Method library · 44 methods
Design-to-cost and cost engineering methods
Forty-four methods to set a defensible target cost, break it down, find the value, generate and evaluate cost-reduction ideas, negotiate on facts and track attainment — target costing, should-cost, VA/VE, FAST, Kano, QFD, DFM/DFA.
Ready-made playbooks
Target setting workshop 1 h
One hour to set a defensible target cost: top drivers, scenario window, business case check — with confidence grades on every number.
Should-cost negotiation pack 2 days
Two days to walk into the negotiation with a model, a normalized comparison and a prepared plan — then open the books with the chosen supplier.
Cost redesign sprint 1 week
One week to redesign the expensive parts: analyze functions, run the workshop, apply DFM rules and cost the prototype honestly.
Gate cost review pack 1 day
One day before each gate: dashboard refreshed, variances explained, attainment measured — and the go/no-go decision documented.
Complexity pruning quarter 1 quarter
One quarter to cut what variety costs: measure complexity, standardize parts, modularize the platform and delete the functions nobody misses.
Sourcing cost-push month 1 month
One month focused on bought-in cost: pareto the spend, substitute materials, settle make-or-buy and lock a cost-down curve with key suppliers.
All 44 methods, by stage
Target
Set the cost the market allows — before designing a single part.
- Target Cost DefinitionSet the cost ceiling from the market backwards: acceptable price minus required margin leaves what the product may cost.
- Cost Window AllocationSplit the total target into subsystems with a cost window each — no subsystem eats the budget alone.
- Price-Value AlignmentCheck that the price customers accept matches the value they perceive — a gap means margin risk or value left unpriced.
- Cost Business CaseModel volumes, margin and investment: the target cost must still make money at the volumes you really expect.
- Top-Down Cost DriversFrom the total target, identify the few physical or technical drivers that explain most of the cost.
Breakdown
Decompose the cost to know exactly where the euros go.
- Cost Breakdown StructureDecompose the product cost into materials, bought parts, labor, machine time, overhead and scrap — visible to all.
- Should-Cost ModelBuild the bottom-up cost the product should have: materials at market, process times at standard, plus overhead and a…
- Cost ParetoRank components by cost: a few parts usually carry most of the money — focus there first.
- Activity-Based CostingAllocate overhead by the activities that actually consume it, not by a flat percentage of direct cost.
- Tear-Down AnalysisBuy and dismantle a competitor product: count parts, weigh materials, estimate processes — learn what they achieved.
- Cost DatabaseBuild a living library of costs: materials, processes, bought parts, quotes — searchable for the next estimate.
Value
Find what the customer actually values — and what they never asked for.
- Functional AnalysisExpress the product as functions — verb plus object — free of solutions: what must it do, not how.
- FAST DiagramOrder functions logically: how, why, when — to expose functions that exist only by tradition.
- Kano ClassificationSort features by customer reaction: basics, performers, delighters — and question the ones nobody would miss.
- QFD LiteTranslate customer requirements into technical characteristics with weights — the light house of quality, one matrix…
- Value Perception MapPlot what customers value against what it costs to deliver; the expensive-ignored quadrant is your saving target.
- Useless Function HuntChallenge every function: who needs it, what breaks without it, what does it cost? Kill the orphans.
Generate
Produce reduction ideas from functions, design rules and process rethink.
- Value Engineering WorkshopCross-functional session: state the function, brainstorm alternative ways to deliver it, cost the best candidates.
- DFM / DFA ReviewDesign for manufacture and assembly: fewer parts, simpler joins, standard processes — cost falls with complexity.
- Standardization PushReplace special parts with standard ones wherever function allows: fewer references, more volume, lower price.
- Modular ArchitectureDesign shared modules across product variants: pay variety only where customers pay for it.
- Material SubstitutionChallenge each material against alternatives on cost, process, quality and risk — with real quotes, not catalogs.
- Process RethinkQuestion the process itself: a different technology or supplier process can delete cost the design cannot.
Evaluate
Grade the estimates and price the risks before deciding.
- Estimate Confidence GradingGrade every estimate A/B/C: quoted, analogous or guessed — and never mix them in one decision.
- Trade-Off CurvesMap cost against the design variable: weight, tolerance, power — know where the next saving lives.
- Make or BuyCompare making in-house versus buying: full cost both, then weigh control, capacity and risk.
- Life Cycle CostCount the whole life, not the invoice: energy, maintenance, service, end-of-life — your product’s cost continues after…
- Cost Risk AssessmentList what could blow the target: commodity swings, tolerances, volumes — and price each risk with a contingency.
- Prototype CostingCost the prototype build honestly: it reveals the real process costs the estimate guessed.
Negotiate
Align suppliers on real costs: models, openness and prepared plans.
- Open-Book CostingShare the should-cost model with the supplier and work the gap together — transparency beats poker.
- Supplier Early InvolvementBring key suppliers into design reviews before the drawing is frozen — their process knowledge is free consulting.
- Negotiation PreparationDefine your target, your walk-away and your concessions before the meeting — trade variables, not price alone.
- Cost-Down AgreementAgree a learning-curve cost-down with key suppliers: annual percentages, shared gains, no renegotiation theater.
- Quote Comparison GridCompare supplier quotes line by line on identical scopes: the cheapest total often hides in assumptions.
Track
Keep the target visible: dashboards, gates and ownership.
- Cost DashboardOne page, one truth: current cost versus target for each module, refreshed on a fixed rhythm.
- Cost Gate ReviewMake cost a go/no-go criterion at every design gate: below target, on track, or blocked — with a recovery plan.
- Cost Variance AnalysisExplain every gap between estimate and actual: which assumption was wrong, and what does that teach the model?
- Cost Ownership MapAssign every cost element a named owner: not the controller — the designer, buyer or process engineer who can move it.
- Target Attainment ReviewAt project milestones, measure distance to target cost and decide: redesign, renegotiate, or accept with eyes open.
Toolkit
Cross-cutting methods: curves, complexity, quality and estimating tools.
- Parametric CostingEstimate from drivers, not parts: cost per kilogram, per watt, per square meter — calibrated on past projects.
- Learning CurveEach doubling of cumulative volume cuts unit cost by a predictable percentage — use it to plan cost-down, not just…
- Complexity CostCount what variety costs: every option multiplies parts, setups, tests and stock — make variety earn its keep.
- Cost of Poor QualityAdd up scrap, rework, warranty, returns and firefighting — the hidden factory is usually the cheapest one to close.
- Design-for-Cost RulesWrite ten costing rules your designers can check in seconds: standard tolerances, preferred materials, no one-off parts.