Joel said:
Sure John, but there are plenty of us here who are lucky to see 1000 units
of what we design go into production, much less a million. I think a better
approach is to spend the extra pennies on the first 1000 units to get the
'time to market' advantage as well as having effectively bought 'insurance'
that the design will work, and then -- if time permits -- go back and start
cost minimizing.
I also find there are usually much bigger fish to fry than saving the price
of an extra resistor or capacitor here of there... things like someone using
a very high end DSP to perform a function that a dedicated FPGA and a
microcontroller could do for 1/4 the price, using a much faster processor
than needed because they don't have a good algorithm for what they want to
do (which can also quickly lead to, e.g., bigger batteries!), etc.
I've worked places where we'd spend something like $10,000 on chrome-plated
stainless steel 'skins' for the machines we were building; it was really
hard to get that excited about saving $10 on some $300 PCBs that went into
it...
(On the other hand, that machine also had a $40,000 air-bearing
stage, and we DID sit around spending time trying to cost reduce _it_!)
I can recount dozens of similar stories. My favourite is this one:
A little drive (<= 2.2kW) we made was designed to be very cheap. After
the basic design was up and running, a buddy of mine was tasked with the
cost-redecution exercise. He spent many weeks at the task, ripping out
parts wholesale - why use 1% when 10% will do, etc. One particular
cost-reduction involved replacing some important 100nF film caps with
Z5U, and all 10 prototypes *exploded* within an hour, but thats a whole
'nother story. The outcome was a reduction of around $4 to $35 worth of
electronics - a sizeable chunk, and well worth implementing, which we
duly did.
Not long after, the marketing powers-that-be decided the original brown
cardboard box with black writing wasnt good enough, and that a fancy,
shiny cardboard box with 6 colours was required instead. They also
decided head office would sell the product thru a wholesale outlet it
owned, rather than us doing it. This box was $7 *more* than the original
box, and they had a minimum run size of 30,000 boxes. So they bought
them, marked with the wholesalers details. Several years later, after
only selling a couple of thousand drives thru head office, we took the
product off them, and sold it ourselves. We of course had to place big
stickers over the (now incorrect) company details on the pretty boxes,
at a cost of about $1 per box. After a few more years we obsoleted the
design, at which point we *still* had about 20,000 of these useless
bloody cardboard boxes.
When we designed the replacement product, we didnt even bother trying to
do a similar cost-reduction by shaving off $0.01 parts. Instead we
concentrated on time-to-assemble, and reduced it from an hour to 3
minutes. This allowed us to spend $35 on a user interface and $20 on a
micro, yet have a build cost slightly lower than the product we
replaced. The cardboard box was cheap and plain brown with black writing....
although we did discover a problem with the box. In the first 3 months
of the new products life, we got a dozen or more (from several thousand)
back with smashed plastic - shipping damage. Our mechanical engineer had
to drop the box onto a corner from > 2m to make them break (spec was
surviving 1m drop test onto concrete). It turned out that for the
smaller drives the package was about the right size to grab in one hand
and throw into a delivery van.....rather than implement my suggestion
(1kg of concrete in each box) Mike beefed up the cardboard so it would
pass a 3m drop test.
Cheers
Terry
