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85% of Costs Happen During Production

Posted On March 12, 2020 By PM Team In Learn DFM /  
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Whether you are an engineer or a project manager, your true purpose that will reward you more than you can ever imagine, is to not just solve problems, but to figure out how to make it cheap and easy. The first step is to realize all the costs that happen in production and are caused by initial design and development.

85% of the costs incurred throughout the life of a project happen during production, which is the last phase. However, those costs are dictated by the design concept, engineering, manufacturability, and planning during the first 15% of the project (first phase).

Production Costs

Yep, don’t think just because you started a new project, your choices don’t really matter. While you are noodling around in CAD, evangelizing your design and not making sure it is cheap and easy to make, you are tragically setting up your employer to have to sell your design at a higher price to make a profit, which causes the business to be less competitive and your value in the company low.

Employ solid DFM (Design for Manufacturability) best practices from the beginning.  That means your initial design concept has to be cost-effective to manufacture out the gate if you plan to save all that money in production.

Lastly, the costs for revisions, design changes, testing, and prototypes every step of the way from concept to production compound as you transition from phase to phase.  By the time you reach production, attempting to revise a design is often more expensive than the saving it will create.

The rule of thumb is simple, don’t operate in a paradigm where design and development happen so fast that you don’t take the time to employ solid DFM that yields a cost-effective manufacturable part upfront. Instead, take the extra time upfront so you can realize the savings later in production.

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