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5 Ways to Reduce Component Costs

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_hm
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Supply Network Guru
Re: Hidden cost for procurement
_hm   2/28/2013 7:31:42 PM
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@Azmat: Yes, concurrent engineering may be solution for this. It is quite effective and has many other advantages.

 

AzmatMalik
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Production Synthesizer
Hidden cost for procurement
AzmatMalik   2/27/2013 10:30:39 PM
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And that is why developer-designer should involve procurement very early in the design stage.  An alternative approach would be to do the first version very fast, and do a serious cost reduction as the market is being tested with the initial version of the product.

Ken Bradley
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Re: Hidden cost for procurement
Ken Bradley   2/26/2013 4:11:09 AM
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In the examples given, proper component engineering analysis was conducted  and design authorizations were received from the design authority. There is real cost reduction available to customers who act!

prabhakar_deosthali
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Supply Network Guru
re:
prabhakar_deosthali   2/26/2013 1:41:13 AM
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I also agree that it is difficult to chnage a component in the later part of the product life cycle just because some distributor says that another part costing less is an exact fit for the original part.

Especially when the product is already in use , it becomes the responsibility of the support and service department to take a decision in this regard and unfiortunely they are neither equipped nor authorised to make such changes and the design department is too busy to put effort in reevaluating their own design for the equivalant part.

_hm
User Rank
Supply Network Guru
Hidden cost for procurement
_hm   2/25/2013 7:54:14 PM
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There are more subtle aspect to this component cost reduction. Many parts are critical and part substition has very high risk of product may not function to specifications. Also, to change part, one also needs approval from designer, and they are very busy in new project. Part change needs update of system and all its document. These hidden cost many times, exceeds price difference.

 



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