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, until the replacement of obsolete technology/components in the advanced stages of the product's lifetime.

Quantity

D2C

Cost

Graph 1: Design to Cost during the product's lifetime

Design to cost application decision:

Since performing a D2C phase has a cost attached to it, the most convenient time to apply for a D2C phase should be considered.

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

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

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 from a simple “lower cost” compatible device market sourcing for the simplest D2C phases, to ASICs design (Application Specific Integrated Circuit design) ranging in labor effort from a few thousand dollars to millions 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 example guide, in each case, an in-depth 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 emphasizes 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, a redesign is a must → Don’t start 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 includes 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, a 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 one time phase done immediately after the R&D phase, it consists 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.