This is a scrubbed version of actual cost reduction rules, to illustrate the types of things controlled. The new unit must perform exactly as the existing unit in system testing. Note that in some areas, there was considerable freedom, others, practically none. At the end of the exercise, you want to be sure that you have really reduced the cost.
Rules for Generation of cost reduction commitments.
Goals are for cost reduction with known risk and schedule impact.
Items with unknown risk or schedule impact are part of the next generation product. Not part of this effort.
Need cost reduction commitments for all unit types.
XXXXX and YYYY are priority – need to be tighter, more on target.
ZZZZ can be a little looser.
Cost reduction is for unit that meets current requirements and performance, including life and reliability.
ZZZZ requirements are not stable, we are not quite done with performance characterization.
Going back to customer or agency with requirement change request is not preferred. It is possible, but risky.
Full requalification and retooling is acceptable.
Lead Free PCA assemblies are included in the base cost. The units themselves are not Lead Free, or RoHS, just the PCAs.
UL – is on the table. May not be needed.
DNI for options – out on the XXXX and YYYY, in on the ZZZZ.
Expansion port is out of the XXXXs.
YYYY – will have expansion, and can act as XXXX, QQQQ, etc, in small numbers. If numbers get high, repackage for lower cost.
Cost Analysis will use existing, known costs as entered in the Enterprise Resource Planning (ERP) system.
Use inputs from vendors only for relative price comparison.
Get quotes through operations whenever possible. They will work cost problems identified with existing components.
When getting comparison costs use 365 day pricing, 20k unit lots, no non recurring cost inclusion.
Power consumption reductions count toward overall grading.
Engineer XX will generate the cost reduction per watt saved (units are on 24/7, entire life)
Accessory cost reductions are not part of this exercise.
Installation time reductions count toward overall grading.
Vendor non recurring costs do not count toward overall grading.
Cutting production over July of 2007. This converts to design complete, schematic capture/drawing detailing has begun by end of October.
Preferable that it is compatible with existing software, but not required.