Many cost problems only become visible when a product is already well advanced in development.
At that point,
- architecture
- materials
- manufacturing process
- interfaces
- Suppliers
- Tooling
are already partly fixed.
Changes are still possible, but often more costly.
Value Engineering therefore deliberately starts earlier.
Cost Targets as a Development Task
In new product development, cost work should not take place only after the design.
Cost targets can be linked to technical decisions from the outset.
This includes questions such as:
- Which customer requirements are really decisive?
- which functions must the product perform?
- which target costs are economically necessary?
- where do particularly cost-intensive functions arise?
- which alternative solution principles exist?
Understand Customer Requirements First
A product must not be optimised for cost alone.
Before technical solutions are reduced or changed, it must be clear:
What performance does the customer expect?
QFD and other customer requirements analysis methods can help to translate the market and customer perspective systematically into technical decisions.
Function Analysis in Early Phases
Function Analysis is particularly valuable in the early phases of development.
Even before a specific architecture has been fully defined, the team can examine:
- what tasks the product has to perform
- which functions are particularly relevant
- how functions relate to one another
- which alternative working principles are conceivable
This deliberately keeps the solution space broad.
Combining Target Costing and Design-to-Cost
Target Costing sets the economic direction.
Design-to-Cost translates cost targets into technical design.
Value Engineering complements these approaches with its function-oriented approach.
This creates a link between:
market → customer value → functions → costs → technical solution.
Developing Cross-Functionally
Product costs are influenced by decisions made in several departments.
Development, procurement, production and product management should therefore work together as early as possible.
Procurement, for example, can contribute knowledge of suppliers and processes, while production can point out design-for-manufacture concepts at an early stage.
New Technology Is Not Automatically Better
New product development does not mean using as many new technologies as possible.
A new solution is only valuable if it performs the relevant functions economically and reliably.
Value Engineering therefore helps to combine innovation with economic evaluation.
Further Reading
- Target Costing and Design-to-Cost
- QFD: Weighting Customer Requirements Systematically
- Function Analysis: Looking at Tasks Instead of Components
- The Value Analysis Work Plan in 10 Steps
- Involving Suppliers in Value Analysis Projects
- When Is the Right Time for Value Analysis?
- Systematic Product Cost Reduction