Producibility Element Highlighted:
Perform Trade Studies on Alternative Product and Process
An electronic instrument manufacturer was considering using a new power supply being offered by a small vendor. The new power supply under consideration was much smaller and would take up less instrument frame space than the standard power supply that had been provided by a large company for several years. Additionally, the new power supply would weigh less than half as much as the standard power supply. The size reduction would improve
producibility by allowing more access room for other components. The weight reduction would reduce ergonomic risk to the material handlers and assemblers in the production of the instruments, as well as to the field service engineers at
the customer location.
However, with the new power supply, inventory costs were expected to grow due to an increase in the number of parts in storage and part numbers that must be monitored by purchasing. Technical risk to the design process would be introduced, because not only had the power supply not been used in a product before, but also the vendor had never produced one. This risk might have affected quality as well as the project schedule.
The estimated cost avoidance of reducing occupational injuries due to the manual material handling of the current power supply was $55.58 per instrument. This figure was based on the injury incidence of 3.4 injuries per 200,000 hours of production with the average incident cost of $52,000 including lost time and medical costs. The production time per instrument is 64 hours. Injury cost avoidance = [($52,000 per injury x 3.4 injuries) / (200,000 hours x 64 hours per instrument)].
The assembly cost reduction, due to improved producibility, was estimated to be $11.88 per instrument, based on a reduction of 0.8 production hours at an hourly rate of $14.85 per hour.
The risk of delay in the project schedule was eliminated when, within three months of the request, the vendor delivered a working prototype. The tradeoff analysis was still ongoing when the prototype arrived for evaluation.
The quality risk cost was estimated to be $4.11 per part, based on a 10% increase in failure rate. The current power supply failure rate was two per 100 units with associated cost of $187 per failure to replace and refurbish (1.1 x 2 failures/100 units x $187 per failed unit). There was no inventory cost increase because the new power supply replaced the previous parts and the inventory costs canceled each other out.
In this tradeoff analysis, the total life-cycle cost savings estimated for the replacement of the old power supply with the new one was: Cost savings ($64.35) = injury cost avoidance ($55.58) + reduction in assembly cost ($11.88) - quality risk cost ($4.11). As the result of this trade study, the electronic instrument manufacturer decided to use the new power supply.