Design to cost – cost management in product development
- Posted by Gerhard Pramhas
- On 7. February 2023
In my previous blog post, I reported on the withdrawal of iPhone production from China. As I have often mentioned in my blogs, companies that not only produce but also have development sovereignty are not as affected by such relocations. This also raises the question for Austrian companies how to keep development AND production in Austria in a sustainable way.
The solution is easier than you think. But first a small, fitting anecdote from my everyday life: Today I received excellent news from a customer of a client. Through my consulting my client was able to sell his product not only from a financial point of view in the best possible way, my client’s customer was even able to win a design award from the USA for his overall product.
Design to cost
The magic word for finding the right balance between efficient and domestic production and development lies in the term “design to cost”. With this approach, the focus is not first on development and then on evaluating costs, but rather on optimizing costs at every step, no matter how small, as early as the product development stage. With the “design to cost” approach, all costs incurred can thus be planned at the same time and also reduced by making the appropriate adjustments in product development (materials, processes, etc.).
And in practice?
What does that mean for you? Quite simply. My motto is ” Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away
You can also find out more about this in detail at https://pramhas.eu. True to VDI 2235, it is enormously important to keep an eye on the product design and, derived from it, the product costs from the very beginning, and by that I really mean from the very beginning.
Cost-efficient and still exceed expectations
A slimmed-down product, where nothing can be left out, fulfills two requirements: On the one hand, the customer’s expectations, hopefully described by him, must be met. On the other hand, there is still room to include at least one requirement that surprises the customer. This, of course, always within the agreed costs. This creates trust and ensures lasting customer loyalty. In the case mentioned, it was, as very often, the choice of materials used with the aim of building lighter and thus more practical. Lightweight structures are not only easier to move for the company’s own production, the customer also benefits from greater ease of service. If, as a bonus, you are awarded a design prize, not only your customer but also you yourself will have been positively surprised!
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