Cost reduction
Cost reduction is the process used by companies to reduce their costs and increase their profits. Depending on a company’s services or product, the strategies can vary. Every decision in the product development process affects cost.
Companies typically launch a new product without focusing too much on cost. Cost becomes more important when competition increases and price becomes a differentiator in the market.
Cost reduction strategies
- Supplier consolidation
- Component consolidations
- Low-cost country sourcing
- Request for quotations (RFQ)
- Supplier cost breakdown analysis
- Function cost analysis / Value analysis / Value engineering
- Design for manufacture / Design for assembly
- Reverse costing
- Cost driver analysis
- Product benchmarking
- Design to cost
- Design workshops with suppliers
- Competitor benchmarking
gollark: > very slyYes. You have been very subtle. It took lots of detective work to figure out your hints.
gollark: Or you could photograph the car with a sheet of paper saying "hello I am wsa on discord and own this tesla".
gollark: Anyway, I am not saying that nationalized healthcare is a bad idea, just that it does *not* magically mean nobody actually pays for it.
gollark: 20% apparently, which is lower than I thought.
gollark: It probably isn't 0.5%. I think the UK's national health service runs to about a third of government expenditure? Not certain, I can check.
References
- Barrett R. Crane. "Cycle time & cost reduction in a low volume manufacturing environment". MIT DSpace. hdl:1721.1/11020.
- Apichart Jearasatit. "Using a total landed cost model to foster global logistics strategy in the electronics industry". MIT DSpace. hdl:1721.1/60836.
- Bryan K. Parks. "Cost and lead time reduction in the manufacture off injection molding tools". MIT DSpace. hdl:1721.1/12092.
See also
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