Minimizing Costs by Applying a Global View of Products, Parts and Their Costs Throughout the Manufacturing Chain

Design to Cost

Within custom manufacturing industries, such as aerospace, rail, pharma and shipbuilding, costs are rarely a primary consideration for design and production. All teams, from design to manufacturing, are primarily focused on the quality of the finished product, the functionality of all components and their proper integration into the final product while meeting required specifications. In the case of systems costing tens or even hundreds of millions of euros, focusing on optimizing the basic cost of one part or another can seem trivial.

However, with increasing international competition, the ability to respond as quickly and effectively as possible to proposals from local authorities and potential customers on a global scale has become paramount. As a result, optimizing product costs and delivery times can no longer be an afterthought.

One of Progress’ build-to-order manufacturing customers wanted to introduce more standardization to support cost optimization so they implemented a “design to cost” approach already widely used in the automotive industry.

Since every “product” is subject to a specific design and industrialization process where system characteristics must be accounted for to meet contract requirements, there were challenges related to the specific nature of the company's business. Each project has its own nomenclature, so it is not uncommon to have a dozen different identifiers for the same part—and in this case, for several million parts. The result was a complex set of information systems and siloed data structures that were difficult to exploit.

Minimizing Costs by Applying a Global View of Products, Parts and Their Costs Throughout the Manufacturing Chain

Because these products have little to no standardization, design and manufacturing processes are highly specific to each operation. The teams involved in a project— sometimes spread across separate sites—each work on a particular segment of the broader project, using their own tools and nomenclature. This variability also applies to the design, engineering and purchasing processes.

Engineers, manufacturers and buyers all have their own reference and management systems. So, when it comes to global costing, the first thing to do is identify all these elements and reconcile their Bill of Materials (BOMs). Not only do they need to link everything throughout the manufacturing cycle, but they must also reconcile identical parts with different names or references so they can compare prices from different suppliers. They then need to consolidate everything to form a complete product. With multiple information systems and data structures, this seemed like an impossible task.

By leveraging Progress MarkLogic, the build-to-order manufacturer was able to integrate all the parts data and the cost information from fifteen years of production into a single, shared data hub, facilitating countless reconciliations and comparisons. Each group was able to maintain its respective identification processes, while matches were created between the parts lists of the various users (designers, manufacturing companies, purchasers). This made it possible to compare the parts used for the same purpose across different plants, benchmark the different projects already completed and identify identical parts or parts with similar characteristics for the same function, at the best cost. With MarkLogic, buyers are equipped with insights that help them effectively negotiate with suppliers and reduce costs, while minimizing manufacturing cycle times and optimizing production.

Intelligent, Optimized Design

Considering the variety of parts that make up each product, combined with numerous teams often working in silos, the manufacturing stages regularly led to costly back-and-forth with engineers to adapt specifications to the reality of production lines. And with new objectives tied to minimizing the costs of the projects they carry out, engineers needed to understand the impact their design choices had on the total cost of the product.

They now have a global view of costs upstream of the V-model. The Data Hub built with MarkLogic makes it possible to evaluate the cost of parts at each stage of the manufacturing cycle, as well as automate the weekly updating of BOMs and part valuation.

The consolidation of costs made possible by the reconciliation of BOMs enables engineers to be alerted to budget overruns, which has helped streamline the entire manufacturing chain.

A Commitment Based on Proof and a Growing Emphasis on “Design to Cost”

For an international manufacturer of this size, with data silos built up over the years and dozens of data structures from different organizations following mergers/acquisitions, the ability to bring parts and cost data together in a single system seemed impossible.  

But the team’s initial skepticism was replaced by confidence in being able to realize their vision once they quickly validated the capabilities of the MarkLogic solution. From the earliest stages of the project, various users were involved so they could better understand the data sources and help identify priorities to define the first releases of the Data Hub.

The first data reconciliations provided invaluable data for users, who were rapidly involved in the construction of the solution and were able to make the necessary adjustments as the project progressed.

By reconciling previously siloed data, users were able to identify new use cases, making it easier to release budgets. The solution enabled the company to break down both organizational and technical silos. The result is cross-functionality and extensive communication between teams starting from the upstream phases of product design to a shared cost culture and the organization’s shift towards a “design to cost” approach.

 “You Made Everyone Dream, and You Did It!”

This is how the VP of Information Systems and Technology recognizes the “design to cost” teams who led this project within this build-to-order. The number of users of the MarkLogic solution tripled in just a few months, to thousands of regular users, including engineers, other manufacturers and buyers.

Today the product cost platform—or “should costing platform” as it is also called in the industry—allows them to compare different configurations done in the past to respond to RFPs in a timely and accurate manner.