Hypertherm Inc., the producer of plasma metal cutting technology, increased its profit per square foot of factory floor space by six times by using design for manufacture and assembly software provided by Boothroyd Dewhurst, Inc.

Hypertherm (www.hypertherm.com) launched a five-year redesign program that relied on the software that Boothroyd Dewhurst markets under the trade name DFMA.

In addition to increasing profit per square foot, the company said Hypertherm's warranty cost per unit declined more than 75 percent during the five-year period from January 2003 to January 2008, in which it adopted the design for manufacturing software.

“We started with a vision to make radical improvements in both product performance and product economies,” Mike Shipulski, Hypertherm's director of engineering, said.

“Hypertherm met both of these goals by aggressively applying Boothroyd Dewhurst's software within our existing programs for robust design and lean manufacturing. We found their product simplification software made it easy for us to improve a product's performance-to-cost ratio. Moreover, we learned that DFMA ideas and financial estimates also lead to profound savings beyond labor and part cost, creating a domino effect ‘downstream’ in operational areas of our organization,” Shipulski said.

All technology development, product development, and manufacturing of Hypertherm's plasma cutting is done in New Hampshire.

By simplifying product designs, Hypertherm decreased labor expenses by 70 percent on redesigned products. That achievement has proven that design simplification is a fundamental and highly effective competitive strategy for negating the effect of cheap foreign labor rates.

In fact, Hypertherm actually sells more of its products in regions such as Europe, Asia and South America than in the United States. The company said that more of the world's cutting tables are equipped with its mechanized systems than all other plasma brands combined.

Other Hypertherm five-year benchmarks tied to its engineering innovation and management practices include the following:

• Greater private stock value and profit-sharing for all associates.

• Flat product prices to customers — with inflation-based increases only — despite rapidly rising material and outside business expenses.

• Win-win supplier strategies focused on waste reduction rather than reducing supplier margins.

“Hypertherm is an outstanding business model of what can be accomplished by deploying engineering technology as a foundational strategy,” John Gilligan, president of Boothroyd Dewhurst said.

“They are integrating their DFMA program with lean concepts, smart use of automation, employee empowerment, and other outstanding approaches. Most unique, from our perspective, is that Hypertherm carefully tracks cause and effect — from the DFMA design station to the shipping dock. They monitor the correlation between part count reduction and business improvement. A 600 percent increase in profit per square foot of factory floor space in five years is a productivity feat of world-class proportions. These results should send a strong signal to other U.S. manufacturing industries about what can be achieved through redesign,” Gilligan added.

Boothroyd Dewhurst (www.dfma.com) has made a DFMA survey-roundtable on the relationship between part count reduction and savings in operational costs that includes measurements and comments from U.S. manufacturers available at http://www.dfma.com/downstream/.