Jan 022013
 

I was just reading a really interesting article by Matthew Littlefield called Cost of Quality Definition.  I applaud the article for several reasons.  It is straightforward, clear, and short.  I especially like that Matthew acknowledged that Cost of Quality is not only in negative things that are avoided (warranties, recalls, scrap, etc.), but also that there are costs to prevent these negative consequences (cost of appraisal and prevention).

This sounds like a trivial thing, but I remember living through the 1990’s where some academics and practitioners had a cultic obsession with quality.  They would hammer you with the idea of cost of ‘poor’ quality.   As a university student and engineer I would say, “Well, yes, but obviously you pay something to ensure good quality and avoid recalls, customer satisfaction loss, etc., right?  I mean, there is a level of quality that is not worth while attaining, because the customer does not value it and will not pay for it.”  The quality obsessed would look at me like I had just uttered vile heresy and inform me that having good quality NEVER cost the organization anything – only poor quality did.  Mr. Littlefield’s definition makes a lot more sense.

What does not make sense is Mr. Littlefield’s engaging, but definitionless graph in the article.  The axes are not labeled, either with specific financial units, or with general conceptual terms.  Furthermore, in the paragraphs before and after, his discussion is about the trade-off needed to find the minimum between Cost of Good Quality and Cost of Poor Quality… but the graph has three axes?    Maybe on axis Total Cost and the others are Cost of Good Quality and Cost of Poor Quality?

Can  someone explain?

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Dec 182012
 
New!   Product Cost Management Survey – Participate now!!!

  Hiller Associates has teamed up with CIMdata , a global leader in Product Lifecycle Management consulting and PLM industry analyst coverage to bring you the first annual Product Cost Management Survey. It takes less than 10 minutes and you will be rewarded by receiving a free copy of the results and report of the Read More!

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Dec 102012
 
Design-to-Value versus Design-to-Cost versus Minimum Viable Product

I just read an article on the site “Strategy + Business” called Building Cars by Design.  It caught my eye for two reasons.  First, the fact that a strategy site would deign to talk about engineering concepts was a pleasant surprise.  Second, the article discussed Design-to-Cost and Design-to-Value. If we strip off the automotive context, Read More!

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Dec 032012
 
Should your kids go into manufacturing – CNN says... NO.

A couple of weeks ago, AJ Sweat posted his article entitled Guess What, Kids? You Don’t Really Want A Job In Manufacturing, which is AJ’s analysis of CNN’s Best Jobs in America.  His lament is obvious – apparently manufacturing was not considered in this list, or it was, and it just was not desirable.    This Read More!

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Nov 052012
 
New Article by HA in Tech Clarity:  PRODUCT COST MANAGEMENT AS A LINK BETWEEN ENTERPRISE SYSTEMS

  Last week, Hiller Associates published an article in Tech-Clarity with the title: PRODUCT COST MANAGEMENT AS A LINK BETWEEN ENTERPRISE SYSTEMS Here’s an outline of the article: Siemens PLM recently bought Perfect Costing Solutions from Tsetinis & Partner.  What does this mean? To answer this, let’s first ask, what IS Product Cost Management and what Read More!

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Oct 292012
 
Your Should-cost Number is Wrong, But It Doesn’t Matter

Last week Hiller Associates published an article on Should-cost in one of the leading online magazines for manufacturing companies, IndustryWeek.com.   Below is a synopsis  of the article.  However, you may want to just read the article here: Your Should-cost Number is Wrong, But It Doesn’t Matter Should cost is not perfect, but it does not matter, because Read More!

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Sep 112012
 
Siemens buys Perfect Costing Solutions (Tsetinis)

Today is a day of solemn remembrance for Americans and many around the world who remember the 9-11 attack on the the United States of America.  However, there is at least one person who likely quite happy today for a very different reason: Andreas Tsetinis.    Andreas is the Founder and CEO of Perfect Costing Read More!

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Sep 052012
 
This is no time to think about profit! We're doing badly enough already.

Yes, you read the title correctly.  It may sound like an oxymoron, but some form of this statement is uttered every day in the world of Product Cost Management (PCM).  Usually, a company, will say, “I don’t have time for profit.” right before it notifies the PCM software vendor that it cannot buy the vendor’s Read More!

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Jul 232012
 
The 6 Reasons Why People and Organizations Withhold Data (Habeas Corpus Data, Part 2)

Last week we began talking about a common problem in many projects, including Product Cost Management: the withholding of needed data for analysis and modeling.  We also talked about the many reasons, some legitimate and some not, why people refuse to share data. Those reasons are summarized in the graph below. Then I introduced one Read More!

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