ABSTRACT
The team members went to the manufacturing floor to see the assembly process and how that affected product cost and the rationalization ideas. Much of the cost reductions we would see in similar situations would involve the aggressive cost down approach with substantial pruning of underperforming product lines. With alternative method of proposing a cost reduction, we set an arbitrary value for the cost reduction. However, as a caveat, we council that usually the best time to make the cost improvement is during the development phase. We can devise a radical scenario or vision of the target cost. The cost management cycle is linked to the product life cycle. Often, in a specific industry, we will have components of our products that are known cost generators. Overspecifying the product also adds undue cost. Another source of cost generation that is frequently overlooked is the cost of packaging.
