What Are the Different Research and Development Costs?

Research and development costs include research and development costs and product costs. Research and development costs include development costs, testing costs, and labor costs. Product costs include procurement and materials costs, manufacturing costs, and so on.

R & D costs

Cost includes design (development) cost, manufacturing cost,

1. Overly concerned about product performance and ignored

1.

Generally speaking, based on the basic experience of large multinational enterprises, the following steps are usually taken to analyze and control costs during the design and development stage:

1. Value engineering analysis.

The purpose of value engineering analysis is to analyze whether there are alternatives that can increase the value of the product. We define the value of a product as the ratio of its function to its cost, which is the price-performance ratio. Therefore, there are two ways to increase the value of the product: maintain the product's function unchanged and reduce costs; maintain the product's cost unchanged and increase functionality. The analysis of value engineering looks at the composition of costs in general, including the manufacturing process of raw materials, the type of labor, the equipment used, and the balance between purchased and self-produced parts. Value engineering follows two implementation methods to set target costs in advance: By identifying improved product designs (even new products should adapt their functional requirements in different ways), reducing product parts without sacrificing functionality And manufacturing costs. By focusing on product features, designers often consider parts that perform the same function in other products, and improve the standardization of parts, which helps improve product quality and reduce product costs. Reduce costs by reducing unnecessary features or complexity of the product. As a profit-oriented company, what we expect is often the most competitive price-performance ratio and the best-selling product on the market. This requires product developers to develop a product with the best price-performance ratio under the guidance of target costs, rather than a product that is not good or bad.

2. Reengineering.

In addition to product design, there is another factor that has a decisive effect on product cost and quality. This is process design. Engineering re-engineering is to re-design the already completed or existing processing process, thereby directly eliminating non-value-added operations, while improving the efficiency of value-added operations in the assembly process and reducing manufacturing costs. For new products, if the initial design of the product can be re-examined when it enters the mass production stage, it will often be found that during the initial design process, there are some expensive and complex parts and unique or complicated production processes. They rarely increase product performance and functionality and can be deleted or modified. Therefore, paying attention to the redesign of products and their alternative functions not only has a lot of space, but also often will not be found by customers. If the design is successful, the company does not have to re-price or replace other products.

3. Strengthen the analysis of new product development costs to achieve the best combination of cost and performance.

Strengthen the analysis of performance cost ratio: The performance cost ratio is the ratio between target performance and target cost. Through the analysis of this indicator, it can be seen whether the newly developed product meets the originally set target cost, target function and target performance. And other related goals. If the actual cost-performance ratio is higher than the target cost-performance ratio, under the premise that the design cost is consistent with the target cost, the performance of the new product design is higher than the target performance, but on the other hand, we can also use the new The performance of the product is adjusted to match the target performance to achieve the purpose of reducing and cutting costs. Considering the cost of expansion: In the development and design of a new product, in addition to the cost of the material, it is necessary to consider more deeply whether the application of the material will lead to other costs. For example, whether the materials used are easy to purchase, easy to store, assemble and ship. In fact, when designing a new product, if the research and development (design) staff lacks comprehensive considerations, they often have to temporarily add certain materials or increase the difficulty of assembly during the rectification process to solve some of its defects. And these temporarily added materials will not only increase material costs, but also increase the complexity of assembly in the production process, which indirectly affects the efficiency of mass production, and this also easily causes a substantial increase in the consumption of related materials, auxiliary materials, etc. These sunk costs are often much greater than the cost of their surface.

4. Reduce the number of times the design needs to be modified before it is delivered to production.

The number of times (or even minor modifications) needs to be modified before the design is delivered to production (normal mass production). This is an indicator for calculating the cost of a new product development. Many facts show that many times it takes a long time for a new product to be put on the market in batches. The biggest reason is that the product cannot meet the design requirements at one time and usually needs to be redesigned and retested several times. Suppose a company estimates that the cost of each design error is 1500 yuan. If the average number of times that each new product needs to be modified is 5 times before the new product is developed and designed and produced, and 15 new projects are introduced and developed each year, its error cost For 112500 yuan. From this simple arithmetic, we can see that in the process of delivering normal mass production, every error (every modification) is bound to bring a certain loss to the company (material, labor, efficiency waste, etc.). The delay in redesigning the product to reduce errors will make the product enter the market later, and the sales lost by missed opportunities are even more distressing. Therefore, the development design of the R & D designer should increase the success rate of the design as much as possible without affecting the cost and performance.