VAVEhub · Toolkit 08
Business Case
Five answers turn an idea into a decision: what changes, what it saves, what it costs to bring in, what could go wrong, and when.
Step 1 · What changes
| What exactly changes (part, drawing, process) | |
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| The function it still performs, and how you know | |
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| Products and part numbers affected | |
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Step 2 · What it saves
| Saving per unit (£) | |
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| Annual volume (units) | |
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| Annual saving = saving per unit × volume | |
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| Who in finance checked it, and when | |
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Step 3 · What it costs to bring in (one-time)
| Tooling | |
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| Validation and testing | |
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| Engineering: ____ hours × £____ an hour | |
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| Scrapped stock | |
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| Re-approval (PPAP, re-certification) | |
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| Total one-time cost | |
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Step 4 · When it happens, and when it pays back
| Date the change goes into production | |
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| Payback in months = total one-time cost ÷ annual saving × 12 | |
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| Remaining product life (years) | |
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| Net saving over the product's life = annual saving × years of savings − one-time cost | |
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Years of savings = remaining life minus the time until the change is made. Savings start on the day the change is made, not the day it's approved.
Step 5 · What could go wrong
| New way it could fail | Severity 1–10 | Occurrence now → after | Detection 1–10 | Action | Test step 1–5 |
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Score the change from the current design, not the absolute figure. Testing ladder: 1 desk calculation · 2 CAE or simulation · 3 rig test · 4 production-line trial · 5 field trial. Only climb as far as the risk needs.
The decision
☐ Approve☐ Approve with conditions☐ Needs more data☐ Reject
Worked example (Module 7): a fine-blanked bracket replaces a machined one. Saving £0.30 × 300,000 units = £90,000 a year. One-time cost: tooling £38,000 + validation £7,000 + engineering 120 hours × £65 (£7,800) = £52,800. Payback = £52,800 ÷ £90,000 × 12 = about 7 months. For a change to a product already in production, aim for under 12 months.