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Every decision in the product development process affects cost: design is typically considered to account for 70–80% of the final cost of a project such as an engineering project [1] or the construction of a building. [2] In the public sector, cost reduction programs can be used where income is reduced or to reduce debt levels. [3]
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.
This explains the non-linearity of learning-by-doing cost reduction, as seen for example in semiconductor manufacturing [3] or with solar PV production. [ 4 ] The concept of learning-by-doing has been used by Kenneth Arrow in his design of endogenous growth theory to explain effects of innovation and technical change. [ 5 ]
Quality, cost, delivery (QCD), sometimes expanded to quality, cost, delivery, morale, safety (QCDMS), [1] is a management approach originally developed by the British automotive industry. [2] QCD assess different components of the production process and provides feedback in the form of facts and figures that help managers make logical decisions.
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, buildings, machines and other assets are considered investments. Operating expenses (OE) is the cost of the supply chain operating to produce the unit. For a system ...
Manufacturing resource planning (MRP II) [1] is a method for the effective planning of all resources of a manufacturing company. Ideally, it addresses operational planning in units, financial planning, and has a simulation capability to answer " what-if " questions and is an extension of closed-loop MRP (Material Requirements Planning).
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The concept of Quick Response Manufacturing (QRM) was first developed in the late 1980s by Rajan Suri, at the time professor of Industrial and Systems Engineering at the University of Wisconsin-Madison. Combining growing academic research in Time-based Competition (TBC) with his own observations from various lead time reduction projects, Suri ...