Reduce Product Costs

Meeting Targets Means Having Full Visibility to Accurate Cost Data Early in Product Development

Reduce Product Costs

Challenges

Like you, many companies struggle to accurately measure, maintain and communicate cost estimates. Frequent changes to the bill-of-materials, part designs and suppliers make this an extremely difficult task. Adding to that challenge is the fact that sources of cost data are scattered across multiple systems and disconnected from product information. And, the scarce subject matter experts who can perform these estimates often lack the bandwidth for these highly manual and time-consuming processes.


Reduce Product Costs: Impact

Impact

Launching products that exceed cost targets can be detrimental to your business. Product margins can suffer because key stakeholders are making decisions without understanding the cost impact of design changes. As a result, valuable engineering time is spent gathering and validating data for cost roll-ups and supporting post-launch value engineering cost reduction activities.


With complex product lines and a growing number of products, Shenyang Blower Works needed a solution that would provide better visibility and traceability on all sources of product data. By implementing a solution to better manage their business complexity, the company was able to achieve: 30% reduction in design cycle, 60% reduction in modeling time, 10% improvement in product quality, and 10% reduction in product costs.
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What’s Possible

By standardizing product cost management processes and making cost analysis available to the enterprise, you gain visibility into cost roll-ups and cost drivers early in the product development process when cost decisions have the greatest impact. The cost of design options can then be fully understood and estimates can be reused for faster roll-ups against different product configurations.


Process Improvement Opportunities

The most successful companies reduce product costs by transforming one or more of these key processes:

Management

 

Hardware and Software Engineering

 

  • Concept Development: Define alternate product concepts, investigate feasibility and select the best candidates.
  • System Architecture Design: Develop the functional and physical architecture, model of the product, associated specifications and derived requirements.
  • Detailed Development: Define the product design completely, such that it meets requirements and is sufficiently documented for manufacturing.
  • Verification and Validation: Ensure that designs meet performance requirements and are verified through digital or physical means, progressing from components to assemblies, systems and products.

Supply Chain and Manufacturing

 

  • Product Cost Management: Enable early and ongoing visibility into detailed cost drivers and evolving estimates to ensure products meet landed cost targets.
  • Component and Supplier Management: Enable effective selection, creation and incorporation of preferred parts and suppliers during the product development process, including the management of associated relevant characteristics.
  • Manufacturing Process Management: Define and manage the manufacturing processes to be used to fabricate parts, assemble final products and perform inspection.
  • Tooling Design and Manufacture: Design and manufacture necessary tooling (e.g., molds, dies, electrodes, mold bases) required to produce a part.

Sales and Service

 

  • Requirements Definition and Management: Translate the voices of customers into prioritized requirements, targets and constraints while establishing bidirectional traceability between requirements, analysis documentation, product designs, BOMs and verification data.

Learn more about reducing your product costs   

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PTC Solutions

PTC offers a comprehensive portfolio of solutions to help manufacturers reduce product costs. To learn more, select any of the solutions below: