DesigntoCost

Design to cost (DTC), sometimes written as design-to-cost, is a product development approach in which the overall cost of a product is constrained by a predefined target while maintaining required function and performance. The target typically covers total life-cycle cost, including materials, manufacturing, assembly, testing, and support. The aim is to deliver a competitive price or budget-aligned product without compromising essential requirements.

In practice, DTC is a cross-functional process involving engineering, manufacturing, procurement, finance, and program management. Cost goals are established early in a program and become a constraint that informs design choices. Teams perform cost breakdown analyses, develop cost models, and explore value engineering or alternative architectures to reduce or contain cost while preserving performance. The process often uses collaboration with suppliers to identify cheaper components, standard parts, and more efficient manufacturing methods. Tools commonly employed include target cost estimation, parametric cost modeling, and design for manufacturability and assembly (DFMA).

DTC is widely used in industries with strict cost and schedule pressures, such as defense, aerospace, automotive, medical devices, and consumer electronics. It is related to, but distinct from, other value-focused approaches like target costing and design for cost; it emphasizes feasibility of a product design within a fixed cost envelope rather than retroactive cost reduction.

Risks include overemphasis on cost at the expense of performance, schedule delays from iterative redesigns, and insufficient supplier engagement. Successful DTC requires clear governance, realistic cost targets, and ongoing cross-functional collaboration.