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Product Cost Optimization

Product Cost Optimization

Optimizing Product Cost for Maximizing Revenue

Manufacturers like you are under constant pressure to optimize product costs, improve time-to-market, all while creating high quality products without compromising features or functionality. This balancing act is key to maximizing revenue for your company.

We can work with you to optimize:

  • Bill of Materials’ cost 
  • Engineering process cost
  • Manufacturing cost 
 

How B-WI can help

We offer comprehensive product cost optimization (PCO) solutions for manufacturers worldwide. By following a systematic analysis of the components of the costs that go into manufacturing a product, we enable manufacturers to save money throughout the various stages of the product life cycle. We use industry proven techniques and methodologies such as DFM, DFT and DFA to save costs and maximize revenue. 

Our Unique Model

Much of a product’s overall cost can be determined early in the product development phase, where design decisions can directly influence later engineering and manufacturing efficiency (and, in turn, your overall product cost). 

Our unique model determining product cost maturity is used to break-down cost into key components, and recognizing core areas for improvement throughout the product engineering process.  We assist manufacturers by identifying product cost optimization opportunities, and addressing those opportunities with the final aim of reducing product cost through the following approaches:

  • Lean Product Development
  • Standardization & Modularization
  • Value Engineering
  • Engineering Collaboration

Lean Product Development

We provide complete solutions for lean product development, designed to optimize product costs through reductions in time-to-market, design optimization and linear processes. Lean product development, when practiced during floor-level engineering, can help your company optimize product cost by simplifying the design process, and delivering on the following benefits:

  • Optimized design and development phase
    • Full integration and alignment of engineers, technology and processes, providing full functional synergy for simplified product development
  • Significant reductions in resource waste
    • Through lean product development, products are developed with optimal standardization and modularization opportunities, as well as DFX, all throughout the design phase. This lowers costs both during and after development.
  • Design continuity and process synchronization
    • Practicing lean product development helps companies achieve simultaneous execution through linear design processes. Synchronized functionality makes it simple for companies to achieve repeatable, consistent results.

Standardization & Modularization

Manufacturers, especially those with cross geographical design and development teams, often lack standardized processes. Often, this causes teams to reinvent the wheel, which creates more unnecessary work among the various teams, similar parts being designed and developed for each separate location, and duplicated efforts for development, validation and approvals.

Here at B-WI, we have proven time after time that implementing standardization and modularization processes help to:

  • Reduce product development time – faster to market
  • Save on the cost for each part through mass production and volume discounts
  • Reduce product risks
  • Reduce R&D costs, particularly design and testing costs
  • Save in part-ordering costs, cost to maintain a supplier
  • Reduce annual cost to store and maintain a part
  • Eliminate “duplicate” designs
  • Improve product reliability – using proven parts and design whose reliability has already been established
  • Reduce the number of new product re-designs by avoiding obsolete, long lead-time, or non-compliant parts
     
Manufacturers who implement standardization and modularization practices also have the added benefit of streamlining their product offerings, which result in:    

  • Lean supply chain management – freeing up team members who can be deployed to improve productivity and part quality reduce rejections 
  • Reduced overhead costs, resulting in reduced part cost
  • Improved operational flexibility, resulting in reliable delivery

Solution Components - Standardization

  • Identification of opportunities for standardization
    • Part, Process, Raw Material, Tool
  • Evaluation of the impacts and resulting benefits 
    • Cost savings and quality improvements
    • Challenges in Inward logistics, if any
    • Serviceability of products in the field
    • Available stock and disposal
  • Prototype, test and approve the change

Solution Components - Modularization

  • Brainstorming and identification of opportunities
  • Conceptualization of the module and evolving the roadmap(s)
  • Tabulation of the qualitative and quantitative benefits
  • Shortlisting of potential candidates and proposal for the budget
  • Detailed design upon approval
     

Value Analysis/Value Engineering (VAVE)

Over time, new products in the market eventually lose their market position as competitor products with lower prices or more features are introduced. With this reality, product managers must find ways, like lowering prices or improving quality to maintain their market share.

Value Engineering enables reduced product costs in an optimal, design-conscious way that preserves the quality while sustaining the functionality and features of the product.

Modifying your engineering processes and functionality to optimize cost should not distract you from the products produced; rather, it should complement your internal functions to raise value.

Product Cost Optimization
Product Cost Optimization