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 relies not on blaming the forecast, but rather controlling the elements of cost that we can control:

• 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
• Product line trimming for focus
• Alternative material selection
• Quality management and control
• Logistics Costs
• Warehousing efficiencies
• Manufacturing Execution Systems and transaction costs

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 download our simple manufacturing cost calculator), 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.

Furthermore, improving reliability adds profit directly to the bottom line.  HALT is one very effective method of finding the weak links in a design prior to production launch.  “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.