Business Excellence Consulting
info@rgcl.co

Product Cost Reduction is challenging, but fun!

Cost reduction drives in recent years have forced manufacturing operations to become more efficient than ever, with correspondingly lower costs and increased flexibility. These improvements, combined with purchasing initiatives and supply chain efficiency drives, mean that we’re now in ‘better shape’ than ever before. However, these great improvements still aren’t enough! Why? - because cost always needs to be reduced for us to remain competitive and profitable.

Analysis of product costs now reveals that manufacturing costs are typically only 25%-35%, or even less in some cases. This leaves a staggering 65% plus of total costs related to materials. Unfortunately, this has been exacerbated by the recent global increases in raw material costs. It is clear that substantial reductions in costs can only be realised by tackling the 65% plus. This can only be achieved through challenging the design, as it is the design that governs the material costs

Product Cost Reduction

Our Product Cost Reduction (PCR) methodology effectively challenges the design from a number of different perspectives to identify opportunities for improvements and particularly cost savings. The opportunities are then prioritised and action plans are developed. Following this, the actions are managed to ensure that the cost reductions are realised.

PCR is a team activity. The core team consists of the product designers, persons responsible for the processes and/or the design of the processes, and purchasing. They may be supplemented by other specialists depending on the nature of the products and your organisational structure.

Why we get results

  • We believe that the best results are achieved by operating in an ‘open’ environment. Our focus is to identify realisable opportunities, rather than assign blame for any inefficiency. Generally, most inefficiencies found in PCR exercises are due to:
  • Changed requirements or circumstances from the time when the product was designed
  • Insufficient time to design the product efficiently
  • Ineffective design processes and/or management systems (this can also be assigned to the above reasons!)
  • None of the above are likely to be the direct ‘fault’ of anyone involved in the PCR exercise and it is important to create a positive atmosphere and avoid defensive behaviour

Wow! - We picked a low volume product for the training…
…imagine what we could achieve with one of our big runners!

  • We have enormous experience analysing, training, coaching and facilitating all aspects of Product Cost Reduction
  • We’re practical and pragmatic - our focus is always on getting results (we’re practitioners - not just trainers!)
  • We tailor our services and approach to meet your needs
  • Please contact us to discuss your requirements

Capability Development

The level of capability development is an important factor in Strategic and ‘Total Immersion’ deployments

Stages of Capability Development: Training; doing supported by coaching; Community infra-structure development

Stages of Capability Development: Training; doing supported by coaching; Community infra-structure development
  • Training provides knowledge, but real understanding is only developed by doing
  • We offer a range of coaching services, to guide capability development and ensure that results are achieved
  • Beyond having people that can do, you’ll need your own, sustainable, support structure to ensure the continued growth and success of your capability - we’ll help you create, or develop, your infra-structure to achieve this

Please contact us to discuss your requirements

Next Steps

We'd be glad to provide more details, or discuss your requirements with you. Please contact us

Related Tools, Techniques and Services

  • FMEA or 'Failure Mode & Effects Analysis' is an extremely powerful quality tool that prevents defects by considering how things might fail and putting appropriate controls in place. Process FMEA is the most commonly used type . However, System (Concept) FMEA and Design FMEA can be even more powerful, as more change is possible at these stages of development, making it possible to avoid many failure modes altogether! [more…]
  • Quality Function Deployment (QFD) is a powerful design tool, which prioritises requirements and translates them into specific deliverables at key stages of development, ensuring that what is delivered is ultimately linked to the customers' requirements. QFD contains the four ‘Houses of Quality’ (HOQ). However, many companies only use the first house of quality and other methods in place of houses two to four. We offer a flexible approach to suit your needs [more…]
  • Complexity is an area that is often talked about, but rarely acted upon. Why? - Often because of a lack of knowledge of its negative impact, it’s sometimes confused with variety (the positive variations required by customers) and also because people aren’t sure what they can do about it [more…]
  • Design tools, techniques, processes and management systems and are critical for all businesses, whether they design products, services, or just their processes. We offer a wide range of services centred around design, from business diagnostics and Design for Six Sigma, through to training, coaching, facilitation and support in the specific tools, such as FMEA, QFD and TRIZ (+ many more) [more…]
  • Variety is about customer choice, but how do you give the customer’s choice and reduce manufacturing variation at the same time? This is a major issue faced by most organisations designing their products and services, with potentially far reaching implications for the customer’s, the product design, the manufacture and supply chain. The solution is to understand the real customer requirements and satisfy these with an agile design, suitable for ‘Mass Customisation’ (also known as ‘Late Point Differentiation’ and ‘Late Configuration’) We have substantial experience training, coaching, consulting and delivering Variety Management solutions, please contact us to discuss your requirements
  • Design for Manufacture (DFM) is about designing products that are easy to make. This isn’t a difficult concept, but typically involves new ways of thinking and working. We have substantial experience training, coaching, consulting and delivering DFM solutions, please contact us to discuss your requirements
  • Design for Assembly (DFA) is about designing products that are easy to assemble. This isn’t a difficult concept, but typically involves new ways of thinking and working. We have substantial experience training, coaching, consulting and delivering DFA solutions, please contact us to discuss your requirements
  • Design for Six Sigma (DFSS): is a powerful, effective, ‘heavy-weight’ methodology that is applied to the design of new products, services, and processes. It covers the entire design and development journey from market to launch, ensuring excellence. We offer wide range of strategic and consultancy, training and coaching services in DFSS , tailored to meet your business’ needs [more…]

Please contact us to discuss your requirements