Drowning in Operations Costs?
Achieve BIG Savings With DFM

Without intending to, many companies build high operations costs into their products. The result is lots of inventory, poor quality, uncompetitive labor costs, late deliveries and high shipping charges, just to name a few. I see it all the time.

Here’s a typical example of how this happens:

A design engineer reduces a new product’s weight by selecting an exotic material from a new vendor for several key parts. The result...it’s the lightest product of its kind on the market. Bonus time, right? Wrong. Look what that choice did to Operations:

• The vendor can’t reliably deliver the part as specified, which forces the company to hold more inventory or pay overnight freight charges.



• Production has problems working with the new material, which causes scrap and rework. Overtime goes up, as does QC time to inspect and test the product. 



• Field failures and warranty claims rise and, of course, Field Service has the same problems with the new material as Production, so repairs take a long time and aren’t reliable.



• A few customers even sue to recoup their downtime losses.

Smart companies design their products with operating costs in mind. A great example is Swedish furniture maker IKEA, which designs products for optimal shipping and self-serve customer handling. All their products’ boxed profiles conform to common size standards and can be handled and shipped using common, inexpensive methods.

Design for Manufacturing is the Answer

The term for this is Design For Manufacturing (DFM). Now, a lot of DFM approaches can be boring and overly complicated. We know companies don’t have time to translate hieroglyphics and need results fast, so we designed a fast-paced, hands-on workshop that focuses on practical concepts and methods. Feel free to call or email me any time if you have questions about it.

Maverick DFM Executive Briefings

We’re also doing a couple of executive briefings on DFM in Colorado and Oregon in the coming weeks: June 17 in Louisville, Colorado and July 8 in Portland, Oregon. The briefing is a quick two-hour overview of DFM benefits and how our process might work for your company. To sign up, give me a call at 303.819.6662 or email me at todd@maverickinstitute.com.

If you take away one thing from this issue of the Stampede, it should be this:  80 percent of your operations costs are rooted in your product design. If you want to be a hero with your CFO, focus on DFM. That’s where you’ll find the big money savings. 

CONGRATULATIONS to the winner of last month’s “Lettuce” contest. Dave Wilson from Oregon Health Sciences University won our drawing for an iPod. Starbucks could save money by not filling their drinks so much for to-go orders. People routinely dump out an ounce of coffee (the stains on the pavement) before driving away so drink contents don’t sloosh out the lid opening. Dave also pointed out that Starbucks, if they’re the property owner, would save additional money and win environmental points by not having to power wash the pavement to remove the stains.