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.

APQP Testing Limitations in Real-World Manufacturing

APQP Testing Limitations in Automotive and Manufacturing Quality Advanced Product Quality Planning promises robust launches, but APQP testing limitations often emerge when teams equate “meets spec” with “fit for use.” APQP testing limitations become most evident when products pass all defined tests yet still fail in customer applications, field use, or long-term durability. The root cause […]

What Is IATF 16949 Standard?

What Is IATF 16949 Standard? The IATF 16949 standard is the global benchmark for automotive quality management systems, built on ISO 9001 and tailored to the automotive supply chain. It defines how organizations design, develop, produce, install, and service automotive products while continually improving, preventing defects, and reducing variation and waste.  Standards often get a […]

Project Schedule Risk: Why “Monitoring and Control” Isn’t the Same as Delivery

When the Schedule Is “Managed” but Still Sinking Not everything can be turned into a process—especially in product development, where discovery and uncertainty are unavoidable. But there is a dangerous gap between acknowledging uncertainty and pretending it is under control. The image illustrates a familiar scenario: a project manager confidently “monitoring and controlling” while the […]

Testing vs Time to Ship: How Rushed Product Launches Create Manufacturing Failures

When Testing Competes with the Calendar Not everything can be turned into a process—especially early in product development, where learning is still underway. However, one decision consistently creates downstream damage: allowing testing to compete directly against launch dates. The image captures a familiar and dangerous scenario—standing still on the tracks while “time to ship” accelerates […]

Root Cause Thinking and Risk-Based Quality Management

Problems Are Symptoms of Unmanaged Risk  by Jon M Quigley This post is in response to an article on LinkedIn from Habib ur Rehman on blaming operator mistake as the root cause, and operator training as corrective action. This article is very timely, as I have been involved in consulting work where this situation was […]

PFMEA and Control Plan Integration for Manufacturing Line Success

The PFMEA–Control Plan Connection in Manufacturing A robust PFMEA connected to a control plan strategy is essential when launching a new manufacturing line or improving an existing one. The Process Failure Mode and Effects Analysis (PFMEA) identifies where and how a process might fail, while the control plan documents how those risks will be monitored, […]

Ensuring Manufacturing Repeatability Through Robust and Repeatable Processes

Manufacturing Repeatability and the Importance of Repeatable Processes Manufacturing organizations striving for predictable, high-quality output often discover that manufacturing repeatability is not achieved by accident—it is engineered through disciplined, repeatable processes. In competitive markets, manufacturers cannot rely on tribal knowledge or inconsistent practices; they must establish process stability that consistently converts raw materials into reliable […]

FAT and SAT in Product Validation

Factory Acceptance Test (FAT) and Site Acceptance Testing (SAT) Overview In product development, acceptance testing is a cornerstone of predictable, high-quality system deployment.  As one of the authors of Configuration Management Theory and Practice, Testing of Complex and Embedded Systems, and multiple industry articles, I often emphasize that product and system verification must validate performance across both controlled […]

Leadership Presence Shift — How Openness Builds Stronger Cultures

Openness Builds Stronger Cultures In the past few weeks, I’ve been reflecting on a pattern that appears across high-performing, logic-driven organizations: brilliant teams slowly losing momentum because the fight to be proper overshadows the desire to understand. Then I saw this LinkedIn article, which is the genesis of this article. I have worked on teams […]

Why Deviation Management Fails: Causes, Consequences, and Control Strategies

Introduction Every organization faces unexpected issues—but how you respond defines your success. When deviations from standard procedures are mismanaged or ignored, the result can be catastrophic: product recalls, regulatory fines, and irreparable brand damage. A deviation in manufacturing refers to a temporary or unplanned departure from approved procedures, specifications, or standards during the production process. […]

Building a Cause and Effect Diagram

Pugh Matrix

How to Brainstorm

Using Pareto Charts

Contact Value Transformation about Cost Management