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Cost reduction is the process used by organisations aiming to reduce their costs and increase their profits, or to accommodate reduced income. Depending on a company’s services or products , the strategies can vary.
Kaizen costing is a cost reduction system used a product's design has been completed and it is in production. [1] Business professor Yasuhiro Monden [2] defines kaizen costing as . The maintenance of present cost levels for products currently being manufactured via systematic efforts to achieve the desired cost level. [citation needed]
As manufacturing companies evolve and automate more and more stages of the processes, these processes tend to become cheaper. DFM is usually used to reduce these costs. [1] For example, if a process may be done automatically by machines (i.e. SMT component placement and soldering), such process is likely to be cheaper than doing so by hand.
Swanson's Law is a solar industry specific application of the more general Wright's Law which states there will be a fixed cost reduction for each doubling of manufacturing volume. Technical Background
A workcell is an arrangement of resources in a manufacturing environment to improve the quality, speed and cost of the process. Workcells are designed to improve these by improving process flow and eliminating waste. They are based on the principles of Lean Manufacturing as described in The Machine That Changed the World by Womack, Jones and ...
Design-to-Cost (DTC), as part of cost management techniques, describes a systematic approach to controlling the costs of product development and manufacturing.The basic idea is that costs are designed "into the product", even from the earliest concept decisions on and are difficult to remove later.
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Throughput accounting uses through methods in dealing with income and expenses in a system. Throughput (T) is the rate at which a system can produce a unit. For profit orientated systems, throughput is considered net sales (S) minus totally variable cost (TVC). Investment (I) is the monetary value of the system. The value of inventory ...