Saving Millions Through Cost Reduction

A. David Boccuti

January 9, 2014

3 Min Read
Saving Millions Through Cost Reduction

My first job out of college was as a design engineer for a well-known consumer products company. Management subscribed to the business practice of introducing new and revolutionary products at a high price, which permitted rapid development and accommodated the resulting high manufacturing costs.

As time went by, these products became popular with high-end consumers, and less expensive versions were introduced, which allowed more people to afford them and increased the size of the market. Because of this strategy, there was a continuous effort in engineering to cost-reduce our products. I am proud to say that reducing quality or reliability was not acceptable to management. We were truly challenged to make the product less expensive to manufacture but just as good, if not better, for the customer. These complex electromechanical products were generally developed with schedule as a higher priority than cost ("better, faster, cheaper -- pick 2"), and there were plenty of opportunities for cost reduction.

The company's engineering organization was divided into groups, and each group was responsible for a particular subsystem. My group happened to own the highest cost mechanical subsystem. This meant that we got lots of attention from management because we scored high on a Pareto analysis of part cost, and therefore on opportunity for cost reduction. But along with attention came resources, so we had access to cost analysts who could calculate how much money a proposed change would save if we made around seven million units with that change the next year.

In my seven years there, I worked on numerous cost reductions, most of them reducing part count by eliminating fasteners or combining previously separate components -- all standard stuff. There were, however, three novel cost reductions that are worth describing.

The first, and most financially significant, eliminated approximately $1 of part cost, saving $7 million a year -- about 5% of total product cost. The part was a stainless-steel shaft about the size and shape of a pencil. It was originally produced as follows: A screw machine was used to machine stainless rod stock to slightly oversized dimensions. The rough machined shaft was profile ground on a centerless grinder to a tolerance of better than plus or minus 0.0001-inch (2.5 mum). The ends were then masked and the body was coated with soft urethane rubber and cured, after which the rubber-coated body was once again ground to a similar tolerance. Needless to say, coating and subsequently grinding a thin, soft, rubber coating to these tolerances was expensive.

The purpose of the coating was to provide a high friction surface on the shaft. The cost reduction was to eliminate the rubber coating and replace it with a textured surface directly on the steel shaft to provide similar friction characteristics.

The novelty was the method of applying the texture. We were familiar with Electrical Discharge Machining (EDM) because we had this equipment in our prototype injection molding shop. EDM is a machining technique used to create cavities in conductive materials -- including odd shapes and in difficult-to-machine materials like hardened steel -- with electrical sparks. The surface left after EDM is a cratered, pockmarked texture resulting from the steel melting and cooling on a microscopic scale. Another engineer in my group had the idea to lightly EDM the smooth surface of the shaft produced by the first grinding.

We prototyped this and discovered that, with a very light EDM, individual spark "craters" looked very similar to the famous high-speed stroboscopic photos of milk drops taken by MIT's Doc Edgerton. We had a custom automated, high-throughput EDM system designed and built that applied the EDM texture in a "barber pole" pattern. It was so closely wound that there were no spaces between the stripes -- it appeared to be a perfectly uniform texture. This was put into production and was a great success -- significant cost reduction and no decrease in quality or reliability. This process received US Patent 4,147,425.

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