Cost reduction - Reduce your manufacturing cost. Our cost reduction program shows 8 strategies on how to significantly reduce cost. Cost reduction can result in significant product cost saving.

HALF COST PRODUCTS   

Cost reduction can result in significant product cost saving, manufacturing cost saving, and life cycle cost saving when companies interested in cutting cost implement all 8 the elements of the following cost reduction strategy:

                 New book: "Design for Manufacturability: How to Use Concurrent Engineering
to Rapidly Develop Low-Cost, High-Quality Products for Lean Production"

1. Cost Reduction by Design

Cost Reduction Opportunities:

The Results:

How to Reduce Product Cost by Design:

Activities Supportive to Low Cost Product Development:

2. Lean Production Cost Reduction

Cost Reduction Opportunities:

The Results:

How to Reduce Manufacturing Cost:

Activities Supportive to Lean Production:

3. Overhead Cost Reduction

See article on how to implement Mass Customization in the April 2011 issue of Mechanical Engineering, published by ASME

Cost Reduction Opportunities:

The Results:

How to Reduce Overhead Cost:

Activities Supportive to Build-to-Order & Mass Customization:

4. Standardization Cost Reduction

Cost Reduction Opportunities:

The Results:

How to Reduce Cost with Standardization:

Activities Supportive to Standardization:

5. Product Line Rationalization Cost Reduction

Cost Reduction Opportunities:

The Results:

How to Reduce Cost with Product Line Rationalization:

Activities Supportive to Product Line Rationalization:

6. Supply Chain Management Cost Reduction

Cost Reduction Opportunities:

The Results:

How to Reduce Cost in Supply Chain Management:

Activities Supportive to Supply Chain Cost Reduction:

7. Quality Cost Reduction

Cost Reduction Opportunities:

The Results:

How to Reduce the Cost of Quality:

Activities Supportive to Quality Cost Reduction:

8. Total Cost Measurement to Support All Cost Reduction Activities

Cost Reduction Opportunities:

The Results:

How to Reduce Cost with Total Cost Measurements:

Activities Supportive to Total Cost Measurements:

How Not to Lower Cost; Short-sighted attempts prevent real cost reduction

Don't try to remove cost after the product is designed because cost is designed into the product and hard to remove later; see article on How Not to Lower Cost

Don't use low-bidding, which only appears to save one category of cost, but can substantially raise many less-obvious costs and compromise other important goals like quality, delivery, and missing out on the major contributions that vendor/partners can make when they help product development teams design products; see article on Low-Bidding.

Don't offshore manufacturing for cost, which will not result in a net cost savings because of hidden overhead costs and because it inhibits, compromises, or thwarts 6 out of the 8 cost reduction strategies (presented on the home page) due to the following reasons:

Offshoring manufacturing separates manufacturing from engineering and thus thwarts Concurrent Engineering and compromises the 80% of the cost determined by the design.  Further, transferring, supporting, and dealing with quality and delivery problems of remote manufacturing absorbs many resources in engineering (in one case, 75%), manufacturing, and purchasing whose time would be better spent developing low-cost products.  See Cost Reduction by Design summary and the article Design for Manufacturability

Offshoring manufacturing to distant contract manufacturers increases the delivery time, which makes it hard to pull parts just-in-time and makes build-to-order impossible.  Further, parts may be batched for shipping, which is opposed to the one piece flow aspects of Lean Production.  Finally, offshoring manufacturing removes production from the control of the OEM manufacturer. All of these effects conspire to:

If all 8 cost reduction strategies are implemented, the cost savings will be much greater than appeared possible through offshoring. For more, see read the article on offshore manufacture.

Don't take prototypes into production without commercialization; Also see article on "How not to commercialize products"

Correcting counterproductive policies may be a prerequisite to designing Half-Cost Products.

Don't try to save cost with unethical business practices.  See the article: Good Ethics is Good Business.
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I would be interested in public seminars on Half Cost Products & Design for Manufacturability.

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I am interested in customized in-house seminars or workshops on "Build-to-Order & Mass Customization.

Name

Title/Position

Company/Division

Phone number

e-mail address

Type of products

Number of different products (SKUs)


Challenges, goals, and opportunities (check all that apply)

Minimizing product cost
Minimizing  product development cost
Fastest time to stable production
Designing in the best quality and reliability right-the-first-time
Fastest build time and throughput time
Designing for Lean Production, Build-to-Order, and Mass Customization
Assured availability of parts, materials, and products
More effective product development process
Growth and ability to meet peak demand
Other challenges, goals, and opportunities:

 



                        For more information call or e-mail:

Call Dr. Anderson at 1-805-924-0100 to discuss implementing these techniques or e-mail him at anderson@build-to-order-consulting.com with your name, title, company, phone, types of products, and needs/opportunities.

Copyright 2014 by David M. Anderson

Dr. David M. Anderson, P.E., fASME, CMC
www.HalfCostProducts.com
phone: 1-805-924-0100
fax: 1-805-924-0200
e-mail: anderson@build-to-order-consulting.com

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Cost reduction - Reduce your manufacturing cost. Our cost reduction program shows 8 strategies on how to significantly reduce cost. Cost reduction can result in significant product cost saving.