Design-to-Cost (DTC), as part of
cost management techniques, describes a systematic approach to controlling the
costs of
product development and
manufacturing. The basic idea is that costs are designed "into the product", even from the earliest
concept decisions on and are difficult to remove later. This costs are seen as an equally important parameter besides feature scope and schedule, the three taken together yielding the well-known
project triangle.
By taking the right design decisions as early as during the initiation and
concept phase
In industry, Product Lifecycle Management (PLM) is the process of managing the entire lifecycle of a product from its inception through the engineering, design and manufacture, as well as the service and disposal of manufactured products. PLM ...
of the
product life-cycle, unnecessary costs at later stages can be avoided. But DTC also tries to capture the necessary measures for cost control during the complete
development cycle. In DTC, cost considerations also become part of extended
requirements specifications.
[http://www.cs.odu.edu/~mln/ltrs-pdfs/iaa-ceso-11-90.pdf ]
In contrast to the closely related
target costing, DTC does not mean a product will exactly reach a defined cost, rather, it is about "considering cost as a design parameter in your product development activities".
DTC can also be contrasted with ''Design-to-value'' which emphasizes the value that can be delivered to the customer, instead of the production costs for the manufacturer or company.
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See also
*Cost reduction
Cost reduction is the process used by companies to reduce their costs and increase their profits. Depending on a company’s services or products, the strategies can vary. Every decision in the product development process affects cost: design i ...
* Total cost of ownership
References
{{wiktionary, design to cost
Manufacturing
Product development
Cost engineering