TSINGHUA SCIENCE AND TECHNOLOGY

ISSN 1007-0214 06/20 pp29 - 33

Volume 6, Number 1, March 2001

Methodology and Technology for Design to Cost *

JIANG Hua ( 4 Φ), ZENG Qingliang ( f A j t ) , XIONG Guangleng 0 & Λ » )

CIMS/ERC, Department of Automation, Tsinghua University, Beijing 100084, China

Abstract Product cost is one of the most important factors affecting product market share. Traditionally,
product costs are estimated after they are manufactured. However, in this way, the best opportunity to control
product cost is lost. In this paper, a method trying to reduce product cost at the design stage is proposed. This
method is called Design to Cost (DTC). According to this method, product structure can be optimized with the
application of value engineering and Design for Manufacturing/Assembly (DFMA) criteria in the conceptual
stage of product design. During embodiment design, products are evaluated economically on the basis of the
product model which includes manufacturing, assembly and test cost information. According to the results,
products are redesigned before manufacture, and the production cost is reduced.

Key words cost; product design; value engineering; structure optimization; design for assembly and
manufacturing

With the global market coming into being,
producing high quality products at lowest cost and
within the shortest possible time has become the
focus of production competition. According to a
research report, the commodities of the United
States are among the most competitive ones in the
world, and the important reason for this is that the
costs of their products are under control. Chinese
enterprises have been operating under a planned
economy system for a long period of time. There is
less competition among them, and there exists the
problem of high product costs and low efficiency of
enterprise operation. With the dawn of China
taking part in the World Trade Organization
( W T O ) drawing near, opening the home market
more is required. Facing the competition from
foreign products Chinese enterprises should
expedite the pace of product renovation and
improve the quality of their products. Also, they
must control and reduce costs effectively.
Otherwise, it is rather difficult for Chinese
products to find a foothold on the international
market.
Research results1-1"5-1 indicate that although the
design cost only accounts for 5% of the product
cost, the design of a product determines 6 0 % ^
70% of the product cost. Additional costs and poor
quality brought by irrational design can not be
remedied by quality and cost control in the later
stage of product development, and it is too late to
perform value analysis after products are designed.
T h u s , the research on the method of estimating
product costs, the theory of cost prediction and the
methodology of design to cost is very significant to
realize product design optimization both technically
and economically, and this research is also vital for
reducing the costs of products and improving their
market competitiveness.

1 Literature Review0'3,6,711
Received: 1999-02-25 Research and development in the field of
* Supported by the State High-Tech Developments Plan product cost analysis can be classified into three
of China (863-511-9842-010)
types : ( 1 ) Product cost estimation based on
 30
regression analysis, ( 2 ) Manufacturing process-
cost modeling, and ( 3 ) Application of value
engineering in product design.
1. 1 Product cost estimation based on regression
analysis
The purpose is to realize quick cost estimation
of products by means of establishing corresponding
relationships between product history data such as
product features and the order form. Cawthorne-
Nugent et al. [8] developed a knowledge based
intelligent product cost estimation system for
ordering products. Quick cost estimation is
realized by means of establishing a product cost
model and performing linear or nonlinear
regression analysis. Lawrence et al. [ 9 ] undertook
similar research work. Cost estimation based on
regression analysis is mainly used to quote product
prices. However, this kind of analysis can not
distinguish the cost factors of products, and has no
direct relation with product design, thus it can not
provide designers with feedback of product cost
information.
1. 2 Product cost information modeling
Quite a number of scholars try to realize
product manufacturing cost prediction during
product design by establishing product cost
models. The following are two typical product cost
models.
( 1 ) Cost vs tolerance model [410] The
tolerance of components is one of the important
technical parameters of products, and the value of
tolerance determines directly component's
manufacturing cost. Using this cost model,
designers can specify tolerance value suitably. As a
result, the manufacturing cost of components is
reduced.
( 2 ) Cost vs technological parameter model[5]
This cost model is based on the technology process
information of components. With this model, the
costs of manufacturing a component with different
manufacturing methods can be estimated and
compared at an early stage of product
development.
1. 3 Application of value engineering in product
design
The application of the value engineering
analysis method can effectively reduce the cost of
products by selecting novel design concepts and
optimum technological processes during product
design. In the early 1990's, American researchers
Tsinghua Science and Technology, March 2001, 6(1): 29 - 33
extended the robust design methodology of the
Japanese scholar, Taguchi, and proposed an
engineering analysis method. The application of
the engineering analysis method can eliminate the
effects of technological parameters' derivation on
the quality of products during product development
at lower costs.
Although Chinese scholars realized the
significance of this research at an early stage, and
made elementary progress1-10-12-1 with respect to
quick product price quoting, this research remains
at the stage of adopting the stated method to
establish a product cost estimating model and does
not look into the relationship between the cost and
design from the viewpoint of design. Furthermore,
most of the estimating models are not very
practical.
In a word, the research on product costs up to
now concentrates on predicting and analyzing
product costs. An integrated system which
includes the functions of product CAD,
technological process planning and product
economic nature evaluation has not been
developed. T h u s , the research so far can not
analyze the cost factors of products, and it has no
direct relation with product design. As a result, it
can not provide designers with feedback of product
cost information.
2 Methodology and Architecture of
Design to Cost
The aim of the research on DTC is to provide
tools for the designers to estimate product costs
during product design, and make it possible for the
designers to consider all the cost factors, such as
manufacturing, assembly, testing, maintenance,
etc. , of product life-cycle. By means of evaluating
the products' technological and economic nature,
designers can redesign the product in time
according to the cost analysis. As a result, product
cost can be reduced.
With the maturing of digital product
modelling, group technology, product data
management, CAD/CAPP/CAM, Computer
Aided Assembly Process Planning ( C A A P P ) ,
etc. , it is now possible to consider various cost
factors, such as material, manufacturing,
assembly, maintenance, etc. of product life-cycle
and establish an integrated DTC system under the
support of ä uniform digital product model.
A methodology of DTC shown in Fig. 1 is
proposed in this paper. The main ideas are as
follows: (1) Establish product conceptual function
 JIANG Hua (-4 ψ) et a l : Methodology and Technology for Design to Cost 31

Product design Conceptual design

assembly modelling!
Retrieve DFA and
Product jomponent librad Structure value
database, optimization engineering
method
Component
compare Embodiment
assembly
modelling

Assembly
process DFA
planning method
library
Assembly cost
estimate

Cost analysis
Feature Λ and evaluation
DFM
manufacturing
evaluation
process
library H
Component
manufacturing
cost estimate
Cost
information
model

Fig. 1 Method and architecture of DTC

model according to the p r o d u c t ' s function
requirements during product conceptual design.
( 2 ) O n the basis of t h e product conceptual function
m o d e l , the m e t h o d s of value engineering and
D F M A are used to realize the optimization of
product s t r u c t u r e . ( 3 ) During e m b o d i m e n t d e s i g n ,
digital product models which contain cost
information of d e s i g n , m a n u f a c t u r i n g , a s s e m b l y ,
t e s t i n g , etc. are established. ( 4 ) Manufacturing
features and assembly features are extracted from
product m o d e l s , and t h e manufacturing process of
components and assembly process of products are
planned. ( 5 ) P r o d u c t costs are estimated according
to the cost information of design features and
manufacturing process f e a t u r e s , cost history d a t a ,
manufacturing resource costs and unit w o r k i n g
hourly costs. ( 6 ) Designers either improve their
designs and optimize product s t r u c t u r e or retrieve
product components library and replace the high
cost components w i t h low cost ones according to
the product cost. T h u s , design to cost product
optimization is realized.
3 Key Technology of DTC System
and Its Approach
T o develop a D T C s y s t e m , the following key
problems should be solved.
3* 1 Establishing digital product model
containing cost information
T h e product model which contains cost
information of d e s i g n , m a n u f a c t u r i n g , a s s e m b l y ,
t e s t i n g , etc. is the basis of estimating product
costs during design. T h e r e are t w o hierarchies in
the product model which are part feature model
and assembly feature model. P a r t cost estimation
is based on part feature m o d e l , while product
assembly cost estimation is based on the assembly
feature model.
T o evaluate product costs comprehensively,
the product models should contain all of the cost
feature information. A data model which is s h o w n
in Fig. 2 is proposed in this paper. T h e cost
information is represented in three hierarchies
which are p r o d u c t , p a r t , and feature levels. A t the
product level, the cost information is about the
serial product cost history d a t a , and the costs of
the product can be decomposed into part
manufacturing costs and assembly costs. A t the
part level, the cost information is about p a r t cost
history d a t a , and the costs of the parts are the sum
of t h a t of manufacturing features. A t the feature
 32 Tsinghua Science and Technology, March 2001, 6(1) : 29 - 33

basic geometry Geometric model

Resource cost

I X
Manufacturing feature Feature cost
Fixture resource

Parts Part cost

r~
Fixture prepare Manufacturing

2ΖΓΖΕ
Manufac- Product model
Manufacturing time Machinel
turing
Resource use cost W resource
time EZCl
|Assembly| Product! Test Material cost

-«Assembly method feature cost feature

(Assembly resourc

—f— ' I
Resource use cost ζ" Assembly process ") Test cost

Fig. 2 Product cost information

level, the cost information is about feature cost
history data, and the feature manufacturing cost is
determined by their manufacturing process.
3*2 Product structure optimization method for
DTC
The costs of products are determined by the
structural complexity of components, the number
of components and other structural factors. During
product development, the analysis method of value
engineering can be used to determine the redundant
functions and to get rid of them. And the
components which have no functional significance
can be deleted or merged. T h u s , the structure of
products can be simplified. According to the cost
analysis method of value engineering, the methods
to reduce product cost are as follows. (1) Optimize
the design concept and use a minimum number of
parts to achieve product function. ( 2 ) Optimize
the dimension and technological parameters to
reduce the cost of machining and manufacturing.
(3) Replace high cost parts with lower cost ones to
reduce the material cost. ( 4 ) Apply optimum
design technology to reduce the use of materials.
(5) Standardize parts, generalize subassembly and
serialize products. (6) Applying the analysis and
evaluation method of DFMA to select novel design
concepts, to design proper structures, and to
improve design. ( 7 ) Simplify complicated
component structures, improving the assembly and
manufacturing performance of components to
reduce the machining and assembly costs.
3.3 Product cost estimation method
Product cost can be estimated in two
hierarchies, which are assembly cost estimation,
part manufacturing cost estimation. The assembly
cost is determined by the assembly performance of
components, while the assembly performance of
components relies on component assembly
features. In addition, the assembly sequence of
products and the assembly resources of enterprises
also have direct effects on product assembly cost.
Therefore, the estimation of product assembly cost
should be based on the assembly feature models,
assembly sequence planning, and assembly
resources. Part cost is determined by part material
cost and manufacturing cost. The manufacturing
cost of parts depends on their manufacturing
process, and part manufacturing process
information consists of part manufacturing
technological process information and
manufacturing resource information. Therefore,
the technological process planning and
manufacturing resource planning for parts are the
foundation to realize the estimation of part
manufacturing cost. In the same way, feature
manufacturing cost is determined by the
manufacturing process. For the often used
manufacturing features, their cost database can be
developed according to their manufacturing process
information. The part manufacturing cost can be
estimated on the basis of this database.
For standard components and those which
were once manufactured by the enterprise, their
cost information can be obtained by retrieving the
 JIANG Hua (4r ψ) et al: Methodology and Technology for Design to Cost
component library of products. For components enabling Chinese enterprises to get out of their
which are similar to those in the product database, present plight.
their manufacturing cost can be estimated by
comparing with the similar parts. References
3-4 Approach to classifying the components and [I]
method for comparing their degree of
analogy
[2]
Some components are frequently used in
product design. If there exist similar components
in the product history database, the costs of [3]
components being designed can be accurately and
quickly estimated with that of the similar ones.
Thus, it is necessary to code the components of [4]
products using group technology. Applying the
group technology, it is possible to retrieve similar
components from the product database, realize cost [5]
analogy with similar parts and select lower-cost
parts by means of feature-based parts' likelihood
comparison. [6]
4 Conclusions
[7]
So far, there are no commercial DTC tools on
the market. Since this kind of software system is
unavailable, it is difficult for the designers to
consider all of the cost factors of the product [8]
during design. Some advanced design
methodologies such as DFMA, value engineering,
etc. are difficult for designers to use. As a result,
products are usually with high cost, and lack
[9]
enough competition power.
The research on DTC applies the technologies [10]
of feature-based product modeling, manufacturing
technological process planning, theory and
methodology of DFMA, value engineering,
product data management, etc. It aims at [II]
establishing the method of DTC and developing a
prototype that integrates the design platform with
the practical need of the Chinese manufacturing [12]
industry. The application of this research is
significant for improving the Chinese
manufacturing product design, increasing the
competitive power of Chinese products and for
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