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Overview

With globalization and technological advancements, the current manufacturing landscape is becoming increasingly challenging. Manufacturers must implement measures to improve utilization of resources, short-term cost-cutting techniques, and long-term cost optimization strategies. The total product cost drives product pricing, which influences a company’s profit and revenue growth. This cost is a cumulative function shaped by the actions of engineering, manufacturing and sourcing.

Product cost optimization is a strategy to identify the impact of these elements on cost and implement sustainable measures to optimize it.

Product Cost Optimization at Infosys

Imperative to the optimization activity is establishing a scientific baseline of cost for each component of a product. Using this cost baseline, we can identify the drivers that influence the product’s cost and utilize cross-functional expertise in design, manufacturing and supply chain to find and implement solutions for cost reduction.

Our approach utilizes tools, automation and in-house expertise across functions and domains to ensure rapid and accurate results for huge volumes. It can make a significant difference in establishing a cost baseline for a product at an early stage.

Infosys CoE for Product Cost Optimization has laid a roadmap to reach these cost reduction and control goals through our offerings:

Objectives

Reduction in the recurring production costs

Reduction in the product lifecycle costs

Empower value-stream to develop cost effective solutions & products

Higher fidelity Basis of Estimate (BoE) at an early maturity state & onwards

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Strategic sourcing through supply chain analysis

Infosys Solutions

Cost Estimation

Empower the supply chain

Value Engineering

Improvements in design, MFG & composition

Product Benchmarking

Analyze features and functions

Design-to-Cost

Product development to target cost

Strategic Sourcing

Optimize supply chain

Cost Analytics

Drive meaningful insights

Key Levers

Engineering Levers

  • Product / Cost Benchmarking
  • Feature / Function Analysis
  • Value Engineering / Design-to-Cost
  • Standardization

Manufacturing Levers

  • Alternate Manufacturing Processes
  • Throughput Optimization
  • Lean Manufacturing Practices
  • Tooling Cost Optimization

Supply Chain Levers

  • Spend Analysis
  • Supplier Negotiations
  • Global Sourcing Studies
  • Make / Buy Analysis

Enabling Framework

Knowledge Models (Guidelines)

Labor, Equipment & Material Rates Repository

Established Implementation Framework

Multi-functional Core Team

Infrastructure

Cost Models

  • Guidelines for every manufacturing process digitized into mathematical models
  • Extensive and regularly updated proprietary repositories for labor, equipment, material rates across locations
  • Pre-defined cost models customized to client requirements
  • An experienced core team of experts having experience in design, manufacturing, and sourcing across domains
  • Proven implementation framework for VAVE, benchmarking, and supply chain solutions
  • In-house labs for mechanical and electronic teardown with specialized facilities for validation and verification, rapid prototyping
  • Infosys’ costing solution, the Product Cost Optimization Platform, integrates all offerings to present a holistic solution

Product cost optimization is a strategy to identify the impact on cost and realize sustainable savings

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Key Differentiators

Multi-disciplinary cost optimization solution – We optimize products across design, manufacturing and supply chain elements for every component, be it mechanical, electrical, electronic or software. It is achieved through in-house labs for product teardown and rapid prototyping and alliances for prototyping, testing and certification.

Infosys costing tool with proprietary databases of material, labor and process rates – Extensive central repositories of rates across geographies feed into our costing solution to the Infosys Cost Optimization Platform, to enable accurate cost estimates at scale and speed.

Cross functional team with multi-domain experience and subject matter experts – Capitalize our technology expertise from across industries and domains to bring the best solutions for your product.

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Challenges & Solutions

Infosys can help you with cost estimation through our Cost Optimization Platform. This first step in cost optimization is to understand the costs and cost drivers of a product as it opens many downstream optimization avenues.

  1. Supplier cost optimization through negotiation
  2. Strategic sourcing
  3. Identify opportunities for value engineering
  4. Contract improvement opportunities

Introducing a product into a new competitive market where similar but cheaper products are available can be quite challenging. Our service can help you bring down the cost of the product to be competitive through:

  • Market research to baseline functional requirement aligned to customer preferences, specifications and life
  • Competition benchmarking: Teardown and benchmarking of competition products
  • Design to Cost focus on cost reduction without compromising function and feature and design to a target cost
  • Validation of new design and performance testing

Our value engineering service provides a holistic method of optimizing the product for cost, value, function and feature. This service relies on our cross functional team of subject matter experts from all stages of the value chain, bringing in extensive industrial and domain expertise, in-house infrastructure including labs for teardown, testing, prototyping and a proven approach.