It’s not uncommon for companies manufacturing a new product to underestimate what it will actually cost when all’s said and done.
They focus on the bill of materials (BOM), get a supplier quote, and assume they have a clear picture. But once the project moves forward, additional costs start piling up: tooling, engineering work, logistics, certification, and more.
In some cases, these overlooked costs can significantly reduce margins or even make the product impossible to manufacture!
Read and listen as we explain how product costing really works in practice. Based on insights from Paul Adams, Sofeast’s head of NPD, we’ll walk through the main cost components, highlight common mistakes, and show how a design-to-cost approach can help you stay in control from the early stages of development.
Listen to the audio here or on Apple Podcasts · Spotify · Amazon Podcasts · Deezer · iHeartRADIO · TuneIn.
Episode Sections:
- 00:00:12 — What Is Design-to-Cost?
- 00:00:49 — Why Costing Is Often Overlooked
- 00:01:55 — The 4 Core Cost Drivers (BOM, NRE, Tooling, Logistics)
- 00:05:24 — Value Engineering & Smarter Design Decisions
- 00:08:54 — Reducing Assembly Cost & Complexity
- 00:10:10 — Supplier Strategy: Cost vs Quality Trade-offs
- 00:12:20 — Tooling Costs & Budget Pitfalls
- 00:15:04 — NRE Explained: Hidden One-Time Costs
- 00:19:40 — Logistics: The Most Underestimated Cost
- 00:22:52 — Design for Cost: How to Reduce Product Cost
- 00:28:08 — Why You Must Think About Cost Early
- 00:31:47 — Biggest Costing Mistakes to Avoid
Further Reading
- Design for Manufacturing (DFM)
- Why Product Idea Validation Is Crucial Before Spending Big on Development
- Product Design Cost: 10 Factors That Affect Electronic Products
- The Benefits of a Feasibility Study (during new product development)
- 7 Must Do New Product Introduction Tasks For Successful Product Launches
- The Design for X Approach: 12 Common Examples
