Design to Cost (DtC)
Design To Cost (DtC) during a New Product Introduction (NPI) process is critical for product cost containment
At Real Insight our experience confirms that decisions made during the design phase define approximately 80% of the product's ex-factory cost. Decisions made later in the manufacturing facility will only account for the remaining 20%.
Designing a product under the guidelines of DtC using our Should Cost Analysis (SCA) application delivers the optimised product design at the target cost.
For our customers, it is critical to design and develop a product that can be manufactured at the right ex-factory price, one that also fits the target cost profile for the commercial distribution or retail channels at a given planned volume.
Using our DtC methodology, the product is broken down into specific elements such that the design teams optimise the design based on a budgeted cost for each element. The manufacturing process and cost of manufacture is therefore fully considered during each phase of the design process and an SCA report is compiled. This helps predict the ex-factory cost and ensures costs are contained and managed within customers' cost targets.
In the DtC process all aspects are considered e.g. optimum parts sourcing/selection, suppliers, handling, manufacturing processes, testing, final assembly, packaging, logistics, export/import tariffs, repair and service.
DtC merges all elements of product rationalisation, the manufacturing process and the target cost. The design team, as part of our DtC process, pro-actively embraces Design for Manufacturability (DfM), Design for Test (DfT), Should Cost Analysis (SCA) and best practice target pricing.
Key elements of Design to Cost (DtC) using Should Cost Analysis (SCA)
At Real Insight our experience confirms that decisions made during the design phase define approximately 80% of the product's ex-factory cost. Decisions made later in the manufacturing facility will only account for the remaining 20%.
Designing a product under the guidelines of DtC using our Should Cost Analysis (SCA) application delivers the optimised product design at the target cost.
For our customers, it is critical to design and develop a product that can be manufactured at the right ex-factory price, one that also fits the target cost profile for the commercial distribution or retail channels at a given planned volume.
Using our DtC methodology, the product is broken down into specific elements such that the design teams optimise the design based on a budgeted cost for each element. The manufacturing process and cost of manufacture is therefore fully considered during each phase of the design process and an SCA report is compiled. This helps predict the ex-factory cost and ensures costs are contained and managed within customers' cost targets.
In the DtC process all aspects are considered e.g. optimum parts sourcing/selection, suppliers, handling, manufacturing processes, testing, final assembly, packaging, logistics, export/import tariffs, repair and service.
DtC merges all elements of product rationalisation, the manufacturing process and the target cost. The design team, as part of our DtC process, pro-actively embraces Design for Manufacturability (DfM), Design for Test (DfT), Should Cost Analysis (SCA) and best practice target pricing.
Key elements of Design to Cost (DtC) using Should Cost Analysis (SCA)
- Identify and analyse marketing/client intelligence
- Set an ex-factory target price for the product
- Breakdown the key design elements of the product
- Assign responsibilities to development team members
- Set and agree budgets for each design element
- Develop a detailed cost model to support the evolving design
- Agree processes required for manufacture
- Continually review the projected manufacturing costs using SCA
- Manage cost-down trade-off’s as they evolve
- Ensure the target price is achieved