Designers Need to be Responsible for Cost

Guest Post by Peter Verkooijen from the DFM Summit

‘Designers need to be responsible for cost’

The first 20 percent of the product design process determines 80 percent of production costs, according to an oft-quotedmythical DARPA study.

Tighter integration between product development, design, engineering and sourcing, earlier in the process, is key to manufacturing viability and innovation.

Early design decisions about materials, numbers of parts and production processes add up.

‘These types of decisions reduce or increase the cost by 20 to 50 percent,’ says Eric Arno Hiller. ‘Major swings. Whereas later in the process you are playing around with just a few percent.’

Eric Arno Hiller is a Product Cost Management pioneer. PCM is a field of management tools related to Design for Manufacturability (DFM), Value Analysis/Value Engineering (VAVE) and lean manufacturing.

All these methods in some ways build on W. Edward Deming’s post-WWII work in Japan and the Toyota Production System (TPS). A central concept in Deming’s work was to eliminate variation and waste in the design process to increase quality and reduce cost.

W. Edward Deming was rediscovered in the United States in the early 1980s. Ford hired him to figure out how to compete with the Japanese. The Detroit giant achieved a dramatic return to profitability in the mid-1980s.

Manufacturing engineer Sandy Munro met W. Edward Deming in 1982 while working at Ford.

Six years later he launched Munro & Associates to help companies apply Design for Assembly (DFA) and DFM methods. Sandy Munro branded his approach Lean Design and later added a Design Profit suite of software tools.

Design for Assembly (DFA) was developed by Geoff Boothroyd in the late 1970s at the University of Massachusetts Amherst.

In 1981 Boothroyd started developing a software version of his method with Peter Dewhurst. Boothroyd Dewhurst’s consulting services and software have been used at John Deere, Ford, GE, Whirlpool and other companies.

These ideas had been around for a while when Eric Arno Hiller started his study in mechanical engineering at the University of Illinois in the nineties.

In 1996 Hiller worked with professor Michael Philpott on parametric cost modelling; using the rich data obtained from 3D CAD models to predict total manufacturing costs.

Hiller pitched the concept to tractor manufacturer John Deere. They put significant funding behind the research and continued development of the concept.

The next five years Hiller worked for Ford and eventually ended up at Harvard Business School. By 2003 Hiller’s method, refined and proven at John Deere and Ford, was turned into software company aPriori.

Getting designers to use aPriori proved a challenge. ‘Being young and naïve I had assumed that most engineers were like me,’ Hiller says. ‘I thought every engineer would naturally want to manage cost and reduce cost as another product attribute, no different than weight, performance or quality. I found that is actually not so common.’

Jon Washington in the early 2000s transferred from mechanical design to procurement at Diebold. ‘My engineering colleagues came to me and said, we can’t believe you are going to the dark side!’ Washington recalls. ‘And literally the same day a member of the supply chain team said, we’re so glad you’ve come in from the dark side.’

‘There was this constant dynamic of tension between the development group and the supply chain group,’ Washington says. ‘The engineers would be looking to create solutions and a lot of times the suppliers that would be on the approved vendor lists didn’t have capabilities that the engineers wanted.’

In recent years bigger corporations have started bringing design, engineering and sourcing together. Integration between the disciplines was one of the drivers in Apple’s success.

Companies like IBM, Lockheed Martin, AT&T, Harley Davidson and Denso currently have job openings for VAVE specialists and ‘procurement engineers’.

Jon Washington became a procurement engineer at Diebold. ‘Part of what my role was was to help bridge that gap between the development group, the sourcing group and the suppliers,’ he says, ‘trying to get those three groups of people to work in a common direction.’

He led a cross-functional team that saved 12 million dollars in acquisition costs in the first project. Last year he left Diebold and started The Innovation Garage to help bigger companies develop a system of innovation. ‘We are lagging behind other countries in the way we are commercializing our technologies,’ Washington says.

‘Most of the radical, leap innovations since WWII have come from small companies. They bring a lot of energy to the table and a lot of passion. That is really their secret weapon that can help bigger companies innovate and do things differently. To grow your enterprise you need to focus on those leap innovations.’

Eric Arno Hiller now attacks the cultural barriers to cross-functional collaboration as consultant Hiller Associates. ‘The software tools is the last thing you want to do,’ he says. ‘Get your culture changed and the right processes in place first, then get the tools to supercharge your efforts.’

Companies will have to assemble their own toolbox, combining costing tools like aPriori, Akoya and Perfect ProCalc with management software like PTC Windchill Cost, Facton and KingCost.

PLM market leaders PTC, Siemens and Dassault until three years ago had ‘virtually no efforts to speak of in this area’ according to Hiller, but that has changed with recent acquisitions and releases.

Hiller Associates works mostly with purchasing and manufacturing managers; there is much less interest in cost reduction from product development and design. ‘Sadly,’ Hiller says. ‘Designers do need to be responsible for cost.’

‘Different methods, technologies and processes can be brought to bear at each stage of product development, whether you are in sourcing, in manufacturing and planning or back in design. Being able to deliver under constraints is what makes a great designer.’

The Design for Manufacturing Summit brings together industrial designers, digital entrepreneurs and manufacturers to explore the opportunities in the digital manufacturing revolution.

Technological and cultural change offers the promise of shortened lines between all parts in the product development lifecycle, making manufacturing leaner, greener, more competitive and more profitable.

In panels and keynotes the DFM Summits cover topics like CAD/CAM, DFM/DFx, 3D printing, lean manufacturing, new materials, open source hardware and the burgeoning maker scene.

The semi-annual Design for Manufacturing Summits are the first part of the broader Design for Manufacturing Forum, a Modified Ventures project.

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