PD-Trak Project Portfolio Management Software

Target Costing Workshop

1. Introduction

Effect of Product Development on Cost
Traditional Approach to Product Cost
Target Cost Approach & Comparison
Design to Cost as a Basis to Achieve Target Costing

2. Product Economics

Product Costs
Recurring and Non-Recurring Costs
Exercise - Developing a Business Case for A New Product
Life Cycle Costs
Developing & Using Manufacturing Cost Data
- Labor Rates & Labor Performance
- Material Costs - Material Databases
- ERP Data, Parts Costs and BOM Cost Roll-up
- Overhead Costs - Budgeting, Allocation & Estimate of Activity/Volume
Escalation and Inflation
Experience Curve
Exercise 2 - New Product Business Case

3. Strategy and Target Pricing

Business & Product Strategy
Pricing Strategies & Models
- Cost-Based Model
- Competition-Based Model
- Value-Based Model
- Experience Curve Model
Offensive and Defensive Pricing Strategies
Demand Elasticity and Considerations in Pricing
Pricing Exercise
Maximizing Value
- Value Innovation Concept
- Value Innovation Case Study
Determining Which Features Customers Value
- Conjoint Analysis
- Conjoint Analysis Example
- Conjoint Analysis Exercise
Setting the Target Price

4. Establishing a Target Cost

Developing a Target Cost From a Target Price
Understanding Cost Drivers
Balancing Customer Needs/Requirements With Target Cost
- Quality Function Deployment (QFD) Overview
- Using Quality Function Deployment to Manage Requirements and Costs
Allocating Target Costs to Subsystems/Subassemblies
Using the Target Cost Worksheet

5. Estimating and Tracking Costs

Using Product Cost Models to Manage Product Costs
- Basic Product Cost Models - BOM Cost Roll-ups and Spreadsheets
- Creating and Refining a Predictive Cost Model
- Computer-Aided Process Planning & Standards Development Systems
- Integrating Cost Models with CAD
- Validating Cost Projections
- Cost Tracking and Performance Monitoring
Life Cycle Cost Costs & Cost Models
Using PD-Trak™ Target Costing Tools

6. Methods and Tools To Achieve Cost Targets

Design for Manufacturability (DFM)
- DFM Principles & Guidelines
- Avoiding Non-Recurring Costs with Standardization
- Impact of Manufacturing Strategy & Process Technology & Organization
- Capacity Planning and Production Investment
- Production Rate & Cost Trade-off's: Materials, Manufacturing & Tooling
- DFM/A Analysis Tools
Make-Buy Analysis
Minimizing Cost Through Maximizing Process Capability
- Centering the Mean and Establishing Realistic Tolerances
- A Minimum Cost Strategy - Cost of Inspection & Test
Value Engineering and Cost Reduction
- Function Analysis
- Function Cost Matrix & Value Analysis Matrix
- Function Analysis System Technique (FAST)
- FAST Exercise

7. Attacking Indirect Costs

Non-Value-Added Activities
Problems with Traditional Overhead Costing & the Impact on Design Decisions
Activity Based Costing (ABC) - A Sounder Basis for Decision-Making
Applying ABC to Improve Product Development
Re-engineering the Development and Production Processes

8. Implementation and Summary

Target Cost & QFD Case Study
Evaluating the Target Cost and Product Development Process Against 260 Best Practices
Developing an Action Plan to Close the Gap
Deploying a Target Cost Program to Your Business/Project
Overcoming Impediments and Applying Lessons Learned

For further information, please contact us at: info@pd-trak.com or at 925-484-8436.

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