High Technology Manufacturing: Hewlett-Packard’s Roseville Network Division

HEWLETT-PACKARD

Design engineers at Hewlett-Packard’s Roseville Network Division lacked accurate information to guide low cost design decisions.

No Data

Design engineers at Hewlett-Packard’s Roseville Network Division lacked accurate information to guide low cost design decisions.

Assumption

the design engineers did not distinguish between components such as axial and DIP (dual in-line processor) insertions assuming the insertion cost was the same.

Results

A study using activity-based principles showed that axial insertions were about one third the cost of DIP insertions. The cost system was modified to differentiate between axial and DIP insertions.

Challenge

The Challenge. Design engineers at Hewlett-Packard’s Roseville Network Division lacked accurate information to guide low cost design decisions. For example, the cost system calculated a cost per insertion that was the same regardless of the type of component. As a result, the design engineers did not distinguish between components such as axial and DIP (dual in-line processor) insertions assuming the insertion cost was the same.

The Solution

The Solution. A study using activity-based principles showed that axial insertions were about one third the cost of DIP insertions. The cost system was modified to differentiate between axial and DIP insertions. The engineers then used this information to guide subsequent product designs and reduce manufacturing cost.

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