This PPT slide, part of the 24-slide Cost Reduction Opportunities (across Value Chain) PowerPoint presentation, outlines strategies for product re-design aimed at achieving significant cost savings across manufacturing, transportation, and procurement. It highlights 3 key design approaches: designing for a lower Bill of Materials (BOM), enhanced manufacturability, and improved supply chain efficiency.
Under "Design for lower BOM," the slide emphasizes the importance of reusing preferred components and leveraging approved supplier lists. This approach not only reduces material costs, but also enhances quality and reliability through standardized designs. The mention of modularization suggests a focus on using common parts across various product lines, which can streamline production and reduce waste.
The second section, "Design for improved manufacturability," discusses the need for a Bill of Processes. This involves linking manufacturing processes with the Bill of Materials to minimize engineering change requests. By integrating manufacturing capabilities into R&D and engineering processes, organizations can better anticipate production challenges and enhance efficiency.
The final approach, "Design for supply chain," focuses on re-designing products to be lighter and more durable. This not only simplifies handling, but also potentially reduces transportation costs. The slide suggests that 80% of product costs are determined during the R&D and engineering phases, underscoring the critical nature of these design decisions.
Overall, the slide conveys that there are substantial cost reduction opportunities available in direct material costs, manufacturing operations, logistics, and transportation. These insights can guide organizations in making informed decisions about product design and operational efficiency.
This slide is part of the Cost Reduction Opportunities (across Value Chain) PowerPoint presentation.
This Cost Reduction framework is created by former McKinsey, BCG, Deloitte, EY, and Capgemini consultants. It identifies over 45+ Cost Reduction initiatives mapped to the Michael Porter Value Chain.
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Value Chain Analysis Cost Reduction Assessment Supply Chain Cost Reduction Value Chain Manufacturing Logistics Transportation Production
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