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Why Cost Engineering is so critical in Early Development Phases
Integrating cost engineering early in the development process is crucial for optimising both cost and design efficiency. By leveraging Tset's data-driven tools, companies can make informed decisions that drive significant cost savings and maintain a competitive edge.
Have you considered cost engineering in your latest project?
Have you reached your target cost?
If you can answer both questions with "yes", then you're already ahead of most market competitors.
Efficient development of complex new products is a highly collaborative, interdisciplinary process that requires a seamless flow of information and consistent decision-making. Designers, electrical engineers, product managers, simulation engineers and many others, all need to work together as a team. And when it comes to industrialising those products, then production engineers, purchasers, and quality engineers augment that team.
Due to the ever-expanding range of global competition and pressure on margins, the role of cost engineers has become increasingly important in hardware development processes. Simply put, a cost engineer provides the entire team with insights into component costs and the primary cost drivers.
So, why exactly is it so crucial to involve cost engineering early in the development process, before technical issues are fully resolved?
To answer this question, let’s look at the following simplified graph depicting where costs are determined in a development process:
Once a product reaches a certain level of maturity, often after the concept phase or early serial development, making significant design changes becomes costly and time-consuming. This is because these changes require extensive revalidation of the concept.
During the design process, there are often several options available to us by which we can fulfil the requirements. Cost engineering provides the analytical foundation for making informed decisions about potential solutions upfront, thereby enabling the team to determine the most cost-effective solution.
Example:
Let's say a flange with a gear needs to be purchased for a drive gear of a power tool. Due to the design's complexity, the designer and purchaser initially consider machining the part from solid material. This would typically involve outsourcing the part to a milling or turning shop.
However, a cost engineer suggests an alternative approach. Depending on the annual volume, it might be more cost-effective to manufacture the part in two stages (e.g. forging and machining). A profound and detailed cost calculation created with Tset Cost, which is a software-based cost management tool, shows us that we can save approximately €150,000 over the product's lifetime.
If cost engineering had not been consulted at an early stage, the design would have been optimised and finalised for machining and potentially missed this opportunity for significant cost savings.
Conclusion
By involving Cost Engineering and using Tset Cost in the early stages of product development, teams can:
1. Identify cost-saving opportunities before design decisions are finalised.
2. Make more informed decisions about materials, manufacturing processes, and component selection.
3. Reduce the risk of costly design changes occurring later in the development cycle.
4. Achieve target costs more efficiently and effectively.
In today's competitive market, cost engineering is a critical component of successful product development. By proactively considering cost factors from the outset, companies can improve their cost structure and gain a competitive advantage.
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