Manufacturing cost deployment

Obviously, one of the major problems in manufacturing is to reduce cost. To do so, various activities such as Total Productive Maintenance (TPM), Total Quality Management (TQM), Industrial Engineering (IE) and Just-in-Time (JIT) are often carried out. However, many companies recognize that these activities do not necessarily guarantee cost reduction even if they have been implemented successfully. In the worst case, manufacturing cost rises with the introduction of such activities. This is an important issue in manufacturing, but strangely in the academic literature there have been no studies that have been addressed directly to the methodology of manufacturing cost reduction. The aim was to develop a good method that establishes a cost-reduction programme scientifically and systematically. This method, termed 'manufacturing cost deployment', is a very powerful tool to identify production losses to reduce costs. A simple algorithm to establish a cost-reduction programme is presented and one case study is given.