Design-to-Cost (DTC), as part of

cost management Cost accounting is defined as "a systematic set of procedures for recording and reporting measurements of the cost of manufacturing goods and performing services in the aggregate and in detail. It includes methods for recognizing, classifying, al ...

techniques, describes a systematic approach to controlling the

cost In production, research, retail, and accounting, a cost is the value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore. In business, the cost may be one of acquisition, in whic ...

s of

product development In business and engineering, new product development (NPD) covers the complete process of bringing a new product to market, renewing an existing product or introducing a product in a new market. A central aspect of NPD is product design, along w ...

and

manufacturing Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of secondary sector of the economy. The term may refer to ...

. The basic idea is that costs are designed "into the product", even from the earliest

concept Concepts are defined as abstract ideas. They are understood to be the fundamental building blocks of the concept behind principles, thoughts and beliefs. They play an important role in all aspects of cognition. As such, concepts are studied by ...

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 of the

product life-cycle 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. PL ...

, 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 software engineering, a software development process is a process of dividing software development work into smaller, parallel, or sequential steps or sub-processes to improve design, product management. It is also known as a software devel ...

. 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.

References

{{wiktionary, design to cost Manufacturing Product development Cost engineering

See also

References