Manufacturing Cost Modeling for Product Design

Abstract

The process of product design is driven toward achieving design specifications while meeting cost targets. Designers typically have models and tools to aid in functional and performance analysis of the design but few tools and little quantitative information to aid in cost analysis. Estimates of the cost of manufacture often are made through a cost multiplier based on material cost. Manufacturing supplies guidelines to aid in design, but these guidelines often lack the detail needed to make sound design decisions.

A need was identified for a quantitative way for modeling manufacturing costs at Motorola. After benchmarking cost modeling efforts around the company, an activity-based costing method was developed to model manufacturing cycle time and cost. Models for 12 key manufacturing steps were developed. The factory operating costs are broken down by time, and cost is allocated to each product according to the processing it requires. The process models were combined into a system-level model, capturing subtle yet realistic operational detail.

The framework was implemented in a software program to aid designers in calculating manufacturing costs from limited design information. Since the information tool provides an estimate of manufacturing costs at the design prototype stage, the development engineer can identify and eliminate expensive components and reduce the need for costly manufacturing processing. Using this methodology to make quantitative trade-offs between material and manufacturing costs, significant savings in overall product costs are achieved.