RD Cost Out

Cost reduction

Cost out powered by Robust Design

How to stay cost competitive without losing quality and performance? Robust Design and RD8 services can aid to foster cost reductions on part and company level without compromising quality or performance.

Next level cost reduction powered by Robust Design

Illustration of cost reduction levers and assets/efforts to drive cost reductions – in relation to product levels.

 

Assets: initiatives/efforts to enable levers.

Levers: drivers for cost reductions on the balance sheet.

Levels: indication of the effect of a cost reduction asset. Complexity reduction on a single part has less impact than if the complexity reduction is scaled to a product platform or portfolio by standardization.

Illustration of cost reduction levers and assets
Cost out levers & assets for driving cost reductions

LEVELS

PART – Single components 

SUB-SYSTEMS – E.g. a gearbox unit in a car

PRODUCT – Assembly of parts and/or sub-systems

PLATFORM – A technical platform to configure products – e.g. a Volkswagen Golf: Golf, Golf GTI, GTE, Golf eHybrid, Golf Variant. In fact, almost all VW’s are based on the same platform – meaning that both a VW UP! (small car) and a VW Passat (medium/large sized car) are two different configured versions of the same car – branded as different products.

PORTFOLIO – Range of products – e.g. BMW’s 100-series, 200-series, … 700-series, …

FUTURE PORTFOLIO – The future product range 

COST REDUCTION LEVERS

PART/PRODUCT COST REDUCTION

    • Change of fabrication method (e.g. CNC to injection molding)
    • Change of material (e.g. steel to plastic)
    • Reduction of waste/scrap (elimination of waste)
    • Change of tolerances (e.g. enables faster process times, low-cost suppliers, lower cost fabrication methods)
    • Change of shape/size (e.g. reduction of weight/material usage)
    • Change of assembly method (e.g. manual to semi-automatic assembly)
    • Reduction of complaints/returns (e.g. reduction of claims handling, repair, replacement products)
    • Volume consolidation (read more about scaling effects)

LABOR (TIME) COST REDUCTION

    • Reduction of development time (read more)
    • Reduction of ramp-up time (e.g. concurrent engineering and reduction of engineering detours)
    • Change of assembly method/automation (e.g. enablement of fully automatic production or maximizing of operator time)

FACILITIES [CAPEX] COST REDUCTION

    • Cheaper or more efficient machines & equipment (e.g. investment in low energy equipment)

DESIGN INFORMATION ASSETS

Efforts to drive cost reductions/levers in general and boosted by Robust Design.

DESIGN INFORMATION ASSETS

COMPLEXITY REDUCTION – Simplification by kinematic interface design – on a part, product, and platform level – reduces requirements and component cost (reduction of overengineering)

INCREASED ROBUSTNESS – On a part, sub-system, product, and platform level – enabling low-cost fabrication methods, low-cost materials, less QA cost, reduction of waste, automated assembly, and fewer product complaints. See an example of robust interface design (60% reduction of complexity).

MECHANIZATION/AUTOMATION – Automation of production and assembly reduces labor cost

STANDARDIZATION & MODULARIZATION – Drives volume consolidation and hence cost reductions

COMMONALIZATION – Reuse of design information across products

TECHNOLOGY DEVELOPMENT – Development of new technologies to enrich product design – e.g. by CAD, CAE, Machine Learning, Artificial Intelligence (AI) 

PROCESS KNOW-HOW ASSETS

Design guides/best practices – Ensures quality and reduces development time

Data repository/capabilities – By using “company repository”/data (see Value Engineering) in new designs ensures that previous failures are not repeated and that company know-how is utilized for new designs – enhances the probability of right-first-time designs (reduction of development time) and enhances the quality

Design drivers – Guiding principles for product development lowers product/part cost and development time – e.g. for a car a design driver could be “low weight”, as low weight drives less material usage (= low cost), good fuel economy, small motor (= low cost), fast acceleration (sporty feel), … Each product possesses its own unique set of design drivers – driven by physics and product requirements. Design drivers are an essential part of RD8 new product development approach.

Way-of-working – A data-driven way of working reduces the development time and increases the quality

Productivity tools – Development of new technologies to enrich product design – e.g. development of MatLab scripts, sophisticated AI algorithms, or even their own CAD/PLM systems to save time and increase product quality

Kaizen – Lift of standards from a stable level to an enhanced/higher level

TALENT ASSETS (PEOPLE ASSETS)

Speed – some engineers are faster than others – saving development time (learn how to enhance the speed of engineering professionals by applying a robust way of working

Quality – some engineers/designers deliver better quality than others (learn more how to yield most of all individuals by robust design talent development programs)

Creativity – applying great brains to perform Kaizen work (adding robust design methods yield new fields of creativity) – to increases product performance or to develop cost reduction mitigations

Scaling know-how – applying/scaling new know-how into new standards & developing other individuals and teams – multiplying cost reduction know-how to the organization (reduces development time and/or product cost)

Growing know-how – development of new know-how (experience, testing, research, development, …) to reduce cost or increase the product price

Abbreviation

Value Analysis & Value Engineering

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