Cost engineering

Engineering Design impacts whole-life cost of products produced. Understanding true cost of a product and the cost drivers during the design stage could guide the design process to obtain more competitive solutions. Cost engineering is concerned with cost estimation, cost control, business planning and management, profitability analysis, cost risk analysis and project management, planning, and scheduling. This special issue is mostly concerned with the cost estimation. Cost estimation is a methodology used for predicting/forecasting the likely future cost of a product or service based on the information available at the time. The cost of a product is significantly committed at the conceptual design stage. Therefore, predicting the cost of a product at the early design stage and making the design decisions based on the information can give significant cost savings. Increasingly, designers are taking interest in understanding costs of their decisions and use the cost as a design driver. It is now necessary that cost is considered along with performance and schedule during the product development and optimization. This special issue includes six papers and has covered a review, cognitive process analysis to specific methodology development.

The first paper titled “Predicting the whole-life cost of a product at the conceptual design stage”, co-authored by Newnes et al. (2008), describes whole-life cost modelling research and relation with design, industrial approaches and commercial systems. The paper focuses mostly on low volume complex electronic and mechanical systems within the aerospace and construction industries only. The whole-life cost review identifies the parametric cost estimating technique as the most popular at the conceptual design stage. The second paper is about “Cost-based producibility assessment: analysis and synthesis approaches through design automation” and is co-authored by Elgh, F. and Cederfeldt, M. (2008). This research has developed a framework for the development of company specific automated producibility estimation systems that considers manufacturing costs of the product produced. The costs are calculated based on the product structure, manufacturing processes and a set of assumptions. Impact of the assumptions on the cost is also studied. It is not clear how the framework could support a new product feature. The third paper titled “Incorporating cost analysis in a multi-disciplinary design environment for aircraft movables”, co-authored by van der Laan, A.H. and van Tooren, M.J.L. (2008), also presents a framework to provide cost engineering information about new designs in an early stage of development. In an attempt to automate the conceptual design, the authors have integrated a cost analysis tool within a Design and Engineering Architecture. The tool also estimates the cost consequences of different manufacturing concepts. The framework improves transparencies of the cost information to the designer, and as a result designers are likely to use the framework for design cost evaluation.

Designers are increasingly expected to predict costs of their designed products. The fourth paper titled “Comparing the cognitive actions of design engineers and cost estimators” co-authored by Houseman, O. et al. (2008) tries to understand the difference in cognitive actions between experienced designers and experienced cost engineers. The comparison illustrates the key training requirements for designers to effectively produce estimates. Designers need to be trained to be more aware of the emphasis that cost estimators place upon the manufacturing processes of a product. The research is limited to hardware cost estimating and therefore does not reflect challenges in the use of software solutions.

The last two papers propose specific applications of cost engineering methods for product development. The fifth paper on a “Proposal for tool-based method of product cost estimation during conceptual design” by Mauchand, M. et al. (2008) presents a manufacturing cost estimating tool that operates with little and inaccurate information in the preliminary design stage. A rule based approach is used for the cost calculation. The sixth and the final paper titled “Tolerance elements: an alternative approach for cost optimum tolerance transfer”, co-authored by Dimitrellou, S. Ch. et al. (2008) presents a method for cost optimum conversion of functional tolerances into machining tolerances. The research develops cost – tolerance element model where the tolerance elements are geometric entities with machining process related attributes. The paper presents an example of cost optimum tolerancing.

This special issue is a reflection of the state of the art research in cost engineering, which is predominantly focused around manufacturing cost analysis. Detailed cost analysis of product development, maintenance and operation require more attention. In addition to cost analysis, it is necessary to understand the uncertainties and cost risks involved in a cost estimate. In some industry sectors, such as defence, aerospace and ship building, a concept of ‘capability contract’ (or ‘availability contract’) is becoming more popular. Here a company sells ‘capability’ rather than a product; a popular example would be the Power by the Hour provision from Rolls Royce. Understanding the whole-life costs of the capability provisions at the early design stage is the future.

Professor Rajkumar Roy

Head of Decision Engineering Centre

Cranfield University

UK