DESIGN FOR MANUFACTURING

Planning
PRODUCT DEVELOPMENT PROCESS
Concept
Development
System-Level
Design
Detail
Design
Testing and
Refinement
Production
Ramp-Up
How can we emphasize manufacturing issues
throughout the development process?
UNDERSTANDING MANUFACTURING
COSTS
DEFINITION
DESIGN FOR MANUFACTURING (DFM) IS A
DEVELOPMENT PRACTICE EMPHASIZING
MANUFACTURING ISSUES THROUGHOUT THE PRODUCT
DEVELOPMENT PROCESS.
SUCCESSFUL DFM RESULTS IN LOWER PRODUCTION
COST WITHOUT SACRIFICING PRODUCT QUALITY.
Planning
PRODUCT DEVELOPMENT PROCESS
GO/NO-GO DECISION GATES
SENSITIVITY AND TRADE-OFF A
ANALYSIS
Concept
Development
System-Level
Design
Detail
Design
Testing and
Refinement
Production
Ramp-Up
PRODUCT DEVELOPMENT CASH FLOW
C
u
m
u
l
a
t
i
v
e

C
a
s
h
I
n
f
l
o
w

o
r

O
u
t
f
l
o
w

(
$
)
Time
Investment
Investment ()
Sales Revenue
Operating Profit
Operating Costs
Break Even
Time
Payback
Time
Development
Time
PROJECT FINANCIAL ANALYSIS
(ALSO BUSINESS CASE ANALYSIS OR PRODUCT ECONOMICS)
MOST COMMON METHOD IS NPV ANALYSIS OF PROJECT CASH
FLOWS.
BASE CASE MODEL COMPUTES NOMINAL NPV.
SENSITIVITY AND TRADE-OFF ANALYSIS SUPPORTS DEVELOPMENT
DECISIONS.
QUALITATIVE FACTORS ALSO INFLUENCE DECISIONS.
NET PRESENT VALUE
NPV =
period cash flow
(1 + discount rate)
period
periods
S
NPV =
C
(1 + r)
i
S
N
i
i = 1
INPUTS FOR NPV BASE CASE
DEVELOPMENT COST AND TIMING
TESTING COST AND TIMING
TOOLING INVESTMENT AND TIMING
RAMP-UP COST AND TIMING
MARKETING AND SUPPORT COST AND TIMING
SALES VOLUME AND LIFETIME
UNIT PRODUCTION COST
UNIT REVENUE
DISCOUNT RATE
EJEMPLO MODELO FINACIERO
Costo de desarrollo 5000,000
Costo de arranque 2000,000
Costo de mercadotcnica y soporte 1000,000 /ao
Costo unitario de produccin 400/unidad
Ventas y volumen de produccin 20,000 unidades /ao
Precio unitario 800/unidad
CALCULO VPN
CAMBIO DE CONDICIONES EN EL COSTO REDUCCION
CAMBIO DE CONDICIONES EN EL TIEMPO DE DESARROLLO
EXAMPLE: STANLEY HAMMER
Designed in 1995 by
Product Genesis for
Stanley Tools
Contractor Grade
TM
Graphite composite
shaft
Soft rubber grip
INPUTS FOR HAMMER BASE CASE
DEVELOPMENT COST AND TIMING
TESTING COST AND TIMING
TOOLING INVESTMENT AND TIMING
RAMP-UP COST AND TIMING
MARKETING AND SUPPORT COST AND TIMING
SALES VOLUME AND LIFETIME
UNIT PRODUCTION COST
UNIT REVENUE
DISCOUNT RATE
$120k, 9 months
$100k, 1 year
$200k, 6 months
$50k, 3 months
$250k + $80k/year for 2 years
200k units/year, 5 years (actually not flat)
$4/unit + $2/unit overhead
$12/unit wholesale
10%/year
Realizar el analisis de sensibilidad para vairacion del tiempo de
desarrollo, Cambio en el volume de ventas, en el precio de
venta y en el costo de desarrollo