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E.T. Hone Home
October 22, 2024
You may not even finish writing your product specification before the commercial questions start. As a designer you may think this is a sales department or an accounting department problem — or even a manufacturing engineering department problem. But, as I have written frequently, you would be wrong.
Everyone in a for-profit company needs to care about costs. If you collect a paycheck you have a vested interest in giving your customers the best value for their money possible. Notice that I did not say the “cheapest” product; there is usually a less-expensive alternative and your team’s objective must be to render it untenable for your customers to give up “value” for a lower price.
Market philosophy aside, you will not be able to completely avoid the “money talk.” Every project has a price point beyond which it ceases to be viable. Part of your challenge is to find ways to reduce costs without compromising performance.
To do that you have to be aware of your “cost drivers” and keep them in mind as you develop your design. An understanding of material cost, heat treat expenses, and purchased content will help as well.
Hopefully, you are not expected to provide a cost estimate without some historical context. What was the cost of the similar unit built previously? Do we know what competitive units sell for? Can someone rough out the material and labor from your study layout and math models?
It has always amazed me that organizations do not know what their cost drivers are or what their overhead rates are for different machining centers. These are important factors in staying profitable!
From the design side of things, you can never go wrong by paying attention to part count; the parts you do not need cost you nothing. Efficient use of raw material is influenced by your design too. You pay twice for the material that ends up in the scrap bucket: once when you buy it and again when you machine it off the blank.
You ought to have some familiarity with the cost and availability of purchased items like bearings, seals, and pumps too. That “book of knowledge” can have dollar signs in it as well.
