Design-to-cost
Setting a cost target for a product early and designing to meet it, with cost treated as a specification alongside function and weight.
Also called: DTC, Target costing, Design for cost
Design-to-cost starts from the selling price. If the market will pay €4,000 for a machine and the company needs a 35% margin, the product has to be built for €2,600. That figure gets broken down by sub-assembly, then by part, and each design team gets a cost budget the same way it gets a weight or a power budget.
Why it works
Because it happens when cost is still cheap to change. Choosing a cast part over a welded assembly, a standard bearing over a custom one, or a 2 mm sheet over 3 mm takes an afternoon at the concept stage. The same change after tooling and qualification takes a project, a budget and usually a customer approval.
Why it is rare
Engineers are measured on whether the product works and ships on time. Cost information reaches them late, if at all, often as a single number from purchasing weeks after they asked. Without a should-cost they can run themselves, design-to-cost becomes a target nobody can check until the quotes come back.
The companies that do it well put cost next to the CAD: a rough cost for each design option, available while the option is still open. It does not need to be precise to the cent. Being right about which of two options is cheaper, and by roughly how much, is enough to change the decision.