Simplify your products!
DESIGN TO COST
Design to Cost is a structured approach that allows to achieve a very competitive cost price by taking action at the product and service design stage.
It aims to bring costs within a defined target by using all the savings levers, even by adjusting functionalities and performance if necessary.
It seeks to satisfy the right needs at the best cost and is characterised by its very direct and pragmatic approach.
Design to Cost is effective if it brings together the relevant skills in a constructive team effort, condensed in time and sufficiently thorough to question established habits and patterns.
Competitiveness potentials largely underestimated
All products and systems hide unsuspected saving potentials, which surprise the teams themselves when they come to light.
Yves Dubreil’s(*) famous drawing has popularised the competitive opportunities that a Design to Cost almost always reveals:
- The weight of habits let whole sections of the cost chain being repeated without question,
- “Beautiful technique” sometimes leads designers, keen on excellence and performance, towards too much sophistication and complexity,
- Safety margins push to over-design and over-quality.
To this triptych should be added the ‘letter to Santa’ specifications, which demand ever higher performance, even where the customer will not pay much attention.
Not to mention the bad choices of standardisation which, in order to reduce the diversity of products and components, generate “envelope” costs on complete ranges.
Too much sequential operation, in silos
Many parts of the company feel responsible for reducing and controlling costs: buyers and supply chain, designers, industrialisation teams, management control, etc.
However, they rarely manage to work well as a team and avoid misunderstandings and multiple iterations.
The costs, discovered too late and far from the initial objectives, then trigger the panic mode!
However, it is the simultaneity of thinking and the early sharing of the impacts of choices (of specification, structure, technology, industrialisation, etc.) that conditions the convergence towards the most attractive and competitive offer.
Simplifying products from the inside…
The essence of Design to Cost is to focus costs on true customer value.
It is therefore important to look at the perceived value and the right needs, but also to look for simplification potentials along the cost chain very quickly.
And aim to eliminate everything that is not essential for the satisfaction of real needs.
… with a simple approach!
To lead teams to the best choices by the shortest route, it is necessary to adopt an approach that goes to the heart of the matter!
The effectiveness of Design to Cost is based on simple and quick tools – and above all not hyper-analytical – that detect the priority levers:
Functional Analysis:
Quick and synthetic, it must question the customer value and the right needs by focusing on the key requirements.
It is a question of distinguishing between imperative needs and “nice to have”, which will be arbitrated according to their obtaining costs and feasibility.
Benchmarking :
Conducted in a “flash” way, it scans the choices of the major competitors and highlights the significant differences in response to needs and solutions.
Value Analysis:
It goes through the whole chain to distinguish “Just Necessary” costs from potentials of questionable cost.
It thus offers, early in the project, a complete mapping of competitiveness levers (Specification, Architecture, Simplification, Process, Sourcing, etc.).
Creativity:
It explores all facets of the offer and imagines possible solutions to address real needs and eradicate unnecessary costs.
Concept Evaluation:
It characterises the possible concepts and solutions in order to converge consensually towards the best compromises.
Structured and reproducible, the Design to Cost approach plays an eminently pedagogical role and, thanks to its highly demonstrative results, encourages a new way of team working.
Conditions for success
Ambitious targets are the key to successful design to cost:
They are equal to the challenge and show the need to go beyond the usual habits and results.
Clearly expressed by the Management, they contribute to the mobilisation of energies.
The multidisciplinary approach must of course involve the whole project team – right down to the key partners and suppliers – in a collegial and constructive work.
Une des forces de la méthodologie est de ne pas statuer trop tôt sur l’acceptabilité ou la faisabilité des solutions : les arbitrages ne se feront qu’avec la pleine visibilité des enjeux (besoins, coûts, risques) pour l’équipe projet et la Direction.
A dynamic and positive animation:
Leading a Design to Cost is not a matter for specialists in a particular field and a broad, multi-sectoral expertise is an asset.
The most important thing is a simple methodology and good management of the human factor:
The aim is to create a dynamic and to lead the team, through constructive exchanges, towards the right levels of questioning, with pleasure and enthusiasm.
Extremely varied applications
Essential approach, Design to Cost is now implemented in all sectors of activity :
- Large, medium and small series products,
- Services,
- Industrial machinery and equipment,
- Complete plants and installations, single or reproducible,
- Responses to calls for tenders,
- B2B and B2C…
It is the subject of numerous naming variations:
- Design to Cost, for new projects,
- Redesign to Cost, for existing systems,
- Design to weight, aiming to reduce masses
- Design to Manufacturing, seeking the best industrialisation and manufacturability…
- And of course, Design to Value, with a focus on Innovation and Customer Value…
But for us, Design to Cost and Value remains the ideal synthesis, the global approach that does not neglect any of the aspects of the attractiveness and competitiveness of the future offer!
Radical gains
The benefits of Design to Cost are high and often surprising:
- Radical reduction of direct costs: -15, -30 or even -50% on new or existing products
- Reduced development and investment costs
- Reduction of CAPEX and OPEX costs of industrial installations
- Savings on Life cycle cost and Total Cost of Ownership
The gains also go beyond economic benefits alone:
- Reduction of development time, thanks to efficient exchanges and less iterations
- And above all, the impetus for change, thanks to a collegial approach and strengthened team cohesion.
Emilie PASQUET – Industrial Methods Engineer – THALES
” A great intervention with people who were involved and concerned about the future of the project. Working with Arolys was a real asset for the project. In particular, it enabled us to create a multi-business team dynamic and to identify potential gains to reach our target. A great experience that I hope to be able to repeat on a future project. “
Jean GATELLET – VP Business Line Exterior – SOMFY
“An intervention carried out on a Design To Cost project which was a success.
The potential saving is identified thanks to a well-honed working method that favours the collective commitment of all the trades, an efficient work rhythm and a very professional facilitation… now it’s up to us to transform!”
Florian DOCHE – Mechanical Designer – SOMFY
“The process is well established and the facilitation is very well structured and dynamic. The multidisciplinary collaboration is a real plus, as it allows us to reach a consensus in order to present a clear and realistic result of the potential savings.”
Rémi SOURAIN – Power transmission expert – SOMFY
“The collaboration with Arolys is positive and enriching because it allows us to identify potential gains.
I particularly appreciated the adaptability of the method and of the consultants, which allows us to get to the heart of the matter.
Arolys knows how to make the most of the experience and skills present in the room.
It’s up to us to turn this into reality!”
Didier DEBRUN – Project Buyer – SOMFY
“The Design to Cost approach with multi-business participation is a performance booster in the analysis and search for solutions, all participants become aware of their added value in cost optimisation.”
Pierre BRION – Head of Motor Expertise Unit – SOMFY
“As with every mission, the simplicity of the approach and the professionalism of the Arolys facilitators enabled us to achieve the set objective. Moreover, it was always a very pleasant, lively and dynamic moment. When will the next one be?!”
François VALENTIN – Responsible for Industrial Innovation & Digitalisation Projects – THALES AVIONICS
” Quick entry into the subject, methodology easy to understand for the participants (…) The rigour applied in the internal tools of AROLYS avoids any confusion and guarantees a form of traceability of the figures avoiding any loss of time. Sharing of internal tasks at Arolys favours a dynamic of continuous animation. “
Raphaël THOMAS – Costing Manager – SAFRAN AEROSYSTEMS
” The choice of partner is key for this type of DtC approach, both to guarantee the achievement of the ambitious results targeted and, in our case, to convince all the internal players of the relevance of the approach. The excellent results obtained with Arolys in the context of our project are linked, in my opinion, to three key parameters: good timing (a very upstream approach), the adaptation of the approach to the environment (product complexity, internal organisation, etc.) and the quality of the participants. Arolys’ agility and seriousness were exactly what we were looking for. “
Laurent GRAVELEAU – DtC Expert – THALES
” AROLYS enabled us to identify, over a short cycle of around 12 weeks, RC* savings of the order of xx% with a low level of NRC* on a serial product deemed to have “no possible areas of cost reduction”.
These savings have since been reflected in the specifications by the project team in accordance with the submitted plan.
More than the method, it is first Arolys’ dynamism and, above all, its willingness to get to the bottom of the technical issues that have enabled these results.
It should be noted that, compared to other consultants, Arolys also worked and detailed the NRC* associated with these gains in order to guarantee the overall ROI* of this operation “
* RC = Recurring cost NRC = Non-recurring costs ROI = Return on investment
Claude PARRA – Program Manager – ITRON
” Simple, pragmatic and flexible, logic design to cost methodology served by excellent AROLYS consultants and effective templates.
We succeed to proceed with the whole AROLYS methodology and the outcome was a solid and documented design to cost solution that was globally confirmed during the next project stage “
Thierry BURGAIN – Acoustics Responsible – BRANDT
” I participated in 3 working groups led by the AROLYS team. The atmosphere of the groups and the dynamism of the speakers made the work on cost reductions, a subject that was initially less exciting than others, very interesting. You feel like an actor if you adhere to the original approach that challenges your habits. In the end, you are positively surprised by the result. “
Aude FALOR – Purchaising Project Manager – THALES
” We embarked on this process, without much conviction on my part.
I am now more than surprised by the result. We had ambitious objectives for our product, (-20%), which we should be able to achieve by carrying out the actions identified thanks to AROLYS.
AROLYS’ expertise in DtC, and an obvious technical background are real assets for this type of mission.
Their size, in my opinion, allows them to be very responsive and competitive with large firms. “
Patrick MAREAU – Program Manager – THALES
” The product’s cost reduction targets were achieved and validated in production. “
Matthieu DROUOT – Product and Market Manager – SOMFY SIMU
” Thanks to a simple and pragmatic method, Arolys has enabled us to objectively target the sources of cost reduction necessary to maintain our competitiveness. The years go by and we very easily add unnecessary costs ! The “Design to cost” approach quickly allows us to identify all the sources of cost reduction, while respecting our values of quality, service and other specificities linked to our company. In a word: Thank you! “
Joanna ALAIMO – DtC Responsible – THALES AVIONICS
” We were very satisfied with the service provided by Arolys, which was able to adapt to our needs, our organization and our constraints throughout the project. Very good facilitation of the multi-trade workshops, in particular the efficient, fast and pragmatic Functional Analysis. “
Mickaël REQUIN – Project Manager – SCHNEIDER ELECTRIC
” The training is very useful and opens the mind to the design to cost approach upstream and downstream of projects. “
Patrice FAGNAN – President – PELSS PBL
” Very interesting method for builders, with a well adapted personalized training. “
Jingwei XU – Procurement NPI – ITRON
” The DTC project we worked with Arolys is quite effective, we achieved the incredibale saving target after three rounds of brainstorming and workshops. “
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