VALUE & COST ENGINEERING

A manufacturer of household appliances, which has so far mainly been active in the premium segment, wants to increase its market share in the volume market segment through a new product family with competitive prices. To this end, the manufacturing costs for the reference product should be reduced considerably, taking into account product-specific specifications, and the necessary measures should then be applied to all 10 types and 26 variants of the new product family.

In order to achieve the project objectives, the team proceeded in two phases. Initially, the aim was to reduce the manufacturing costs of the reference product by around 30% without restricting the range of functions of the planned device family as part of a Should Cost Modelling. For this purpose, the project team relied on a combination of different cost engineering methods, such as cost-out and supplier workshops, investigation of competitor equipment as well as value and scenario analyses of the individual components. As part of this procedure, a total of 6 competitor devices were examined, 31 new suppliers were inquired and 33 components were calculated via Should-Costing. Almost 100 VCE ideas made it possible to reduce the manufacturing costs of the reference device by more than 30% and the time-to-market by more than 50%. Subsequently, these measures had to be transferred to the other device types and variants of the new product family. To this end, the project team first drew up a requirement specification for the implementation of the identified savings measures. With the help of an integral project management approach including PMO across all departments, the successful industrialization of the new product family was subsequently monitored. This ensured that the introduction was on schedule and on budget.