Manufacturing operations consultants

Manufacturing Cost Reduction

The key to manufacturing standard cost reduction is to first identify the cost goals based on the pricing forecast and the company's business financial model. In other words, manufacturing cost reduction is a top-down process. Operations has little control over market pricing and therefore the process has to start with pricing assumptions. Then, based on the pricing forecast and the expected margins, goals can be set for manufacturing cost.

These goals can then be made reality for the business unit based on a manufacturing cost reduction plan that sets out the detailed tasks to be accomplished. Conversion costs must be in line with market expectations and the market is not controllable. The DCI model for manufacturing cost reduction uses the demand forecast as a given, and focuses on controlling the elements of cost that can be controlled:

  • Production cycle times
  • Supplier partnerships
  • Inventory levels
  • Outsourcing - sources and extent
  • Non-value added processes
  • Procurement and material acquisition costs
  • Factory Utilization rates
  • Waste Reduction
  • Reliability Improvement
  • Alternative material selection
  • Quality management and control
  • Logistics Costs
  • Warehousing efficiencies
  • Manufacturing Execution Systems

In highly competitive markets, achieving product cost goals the product of setting the right goals and dedicating the organizational resources necessary to achieve them. If your understanding of manufacturing cost is sufficient (Click to read about our simple manufacturing cost analysis software), then we can help to set out a plan and execute it. If the first step in understanding product cost needs work, we can help there as well.

Beyond that, we can show how improving reliability adds profit directly to the bottom line by reducing cost. Finding the weak links in a design prior to production launch is one very effective method of reducing manufacturing cost and is essential to the 3P process. “Using the process of Highly Accelerated Life Testing (HALT) can reduce time to market and increase the reliability of your product at the time of product launch”, says Mike Silverman, Managing Partner of Ops A La Carte Consulting and Owner of HALT and HASS Labs in Santa Clara California.

Engagements

Lockheed Martin

lm-logo-web-whiteLockheed Martin's Focal Plane division in Goleta CA needed to increase capacity in its wafer fab and focal plane electronic assembly areas.  After generating several preliminary designs, DeHart Consulting was hired to review the factory layouts within the context of lean manufacturing principles and to assist with the overall factory redesign efforts.

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Raving Fans

Xilinx

facility design expertsXilinx, Inc.
"DEHART CONSULTING has provided innovative solutions to our operational space planning and facility design needs on several occasions.  DCI consultants bridge the gap between operations and facility management to assure that we arrive at win-win solutions for our stakeholders ..."
-- Forrest James, Sr. Director, Global Real Estate and Site Services at Xilinx, Inc.