ProDFM Lecture

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Title
A Worksheet Tool for DFM and Cost Analysis in the
NPD Process
www.cloversoft.net
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DFM Introduction

• Design for Manufacturability (DFM) may be
  described as a method for evaluating product
  designs so as to identify likely manufacturing
  cost drivers, and then leading to solutions for
  the mitigation of these cost drivers.
• DFM emphasizes cross functional integration and
  early evaluation of downstream manufacturing
  issues. DFM analysis must therefore be
  integrated into the New Product Development (NPD)
  process. Further the DFM metrics must be linked
  to one or more NPD stage-gates.
• The use of DFM techniques early in the design
  cycle results in shorter design delays, easy
  production transitions, and higher product
  quality.

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Integrating DFM in the NPD Process

• An effective NPD/DFM analysis requires that the
  following three sequential events occur in an
  efficient manner
• 1. Capture and deploy all new design and
  production related data to the NPD team
• 2. Evaluate, quantify and document the
  manufacturability of the proposed design
• 3. Integrate the manufacturability evaluation
  into cost estimating.
• Pro-DFM is a worksheet based tool that
  facilitates the accomplishment of these three
  events.
• Pro-DFM provides accurate production cost
  estimates with little analytical effort. It is
  based on a parametric cost model which focuses on
  the primary drivers of cost.

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Key Metrics Generated

• The goal of Pro-DFM is to provide the NPD team
  with an accurate estimate of the unit production
  cost, and then facilitate the reduction of this
  cost. Using Pro-DFM you will generate the
  following key metrics. These will be used by the
  NPD team to evaluate and monitor DFM initiatives.
• Estimated Unit Production (EUP) Cost - The EUP
  Cost is what Pro-DFM estimates it will cost to
  make the new product. It starts with the Direct
  Part Cost (as provided by vendor quotes or plant
  estimating) and then progressively scales this
  cost for inventory and considers all DFM Eval
  factors plus any supply chain costs.
• (ii) Inventory Penalty Cost - Projects the
  likely additional costs for maintaining the
  needed parts inventory. An Inventory Eval Factor
  ( 0 to 1 range) is first derived on the basis of
  weeks of supply and number of part variants. In
  the extreme case where the factor is 1, the part
  cost is doubled.

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Key Metrics Generated
(iii) DFM Part Evaluation Penalty - Projects the
likely additional costs in the processing of this
part. A DFM Part Eval Factor (0-1 range) is
derived on the basis of NPD team responses to a
set of scaled response queries. These queries are
divided into three criteria Procurement, Part
Handling, and Part Geometry. (iv) DFM Assembly
Evaluation Penalty - Projects the likely
additional costs in the execution of this
assembly step. A DFM Process Eval Factor (0-1
range) is first. The evaluation queries are
divided into seven criteria Process Difficulty,
Equipment Needs, Tooling Needs, Process Setup,
Handling, Inventory and Quality Control. (v) DFM
Part Reduction Opportunity Projects the likely
percent reduction in direct part costs by
eliminating parts. Is based on the likelihood
that individual parts can be eliminated. Where
the opportunity is close to zero then the NPD
team need not focus on part reduction.
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Pro-DFM A Simple Analysis

• A key problem with traditional DFM analysis is
  that it tends to be cumbersome and requires an
  extensive effort from an experienced user group.
• This makes the cost and effort difficult to
  justify, for most NPD projects. As a result in
  many cases DFM analysis is only being done by
  large company design groups.
• Pro-DFM solves this problem by proposing a simple
  and time-tested approach to DFM analysis. This
  simplicity is achieved by using the following two
  strategies
• - A Multi Factor Scaled Response Model
• - A MS-Excel Based Worksheet

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A Multi Factor Scaled Response Model

• Pro-DFM analyses three different factors (i)
  parts, (ii) assembly processes, and (iii)
  inventory. Each of these is independently
  analyzed using multiple criteria, with each
  criterion being further divided into
  sub-criteria.
• The evaluation metrics are presented in the form
  of simple queries, with an anchored response
  scale. The NPD team selects the relevant
  response.
• This approach bypasses the traditional DFM use of
  a rigid knowledge base, and automatically adapts
  Pro-DFM for each company.

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DFM Part Evaluation
DFM Part Eval Factor (DPi) Projects the likely
additional costs in the processing of this part.
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DFM Part Evaluation

• Each sub-criterion is evaluated on a 0 (none) to
  10 (max penalty) score using an anchored scale.
• Use your judgment to select the score that best
  represents the specific situation. If there is
  insufficient data to evaluate then select 0.
• Empirical evidence suggests that DFM issues could
  effect part cost by as much 50
• DPi indicates the cost penalty assigned to the
  part. If a part is expected to cost 1.50 and DPi
  0.50, then Pro-DFM projects that a more accurate
  cost estimate is 1.50 (10.50) 2.25.

Criterion Part Handling Sub-Criterion Part Feed
Automation Response Scale Part feeding into
assembly machines will be (0-2) Automatic on
existing equipment (2-5) Automatic needs new
equipment (4-8) Manual assisted feeding (5-10)
100 Manual feeding
DPi 0.5 Sk Wk Xik/90 Where i1,..,N
Parts in the assembly k1,..,9 Part eval
sub-criteria. Wk Sub-criteria weight (0 to
1) Xik Part DFM evaluation scores
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DFM Assembly Process Evaluation
DFM Assembly Process Eval Factor (DAj)
Projects the likely additional costs in the
execution of this assembly step
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DFM Assembly Process Evaluation

• Each sub-criterion is evaluated similar to the
  part evaluation.
• Empirical evidence suggests that DFM issues could
  effect the assembly process cost by as much 70
• DAj indicates the cost penalty assigned to the
  assembly process step. If the direct assembly
  process cost is expected to cost 0.80 and DAj
  0.40, then Pro-DFM projects that a more accurate
  cost estimate is 0.80 (10.40) 1.12.

Criterion Setup Sub-Criterion
Commonality Response Scale Setup process that
is common to similar products(0) 100
commonality(1-3) 80 to 100 commonality(4-7) 50
to 80 commonality(8-10) lt 50 commonality
DAj 0.7 Sp Vp Yjp/190 Where j1,..,M
Steps in the assembly p1,..,19 Assembly eval
sub-criteria. Vp Sub-criteria weight (0 to
1) Yjp Assembly DFM eval scores
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Inventory Evaluation
Inventory Eval Factor (DVi) Projects the
likely additional costs for maintaining the
needed parts inventory
DVi 0.4(Bi-1)/10 0.6Si/52 Where i1,.
.,N Parts in the assembly Bi Number of part
variants (color, etc.) Si Projected weeks of
supply per order

• The inventory requirements for a part are often a
  function of several design parameters.
• When a part has many variants on the basis of
  color, size, labels, etc., this can have a
  significant impact on inventory levels.
• The part type (material, production process,
  etc.) will influence the order batch size and
  hence the weeks of supply to be inventoried.

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Estimated Unit Production (EUP) Cost
The EUP cost derivation considers all DFM Eval
factors plus other factors as shown below. EUP
COST Direct Part Cost (i) (DPi DVi
Indirect Rate) Inbound Supply Chain Direct
Assembly Cost (j) (DAj Indirect Rate)
Outbound Supply Chain
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DFM Part Reduction Opportunity

• The assessment is based on the likelihood a part
  can be eliminated and why. For each part you will
  select from the list of reasons the most
  applicable reason.
• The likelihood evaluations are used to derive the
  Part Reduction Opportunity as follows
• PElimination(i) x Direct Part Cost(i) / Total
  Direct Part Cost

Prob of Reason Elimination (0.0) No -
Provides Primary FR" (0.0) No - Motion
Requirements" (0.2) No - Material
Restrictions" (0.3) No - Assembly
Restrictions" (0.4) Yes - Possible to Transfer
FR" (0.5) Yes - Possible to Reduce
Count" (0.7) Yes - Easy to Transfer
FR" (0.8) Yes - FR maybe Eliminated" (1.0) Yes
- Redundant FR" (0.0) No - Unable to Evaluate"
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A MS-Excel Based Worksheet

• Pro-DFM is based on the popular MS-Excel
  program and therefore requires minimal training.
  MS-Excel provides a familiar interface and file
  portability.
• The Pro-DFM software is organized into a series
  of 14 worksheets. All sheets are linked together
  by our backend macro program.
• Data is entered through pop-up windows, and the
  worksheets are automatically updated.

Pro-DFM Worksheets FRONT 1. NPD/DFM Analysis
Cover Page 2. DFM Action Item Log REPORTS 3. NPD
/DFM Exec Summary Report 4. EUP Cost
Report 5. Analysis of Prod Cost by Plant 6. DFM
Evaluation Summary Report DATA 7. Part/Material
Data 8. DFM Part Evaluation Data 9. Assembly
Process Data 10. DFM Process Evaluation
Data 11. Assembly Process CostCalc 12. Supply
Chain Costs 13. Alternate Plant HELP 14. Defini
tions Help
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Data Requirements

• Listed here are the data required for creating a
  Pro-DFM file and running the analysis.
• You need not wait to have all the data to start
  the analysis.
• Most of the analytical components use numerical
  data. Where the data is not available enter the
  default (usually zero) value.
• Pro-DFM also promotes data transparency in the
  NPD team. Some data is recorded for this purpose
  and not used in the DFM or costing analysis (e.g.
  Quality Requirements). This data, though, is
  found to promote a more reliable DFM evaluation.
• The development time data is used to support
  project planning and estimate what design changes
  can be made without effecting the end date.

• PART DATA
• Product BOM including material specs
• Design drawings or schematics
• Part function and key features
• Test method specs
• Quality control specs
• Inventory supply chain data
• Development time

• ASSEMBLY PROCESS DATA
• Assembly process plan
• Tooling requirements
• Equipment requirements
• Labor and Equipment unit utilization times
• Setup times
• Quality rejection rates
• Production volumes and unit batch sizes
• Development time

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Adding Parts
Step 1 Add parts to your Pro-DFM file. A part
will typically be a BOM item retrieved from the
product specifications.
Step 2 Complete the DFM evaluation of all
added parts. You can view the anchor scales for
each sub-criterion as you enter the evaluation.
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Adding Assembly Process Steps
Step 4 Complete the DFM evaluation of all
added assembly steps.
Step 3 Add assembly process steps to your
Pro-DFM file. The steps can be retrieved from a
process plan document.
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CostCalc Utility for Assembly Process Costs
For each assembly step you can either directly
enter the hourly costs or derive it using the
inbuilt Pro-DFM CostCalc utility. LABOR
DETAILS Can add up to 4 operators. For each
operator specify the (i) Hourly Rate (ii)
Productivity - relative to benchmark production
rate and (iii) Busy Time - what of time is
dedicated to this step, if he operates 2 machines
then 50, if he works for 10 minutes in a 100
minute run then 10. EQUIPMENT DETAILS Can add
up to 3 equipment. For each equipment specify the
(i) Hourly Run Rate - cost to operate the machine
minus labor (ii) Utilization - of run time that
the machine is busy on this step, if a blender is
needed for 5 minutes in a 50 minute step then 10
and (iii) Setup Time - time to setup a batch run.
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Example Pencil Sharpener
The design of an electric pencil sharpener (shown
below) will be used to demonstrate the use of the
Pro-DFM software. There are 20 parts and 4
assembly process steps. The design is based on a
common model that is readily available in any
office supply store (e.g. Staples). This product
has an average retail price of price of 11.50.
The target EUP price should therefore be 5.75.
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EUP Cost Report
Provides summarized costing details for each part
and each assembly process step. Lets you see the
cost roll-up and cost significant parts and
assembly process steps. Provides a starting point
for direct cost reduction initiatives. The DFM
and Inventory penalties are listed. DFM
activities initiatives should initially focus on
the highest penalties.
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EUP Cost Report
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EUP Cost Report
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DFM Evaluation Summary Report
Provides aggregated details of the DFM
Evaluation. First part aggregates the part and
process evaluation responses. Displays the
average and maximum scores, plus alert frequency.
An alert is issued when the score to any response
is above your specific alert limit. Second part
is divided into DFP Part Analytics and DFM
Process Analytics. Presents data graphically and
identifies the part and process with highest DFM
scores, plus the most penalized DFM criterion.
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DFM Evaluation Summary Report
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NPD/DFM Executive Summary Report
Summarizes the results of the DFM and cost
analysis, and should be reviewed first by the NPD
team. Divided into the following sections (i)
Unit Production Cost Summary, (ii) Development
Time Summary, (iii) DFM Evaluation Summary, (iv)
Production Cost Analytics, and (v) Design
Development Time Line.
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NPD/DFM Executive Summary Report
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NPD/DFM Executive Summary Report
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Getting Started

• Following this brief introduction you are now
  ready to start a Pro-DFM project. You will be
  provided with the following files
• 1 ProDFM-2 - This file is of the type MS-Excel
  Add-in (.xla extension), and requires MS-Excel
  XP or later to run.
• 2. Pencil Sharpener A MS-Excel file
• 3. ProDFM User Manual A .pdf file
• Please read the User Manual to learn how each
  function is performed. Print out Sheet.14 Help so
  that you can quickly reference all the
  definitions.
• We recommend that you browse through the Pro-DFM
  example provided to you (Pencil Sharpener file)
  to familiarize yourself with the different
  worksheets and the associated data requirements.
• Create an appropriately named folder on your
  computer and transfer the ProDFM-2 file to this
  folder.