Engineering Materials for Cost Reduction
One approach to cost reduction is to re-engineer products to use less expensive materials or reduced quantities of higher priced materials. This approach can have a significant impact on a product’s costs, since the materials used in a product account for a large part of its total cost.
With appropriate risk assessment and design verification, it is possible to make the desired product changes and preserve the required performance and reliability. In fact, sometimes a product’s performance and reliability is also improved, providing an additional competitive advantage.
The materials engineering approach discussed here is applicable to all types of products, all types of materials (metals, plastics, ceramics, composites, coatings, and adhesives) both common and uncommon materials, and components and materials used to make joints between components. The trick is to identify the products, components, and materials that offer the greatest opportunity for cost reduction in the shortest period of time.
The balance of this paper provides ideas and examples for re-engineering the materials used in products.
Opportunities for cost reduction
The following situations offer opportunities for cost reduction through materials re-engineering:
- Products that are over designed.
- Different product lines with similar components made of different materials.
- When manufacturing yields are low or the costs of manufacturing are high.
- Products made using materials selected a long time ago and no one remembers the rationale for their selection. Or the materials have never been revisited to see if they can be better optimized.
Each of these situations is discussed below.
In some instances, products may be over-engineered using materials that provide way more performance and reliability than necessary. Such over-engineering can add significantly to the bill of materials cost and to direct labor cost.
Consider the case where steel alloy 4142 was specified, but a 1045 steel would have sufficed. The 4142 steel was selected when the material was not too expensive, and the design team could afford to use a material that provided way more reliability than needed for the product. How about the situation where gold plating is used, but tin plating would be sufficient for the desired performance and reliability. Or the component made of polycarbonate, but could have been made of hi impact polystyrene.
In some designs, the material used in a component is the correct choice but the physical dimensions of the component are overkill, resulting in the use of more of the material than is necessary to meet the performance and reliability targets.
Product over-design is a fairly typical situation in older products that were designed when there was less customer price pressure and manufacturers could afford to have more cost in their products. It also occurs in new products when design engineers use the same materials repeatedly, without considering other options of materials that might be suitable.
In all of these cases re-engineering can be a fairly straight-forward process that starts with a review of the product performance and reliability requirements and identifying the options of materials that can be used.
Consolidation of Materials
Another opportunity for realizing significant cost reduction is the economy of scale realized through the consolidation of materials used across product lines. Do your different products use common components made from different materials? If so, this may offer an opportunity to use the same materials in the different components. This enables cost-reduction through volume discounts, and the need to carry less inventory of a particular material or type of component. In some cases, consolidating materials also leads to improvements in manufacturing yields by selecting the materials that are easiest to work with.
For example, a company was using three different grades of polycarbonate for similar types of components. The company changed to a single grade of polycarbonate for all components and got a price reduction of 10% per pound of plastic resin. Furthermore, of the three resins, the one that was selected was the easiest to use during injection molding process. Its use led to a 7% increase in manufacturing yields.
Or consider a large manufacture that used three different solder pastes to build electronics assemblies. Changing to a single, newer solder paste resulted in 25% reduction in material cost and improvements in manufacturing quality.
Reducing Manufacturing Costs
Manufacturing costs can be reduced by using materials that enable higher yields or higher throughput. Poor yields are often due to using materials that were selected with only performance and reliability in mind, and not optimized for manufacturability. Or, the materials may be inherently suitable, but there is too much variation in their properties because the supplier has poor process control. In either case, inadequate materials make it difficult to make components and form joints that consistently meet their design requirements. In some cases, this shows up as poor yields. In others, production line throughput is reduced because the process requires extra attention.
Revisiting Existing Designs
It is beneficial to hold periodic design reviews to determine if there are opportunities to revisit previous materials selection decisions. This approach is applicable to both long-standing products and designs that are still under consideration.
The design review approach provides an opportunity to consider taking advantage of materials that were not initially available when the product design was contemplated. It also allows the manufacturing team to take advantage of new, improved methods for processing and joining materials.
The goal of the design review is to look for significant opportunities to reduce bill of material costs, reduce labor content, reduce overall process time, and reduce yield loss. Addressing any of these issues involves the methods already discussed, namely –
- Using lower cost materials
- Redesigning components.
- Consolidating materials.
- Using materials that enable increased manufacturing yields and throughput.
As mentioned earlier, re-engineering is a straightforward process that starts with a review of the product design requirements and identifying the options of materials that can be used.
Why Isn’t Everyone Doing This?
There are a few reasons why companies do not look to re-engineering of materials in their products for cost reduction. First, engineers often do not see materials as an aspect of the design for optimization. Typically, they first look to modify the mechanical or electrical aspects of a product.
Second, engineers often believe that changing materials will turn into a big research project that will take a long time to complete. However, this is typically not the case if the proper considerations are made when evaluating and implementing the materials.
The final reason is that engineers may not know of all the options of materials to consider, especially when trying to optimize all of the performance, reliability, cost, and manufacturability requirements.
There are ample opportunities in most product designs to achieve significant cost reduction if one knows where to look and what questions to ask. These techniques are applicable to simple and complex products and to common and high-tech materials. In many cases it is possible to find materials that not only reduce costs, but also improve product performance and reliability.