From the Design to cost


Design to cost target:

Design to cost is a phase that should be targeted to reduce the overall cost while upgrading the MTBF reliability, producibility and serviceability of the product.

Note that that such definition implies that D2C “Design to Cost” can be applied several times during a product lifetime, depending on the increase of production quantity (during the first phases of the product lifetime, till the replacement of obsolete technology/components on the advances stages of the product lifetime.


Quantity

D2C

Cost

Global R&D iot creation

Graph 1: Design to Cost during the product lifetime

Design to cost application decision:

Since performing a D2C phase have some cost attached it should be decided when is the most convenient time to apply for a D2Cphase.

In order to decide the best moment to apply for a design to cost it should be considered the cost reduction benefit against the D2C labor cost.

For example if 10000 units that cost $30 each need to be produced and a D2C phase that reduce the cost to $25 cost $10000 and takes 3 months, and a more intense D2C phase can reduce the cost further to $22 and cost $90000 and takes 6 months, it may be most convenient to do the first phase, but if we know that a 30000 units order will follow we should perform the second D2C phase in order to save more money.

Global R&D graph 2

Graph 2: Keeping D2C labor cost + production cost after D2C lower than production cost without the D2C phase

Design to cost engineering labor:

Any D2C phase is an engineering effort.

This engineering effort can vary to a simply “lower cost” compatible devices market sourcing for the simplest D2C phases, to ASICs design (Application Specific Integrated Circuit design) ranging in labor effort from a few thousand dollars till million of dollars for the heaviest D2C phases (normally done for huge quantities, like cellular phones etc)

In practice those are the levels and rough cost for the possible D2C phases (this is only an exemplar guide, in each case an in deep calculation should be done):

Design to Cost engineering performed

D2C level

Approximate cost reduction

Approximate D2C labor cost

Approximate time required

Compatible device market search

1

4-10 %

$1000 - $3000

1-3 weeks

PCB redesign to match lower cost technologies

2

10-30%

$5000-$20000

5-10 weeks

PCB and in circuit Modules redesign(1)

3

20-60%

$50000-$80000

4-7 months

ASICs design(2)

4

50-80%

$300000-$900000

8-14 months

Notes: (1) this level of D2C is valid only if modules (like BLE GSM etc.) are in use

(2) by ASICs we mean silicon developed specifically for the product (not FPGA nor processors)

The above table also emphasize the previous paragraph, for sure it will not be wise to perform a 4 level D2C in order to produce a few thousand units of any product, but it will be most wise to perform a level 2 or 3 D2C phase in most of the cases.

Notice that since there is labor required in any D2C, it will take some time, therefore it is very important to plan in advance in order to avoid delays in production or alternatively to produce with higher costs in order to be able to deliver on time.

Other reasons for redesign:

1- Technology state of the art:

In our time technology changes fast.

A lot of products maintain its validity on the market far more time that the technology used while developed.

As a result, good “old” products (by “old” we mean 3-15 years) may benefit from a redesign, both in production cost and in MTBF.

2- Design not suitable for production

In some cases, we find “prototypes” of product developed in ways not best for production, maybe because there are not producible with low labor cost, or not automated, or may result in low MTBF or their testing validation quality assurance and or serviceability are lacking.

In those cases, redesign is a must → Don’t enter production of any product if their MTBF or T&V or QA or serviceability are lacking.

3- Obsolete or no second source parts

If the product include parts that became obsolete or are hard to find because of lack of second sources it might also be necessary or at least recommendable to redesign.

4- Reliability

In some cases, specially (but not only) medical device development and electronic defense systems, we find out that the prototype (if not developed by Us) lacks the required reliability to match the product requirements. In those cases redesign is not an option but a must, if to match a specific standard, or simply to get credited by a good product and not falling short in the market.

Global R&D redesign advantages:

Global R&D can include in the design the technology most suitable for the specific product.

We are not bound to specific microcontrollers nor technologies.

Large experience in analog and digital design since 1987 allow us to use any

  • processor,
  • microcontroller,
  • DSP,
  • FPGA,
  • CPLD,
  • and any analog and digital device.

As required by the product in order to:

  • Lower device count
  • Lower power consumption
  • Increase MTBF
  • Improve reliability
  • Better T&V
  • Better QA
  • Easy producibility
  • Easy serviceability
  • Lower production cost

Conclusion:

Design to cost is a onetime phase done immediately after the R&D phase, it consist of many phases that should be done before starting the first mass production and during the product lifetime, however if well timed, it should not add any cost, on the contrary it should only reduce the expenses of the production batch and also indirect costs related to MTBF T&V QA producibility and serviceability of the product.

Notice that we don’t list here “reliability”, since a product with low reliability is not only “expensive”. Any product should have high reliability and if it doesn’t it must be redesign even it is not to reduce costs in order to stay alive in the market.

-weight: 400;">At some point a Design to Cost phase may be recommended in order to lower the cost and maximize revenues.