Challenges to an Integrated Cost Management during Early Phases of Product Development Dr.-Ing. Markus Mörtl Lehrstuhl für Produktentwicklung / Institute of Product Development Technische Universität München Garching (near Munich), Germany http://www.pe.mw.tum.de 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 1/45
Overview 1. Technische Universität München, Institute of Product Development 2. Introduction 3. Challenges 4. Research projects 5. Conclusion 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 2/45
Garching, 15 km north of Munich Technische Universität München Faculty of Mechanical Engineering Campus Garching Viewing Direction: South (Direction to Munich and to the alps) 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 3/45
Research Topics of the Insitute of Product Development Individuals teams organisation distributed organisation virtual organisation invention innovation quality cost management complexity management environment methods process person situation resources time, competitors, knowledge, competence, patents, complexity, time quality costs flexibility CAD PDM VR management of ideas engineering workshop Reference: Institute of Product Development. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 4/45
Overview 1. Technische Universität München, Institute of Product Development 2. Introduction 3. Challenges 4. Research projects 5. Conclusion 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 5/45
What is cost management? Cost management is targeted and systematic steering of costs. Thea aim is to influence the costs of products, processes and resources by using concrete measures, such that an appropriate company success is achieved, and its competitive strengths are improved for a long time to come. Reference: Ehrlenspiel et al.: Cost Efficient Design, 2007. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 6/45
The dilemma of product development High groß Cost appearance Cost influence Possibility Möglichkeit of der influencing Kostenbeeinflussung costs Information feedback: From former projects to new projects Cummulative costs Low gering time Product planning, project planning Development Manufacture Use Disposal Reference: Similar to: Ehrlenspiel et al.: Cost Efficient Design, 2007. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 7/45
Costs set and costs incurred in different departments Product costs in [%] 100 ~7 % ~5 % ~22 % ~18 % ~38 % 50 0 ~70 % ~9 % Design Development Production planning ~3 % Production ~28 % Costs set (established) Costs realized (incurred) Material costs, Suppliers Sales Administration Technical planning departments (product development and production planning) set approximately 90% of the product costs Reference: Ehrlenspiel et.al.: Cost efficient design, 2007. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 8/45
In former times: easy mechanical engineering and cost management. Example centrifuge base: Previous and new centrifuge base Results: Manufacturing costs: 100% => 82% Number of parts: 27 => 14 Less weld length: 57m => 23m Reference: Ehrlenspiel et.al.: Cost efficient design, 2007. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 9/45
Form design rules for milling Reference: Ehrlenspiel et.al.: Cost efficient design, 2007. & Pahl, G.; Beitz, W.; Feldhusen, J.; Grote, K.-H.: Konstruktionslehre. 7. Aufl. Berlin: Springer 2007. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 10/45
Quick cost calculation with cost growth law cost growth law Geometric similarity (size ratio) PCs MC N 0 N = ϕ 0,5 L + PCe 0 ϕ L2 + MtC 0 ϕ 3 L Length = = L Length L ϕ L 1 0 1 0 MC PCe PCs MtC = Manufacturing cost = Production cost from total time units = Production cost from set-up times (Set-up cost) = Material cost Also other laws exist Reference: Ehrlenspiel et.al.: Cost efficient design, 2007. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 11/45
Html-based cost estimation tool: cost control assistent KosKA: cost estimation tools and documentation Tool box Differentiating overhead costing Analysing actual costs Estimating Similarity calculaton Weight-based costing Solution search Material cost method Regression analysis Reference: FVA-research project & Nißl, A.: Modell zur Integration der Zielkostenverfolgung in den Produktentwicklungsprozess. München: Dr. Hut 2006. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 12/45
Overview 1. Technische Universität München, Institute of Product Development 2. Introduction 3. Challenges 4. Research projects 5. Conclusion 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 13/45
Challenges to an Integrated Cost Management during Early Phases of Product Development 1. cycles 2. interdisziplinarity / mechatronic products / hybrid products&services 3. virtuality 4. distributed located organisations & design departments 5. sight on functions, function-integrated products 6. complexity management 7. innovations & new business cases 8. changed use of products 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 14/45
Overview 1. Technische Universität München, Institute of Product Development 2. Introduction 3. Challenges 4. Research projects 5. Conclusion 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 15/45
Research project: managing cycles of innovation processes SFB 768 (Deutsche Forschungsgemeinschaft) cycles: product cost (material, ) personnel (know how, number of persons, ) tax law, different kind of cycles: Reference of figures: Friedrich, M.: presentation at SFB 768, 19.5.09. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 16/45
Example: car / navigation system / traffic Car modell: 20 years market life time Navigation system: 1 year time to develop Street map: Update every 2 months Traffic: actualiced every 15 minutes Reference: SFB 768. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 17/45
Example: car / navigation system / traffic Car modell: 20 years market life time Navigation system: 1 year time to develop Street map: Update every 2 months Traffic: actualiced every 15 minutes Reference: SFB 768. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 18/45
Mechatronic product: Fuel injection system Software Electric fuel pump Injection valve Foto: BOSCH. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 19/45
Mechatronic product: different design concepts 1996: 2 mechanically coupled windshield whipers, rubber lip and whisher arm separated [BMW E30] 2006: 2 separate windshield whipers, electronically combined steering e.g. for changing parking positions, [Skoda Octavia II] Fotos: M. Mörtl. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 20/45
Research project: Estimation of costs of mechatronic products. Challenges in designing mechatronic products. Increasing amount of tasks More functions, more tasks regarding costs, quality, time, Higher product complexity Number of parts & variants, Higher process complexity More people and departments involved, More difficult estimation of ressources needs Intransparent and secret costs, less information, each domain has its separate cost estimation and calculation, Reference: Braun, S.C.: internal presentation at the institute, 2008/2009. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 21/45
Research project: Estimation of costs of mechatronic products. Challenges in designing mechatronic products. Increasing amount of tasks More functions, more tasks regarding costs, quality, time, Higher product complexity Number of parts & variants, Higher process complexity More people and departments involved, More difficult estimation of ressources needs Intransparent and secret costs, less information, each domain has its separate cost estimation and calculation, Reference: Braun, S.C.: internal presentation at the institute, 2008/2009. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 22/45
Research project: virtual product development & cost estimation in early phases Robust design to produce products not only at one manufacturing plant (but to be able to produce all over the world) costs Robust design Be able to make design decisions in a very early phases of product development 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 23/45
Research project: virtual product development & cost estimation in early phases Robust design to produce products not only at one manufacturing plant (but to be able to produce all over the world) costs Robust design Be able to make design decisions in a very early phases of product development 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 24/45
Research field at the Insitute: product development distributed at different locations 2D-Shared- Whiteboard 3D-Sketching 3D-Shared-Whiteboard Work place 1 Work place2 Fotos: Grieb, J.: presentation of doctor thesis, 2007. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 25/45
Research field at the Insitute: product development distributed at different locations 2D-Shared- Whiteboard 3D-Sketching 3D-Shared-Whiteboard Work place 1 Work place2 Fotos: Grieb, J.: presentation of doctor thesis, 2007. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 26/45
New design concepts: functional integrated products. Search table for costs for windsheld whiper (function: clean windsheld) 1. Session: Analysis, targets, potentials windscreen whiper: own system part no. actual costs % actual costs competitor target costs required cost reduction required cost reduction cost reduction potential responsible date 2386-US-DC-68 1.10.05 [ ] [%] [ ] [ ] [%] [ ] person electric motor 28465948 14,70 49,7 12,20 11,80-19,7-2,90 other principl. Development 15.12.05 connecting arm 83756197 2,20 7,4 2,30 2,15-2,3-0,05 welded design Devl.-Productio 1.2.06 bearings 93758298 2,80 9,5 1,90 2,10-25,0-0,70 simplify Development 20.10.05 whiper arms 83776452 4,15 14,0 7,50 7,20 73,5 3,05 change concept Development 20.10.05 rubber lip 74519674 3,95 13,4 0,00 0,00-100,0-3,95 change concept Development 20.10.05 water pipes 38562857 0,50 1,7 0,60 0,47-6,0-0,03 other supplier Purchasing 20.10.05 software 1,25 4,2 1,00 1,20-4,0-0,05 known prices Purchasing 20.10.05 sum 29,55 100,0 25,50 24,92-15,7-4,63 Not real example & costs 2. Session: actual costs competitor achieved cost reduction new measures responsible date 1.11.05 [ ] [%] 14,50-0,4 other supplier purchasing 15.1.06 2,40 10,1 change productionproduction 1.2.06 2,76-0,4 other supplier purchasing 15.11.05 4,11 0,0 other principl. development 15.1.06 4,20 7,3 other principl. development 15.1.06 0,47-5,0 ok 1,22-1,4 ok 29,66 1,4 further sessions control, New measures Integrated functions Results: actual costs competitor achieved cost reduction 1.4.06 [ ] [%] 11,78-18,9 2,18 0,1 2,00-27,6 6,83 65,6 0,00-99,0 0,48-3,0 1,22-1,4 24,49-16,1 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 27/45
Cost curve over period of product development 29,55 Target costs Achieved costs 24,49 (= -16%) 24,92 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 28/45
New design concepts: functional integrated products Windshield whiper: rubber lip + windshield whiper arm = 1 integrated part Foto: BOSCH. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 29/45
New design concepts: functional integrated products Windshield whiper: rubber lip + windshield whiper arm = 1 integrated part Foto: BOSCH. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 30/45
Research field at the institute: The complexity challenge in product design Head Market complexity Product complexity Popularity Departments Long Tail Products Product lines Complexity involves many domains can provide competitive advantages Organizational complexity steadily increases Process complexity Development time Functionality Reference: Maurer, M.: presentation of doctor thesis, 2007. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 31/45
Challenge: Structure analysis of multiple-domain networks Single-domain dependency network 3 10 9 Affects Component 1 7 11 5 1 2 6 4 Analysis Component 2 Closed impact loop 8 Component 3 Multiple-domain dependency network A α γ B 1 C δ β 2 4 3 Analysis Processed by Person 1 Uses Component 1? Describes Data 1 Reference: Maurer, M.: presentation of doctor thesis, 2007. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 32/45
Challenge: Structure analysis of multiple-domain networks Single-domain dependency network 3 10 9 Affects Component 1 7 11 5 1 2 6 4 Analysis Component 2 Closed impact loop 8 Component 3 Multiple-domain dependency network A α γ B 1 C δ β 2 4 3 Analysis Processed by Person 1 Uses Component 1? Describes Data 1 Reference: Maurer, M.: presentation of doctor thesis, 2007. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 33/45
New products, which do not exist => New business cases: for example electrical / hybrid driven cars: How to calculate the lifecycle costs? Reference: Gorbea, C.: internal presentation at the institute, 2008/2009. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 34/45
Understanding lifecycle costs Reference: Gorbea, C.: internal presentation at the institute, 2008/2009. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 35/45
Understanding lifecycle costs Reference: Gorbea, C.: internal presentation at the institute, 2008/2009. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 36/45
Research project: Design for upgrading. Changed use of products. Problem: How to calculate life cycle costs? Upgrading Modernization Renew Repair Reference: Mörtl, M.: presentation of doctor thesis, 2002. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 37/45
Research project: Design for upgrading Life cycle of a normal (not upgradeable) productidea/ planning Development Manufact. Selling Use phase I Reference: Mörtl, M.: presentation of doctor thesis, 2002. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 38/45
Research project: Design for upgrading Life cycle of an upgradeable product Idea/ planning Development Manufact. Selling Use phase I Further phases of use Use phase II... Upgradeprocess Life cycle of additional components Idea/ planning Development Manufact. Selling Reference: Mörtl, M.: presentation of doctor thesis, 2002. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 39/45
Turning machine & Bottle labeling machine First use After modernization Concept without design for upgrading : Integrated product Concept with design for upgrading : Modular product (different bottles, labels, ) Fotos: FKW GmbH, Krones AG. Reference: Mörtl, M.: presentation of doctor thesis, 2002. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 40/45
Turning machine & Bottle labeling machine First use After modernization Concept without design for upgrading : Integrated product Concept with design for upgrading : Modular product (different bottles, labels, ) Fotos: FKW GmbH, Krones AG. Reference: Mörtl, M.: presentation of doctor thesis, 2002. 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 41/45
Overview 1. Technische Universität München, Institute of Product Development 2. Introduction 3. Challenges 4. Research projects 5. Conclusion 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 42/45
Conclusion Cost decreasing is possible (almost) at every product, process at almost every time! It depends upon different circumstances: Equipment at the plant, tasks, as well as the known methods, knowledge, Engineering & Design has a great influence on all costs of product life! Work together (with other departments) is a very important point to achieve target cost orientated design! Work systematically (and when there is no method, so create one by yourself!) 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 43/45
Literature Ehrlenspiel, K.; Kiewert, A.; Lindemann, U.: Kostengünstig Entwickeln und Konstruieren Kostenmanagement für die integrierte Produktentwicklung. 6. Aufl. Berlin: Springer VDI 2007. Ehrlenspiel, K.; Kiewert, A.; Lindemann, U.; Hundal, M.S. (Ed.): Cost-Efficient Design. Berlin: Springer VDI 2006. Lindemann, U.: Methodische Entwicklung technischer Produkte Methoden flexibel und situationsgerecht anwenden. 2. Aufl. Berlin: Springer VDI 2007. Ponn, J.; Lindemann, U.: Konzeptentwicklung und Gestaltung technischer Produkte Optimierte Produkte systematisch von Anforderungen zu Konzepten. Berlin: Springer VDI 2008. Gahr, A.: Pfadkostenrechnung individualisierter Produkte. München: Verlag Dr. Hut 2006. (Diss. TU München) Nissl, A.: Modell zur Integration der Zielkostenverfolgung in den Produktentwicklungsprozess. München: Verlag Dr. Hut 2006. (Diss. TU München) Mörtl, M.: Entwicklungsmanagement für upgradinggerechte Produkte. München: Verlag Dr. Hut 2002. (Diss. TU München) Lindemann, U.; Maurer, M., Braun, T.: Structural Complexity Management An Approach for the Field of Product Design. Berlin: Springer 2008. CiDaD News (published 2x per year) for free, online http://www.pe.mw.tum.de/news/cidad-news CiDaD Working Paper Series for free, online http://www.pe.mw.tum.de/forschung/publikationen/cidad-wps Lehrstuhl für Produktentwicklung Books, Publications, Doctoral Thesis http://www.pe.mw.tum.de/forschung/publikationen 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 44/45
Final slide Many thanks for your attention! Contact: Dr.-Ing. Markus Mörtl Technische Universität München Lehrstuhl für Produktentwicklung Boltzmannstraße 15 85748 Garching, Germany Tel.: +49.89.289.15152 Fax: +49.89.289.15144 Email: Web: markus.moertl@pe.mw.tum.de http://www.pe.mw.tum.de 2009 Markus Mörtl, Munich: Challenges to an Integrated Cost Management during Product Development Free Univ. of Bozen, Series of Lectures, 21.05.2009 45/45