We can talk as much as we like on cost optimization practices such as value engineering, lean development and modularization; however, the most useful information a manufacturer can have incorporates the hard data on these practices. How exactly do practices like value engineering help companies gain market advantage, and how much success have companies had in achieving PCO by implementing them?
Value engineering, essentially the replacement of high-cost product parts and tools with more affordable alternatives, provides values for manufacturers by increasing margins from within product development. With lower manufacturing cost, companies can get more value out of their revenues and expand their profits.
We know the value manufacturing executives in any industry place on the hard data; the RoI for key initiatives, and venues for improving profitability without draining from product quality. The following are real-world examples of cases in which B-WI was able to help industry leading manufacturers reduce their costs and improve functionality with value engineering practices.
Highlight: Welding Equipment Manufacturer
The following is an excerpt of a case study on PCO, in which value engineering practices implemented with the help of B-WI engineers helped lead the company to reduced product cost and establishment in new markets:
“The customer was manufacturing in Europe initially and wanted to establish India as the manufacturing hub for exports to price-sensitive Asian and South American markets. The main objective was to minimize product cost and to ensure competitiveness in such markets…
B-WI’s structured, framework-driven value engineering approach helped identify a few alternative designs for the same product for the customer to choose from.”
B-WI identified alternative, lower cost materials for the manufacturer, and offered design modifications that significantly reduced consumption of said materials. With the help and VE strategizing of B-WI, the company was able to obtain all safety certifications and find high quality, affordable vendors in their new markets.
Highlight: Converting, Printing and Packaging Technologies
The company in our next study, based in Green Bay, Wisconsin, manufactured for four main printing and packaging technologies:
- Tissue converting
- Wide web printing, coating and laminating
- Narrow web inline printing
To implement practices for sustaining market strength, the company reached out to B-WI, who then identified VE approaches intended to improve manufacturing functionality:
“The customer was facing increased demand from his clients to revamp its equipment to address the new market needs like:
… The VE experts at B-WI gathered the existing information on the tissue wrapper machine, and identified key modules and areas of the machine to engineer for value.”
Upon review, it was found that expensive welding equipment used in production contributed a great deal to overall costs. By swapping out these technologies with lower cost laser cutting/bending alternatives, the company was able to improve their functionality and cut product costs by roughly 40%.
Highlight: European Automotive Air Conditioning Manufacturer
Our final case study on VE strategy and cost optimization involves a European manufacturing leader in the automotive air conditioning and engine cooling systems industry. A major supplier of these systems to commercial auto manufacturers, the company sought ways to improve system motor performance while eliminating persistent cogging issues:
“The customer was looking to reduce the low speed noise and cogging issue from a Permanent Magnet Direct Current (PMDC) motor. The highlighted issue was the passenger discomfort and battery energy drop in the vehicle due to more consumption of current at low speed…
B-WI analyzed the given problem, and benchmarked different products available in the market to arrive at a solution through VE methodology.
B-WI decided to incorporate skewing design in the rotor or stator. As the PMDC has the stator in magnetic form, the skewing design was incorporated in the rotor without changing the existing lamination design. Design changes are incorporated only in lamination stack and assembly fixture.”
Through implementing value engineering initiatives, the company was able to completely erase the cogging and low speed noise issues they had faced previously. By completely redesigning their stacking fixtures for optimal value, the company also increased system battery life and performance.
In our most recent case study, “Structured Approach to Product Cost Optimization,” we assess the ways a broken down understanding of product cost enables manufacturers to tackle PCO initiatives to the greatest effect. For many, simply rethinking product cost can lead to huge savings and revenue growth potential down the line.