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NEW APPROACH TO PRODUCT DESIGN THAT PROMISED
Remember Japan? In the fall of 1989, both Business Week and Industry Week broke stories about a new approach to product design that promised to make U.S. manufacturing more competitive with our upstart neighbor to the east. The stories reported how Ford, General Motors, IBM, NCR, Texas Instruments, and a host of other engineering companies were racking up spectacular cost savings on their products by focusing on manufacturability. Ford even named a figure, boldly stating that a disciplined approach to design for manufacturability had helped save more than $1.2 billion. Major Design for Manufacture and Assembly software goals at Dell Inc. (Round Rock, TX; dell.com) are improved design efficiency and increased factory throughput. Assembly innovations such as pushbutton releases for its Optiframe computer chassis helped the company avoid construction of a new factory and saved an estimated $60 million in labor, material, and supply chain costs. What a difference a decade and a half makes. These stories seem oddly prophetic now, given the claims and counterclaims being made everywhere from union halls to the halls of Congress about the U.S. business phenomenon of industrial outsourcing. Whether outsourcing will improve U.S. competitiveness is yet to be seen. Nonetheless, the stampede is on to relocate manufacturing to overseas markets with lower labor costs. The thing is, what everyone knew by 1989 but has since forgotten, labor has a relatively small influence on total product cost. By the time you hire someone to manufacture your product, you have already designed in 70 percent or more of the cost. In other words, if you really want to cut product costs, do your cutting during design. U.S. manufacturers learned this lesson in the 1980s to rousing success and are still taking advantage of it today.
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