The smart forfour car - supporting product cost optimization to deliver savings
Car maker smart develops vehicles which combine innovation, functionality and driving fun, and the smart forfour is yet another example that follows the central vision of this innovative producer: ensuring competitiveness by combining the creativity and expertise of its business partners. However, estimated production costs grew beyond target due to additional functionalities, features and market demands as well as technical requirements during the development and planning phase, and this made it necessary to revise the plan.
The product cost optimization project for the smart forfour - 'Z-TARGET' - started in 2002 with development and construction based on previous cost cutting projects. The aim was to determine potential cost savings, document them for the management and realize them jointly with the supplier.
PA was asked by smart to support the Z-TARGET cost optimization project in six areas: electrical controls, air filters, front and rear axles, fuel, exhaust and cooling systems. PA was asked to identify cost saving potential to compensate for cost increases, and to implement these savings jointly with the supplier.
The project led to multi-million Euro cost savings in each of the six areas selected for optimization. In addition the increased cost transparency enables leverage for further change and optimization during the production lifecycle.
Overall, PA has identified potential cost savings in the global automotive industry since 2000 totalling more than 400 million Euros.
