Cost reduction
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This article includes a list of references, related reading or external links, but its sources remain unclear because it lacks inline citations. (November 2011) |
Cost reduction is the process used by companies to reduce their costs and increase their profits. Depending on a company’s services or Product, the strategies can vary. Every decision in the product development process affects cost.
Companies typically launch a new product without focusing too much on cost. Cost becomes more important when competition increases and price becomes a differentiator in the market.
Main cost reduction strategies [edit]
- Supplier consolidation
- Component consolidation
- Re-source to low cost countries
- Request For Quotations (RFQ)
- Supplier cost breakdown analysis
- Function analysis / Value analysis / Value engineering
- Design For Manufacture / Design For Assembly
- Reverse costing
- Cost driver analysis
- Should cost
- Product benchmarking
- Design to cost
- Design workshops with suppliers
- Competitor benchmarking
References [edit]
Barrett R. Crane, http://hdl.handle.net/1721.1/11020 "Cycle time & cost reduction in a low volume manufacturing environment", MIT DSpace
Apichart Jearasatit, http://hdl.handle.net/1721.1/60836 "Using a total landed cost model to foster global logistics strategy in the electronics industry", MIT DSpace
Bryan K. Parks, http://hdl.handle.net/1721.1/12092 "Cost and lead time reduction in the manufacture of injection molding tools", MIT DSpace
