Cost Gate Review

Make cost a go/no-go criterion at every design gate: below target, on track, or blocked — with a recovery plan.

Time45 min
FormatSmall group
StageTrack

Cost Gate Review: what it is and why it works

A Cost Gate Review makes cost a formal go/no-go criterion at each design gate, alongside technical maturity, schedule and risk. Before the gate, the cost dashboard is prepared, and each module and the total are classified into one of three states: below target, on track with a credible recovery plan, or blocked. At the gate the decision is forced: go, conditional go with a written recovery plan and deadline, or stop. The decision and any plan are recorded, and the next gate starts by checking whether the previous recovery plan was delivered.

The method works because cost reviewed only at the end is cost accepted by default. By the time tooling is ordered, most of the cost is locked in; gates are the last points where redesign is still affordable. Stage-gate processes, described by Robert G. Cooper, give a structure of decision points; adding explicit cost criteria turns them into cost controls rather than status meetings. A gate without a real no-go option is a ceremony. The Cost Gate Review draws on the Cost Dashboard for its data, on Target Attainment Review for the module-by-module decisions, and on the Cost Window for the acceptable range at each phase.

What you need

Current cost dashboard, prepared at least one week before the gate
Target cost and allowed range for the phase
Recovery plans from the previous gate and their status
Business case sensitivity: how much cost gap the case can absorb

What you get

Cost status per module and total: below target, on track, or blocked
A recorded decision: go, conditional go or stop
Written recovery plans with owners, actions, savings and deadlines
An updated risk and contingency view for the next phase

When to use it

When cost is reviewed at the end, when the design can no longer change.

How to do it, step by step

Define the gate criteria: below target, on track with plan, or blocked.
Prepare the cost dashboard one week before each gate.
Force the decision: go, conditional go with recovery plan, or stop.
Record the decision and the recovery plan in writing.
Follow up the recovery plan at the next gate first.

Worked example: Gate 3 on a mobile crushing unit

Illustrative scenario — figures are realistic but not from a real company.

A mining equipment manufacturer was moving a new mobile jaw crushing unit from detailed design into prototype build. The target cost was $586,000. Gate 3 was scheduled for the end of the month, and the dashboard showed the design at $639,000, 9% over target.

One week before the gate, the cost engineer circulated the dashboard. Three modules were below or on target, the power pack and the discharge conveyor were blocked, and the chassis was on track with a plan already running.
The power pack owner presented a recovery plan: a standard engine rating from the supplier's catalog and a simplified cooling package, worth about $24,000.
The conveyor had no credible plan; its cost came from a customer-specific belt width the sales team had promised.
The gate board decided a conditional go: prototype build could proceed, the power pack plan was accepted with a deadline at Gate 4, and product management had four weeks to confirm or drop the wider belt.

Result. At Gate 4 the power pack saving was confirmed at $21,000 and the belt width was reduced to the standard size after customer consultation, saving $17,000. The design stood about 3% over target, which the board accepted explicitly. The team noted that the gate forced the belt decision months earlier than it would otherwise have come.

Open it in the FieldKit Design to Cost app → Get the Design to Cost template pack — join the waitlist

Common pitfalls and how to avoid them

Gates where cost is presented but never blocks anything.Define in advance the cost conditions under which the gate result is conditional or stop, and apply them.
Recovery plans that are lists of hopes without owners or figures.Require each plan to name actions, owners, expected savings and a deadline.
Preparing the cost figures the night before the gate.Freeze and circulate the dashboard a week ahead so issues can be worked before the meeting.
Forgetting the recovery plans once the gate is passed.Open each gate by reviewing the previous plans before looking at new numbers.

Frequently asked questions

What is a stage-gate process?

It is a product development framework that divides a project into stages separated by gates. At each gate, a decision board reviews deliverables against defined criteria and decides whether to continue, continue with conditions, hold or stop. Robert G. Cooper popularized the approach for new product development. Cost criteria are one set among technical, market and risk criteria.

What are typical cost criteria at a design gate?

Common criteria include the current estimated cost against target and the allowed range for that phase, the trend since the last gate, the share of the estimate supported by quotes or measured data, and the existence of credible recovery plans for modules above target. Criteria tighten as the project matures, since fewer options remain to recover gaps.

What is a conditional go decision?

It allows the project to proceed to the next stage while specific issues are resolved under a defined plan and deadline. For cost, it typically means proceeding with an accepted recovery plan whose delivery is checked at the next gate. It avoids stopping good projects over fixable gaps while keeping the gaps visible.

Origin

Stage-gate cost criteria — Robert G. Cooper, "Winning at New Products", 1986.

Used in these playbooks

Gate cost review pack 1 day

One day before each gate: dashboard refreshed, variances explained, attainment measured — and the go/no-go decision documented.

Related methods

More in “Track”

Keep the target visible: dashboards, gates and ownership.