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1. Title A Worksheet Tool for DFM and Cost Analysis in the NPD Process www.cloversoft.net

2. DFM Introduction • Design for Manufacturability (DFM) may be described as a method for evaluating product designs so as to identify likely manufacturing cost drivers, and then leading to solutions for the mitigation of these cost drivers. • DFM emphasizes cross functional integration and early evaluation of downstream manufacturing issues. DFM analysis must therefore be integrated into the New Product Development (NPD) process. Further the DFM metrics must be linked to one or more NPD stage-gates. • The use of DFM techniques early in the design cycle results in shorter design delays, easy production transitions, and higher product quality.

3. Integrating DFM in the NPD Process • An effective NPD/DFM analysis requires that the following three sequential events occur in an efficient manner: • 1. Capture and deploy all new design and production related data to the NPD team • 2. Evaluate, quantify and document the manufacturability of the proposed design • 3. Integrate the manufacturability evaluation into cost estimating. • Pro-DFM is a worksheet based tool that facilitates the accomplishment of these three events. • Pro-DFM provides accurate production cost estimates with little analytical effort. It is based on a parametric cost model which focuses on the primary drivers of cost.

4. Key Metrics Generated • The goal of Pro-DFM is to provide the NPD team with an accurate estimate of the unit production cost, and then facilitate the reduction of this cost. Using Pro-DFM you will generate the following key metrics. These will be used by the NPD team to evaluate and monitor DFM initiatives. • Estimated Unit Production (EUP) Cost- The EUP Cost is what Pro-DFM estimates it will cost to make the new product. It starts with the Direct Part Cost (as provided by vendor quotes or plant estimating) and then progressively scales this cost for inventory and considers all DFM Eval factors plus any supply chain costs. • (ii) Inventory Penalty Cost - Projects the likely additional costs for maintaining the needed parts inventory. An Inventory Eval Factor ( 0 to 1 range) is first derived on the basis of weeks of supply and number of part variants. In the extreme case where the factor is 1, the part cost is doubled.

5. Key Metrics Generated (iii) DFM Part Evaluation Penalty - Projects the likely additional costs in the processing of this part. A DFM Part Eval Factor (0-1 range) is derived on the basis of NPD team responses to a set of scaled response queries. These queries are divided into three criteria: Procurement, Part Handling, and Part Geometry. (iv) DFM Assembly Evaluation Penalty - Projects the likely additional costs in the execution of this assembly step. A DFM Process Eval Factor (0-1 range) is first. The evaluation queries are divided into seven criteria: Process Difficulty, Equipment Needs, Tooling Needs, Process Setup, Handling, Inventory and Quality Control. (v) DFM Part Reduction Opportunity – Projects the likely percent reduction in direct part costs by eliminating parts. Is based on the likelihood that individual parts can be eliminated. Where the opportunity is close to zero then the NPD team need not focus on part reduction.

6. Pro-DFM : A Simple Analysis • A key problem with traditional DFM analysis is that it tends to be cumbersome and requires an extensive effort from an experienced user group. • This makes the cost and effort difficult to justify, for most NPD projects. As a result in many cases DFM analysis is only being done by large company design groups. • Pro-DFM solves this problem by proposing a simple and time-tested approach to DFM analysis. This simplicity is achieved by using the following two strategies: • - A Multi Factor Scaled Response Model • - A MS-Excel® Based Worksheet

7. A Multi Factor Scaled Response Model • Pro-DFM analyses three different factors: (i) parts, (ii) assembly processes, and (iii) inventory. Each of these is independently analyzed using multiple criteria, with each criterion being further divided into sub-criteria. • The evaluation metrics are presented in the form of simple queries, with an anchored response scale. The NPD team selects the relevant response. • This approach bypasses the traditional DFM use of a rigid knowledge base, and automatically adapts Pro-DFM for each company.

8. Criterion: A. Procurement Sub-Criteria: A1. Material Knowledge A2. Sourcing Difficulty A3. In-bound Quality Control Criterion: B. Part Geometry Sub-Criteria: B1. Dimensional Tolerance B2. Alignment Ease B3. Part Symmetry Criterion: C. Part Handling Sub-Criteria: C1. Part Damage C2. Handling Difficulty C3. Part Feed Automation DFM Part Eval Factor DFM Part Evaluation DFM Part Eval Factor (DPi) – Projects the likely additional costs in the processing of this part.

9. DFM Part Evaluation • Each sub-criterion is evaluated on a 0 (none) to 10 (max penalty) score using an anchored scale. • Use your judgment to select the score that best represents the specific situation. If there is insufficient data to evaluate then select 0. • Empirical evidence suggests that DFM issues could effect part cost by as much 50% • DPiindicates the cost penalty assigned to the part. If a part is expected to cost $1.50 and DPi =0.50, then Pro-DFM projects that a more accurate cost estimate is $1.50 (1+0.50) = $2.25. Criterion:Part Handling Sub-Criterion:Part Feed Automation Response Scale:Part feeding into assembly machines will be (0-2) Automatic on existing equipment (2-5) Automatic needs new equipment (4-8) Manual assisted feeding (5-10) 100% Manual feeding DPi = 0.5 * Σk {Wk Xik}/90 Where: i=1,..,N Parts in the assembly k=1,..,9 Part eval sub-criteria. Wk Sub-criteria weight (0 to 1) Xik Part DFM evaluation scores

10. Criterion: D. Process Difficulty Sub-Criteria: D1. Steady Yield Interval D2. Process Experience D3. Process Failure Modes D4. Fastening Type D5. Output Rate Criterion: H. Handling Sub-Criteria: H1. Container H2. Orientation Criterion: G. Process Setup Sub-Criteria: G1. Setup Time G2. Commonality Criterion: E. Equipment Needs Sub-Criteria: E1. Available capacity E2. New Machine E3. Process Control Design Criterion: J. Inventory Sub-Criteria: J1. Production Volumes J2. Work-in-Process Criterion: F. Tooling Needs Sub-Criteria: F1. New Tooling F2. Complexity Criterion: K. Quality & Testing Sub-Criteria: K1. Test Process Expertise K2. Inspections Specs K3. Process Capability DFM Assembly Process Eval Factor DFM Assembly Process Evaluation DFM Assembly Process Eval Factor (DAj) – Projects the likely additional costs in the execution of this assembly step:

11. DFM Assembly Process Evaluation • Each sub-criterion is evaluated similar to the part evaluation. • Empirical evidence suggests that DFM issues could effect the assembly process cost by as much 70% • DAj indicates the cost penalty assigned to the assembly process step. If the direct assembly process cost is expected to cost $0.80 and DAj =0.40, then Pro-DFM projects that a more accurate cost estimate is $0.80 (1+0.40) = $1.12. Criterion:Setup Sub-Criterion:Commonality Response Scale:Setup process that is common to similar products(0) 100% commonality(1-3) 80 to 100% commonality(4-7) 50 to 80% commonality(8-10) < 50% commonality DAj = 0.7 * Σp {Vp Yjp}/190 Where: j=1,..,M Steps in the assembly p=1,..,19 Assembly eval sub-criteria. Vp Sub-criteria weight (0 to 1) Yjp Assembly DFM eval scores

12. Inventory Evaluation Inventory Eval Factor (DVi) – Projects the likely additional costs for maintaining the needed parts inventory: DVi = 0.4*{(Bi-1)/10} + 0.6*{Si/52} Where: i=1,..,N Parts in the assembly Bi Number of part variants (color, etc.) Si Projected weeks of supply per order • The inventory requirements for a part are often a function of several design parameters. • When a part has many variants on the basis of color, size, labels, etc., this can have a significant impact on inventory levels. • The part type (material, production process, etc.) will influence the order batch size and hence the weeks of supply to be inventoried.

13. - Unit Direct Part Cost - DFM Part Penalty - Inventory Penalty - Supply Chain Cost - Indirect Costs PART COSTS ESTIMATED UNIT PRODUCTION COST • Process Labor Rate • Process Equipment • - Process Setup • - Quality Loss • - DFM Process Penalty • - Indirect Costs ASSEMBLY PROCESS COSTS Estimated Unit Production (EUP) Cost The EUP cost derivation considers all DFM Eval factors plus other factors as shown below. EUP COST = {Direct Part Cost (i) (DPi + DVi + Indirect Rate) + Inbound Supply Chain } + {Direct Assembly Cost (j) (DAj + Indirect Rate) + Outbound Supply Chain }

14. DFM Part Reduction Opportunity • The assessment is based on the likelihood a part can be eliminated and why. For each part you will select from the list of reasons the most applicable reason. • The likelihood evaluations are used to derive the Part Reduction Opportunity as follows: • {P[Elimination](i) x Direct Part Cost(i) }/ Total Direct Part Cost Prob of Reason Elimination (0.0) No - Provides Primary FR" (0.0) No - Motion Requirements" (0.2) No - Material Restrictions" (0.3) No - Assembly Restrictions" (0.4) Yes - Possible to Transfer FR" (0.5) Yes - Possible to Reduce Count" (0.7) Yes - Easy to Transfer FR" (0.8) Yes - FR maybe Eliminated" (1.0) Yes - Redundant FR" (0.0) No - Unable to Evaluate"

15. A MS-Excel® Based Worksheet • Pro-DFM is based on the popular MS-Excel® program and therefore requires minimal training. MS-Excel® provides a familiar interface and file portability. • The Pro-DFM software is organized into a series of 14 worksheets. All sheets are linked together by our backend macro program. • Data is entered through pop-up windows, and the worksheets are automatically updated. Pro-DFM Worksheets FRONT: 1. NPD/DFM Analysis Cover Page 2. DFM Action Item Log REPORTS: 3. NPD/DFM Exec Summary Report 4. EUP Cost Report 5. Analysis of Prod Cost by Plant 6. DFM Evaluation Summary Report DATA: 7. Part/Material Data 8. DFM Part Evaluation Data 9. Assembly Process Data 10. DFM Process Evaluation Data 11. Assembly Process CostCalc 12. Supply Chain Costs 13. Alternate Plant HELP: 14. Definitions Help

16. Data Requirements • Listed here are the data required for creating a Pro-DFM file and running the analysis. • You need not wait to have all the data to start the analysis. • Most of the analytical components use numerical data. Where the data is not available enter the default (usually zero) value. • Pro-DFM also promotes data transparency in the NPD team. Some data is recorded for this purpose and not used in the DFM or costing analysis (e.g. Quality Requirements). This data, though, is found to promote a more reliable DFM evaluation. • The development time data is used to support project planning and estimate what design changes can be made without effecting the end date. • PART DATA: • Product BOM including material specs • Design drawings or schematics • Part function and key features • Test method specs • Quality control specs • Inventory & supply chain data • Development time • ASSEMBLY PROCESS DATA: • Assembly process plan • Tooling requirements • Equipment requirements • Labor and Equipment unit utilization times • Setup times • Quality rejection rates • Production volumes and unit batch sizes • Development time

17. Adding Parts Step #1 – Add parts to your Pro-DFM file. A part will typically be a BOM item retrieved from the product specifications. Step #2 – Complete the DFM evaluation of all added parts. You can view the anchor scales for each sub-criterion as you enter the evaluation.

18. Adding Assembly Process Steps Step #4 – Complete the DFM evaluation of all added assembly steps. Step #3 – Add assembly process steps to your Pro-DFM file. The steps can be retrieved from a process plan document.

19. CostCalc Utility for Assembly Process Costs For each assembly step you can either directly enter the hourly costs or derive it using the inbuilt Pro-DFM CostCalc utility. LABOR DETAILS: Can add up to 4 operators. For each operator specify the (i) Hourly Rate (ii) Productivity - relative to benchmark production rate and (iii) Busy Time - what % of time is dedicated to this step, if he operates 2 machines then 50%, if he works for 10 minutes in a 100 minute run then 10%. EQUIPMENT DETAILS: Can add up to 3 equipment. For each equipment specify the (i) Hourly Run Rate - cost to operate the machine minus labor (ii) Utilization - % of run time that the machine is busy on this step, if a blender is needed for 5 minutes in a 50 minute step then 10% and (iii) Setup Time - time to setup a batch run.

20. Example – Pencil Sharpener The design of an electric pencil sharpener (shown below) will be used to demonstrate the use of the Pro-DFM software. There are 20 parts and 4 assembly process steps. The design is based on a common model that is readily available in any office supply store (e.g. Staples). This product has an average retail price of price of $11.50. The target EUP price should therefore be $5.75.

21. EUP Cost Report Provides summarized costing details for each part and each assembly process step. Lets you see the cost roll-up and cost significant parts and assembly process steps. Provides a starting point for direct cost reduction initiatives. The DFM and Inventory penalties are listed. DFM activities initiatives should initially focus on the highest penalties.

22. EUP Cost Report

23. EUP Cost Report

24. DFM Evaluation Summary Report Provides aggregated details of the DFM Evaluation. First part aggregates the part and process evaluation responses. Displays the average and maximum scores, plus alert frequency. An alert is issued when the score to any response is above your specific alert limit. Second part is divided into DFP Part Analytics and DFM Process Analytics. Presents data graphically and identifies the part and process with highest DFM scores, plus the most penalized DFM criterion.

25. DFM Evaluation Summary Report

26. NPD/DFM Executive Summary Report Summarizes the results of the DFM and cost analysis, and should be reviewed first by the NPD team. Divided into the following sections: (i) Unit Production Cost Summary, (ii) Development Time Summary, (iii) DFM Evaluation Summary, (iv) Production Cost Analytics, and (v) Design Development Time Line.

27. NPD/DFM Executive Summary Report

28. NPD/DFM Executive Summary Report

29. Getting Started • Following this brief introduction you are now ready to start a Pro-DFM project. You will be provided with the following files: • 1 ProDFM-2 - This file is of the type MS-Excel® Add-in (.xla extension), and requires MS-Excel® XP or later to run. • 2. Pencil Sharpener – A MS-Excel file • 3. ProDFM User Manual – A .pdf file • Please read the User Manual to learn how each function is performed. Print out Sheet.14 Help so that you can quickly reference all the definitions. • We recommend that you browse through the Pro-DFM example provided to you (Pencil Sharpener file) to familiarize yourself with the different worksheets and the associated data requirements. • Create an appropriately named folder on your computer and transfer the ProDFM-2 file to this folder.