NMHG Drives Down Product Costs with aPriori
Company Size
1,000+
Region
- America
- Asia
- Europe
Country
- China
- Japan
- Mexico
- United States
Product
- aPriori
- Hyster®
- Yale®
- Sumitomo
- Utilev®
Tech Stack
- Product Resource Management System (PRMS)
- IBM MRP system
- CAD model integration
Implementation Scale
- Enterprise-wide Deployment
Impact Metrics
- Cost Savings
- Digital Expertise
- Productivity Improvements
Technology Category
- Analytics & Modeling - Predictive Analytics
- Application Infrastructure & Middleware - Data Exchange & Integration
- Functional Applications - Product Lifecycle Management Systems (PLM)
Applicable Functions
- Business Operation
- Product Research & Development
- Quality Assurance
Services
- Software Design & Engineering Services
- System Integration
- Training
About The Customer
NACCO Materials Handling Group (NMHG), headquartered in Cleveland, Ohio, designs, engineers, manufactures, sells, and services a comprehensive line of lift trucks and aftermarket parts. Marketed globally under the Hyster®, Yale®, Sumitomo, and Utilev® brand names, these are some of the most successful lift truck brands in the industry. NMHG is one of the world’s largest lift truck manufacturers, with a global network of 12 strategically located manufacturing facilities and four product development centers on three continents. The company provides localized service and expertise across diverse geographic regions, translating into significant cost savings and competitive advantages for its dealers and customers. Today, NMHG has over 750,000 Hyster® and Yale® lift trucks in operation worldwide.
The Challenge
As a leading manufacturer with over $2.5 billion in global sales, NMHG faces stiff competition in North America, Europe, Japan, and China. Product quality and cost management are key measures for the company. With manufacturing and product development centers across the globe, streamlining the product development process to offset the rising cost of materials while maintaining an efficient project schedule was challenging. Product engineers typically sent their designs to cost engineers on NMHG’s manufacturing team for cost estimating, which was a highly manual process. This process took time and was designed for use by a small group of cost estimating experts, making it difficult to share cost information across different departments or physical locations. The company frequently found itself over product cost targets when the product was handed off to production, slowing time to market for new products. Rick Goldsmith, manager of corporate manufacturing engineering and tooling at NMHG, realized the need for a different approach to product costing efforts. He sought a tool to roll up costs into a single system for better analysis and monitoring, and to enable the design team to take on more responsibility for delivering product designs within cost goals.
The Solution
NMHG was introduced to aPriori in mid-2006. aPriori provided a flexible costing engine to instantly and precisely determine the cost of any part or product from a CAD model, based on the manufacturing process, materials, and production location. It could be used by designers, cost engineers, and sourcing professionals, not just cost estimating experts. NMHG’s design engineers could use aPriori to quickly compare the cost of different design alternatives and understand the cost impact of different design options. As design changes were made, aPriori automatically reassessed and provided updated product costs. This enabled NMHG to attack costs earlier in the product lifecycle and make more informed design and production decisions. In November 2006, NMHG began its initial implementation, testing aPriori at one of its factories in Mexico. aPriori identified considerable savings in just 24 hours of use across eight different assemblies. The implementation also allowed NMHG to test the accuracy of aPriori’s industry-standard cost data, which proved to be more accurate than the plant’s own cost estimates. In 2009, NMHG restructured its design and manufacturing operations to accelerate cycle time and shorten the time to market for new products. aPriori became a crucial communications tool, providing accurate and detailed cost estimates in real-time, helping NMHG communicate more clearly about product costs and explore cost-saving design alternatives.
Operational Impact
Quantitative Benefit
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