CONFIDENTIAL
26.10.2012
Slide 2
COST REDUCTION: INSPIRING &
EFFICIENT APPROACHES
CONFIDENTIAL
Ann Van Mele
Business Develo...
CONFIDENTIAL
26.10.2012
Slide 3
Cost Reduction
Agenda
• Introduction
• Drivers?
• Where?
• Cost reduction program
• Cost P...
Slide 4
26.10.2012
CONFIDENTIAL
Introduction - Drivers
• Globalisation
• Low-cost country production
• More important for ...
Slide 5
26.10.2012
CONFIDENTIAL
Introduction – Where?
Number of uncertanties
Intended level
of learning Cost of
changes
Un...
Slide 6
26.10.2012
CONFIDENTIAL
Introduction – Where?
Product cost
Slide 7
26.10.2012
CONFIDENTIAL
3 fold engagement
Perfor-
mance
Planning
Risk
manage
ment
Price
Introduction - Cost Reduct...
Slide 8
26.10.2012
CONFIDENTIAL
Introduction - Cost Reduction Program
Detailed concepts
Product concept
System concept
Str...
Slide 9
26.10.2012
CONFIDENTIAL
Cost Reduction Program
Strategy
Positioning
Tactical
Architecture & system
Operational
Det...
Slide 10
26.10.2012
CONFIDENTIAL
Cost Planning
Slide 11
26.10.2012
CONFIDENTIAL
Cost Planning - What?
“You can’t manage what you don’t measure”
Ed. Deming
Slide 12
26.10.2012
CONFIDENTIAL
Cost Planning - Why?
• By the end of the concept phase 60% of total cost is fixed
• To kn...
Slide 13
26.10.2012
CONFIDENTIAL
Cost Estimation - Top Down
Target Costing
• From the market (set objective)
• Market rese...
Slide 14
26.10.2012
CONFIDENTIAL
Cost Estimation – Bottom up
Slide 15
26.10.2012
CONFIDENTIAL
Design
freedom
Cost Estimation – Bottom up
Need to estimate the product cost in an early ...
Slide 16
26.10.2012
CONFIDENTIAL
Cost Estimation – How?
Function tree
• E.g. Design Function Deployment
• Excel sheet
Slide 17
26.10.2012
CONFIDENTIAL
Cost Estimation – How?
• Generative method (production process & material)
• Estimate amo...
Slide 18
26.10.2012
CONFIDENTIAL
Cost Planning - What?
“You can’t manage what you don’t measure”
Ed. Deming
Slide 19
26.10.2012
CONFIDENTIAL
Cost reduction in the development process
Approaches
Slide 20
26.10.2012
CONFIDENTIAL
Design for manufacturing
Cost Reduction Program
Strategy
Positioning
Tactical
Architectur...
Slide 21
26.10.2012
CONFIDENTIAL
1 .Value Engineering
Cost Reduction by evaluation function/user value
• Function analysis...
Slide 22
26.10.2012
CONFIDENTIAL
Cost Reduction Program
Strategy
Positioning
Tactical
Architecture & system
Operational
De...
Slide 23
26.10.2012
CONFIDENTIAL
2. Portfolio Rationalisation
What?
• Contribution analysis
• Segmentation
• Feature ratio...
Slide 24
26.10.2012
CONFIDENTIAL
Cost Reduction Program
Strategy
Positioning
Tactical
Architecture & system
Operational
De...
Slide 25
26.10.2012
CONFIDENTIAL
3. Discount Usability Engineering (DUE)
Cost Reduction by Disruptive concepts
• Identifyi...
Slide 26
26.10.2012
CONFIDENTIAL
Cost Reduction Program
Strategy
Positioning
Tactical
Architecture & system
Operational
De...
Slide 27
26.10.2012
CONFIDENTIAL
4. Design for Manufacturing
Economy of scale:
• Smart definition of modular architectures...
Slide 28
26.10.2012
CONFIDENTIAL
4. Design for Manufacturing
Tolerances
• Geometric tolerances (tighter more expensive)
• ...
Slide 29
26.10.2012
CONFIDENTIAL
Design for Assembly
• Reduction of parts e.g. dual use major cost benefit
• Provide featu...
Slide 30
26.10.2012
CONFIDENTIAL
Conclusion - Cost Reduction Program
• User centered – Value driven
• fundamental cost red...
Slide 31
26.10.2012
CONFIDENTIAL
VERHAERT MASTERS IN INNOVATION®
Headquarters
Hogenakkerhoekstraat 21
9150 Kruibeke (B)
te...
Upcoming SlideShare
Loading in …5
×

Innovation day 2012 8. ann van mele - verhaert - 'drastically increase your bottom line from powerful design to cost strategies'

1,271 views

Published on

Published in: Technology, Business
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
1,271
On SlideShare
0
From Embeds
0
Number of Embeds
782
Actions
Shares
0
Downloads
9
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Innovation day 2012 8. ann van mele - verhaert - 'drastically increase your bottom line from powerful design to cost strategies'

  1. 1. CONFIDENTIAL 26.10.2012 Slide 2 COST REDUCTION: INSPIRING & EFFICIENT APPROACHES CONFIDENTIAL Ann Van Mele Business Development key accounts Ann.vanmele@verhaert.com
  2. 2. CONFIDENTIAL 26.10.2012 Slide 3 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 • Conclusion
  3. 3. Slide 4 26.10.2012 CONFIDENTIAL Introduction - Drivers • Globalisation • Low-cost country production • More important for mature products • Increased product changes - Product differentiation
  4. 4. Slide 5 26.10.2012 CONFIDENTIAL Introduction – Where? Number of uncertanties Intended level of learning Cost of changes Uncontrolled learning Progress in development NPINPDFront end Fundamental cost reduction Why most corporate actions lead to marginal cost reduction?
  5. 5. Slide 6 26.10.2012 CONFIDENTIAL Introduction – Where? Product cost
  6. 6. Slide 7 26.10.2012 CONFIDENTIAL 3 fold engagement Perfor- mance Planning Risk manage ment Price Introduction - Cost Reduction Program
  7. 7. Slide 8 26.10.2012 CONFIDENTIAL Introduction - Cost Reduction Program Detailed concepts Product concept System concept Strategic architecture Costplanning Requirement setting Benchmarking Re- engineering Strategic architecture System concept Product concept Detailed concepts Costplanning Requirement setting Benchmarking New Product
  8. 8. Slide 9 26.10.2012 CONFIDENTIAL Cost Reduction Program Strategy Positioning Tactical Architecture & system Operational Detailed concepts Business Technical Value Eng. Discount Usability Eng. Portfolio Rationalisation Design for manufacturing
  9. 9. Slide 10 26.10.2012 CONFIDENTIAL Cost Planning
  10. 10. Slide 11 26.10.2012 CONFIDENTIAL Cost Planning - What? “You can’t manage what you don’t measure” Ed. Deming
  11. 11. Slide 12 26.10.2012 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 decisions
  12. 12. Slide 13 26.10.2012 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 trajectory
  13. 13. Slide 14 26.10.2012 CONFIDENTIAL Cost Estimation – Bottom up
  14. 14. Slide 15 26.10.2012 CONFIDENTIAL Design freedom Cost Estimation – Bottom up Need to estimate the product cost in an early stage knowledge Development cycle No data available
  15. 15. Slide 16 26.10.2012 CONFIDENTIAL Cost Estimation – How? Function tree • E.g. Design Function Deployment • Excel sheet
  16. 16. Slide 17 26.10.2012 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) • …
  17. 17. Slide 18 26.10.2012 CONFIDENTIAL Cost Planning - What? “You can’t manage what you don’t measure” Ed. Deming
  18. 18. Slide 19 26.10.2012 CONFIDENTIAL Cost reduction in the development process Approaches
  19. 19. Slide 20 26.10.2012 CONFIDENTIAL Design for manufacturing Cost Reduction Program Strategy Positioning Tactical Architecture & system Operational Detailed concepts Business Technical Value Eng. Discount Usability Eng. Portfolio Rationalisation
  20. 20. Slide 21 26.10.2012 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 proposition
  21. 21. Slide 22 26.10.2012 CONFIDENTIAL Cost Reduction Program Strategy Positioning Tactical Architecture & system Operational Detailed concepts Business Technical Value Eng. Discount Usability Eng. Portfolio Rationalisation Design for manufacturing
  22. 22. Slide 23 26.10.2012 CONFIDENTIAL 2. Portfolio Rationalisation What? • Contribution analysis • Segmentation • Feature rationalizing • Cost reducing architectures Platform integration Modular design (plug & play)
  23. 23. Slide 24 26.10.2012 CONFIDENTIAL Cost Reduction Program Strategy Positioning Tactical Architecture & system Operational Detailed concepts Business Technical Value Eng. Discount Usability Eng. Portfolio Rationalisation Design for manufacturing
  24. 24. Slide 25 26.10.2012 CONFIDENTIAL 3. Discount Usability Engineering (DUE) Cost Reduction by Disruptive concepts • Identifying over served market segments • Product stripping Disruptive technologies evaluation • Technology scouting • Technology evaluation • Preliminary system concepts Performance incremental incremental Just good enough Competition to non consumption incremental Source: Based on Christensen
  25. 25. Slide 26 26.10.2012 CONFIDENTIAL Cost Reduction Program Strategy Positioning Tactical Architecture & system Operational Detailed concepts Business Technical Value Eng. Discount Usability Eng. Portfolio Rationalisation Design for manufacturing
  26. 26. Slide 27 26.10.2012 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,..)
  27. 27. Slide 28 26.10.2012 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/preventive
  28. 28. Slide 29 26.10.2012 CONFIDENTIAL 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 sourcing 4. Design for Manufacturing
  29. 29. Slide 30 26.10.2012 CONFIDENTIAL Conclusion - Cost Reduction Program • User centered – Value driven • fundamental cost reduction in the beginning of the process •Cost planning • Be aware of the insidious character of cost drivers
  30. 30. Slide 31 26.10.2012 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 2201 BB Noordwijk (NL) Tel: +31 (0)633 666 828 willard.vanderheijden@verhaert.com More at www.verhaert.com VERHAERT MASTERS IN INNOVATION® helps companies and governments to innovate. We design products and systems for organizations looking for new ways to provide value for their customers. We are a leading integrated product innovation center; creating technology platforms, developing new products and business in parallel, hence facilitating new-growth strategies for our clients.

×