Interview
with Nick Dewhurst
Post-Forum Interview
with Nick Dewhurst,
Executive Vice
President of
Boothroyd Dewhurst,
Inc. on the state of
DFMA and
Manufacturing
Miles Parker:
What are you seeing
in manufacturing
today, regarding
early stage,
analytical product
costing? What are
the trends?
Nick Dewhurst:
What seems to be
happening most
prevalently is the
companies that we
work with are doing
three different
things with early
stage costing. First
off, it is becoming
an integral part of
new product
development
projects, where
teams that are
tasked with doing
that type of
analysis are
providing cost
feedback to design
teams early in the
development stages.
On a second front,
companies are
starting to use the
cost information
that they're
developing using our
DFM Concurrent
Costing tools to
help them in the
later stages of the
development of new
products, to make
the correct process
choices. So they're
using it to trade
off manufacturing
process and material
combinations with
one another. And
finally, we're
seeing a little bit
more use in the area
of competitive
intelligence where
new product
development teams
are beginning to
find some value in
taking time early in
their own product
development
processes to explore
what it is their
competitors have
done in that market
space. And, in some
cases they're using
DFM to do
competitive
benchmarking of what
those competitive
products are likely
to cost. This gives
them some idea as to
whether or not they
are going to be able
to sell their
products at the
required margins.
M: Are you
seeing more or less
DFM and DFA being
applied than in the
past? Across two
decades there has
always been some
sense of urgency in
implementing DFMA.
How would you
measure that sense
of urgency or lack
thereof today?
N: So if I were
to sum it up simply,
I would say there is
less Design for
Assembly (DFA) and
more Design for
Manufacture (DFM.)
This is nothing new,
I don't think.
Certainly in the
last 10 years
there's been a push
to hurry up and get
it done. Product
development teams
are not given the
time they need to
explore creative
design alternatives
because of the
time-to-market
pressures and
resource pressures,
or whatever it
happens to be that
they're under. And
so, DFA,
unfortunately, is
being seen as an
activity that they
don't have enough
time to do. But they
are interested in
using DFM later on,
once the design is
finished and parts
have been sourced,
to negotiate prices
with suppliers using
the costs that are
coming out of our
DFM tools. However,
the truly
significant money is
being left on the
table when DFA is
not used, and people
often don't realize
that. They're taking
hurried and rushed
designs and worrying
about buying a
dollar piece of
sheet metal for 85
cents instead of
whether or not that
part needs to be in
the product in the
first place.
M: Is that
because they feel
comfortable that
they've met their
margins and now have
a product that's
functional for the
market-and just want
to tune up their
costs later on?
N: I think it's
because people are
naturally
risk-averse. So
changing the design
of a product that is
working seems
dangerous and isn't
something they're
willing to do. But
instead, you can go
to the supplier and
say, "You're
charging me a dollar
for this component,
and I think it
should cost 85
cents." Companies
get a 15% savings at
a piece-part level,
but at the end of
the day that doesn't
have a positive
impact on throughput
and quality at the
factory that's
producing the
product. I do
believe it's the
short-sided view.
It's essentially
saying: "Let's take
our pennies now,
instead of worrying
about the dollars we
could yield later
on."
M: Is
procurement
embracing
science-based
costing? And if not,
what are their
hesitations and
limitations?
N: We get lots
of contacts from
procurement groups
within organizations
now. Quantitative
costing is certainly
something that they
want to do. They
typically don't have
the technical
training to use
current
science-based
costing tools.
Again, if you're
talking about
companies taking the
short-sided view, I
think that not
hiring engineering
people in their
purchasing
departments is
another place where
tremendous amounts
of money are being
left on the table by
U.S. corporations.
Procurement is still
seen within
companies as a paper
pushing exercise:
"Here's a packet of
drawings, send them
out to 3 suppliers,
when the quotes come
back pick the lowest
one." Instead, those
individuals could be
doing cost analysis
to understand what
it should cost to
manufacture those
parts and using that
as the basis for
supplier selection
and negotiation.
I could probably
count it on one hand
the companies that
have brought
engineers onto the
full-time staffs of
purchasing groups.
But the ones that do
are accomplishing
tremendous things
because they
understand how to
work with the
suppliers, and how
to talk to them, and
how to develop the
cost estimates, and
use that information
to leverage the
supply base in
positive ways.
M: At the 2016
DFMA forum, a number
of speakers
recommended using a
larger costing
procedure that still
entails DFM should
costing-managed by
engineering teams
with procurement
involvement-yet with
more iterative
DFA/DFM done first
by the engineers.
Should designers be
taking a larger role
and responsibility
in costing and why?
N: Yes. Because
the decisions they
make when they're
developing new
concept designs for
products impact
everything else in
that organization
for the x number of
years in the future
that they're going
to make it. This is
a big point of
frustration with me
and a lot of the
groups that I work
with. The
engineering team is
being pressured to
hurry up and finish
their designs. So
they don't get a
chance to do things
like DFA analysis to
explore design
alternatives, and
yet the company's
now hamstrung for
the next 10 years,
producing a design
that is terribly
inefficient because
we wouldn't take an
extra 3 days in the
design process to
look at some of the
alternative concepts
and what those might
do to impact
manufacturability,
cost, quality and
everything else that
goes on. So if it
were up to me, and I
were the CEO of a
large company that
manufactured
electro-mechanical
products, I would
rely heavily on my
design engineering
team to produce the
most efficient
designs that they
could early-on. I
think a
forward-looking
company realizes
that the design
decisions
individuals are
making in the
trenches are going
to ultimately impact
their profitability
well into the
future.
M: Some of the
presenters at the
Forum were clearly
practicing textbook
DFMA. I'm thinking
of Woodward, for
instance, where they
first engaged DFM
and went on to
deploy DFA for full
efficiency. Is it
still just a
minority of user
companies that roll
out integrated DFMA?
N: Yes.
Unfortunately, I
think that's true.
But look at the
savings Woodward was
experiencing.
Millions and
millions of dollars
of avoided costs for
a software
investment that is a
fraction of the
savings. Their ROI
calculations just
looked ridiculous.
The speaker didn't
think anyone would
believe they were
correct.
M: Tell us about
your integration of
DFMA data fields
with TCO. When did
this happen and what
outcomes do you
expect for industry?
How will DFMA and
TCO aid in sourcing
decisions?
N: It happened
about 7 or 8 years
ago. That is when we
casually linked DFA
with TCO fields.
What companies have
finally come around
to realizing about
DFA and TCO is
really the argument
that Dave Meeker and
I wrote about 13
years ago: it's not
just the labor you
have to measure. The
mantra for 10 years
was, "It's 60
dollars an hour here
in the US to
assemble things, and
it's 50 cents an
hour in China to
assemble things."
What people are
finally
understanding
through trial and
error is that it's
not just about the
labor rate. There's
a lot of intangible,
unquantifiable costs
that should be added
to the bottom-line
cost of that product
that's being made in
China in order to
perform a true
apples-to-apples
comparison with
that's being made in
the U.S. and
elsewhere.
Walmart is currently
willing to invest
250 billion dollars
to revive American
manufacturing. I
wonder whether
they're playing the
long game and
realizing that
low-cost Chinese
labor isn't going to
continue to bear
fruit like it has.
And you see that
already! We work
with companies all
the time that are
moving production
from China to
Vietnam or Thailand,
because labor rates
in China have become
more expensive and
the savings that
they had been
getting simply
aren't materializing
anymore. TCO is a
direct view into
that accounting
dynamic. You get to
realize all of the
things that were
missing in a
standard analysis
that didn't apply
overhead and hidden
costs to the piece
part under bid on
the other side of
the world.
M: What outcomes
do you expect for
industry when they
start using TCO?
N: All of a
sudden U.S.
manufacturing is
going to look a lot
more interesting. If
a lot of the talk
that you hear from
both political
parties about
bringing back jobs
starts to be
something that gets
some engineering and
accounting "teeth,"
then the companies
that are ahead of
the curve on DFMA
and TCO are going to
be more successful
in their large
domestic markets and
reap rewards
earlier.
M: Is the
engineering argument
for domestic
manufacturing is too
technical for the
nation to
concentrate on.
People will be
looking instead for
changes in our trade
agreements, which is
critical too. But if
we're stuck with
what we've done in
those agreements,
then we really need
to turn to design.
N: It all comes
back to that design
and accounting team
in the end, doesn't
it? Those folks
spinning the data
models in the
trenches are making
decisions that
ultimately dictate
the profitability of
their business,
regardless of trade
inequities.
M: Can DFMA TCO
equalize the playing
field for advanced
industrialized
nations competing
against low foreign
labor rates.
N: Yes, because
of what we just
talked about in
design and total
cost. Allowing a
company to come up
with those
additional total
costs, which are
associated with
low-cost overseas
labor, will start to
make American
manufacturing look
competitive. 13
years ago we were
arguing that you had
to add 24% to do an
apples-to-apples
comparison between
China and the U.S.
And I think with 13
more years' worth of
data, companies now
realize that the
number has grown
because labor and
related costs have
gone up.
M: Coupling with
what you're talking
about with more
efficient designs,
we're seeing a
national investment
in automation that
will also reduce
labor. How does this
contribute in your
opinion?
N: There is a
problem waiting to
happen in that
world, as well.
Because if the
designers have not
taken the time to
design those
products for ease of
assembly by hand,
you're going to have
a heck of a time to
get automatic
equipment or a robot
to put your products
together.
M: Are customer
requirements being
considered
accurately by
manufacturers? Do
customers lose in
the cost reduction
exercises?
N: Companies
that are taking an
un-disciplined
approach to cost
reduction are
generally
de-featuring and
cheapening products
in order to offer
them at lower costs.
What going through a
DFMA exercise allows
you to do,
especially with the
addition of our new
functional groupings
in the software, is
identify what things
are important to the
customer (the
functions that they
value and the ones
they don't), and
then you can assign
parts within your
DFA analysis to each
of those function
groups. It's a
really powerful
thing to be able to
look at because you
can change the
design to reduce the
amount of money
spent on features
they don't care
about, and increase
the amount of
resources for in
areas that are
valued.
M: Achieving
time to market,
product performance,
and cost goals were
discussed at the
Forum as not being
exclusive of each
other. Can
organizations have
all three objectives
realistically met?
N: Yes you can,
with appropriate
resource allocation
to upfront design.
An investment in
upfront design time
is going to be the
thing that helps you
achieve all three of
those factors. It's
long been
established that 70%
of the cost of the
product is locked in
in the design phase.
You better make sure
that you're asking
the right questions
and making the right
decisions during
that development
phase in order to
lock in the lowest
possible 70% of the
cost. And fewer
parts leads to
enhanced quality and
there's less
material to drag
through your product
development process.
So time-to-market is
speeded by
part-count reduction
in upfront design.
It all comes back to
that investment in
upfront design time
and getting people
to think critically
about the designs of
their products with
an eye to part-count
reduction. Simply
doing that would get
a lot of
organizations well
on their way to
achieving what seems
impossible to them
today, which is to
bring products to
market more quickly,
at lower cost, and
with higher quality.
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