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the product target cost is one of the main requirements of the project
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1 Itzhak Ben-Levy LEAN Expert ©
The project manager is
responsible for the serial
product cost
Itzhak Ben Levy - LEAN Expert
972-523579166
www.benlevy.co.il
June 2012
2 Itzhak Ben-Levy LEAN Expert ©
The 2 customers of the
Project manager
• The external customer - determines
– Performance
– Time schedule
– …
• The internal customer, (CEO) - determines
– Cost
– Quality
– …..
3 Itzhak Ben-Levy LEAN Expert ©
ONCE
PRICE = PROFIT +COST
What the
customer
pays
"by product "
of the design
Determined
by the
corporate
4 Itzhak Ben-Levy LEAN Expert ©
NOW
COST = PROFIT - PRICE
Determined
by the
corporate
Determined
by the
competitors Determined
to the project
manager
5 Itzhak Ben-Levy LEAN Expert ©
The Traditional way
I cant assemble it
Too many parts It is
expensive Nobody gave me
The target cost
The requirements
were changed
6 Itzhak Ben-Levy LEAN Expert ©
Who has the Biggest Effect on Costs
production
Development
7 Itzhak Ben-Levy LEAN Expert ©
How the engineer know
how to design?
Casting Welding
Machining Forging
Sub
contracting Riveting
The cost target determines it
8 Itzhak Ben-Levy LEAN Expert ©
Design to Cost
Conceptual
Design
Target
cost
Target
cost
Preliminary Design
DRR
Changing
concept,
Architecture
PDR
NO
NO
Changing
Preliminary
Design
9 Itzhak Ben-Levy LEAN Expert ©
Cost Reduction workshop
Project
manager
DFMA Tools Facilitator
Challenge the design
Multidisciplinary
Team
• Requirements
• Architecture
• Technology
• Assembly
• Reuse
• COTS
• Standards
• Symmetry
• Tolerances
• No. of Parts
• Tests
• Commonality
10 Itzhak Ben-Levy LEAN Expert ©
Not
important
Important
Low High
Requirements
(QFD)
Accept all
Consider to
delete delete
challenge
Implementation
Cost
(DTC)
Reduce requirements And cost
11 Itzhak Ben-Levy LEAN Expert ©
Engineering
Requirements Reduction Cost Reduction
Supplier
Suppliers costs reduction
Costs drivers
Requirements
Priorities
12 Itzhak Ben-Levy LEAN Expert ©
Description$hr
1sliding tube material 100
2sliding tube assy, 14
3INER BODY 130
4GLEND120
5NUT8012
6ORIFICE CAP80
7DOWEL 4804
8SPACER2007
9RING80
10tests300
11
total117037
How to integrate the production and
procurement into development process
The project manager should require
a real cost status in each gate
Multidisciplinary
Team
