Industrial activities without very strict limits in the possible production costs are today very unusual. The time as for instance in the 50th when clients were waiting months for products as cars is over for many decades. Today with competition in every sector, and customers who are extremely well informed about the available products, any product not sold at its effective market prices face hard competition and has difficulties to find clients accepting overpaying it.
This is the reason why a very strict analysis of the estimated production costs at each step of its development is necessary, only to guarantee the product to be in situation to be sold. This process is called design to cost
Construction is always a difficult activity. The designers make the synthesis between technical constraints, industrial feasibility, and production costs. There is also a choice to make whether to use already proven solutions, to innovate with associated risks and opportunities. The balance between all these constraints is ever an estimate made by the designers, neither an objective decision. The tendency of designers usually with technical background is to favor the technical constraints to be sure to make a “good product”. Importance to build products which are designed technically with quality is of course not to be neglected. However, if the financial question is not investigated at each step of the development in a very systematic design to cost approach, it is sure that costs won’t be optimized.
Design to cost must be conducted with a comprehensive process: each part, each factor of cost, must be quoted at several milestones of the development of the product or of the machine. Indicators must be built to have both detail understanding of the costs of each component or unit, and a general and consolidate value of the whole product and / or project. Technical parameters are always controlled, as a product can’t work if it doesn’t pass them. Financial questions can be ignored during the design phase, letting any “financial” manager solving them thereafter. Industrial products are always technical products, and the cost of the product is mainly generated when it is designed. Supposing that the question of cost could be solved any later, at a step when deeply modifying the design is no more possible or only thanks to a huge delay of the project, is clearly out of the reality.
That is why the design to cost approach must be integrated in a project very early, to make sure design is achieved according also to economic necessities.
An equally important point to consider is the ability of companies to question themselves throughout the process. We have thus been able to offer some of our customers new functionalities, linked, for example, to eco-design or additive manufacturing. Design to cost will thus influence all departments, inviting everyone to take initiatives and propose new solutions.
One of the most significant additions was for IAC Partners to rethink the cycle of a product by inserting easily recyclable components. This made it easy for our customer to be labelled “Green”.