide 20
  • 21. CONFIDENTIAL 2. Portfolio Rationalisation What? • Contribution analysis • Segmentation • Feature rationalizing • Cost reducing architectures Platform integration Modular design (plug & play)26.10.2012 Slide 21
  • 22. CONFIDENTIAL Cost Reduction Program Business Strategy Positioning Discount Usability Eng. Portfolio Rationalisation Tactical Value Architecture & system Eng. Operational Design for manufacturing Technical Detailed concepts26.10.2012 Slide 22
  • 23. CONFIDENTIAL 3. Discount Usability Engineering (DUE) Cost Reduction by Disruptive concepts • Identifying over served market segments • Product stripping incremental Disruptive technologies evaluation incremental incremental • Technology scouting • Technology evaluation • Preliminary system concepts Performance Just good enough Competition to non consumption Source: Based on Christensen26.10.2012 Slide 23
  • 24. CONFIDENTIAL Cost Reduction Program Business Strategy Positioning Discount Usability Eng. Portfolio Rationalisation Tactical Value Architecture & system Eng. Operational Design for manufacturing Technical Detailed concepts26.10.2012 Slide 24
  • 25. CONFIDENTIAL 4. Design for Manufacturing Economy of scale: • Smart definition of modular architectures can have a huge impact on the economy of scale on component level. • Working with standardized components can reduce your development cost , and will increase your time to market. Material type • Choose material which is easy to fabricate • Manufacturing techniques Material form • Size and shape of component determines the form & cost (bar, plate) Material volume • Material reduction by (FEM modelling,..)26.10.2012 Slide 25
  • 26. CONFIDENTIAL 4. Design for Manufacturing Tolerances • Geometric tolerances (tighter more expensive) • Capacity tolerances (e.g. battery, processing unit,…) Design & shape The shape and volume of your component will determine the machine time • Time to install & remove material • Tooling • Shape (radii or chamfers,…) Design for Maintenance • Life cycle • Accessability • Corrective/preventive26.10.2012 Slide 26
  • 27. CONFIDENTIAL 4. Design for Manufacturing Design for Assembly • Reduction of parts e.g. dual use major cost benefit • Provide features to easy grap, insert, move, orient • In-mold assembly • Reduce complexity Design for Testing • Sub-assemblies testing • Add certain testability features Sourcing • Evaluate Suppliers • Evaluate outsourcing of production • Second sourcing26.10.2012 Slide 27
  • 28. CONFIDENTIAL Conclusion - Cost Reduction Program • User centered – Value driven • Cost planning • Be aware of the insidious character of cost drivers26.10.2012 Slide 28
  • 29. CONFIDENTIAL VERHAERT MASTERS IN INNOVATION® Headquarters Hogenakkerhoekstraat 21 9150 Kruibeke (B) tel +32 (0)3 250 19 00 fax +32 (0)3 254 10 08 ezine@verhaert.com More at www.verhaert.com VERHAERT MASTERS IN INNOVATION® Netherlands European Space Innovation Centre Kapteynstraat 1 VERHAERT MASTERS IN INNOVATION® helps companies and governments to innovate. 2201 BB Noordwijk (NL) We design products and systems for organizations looking for new ways to provide value Tel: +31 (0)633 666 828 for their customers. willard.vanderheijden@verhaert.com We are a leading integrated product innovation center; creating technology platforms, More at www.verhaert.com developing new products and business in parallel, hence facilitating new-growth strategies for our clients.26.10.2012 Slide 29

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