Feb 042013
 

People complain about the profitability of products, especially early in production, but how often do products actually miss their profitability at launch?

According to the latest research by Hiller Associates, most companies miss product cost targets.  We asked almost forty  people from a variety of corporate functions “How often do you meet or beat product cost targets at launch?”   The results follow the familiar 80/20 rule of many business phenomena.  On 17% of respondents said that their companies meet cost targets Often or Very Often.

Product Cost Results goals at launch Hiller Associates

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That is not an impressive showing.  We would not accept 17% as a pass completion percentage from a NFL quarterback.  That’s not even a good batting average in baseball.  So why do we put up with this in our companies?  It’s also interesting that almost the same percentage of respondents (15%) don’t know enough about product profitability to even guess how well their companies are doing.

Companies are understandably careful with releasing actual product profit numbers.  Still, it would be great to have a more in-depth academic study done, in which actual financials were analyzed to answer the same question.

Percent meeting product cost summary Hiller AssociatesHow often does your company meet its product cost targets?  Does anyone know in your company know? These are questions you cannot afford not to ask. Is your firm the 17%… or the 83%.  If you are in the 83%, consider starting or improving your efforts in Product Cost Management.

 

 

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Jan 312013
 
The Middle Term Enigma by Shipulski On Design

One of my fellows in the world of product cost and design, Mike Shipulski, just posted the following: The Middle Term Enigma     The general synopsis of it is: Firms focus more and more on the short term The “short term” is shorter and shorter. Short term leads to minimization and typically damages long term Read More!

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Jan 292013
 
Buying the shake weight as the solution to your bad product cost eating habits

Hiller Associates recently was the keynote speaker at aPriori’s first customer conference.  It was a great opportunity to both teach and learn from experts that came from a wide range of industries and geographies. Hiller Associates’ President, Eric Hiller, discussed several topics, of which we’ll mention two here.  The entire presentation can downloaded for FREE. Read More!

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Jan 292013
 

  If you would like to download the presentation (Best Practices for Starting Your Product Cost Management Journey or Improvement)  for FREE, please fill out the form below and click the button. A link to the .pdf of the presentation will then appear below that you can click on.   AFTER you fill out the Read More!

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Jan 162013
 
Where is "The DARPA Study"?!

It’s one of the most famous studies in the world of product development and probably the most famous study in the history of Product Cost Management.  It was done in the 1960’s (reportedly) by DARPA (The US Defense Advanced Research Projects Agency of the United States Government).  It’s so famous that it is typically referred Read More!

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Jan 022013
 
Cost of Quality:  Defined by Equation, But Not By Graph?

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 Read More!

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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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