Essay 1
Magna - Cost Reduction : Automotive
Introduction
In the automotive industry, the pressure to reduce prices is present at all levels, from the vehicle manufacturer (OEM) through to the lowest level of the supply base. Most first and second tier suppliers are faced with contractual performance or productivity clauses which require annual downward price adjustments of 3 to 5% on the products they provide to the OEM.
Faced with these pricing constraints and continuing cost pressures, the suppliers and OEM's alike have resorted to a multitude of formalized techniques designed to meet the challenge.
These include GFD, TQM, VE, VA, and DFM, DFA. Some of these techniques have met with success while others have been tried briefly and dropped. At the Magna Interior Systems Seating Group, we have found the most powerful combination by a wide margin has been the melding of the disciplines of DFA and VE/VA.
This paper describes the means by which the Magna Seating Group VE/VA team has employed the Boothroyd Dewhurst DFA method to enhance the outcomes of our Value Engineering Workshops, resulting in significant savings in materials, design costs, tooling, and processing of parts and assemblies.
Value Engineering/Analysis as a Full-Time Activity:
Because of the continuing requirements for maintaining downward pressures on all costs, it has been found productive to establish and maintain a small department within Engineering whose only purpose is to concentrate on the broadest areas of cost reduction through the Value Engineering/Value Analysis approach. This department is made up of experts in each of the disciplines required to develop and manufacture the products of the supplier company. Personnel were selected for their demonstrated skills in the areas of product development, manufacturing, tooling, and processing as well as their overall industry experience. In many organizations, it would be difficult to take people with these skills out
Introduction
In the automotive industry, the pressure to reduce prices is present at all levels, from the vehicle manufacturer (OEM) through to the lowest level of the supply base. Most first and second tier suppliers are faced with contractual performance or productivity clauses which require annual downward price adjustments of 3 to 5% on the products they provide to the OEM.
Faced with these pricing constraints and continuing cost pressures, the suppliers and OEM's alike have resorted to a multitude of formalized techniques designed to meet the challenge.
These include GFD, TQM, VE, VA, and DFM, DFA. Some of these techniques have met with success while others have been tried briefly and dropped. At the Magna Interior Systems Seating Group, we have found the most powerful combination by a wide margin has been the melding of the disciplines of DFA and VE/VA.
This paper describes the means by which the Magna Seating Group VE/VA team has employed the Boothroyd Dewhurst DFA method to enhance the outcomes of our Value Engineering Workshops, resulting in significant savings in materials, design costs, tooling, and processing of parts and assemblies.
Value Engineering/Analysis as a Full-Time Activity:
Because of the continuing requirements for maintaining downward pressures on all costs, it has been found productive to establish and maintain a small department within Engineering whose only purpose is to concentrate on the broadest areas of cost reduction through the Value Engineering/Value Analysis approach. This department is made up of experts in each of the disciplines required to develop and manufacture the products of the supplier company. Personnel were selected for their demonstrated skills in the areas of product development, manufacturing, tooling, and processing as well as their overall industry experience. In many organizations, it would be difficult to take people with these skills out