Cross Functional Team Collaboration Drives Product Cost Savings
Early visibility to product cost drivers helps companies eliminate problems before they become extremely expensive to fix. This was the conclusion of the team at Honeywell Aerospace after their first few programs where they integrated a product cost management platform into the product development process.
Combining the forces of the Mechanical Design, Value/Cost Performance Engineering and Sourcing departments, along with a handful of key suppliers, the Honeywell product team was able to identify and achieve more than 20% cost savings on a series of new product designs.
Know Product Cost or No Product Profit
In the traditional approach to generating product cost estimates, the Mechanical Design & Engineering teams focus exclusively on form, fit and function during the early stages of product design. After they have invested a massive amount of time, effort and R&D dollars to refine their product design, they pass that finished version downstream to Cost Engineering and Sourcing teams for cost evaluation.
The Honeywell product team – led by Bret Armstrong, Manager of the Should Cost team in Cost Performance Engineering – decided that knowing product cost in the early stages of design could have a profound impact on product profit.