DFMA: SHOULD COSTING
DFMA: PRODUCT SIMPLIFICATION
Expand below to see where the presets come from, how DFMA shifts work earlier in development, and ROI/NPV definitions.
Average DFMA cost reductions (170+ case studies)
- The bars reflect published averages from DFMA case studies. The presets in this calculator are intentionally lower and easier to hit.
- "Total cost" on the slide is 50%. This calculator breaks savings into simplification, should-cost price moves, and scrap reductions for auditability.
How DFMA shifts the development process
- DFMA moves work out of late-stage design changes and into concept and first-pass design.
- That shift is what drives the engineering hours saved and avoided tooling changes in the calculator.
- The engineering defaults here are conservative versus the averages shown above.
How we calculate ROI and NPV (definitions)
- Run-rate savings = the annual value DFMA analysis identifies across all included levers at full implementation.
- Identified vs. Realized: DFMA analysis identifies savings opportunities quickly (weeks). Realized savings follow implementation: design changes must reach production, supplier contracts must be renegotiated, teams must adopt new practices.
- Realization curves: Product Simplification 15% → 65% → 100% (Y1-3); Should-Costing 50% → 100% (Y1-2); Engineering Productivity 85% → 100% (Y1-2).
- Year 1 ROI = (Realized Year 1 savings − Year 1 cost) / Year 1 cost.
- Steady-state ROI (Year 3+) = (Run-rate savings − recurring cost) / recurring cost.
- Payback = months until cumulative realized savings exceed cumulative costs.
DFMA Product Simplification
Redesign products for fewer parts, simpler assembly, and lower manufacturing costs. This lever captures unit cost reductions from DFMA-driven design changes.
What's included in each tier?
Growth: Best for 3–5 projects/year, ~40–120 purchased parts.
Scale: Full-scale deployment for 5+ projects/year, 120+ purchased parts and/or multi-site rollout.
📊 Cost Reduction Breakdown
Defaults are conservative yet realistic based on published DFMA case studies. Adjust to match your product and goals.
Based on Boothroyd Dewhurst research: 72% of product cost is parts/materials. Case studies show 15-40% total cost reduction; defaults use the lower end for credible projections.
🔧 Implementation Effort (NRE)
One-time engineering, change, and IT effort needed to implement DFMA redesigns.
Total NRE (one-time): $0
DFMA Should-Costing
Use DFMA as a should-cost baseline to negotiate better prices on purchased parts. Captures procurement savings after accounting for analysis effort.
What's included in each tier?
Growth: Best for several suppliers or product families, just over 100 parts/year in scope.
Scale: Full-scale multi-commodity or multi-site backbone for negotiations, roughly 200+ parts/year in scope.
Should-cost analysis workload: 0.0 hours/year.
Net should-cost savings are calculated as: (Gross price improvement) − (analysis effort cost).
Engineering Productivity
DFMA shifts work earlier in development, reducing late-stage changes. Captures engineering hours saved and avoided tooling changes.
Financial Assumptions
Adjust discount rate for NPV calculation and annual savings escalation (inflation).
Tip: For full definitions (Year 1 cost vs steady-state, ROI formula, NPV), see the Proof & Methodology section above.
