On Mar 31, 2006, at 10:14 AM, Tom C wrote:
From: Godfrey DiGiorgi <[EMAIL PROTECTED]>
Someone said they thought it would cost $0.50 per body to support
the TTL metering. That may not seem like much to you, but I've
seen weeks of debate in an engineering/marketing meeting to get
$0.01 more cost out of a component intended for production. It is
particularly the case that this kind of trade-off goes on for the
low-end products because profit margins on low-end products are
very very low.
But it's particularly this kind of stupidity that lowers profit
margins. Likely thousands or tens of thousands of dollars in
productive time wasted to save pennies that will never be recouped.
I disagree. $0.01 in production cost on an item that will be
manufactured in the tens of thousands runs into thousands of dollars
of manufacturing cost, and with retail markup from manufacturing cost
being on the order of 5x to 10x cost, it save substantially on
product cost to the purchaser. From the other direction, what drives
profit margins down on low end products is competition from other
vendors, not time spent reducing cost of manufacture.
These notions are part and parcel of volume manufacturing economics.
The people spending time in the engineering department and at
meetings are being paid on fixed salaries most of the time, their
reason for being hired in the first place is to do these sorts of
things, so it is not "tens of thousands of dollars in productive time
wasted". They're doing the job they were intended to do, that cost is
part of the overall investment in development of any product, not the
running costs of manufacture.
Godfrey
