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Can you cut down on both product costs and project costs?

AVENCORE assisted a major electrical equipment manufacturer in implementing a new product development project. In a highly competitive market, the challenge was to cut down project costs (management, engineering, on-site deployment, etc.), and product costs, to remain competitive and achieve the expected sales margin.

To reach a differentiating price point, we analyzed the market and challenged the current product specifications to limit the feature set to only what end user customers demand. This approach, along with competitivity workshops involving suppliers, allowed us to identify and validate design optimization options that helped dramatically cut the overall product’s cost.

At the same time, we worked on improving efficiency by rethinking project organization modes. In particular, new processes and performance indicators put in place made it possible to cut installation lead time and required on-site support at customer locations worldwide.

The resulting equipment is now on the market with a 25% reduction of product cost and 20% reduction of associated project cost.