CALIFORNIA INSTITUTE OF TECHNOLOGY INDUSTRIAL RELATIONS CENTER

AN EXECUTIVE COURSE

Manufacturing Cost
Strategies
Reducing Costs and Creating Capital for Growth

Alan G. Dunn

February 20-21, 2007

June 4-5, 2007

w w w . i r c . c a l t e c h . e d u

Manufacturing Cost Strategies

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Business Issues Addressed

COMMENTS FROM
PAST PARTICIPANTS
The aspect of the course that really sticks
is learning how to focus on the real cost
drivers in my organization. Alan Dunn is
impressive; he has a solid understanding
of the material. This course provides a
good, practical base of knowledge not
just theory.
Bill Price
Manager of Manufacturing Financial
Systems
Schlumberger
The content of this course is excellent.
Alan Dunn presented the information with
demonstrated knowledge and real world
experience.
Peter Heffernan
Operations Finance Manager
Boston Scientific Corporation
The information presented a real-world
approach to cost accounting. I will
re-examine methods used to create
burdens for labor and material overhead.
The instructor knew his stuff and his
anecdotes were interesting.
Robert S. Meybohm
Controller
QSC Audio Products, Inc.
The performance and diagnostic tool
will be useful in tracking the health status
of our various work centers. The instructor
has broad and deep knowledge of the
subject matter.
Ben Licera
Manager, Manufacturing Operations
Northrop Grumman Corporation
Surveillance and Remote Sensing
Division

Find opportunities for sustainable cost reductions without

creating systemic problems elsewhere in the organization.
Youll gain manufacturing cost strategies and experience-based
guidance to:
Lower your total cost of manufacturing
Create working capital and grow your business
Partner with your suppliers to save more money
Determine and reduce the asset drain of work-in-progress
Keep non-value added activity from depleting resources
Reduce procurement costs
Cost effectively introduce new products
Positively impact your bottom line with improved factory utilization
Forecast more effectively
Determine if a product line truly is profitable to your bottom line
Identify and eliminate waste in all parts of your operation
Additionally, you will learn how to increase the effectiveness of all
workers, which ultimately leads to product cost reductions and margin
improvements.
Participate in this highly interactive course to gain practical
ideas for immediate implementation into your organization.

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Key Topics

This executive workshop focuses on:

Elements of a comprehensive cost management strategy
Linking cost management to marketing, design, production,

logistics, supply chain, and other functions

Identifying tangible and systemic cost drivers
Tactics for reducing the impact of cost drivers on product cost
How to cost a product in a virtual factory environment
Better methods for allocating burden and overhead
New tools available to calculate work center costs
Evaluating outsourcing and off-shore sourcing opportunities
Finding and eliminating waste

Course Agenda
Constructing a High Performance
Manufacturing Cost Strategy
How asset, cash, quality, and customer service management

relate to cost management

Economic drivers that impact gross margins
How cost management can fund your future

Describing the Real Cost of Your Products

Eight elements of financial costing

Three elements of competitive costing
Three elements of managerial costing
Nine litmus test questions every cost accountant must
answer

Reducing Production Costs

Improving production effectiveness

Reducing production cycle times
Factory utilization and mixed model production line costs
Flow production and Just-in-Time (JIT) methods
Eliminating non-moving Work-in-Process (WIP)
Eliminating defects and scrap and rework costs
Using value-engineering tools to identify and prioritize waste
Reducing underutilization costs with improved scheduling
Choosing on-shore or off-shore production sources

Reducing Material Acquisition Costs

Cost of material acquisition

Reducing total material acquisition costs
Reducing material content and real material cost
Replacing procurement transaction costs with annualized
agreements
Drivers of suppliers costs
Measuring your suppliers cost reduction curve
Moving qualitys role to your suppliers factory
How to convert your purchasing function to a true supply
chain organization

Concurrent Workshops 1 and 2: Reducing production and

material acquisition costs

Reducing Inventories and Inventing Capital

Why inventory is NOT an asset and how it impedes growth

and reduces opportunities

Dramatically reducing inventory...quickly
Sales growth and inventory growth
Setting safety stock levels, order points, and lot sizes
Reducing WIP inventory investment
The relationship of lead-time to inventory investment

Concurrent Workshops 3 and 4: Reducing material

acquisition and inventory investment costs

Reducing Product Development Costs

Reducing the design cycle and improving time-to-market

Determining to create designs internally or externally
How design costs get into product line P&Ls
Measuring performance of knowledge workers

Concurrent Workshops 5 and 6: Reducing inventory levels

and product development costs

Reducing the Cost of Logistics

Why store inventory

Defining logistics cost elements
Identifying cost trade-offs in logistics
Using time-to-shelf as a competitive weapon
Price and cost relationships in logistics
Finished goods inventory, customer service, and shareholder
value

Reducing Information Management and

Transaction Processing Costs
Has your information management system paid off
Information system cost drivers
Improving information systems performance and

effectiveness
Outsourcing opportunities in IS
Assuring information integrity

Concurrent Workshops 7 and 8: Reducing logistics and

information management costs

Eliminating Waste From Administrative

Functions
Relationship of administrative activities to events to where

costs ultimately manifest

Source of administrative waste
Difference between burden and overhead costs
Ways to attack obvious and systemic waste

Reducing the TOTAL Cost of People

How to stop the growth of unnecessary support personnel

Identifying systemic waste in support functions
Ten ideas for reducing the cost of employees
Rethinking metrics in order to shape a variance-curious
culture

Concurrent Workshops 9 and 10: Reducing administrative

and people costs

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Needed Changes to Cost Accounting
Processes
Five relevant reasons for cost accounting
Three additional requirements of a truly informative cost

accounting system
Accounting for time and waste
Allocating overhead to individual products properly
Implementing value-based cost accounting in a

manufacturing environment
Cost accounting systems that change behaviors
Why net contribution management is more important than

gross margin management

Bring This Course To Your Company

All courses offered by the Caltech Industrial Relations

Center can be customized to meet the specific needs of
your organization and offered at significant cost savings
at your facility.
Customized courses address important company issues
in a confidential environment, build a team with a common
language, and save travel time and costs for participants.
Among the wide selection of courses which can be
customized to your companys requirements, are the
following:

Using new P&L formats and value engineering for real cost

reduction

Mounting an Effective Cost Reduction

Initiative

Identifying serious cost drivers in your company

Distinguishing controllable and control resistant cost drivers
The link between cost drivers and shareholder value
Cost reduction responsibilities

Designing an Ongoing Cost Reduction

Process

Overcoming technical, organizational, and cultural barriers

Designing a successful cost reduction initiative
Addressing behavioral pushback during implementation
A 10-step plan for implementing cost reductions
Documenting and justifying cost reduction initiatives
Cost management critical success factors
Rewarding for significant cost reduction initiatives
Identifying what participants can do when they return to
their companies

The California Institute of Technology Industrial

Relations Center is registered with the National
Association of State Boards of Accountancy (NASBA)
as a sponsor of continuing professional education on
the National Registry of CPE Sponsors. State boards
of accountancy have final authority on the acceptance
of individual courses for CPE credit. Complaints regarding registered
sponsors may be addressed to the National Registry of CPE Sponsors,
150 Fourth Avenue North, Suite 700, Nashville, TN, 37219-2417.
Web site: www.nasba.org

Manufacturing Cost Strategies

Successful Global Business Operations
Driving Business Performance: Implementing New

Metrics and Incentives

Successful Project Management

For complete details regarding customized courses,

please call 626.395.2348 or email cstprg@caltech.edu.

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Special Feature

Participants are invited to attend a dinner the first

evening of the course, providing an opportunity to share
information and ideas with the instructor and other
participants.

Internet Access
See this course and others at our website:

www.irc.caltech.edu

Course

Leader

Alan G. Dunn* is president of GDI and chairman of GDIs business investment firm. He specializes
in global manufacturing management, cost management, and business finance. Previously,
Mr. Dunn was a partner at Coopers & Lybrand and a vice president at Gemini Consulting.
Mr. Dunn has worked with: AlliedSignal, American Cyanamid, Amgen, AT&T, Ballard Power
Systems, Baxter, Boeing, General Instrument, General Motors, Intel, Johnson & Johnson, Lockheed
Martin, Loral, Monier Lifetiles, Phelps Dodge, Sony Corporation, Sybron Dental Specialties,
Technicolor, Toshiba Corporation, United Technologies, U.S. Borax, the U.S. Department of Energy,
and Warner Bros.
Mr. Dunn is an international educator, speaker, and author on performance measurement,
manufacturing systems, cost management, value engineering, business process reengineering,
information systems management, business transformation, corporate governance, and business
finance. He has addressed the American Production and Inventory Control Society (APICS), the
Council of Logistics Management (CLM), the Product Development Management Association
(PDMA), the Society of Manufacturing Engineers (SME), the National Association of Accountants
(NAA), and the Young Presidents Organization (YPO).
His articles have been published in the Los Angeles Times, Journal of Manufacturing Systems,
Material Handling Engineering, Automation, Production and Inventory Review, Managing
Automation, Warehouse Cost Digest, Transformation Magazine, and Industrial Engineering
Management.
Mr. Dunn has served on the boards of directors of both public and privately held international
companies in the aerospace, asphalt production, automotive, and nutriceutical sectors. He is
currently an active member in the National Association of Corporate Directors (NACD).
Mr. Dunn has a degree in business management.
* See the CFO.com website article, Going With the Flow, for additional courses Mr. Dunn presents at the Caltech
Industrial Relations Center.

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Earn Certificate Credit

Manufacturing Cost Strategies is eligible for credit in the Engineering Management Certificate
Program. See our website for details, www.irc.caltech.edu, or call us at 626.395.4043.

Express Registration: www.irc.caltech.edu

>>

Manufacturing Cost Strategies

Register Me Today!

February 20-21, 2007 Express #2050207

June 4-5, 2007 Express #2050607

Yes, I want to participate.

Payment: To pay by credit card, complete the form below. Please make
checks payable to Caltech Industrial Relations Center, enclose the
registration form, and send to the mailing address. The California
Institute of Technologys tax identification number is 95-1643307.

Fax:
Mail:

626.795.7174
California Institute of Technology
Industrial Relations Center, 1-90
Pasadena, California 91125-9000
Phone: 626.395.4045
Email:
execedu@caltech.edu
Internet: www.irc.caltech.edu

Registrants will immediately receive a fax acknowledging enrollment.

Approximately one month prior to the course, participants will receive a
confirmation letter containing further details regarding the course schedule,
location, and directions to hotels and the Center. Attire is business casual.
Wireless Internet access is available.
Course Location: California Institute of Technology Industrial Relations
Center, 383 South Hill Avenue, Pasadena, California 91106-3405
Schedule
First Day:

Registration and continental breakfast 8:00 a.m.-8:30 a.m.

Course
8:30 a.m.-6:00 p.m.
Dinner
6:15 p.m.

Second Day: Continental breakfast

Course

7:30 a.m.-8:00 a.m.

8:00 a.m.-5:00 p.m.

CPE Credit Information

Field of Study: Management Advisory Services, Production, Finance
Program Level: Overview.
No prerequisites or advance preparation is required.
Instructional Method: Group-Live offering
Continuing Professional Education (CPE) credits: 19
Course hours: 16.5, Continuing Education Units (CEUs): 1.65

Course Fee: The 2007 course fee is $2395. The fee includes the course,
instructional materials, adjacent parking, continental breakfasts, lunches, and
a dinner. The fee is due four weeks prior to the course. Each course is limited
to 40 participants. If the course is not held for any reason, California Institute
of Technologys liability is limited to refund of the course fee.
Transfers/Cancellations: We offer the registrant an opportunity to either:
1) send a substitute to the original course or
2) transfer once to a later session.
Please notify us at least 11 business days prior to the course date to receive a
full refund. If a cancellation is made within 10 business days prior to the course
date, one-half of the course fee will be refunded. Refunds cannot be
granted for cancellations made the day of the course or following a
transfer.
Hotel Accommodations: (Hotel rates are subject to change and availability.)
Caltech Athenaeum (Faculty Club)
626.395.8200
($137)
Old Pasadena Courtyard by Marriott
626.403.7600
($139)
Pasadena Hilton Hotel
626.577.1000
($149)
Ritz-Carlton Huntington Hotel & Spa
626.568.3900
($179)
Sheraton Pasadena Hotel
626.449.4000
($139)
Westin Hotel
626.792.2727
($159)
Please request the California Institute of Technology/Caltech rate indicated.
To ensure your reservation, guarantee for late arrival. Hotels listed are within
3 miles of the Industrial Relations Center.

Customer Satisfaction Policy: For information regarding course satisfaction

guarantee, please contact Gaylord Nichols, Director, at 626.395.4049.

Travel Savings: Protravel International, Gina Robles,

grobles@protravelinc.com or Gloria Lopez, glopez@protravelinc.com, call
800.481.7774 or 626.796.4448. Fax 626.844.3055. Request the Caltech
Industrial Relations Center participant rate.

Manufacturing Cost Strategies

February 20-21, 2007

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June 4-5, 2007

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