Cost Management

For an enterprise to thrive costs must be under control. There are many approaches of varying complexity available to ensure the organization’s costs are optimized. The variety of techniques allows any organization, independent of levels of complexity and sophistication to critique the cost structure and explore alternatives throughout the product lifecycle.

Cost Management - Value Transformation

Brainstorming

Brainstorming can be used for problem-solving as well as uncovering alternative approaches that may improve the cost structure for the product or process. Brainstorming is conducted multidiscipline to gather the most perspectives possible from which selection of the best possible solution will be made. We will employ many team idea generating and collecting methods as well as the use of tools such as mind mapping to build associations from which we can generate the best solution. Brainstorming does not apply solely to cost, but can also be applied to design solutions as well. We have used this technique many times to improve cost and generate intellectual property (patents).

Function Allocation Systems Technique

FAST is an acronym for functional analysis system technique. FAST allows us to reduce ambiguity in the definition of a functional product or a functional process. Value of a product is interpreted differently by different customers. Characteristics that are common to value are high level performance, capability, emotional appeal, and style relative to its cost. Value is generally expressed in terms of maximizing the function.

Value = (Performance + Capability)/Cost
Value = Function/Cost

Lean

Lean is a set of techniques that are typically employed to improve the costs in manufacturing by reducing waste, but not exclusively. In fact, this technique can be applied to process management in general, such as product development, and not just manufacturing. Cost improvement comes from managing and controlling aspects of manufacturing that have increase the cost. This includes transportation, inventory, motion, wait, over processing, over production, and defects.

Make or Buy Analysis

Make or buy analysis considers the scope and objective of the work compared to the company strategies and tactics for growth. Make refers to the company decision to internally handle the design and or fabrication of the component or subassembly. Buy refers to outsourcing the component or subassembly. There can be many compelling reasons to select one or the other of these alternatives rather than leave to random chance or little forethought.

Teardown

Teardowns are used to learn the cost implications of the design, often another manufacturer of the product. Tearing the product down is one method to identify and understand the cost drivers for the product. This includes the manufacturing, material composition and assembly of the product. The teardown will be multidiscipline approach to obtain a multitude of perspectives that will help ascertain the constituents of the product cost. This can be material, design or methods of production.

Additive Manufacturing and IoT

Introduction to Additive Manufacturing and IoT Additive manufacturing, commonly referred to as 3D printing, has revolutionized production across industries by enabling the creation of complex components with minimal waste. The rise of the Internet of Things (IoT) has further enhanced additive manufacturing capabilities, allowing for more intelligent, more connected, and highly efficient production systems.   […]

Press Release New Book: “Cost Efficiency Unleashed”

FOR IMMEDIATE RELEASE Unlock the Secrets of Superior Cost Efficiency with a New Book: “Cost Efficiency Unleashed” “Innovative Guide Offers Advanced Strategies for Transforming Product and Process Improvement” Lexington, NC- September 21, 2024 – Pursuing cost efficiency has never been more critical in a rapidly evolving business landscape.  We are constantly working to improve the […]

The Importance of Documentation

In the fast-paced manufacturing world, the importance of documentation cannot be overstated. Documentation is the backbone of product development and manufacturing, ensuring every step is traceable, repeatable, and optimized for quality. Companies risk inefficiencies, product failures, and costly setbacks without proper documentation. This article delves into why documentation is essential, the problems associated with inadequate […]

Its been Five Weeks

A Song As I wrote this, I kept getting that song by Barenaked Ladies, One Week, going through my head. I have been working on the bassline for that song. My kid introduced the song to me some years back and just recently I thought about learning it. I’m very close. Estimating I have a […]

The Product Development Hike.

The Product Development Hike. You won’t read far in product development, where product road map analogy (or actuality) is brought up. Recently, I saw a tweet (is it still called tweet, or is it an X) from @CGLambdin. I wish I had captured the tweet for posting here, but I recall it was about the […]

Off Topic: Jimmy Buffett is Dead

I usually have little problem writing. I write multiple columns at technical and business magazines per month; I have a book or books in the queue at any given time. This has taken much longer than I had hoped, but for days, my mind raced. I ran through many Jimmy Buffett experiences and have never […]

Projects are People

People are Human I realize this piece is likely, nearly certainly, to ruffle some feathers. That is not my intention for sure.  We have written on the impediments to us seeing things truly as it is.  There are many cognitive biases that may plague us. In fact, we dedicated an entire section in our latest […]

Once Upon a Time

Once Upon a Time I worked while I was acquiring my undergraduate engineering degree, hell, I worked while getting all three of my degrees. My undergraduate was especially interesting, in that I did not have a mass of skills so my work was not a high-paying gig.  I am grateful for the job, but there […]

Sergeant York – and Old Homesteads

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Manufacturing X0 Event

It was a wonderful learning event at the Manufacturing X.0 Southeast event.  I want to thank Lacy Ashton and Boni Quatroche for making the even and my involvement possible.  There was much to learn from the confluence of topics from AI to Big Data, from the individual to team learning and retrieval.  All of these […]

Building a Cause and Effect Diagram

Pugh Matrix

How to Brainstorm

Using Pareto Charts

Contact Value Transformation about Cost Management