Design-for-Cost – An Approach for Distributed Manufacturing Cost Estimation

Abstract

Research has shown that design changes cost more in later stages of product development. Therefore, companies adopt Design-for-X methods to optimize product designs for many aspects in the early design stage. Despite such efforts, products often encounter several design changes during the commission of the production, a principal reason being failure to meet target costs. Accurately estimating cost in the early design stage is difficult due to insufficient information. In particular, as production becomes more distributed cost estimation is also more difficult because information is more distributed. This paper introduces a cost estimation method to address this problem. It describes a distributed manufacturing situation and a cost breakdown framework. A use case is provided to illustrate how the framework allows for supply-chain cost negotiation and design adjustments in the early design stage.