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POV: Design Determines 90% of Product Cost

Original Press Release

POV: Design Determines 90% of Product Cost

Press release date: May 1, 2012

In the New Product Development (NPD) process, 90% of the cost of a product is fixed by the end of the design phase, By this time in the process the direct material, direct labor and product specific capital equipment costs are set in place, whether we fully realize it or not. The ability to control cost is greatest during the concept development stage. Getting manufacturing and suppliers involved early and clearly understanding customer needs from the start are key to managing product costs. Ways to implement such approach involve careful selection and early collaboration with suppliers for help in making design tradeoffs for customer requirements, functionality, and cost. What is needed is great communication across the design and supplier network that is responsive to customer requests and priority requirements. This effort will reap great dividends for a more salable and profitable product. Of course, it is important to first probe deeply into customer requests. Is a functional capability a must have, need to have or nice to have? Clarifying and prioritizing of customer requirements provides design engineers with the maximum range of options, and allows them to make informed trade off decisions when handling competing performance and cost goals in the design process. Finally, be sure to evaluate usability to deliver a user-centric design, which is critical for total design success. With these practices of understanding customer needs and usability and by collaborating with the supplier base during the concept development phase, designers will be in the best position to deliver an optimal design - and to maximize their impact on 90% of product cost from the start. Sigma Design Company, LLC Turning Smart Ideas Into Product Solutions Located in central New Jersey, Sigma Design Company conceives, designs, prototypes, engineers and manufactures novel new products in the USA. We specialize in complex mechanisms, electro-mechanical devices, and analytical systems and appliances for the renewable energy, medical device/laboratory, clean technology, marine, filtration, consumer products and other sectors. Our professional team offers design engineering consulting, failure analysis, human factors design, and rapid prototyping services, as well as new product development, marketing and business development services. The company also offers manufacturing cells that are fully staffed and tooled - from 500 to 10,000 square feet. The company started in 1962 and was acquired by its current owner in 1999. In October 2011, Sigma Design Company relocated, expanded and opened its 'Technology Commercialization and New Product Manufacturing Center' in Middlesex, New Jersey. 200 Pond Avenue, Middlesex, New Jersey 08846 USA www.sigmadesign.net Phone (732) 629-7555 (new) | Fax (732) 629-7556 (new) | info@sigmadesign.net

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