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“Design to Cost” (DtC)
is a popular buzzword in businesses today. This project paper will
discuss the development of a DtC program for Case New Holland (CNH)
in Wichita, Kansas. In February 2001, the project was started with a
primary focus on cost reducing the current production Case and New
Holland skid steer loaders. A secondary and tertiary focus is to
develop additional cost reduction ideas that can be implemented on a
current product redesign and implemented at a later date on a common
platform project. After analyzing the current cost top-down and
bottom-up, a cost reduction goal of 22-25% was determined. The skid
steer loaders were divided into system modules for ease of
workability. Next, cost reduction ideas were then developed using
idea generation workshops and a cost savings value was established
for each idea by means of the Linear Performance Pricing (LPP), cost
driver analysis, design benchmarking, best-of-best, and clean sheet
buildup tools. Through the utilization of the developed process, CNH
was able to take significant strides in reaching the cost reduction
objectives. Overall, $73.6 million in annualized savings ideas were
generated. From these ideas, $15.2 million is possible to be
implemented into current production, 24.4 million is implementable
on a current production redesign, and $12.6 million is possible to
implement on a global platform project. Finally, $3.7 million in
annualized savings have already been implemented into current
production to be realized immediately. |
