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: It isn't a very good case.
gollark: They had designed ARM CPUs for ages for their phones. Recently they got good enough and/or Intel annoyed them enough that they switched over.
gollark: ARM is an instruction set. "Traditional CPU[s]" use the x86 instruction set. People argue a lot over which design is best but broadly speaking there doesn't seem to be *that* much difference, although x86 has some advantages like I think greater code density and downsides like variable length instructions being annoying to decode.
gollark: That's not a very valid comparison. But Apple's cores are somewhat better than available x86 ones.
gollark: Apparently they did lose most of their CPU design team to some other company recently, so who knows.
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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