Product & Service Competitiveness
Controlling manufacturing costs (purchasing and labor) while maximizing the value for the end customer
Value Engineering, Design-to-Cost and Redesign-to-Cost: Responding to new market demands in a competitive way
Combining competitiveness and value in an uncertain economic environment
Industrial companies are facing two competing challenges: meeting their clients’ expectations in terms of innovative products and services while also optimizing their economic performance. Value Engineering, Design-to-Cost and Redesign-to-Cost are just a few of the levers available to management. With more than 15 years’ experience, Avencore has a track record and benchmarks from every industry, which guarantees our customers practical and effective solutions.
Design-to-Cost or Design-to-Cost Objective (COO): Controlling costs from the development phase
Design-to-Cost targets products under development for which the projected production costs are incompatible with the market price requirements, thereby jeopardizing the profitability of a product or even the company. The objective: to coordinate marketing, R&D, purchasing, manufacturing, quality, maintenance, partners and suppliers, to rethink the product (from specifications to design to the Supply Chain and meet the target cost. When it comes to such interdisciplinary projects, only strong, expert leadership can stimulate the teams’ ability to innovate and bring out new technical and economic solutions. In addition to the cost, the Design-to-Cost approach offers opportunities for differentiation (performance, characteristics, quality, aesthetics, associated services).
Redesign-to-Cost: Rethinking a product's functions to meet market needs
Redesign-to-Cost is one of the most effective productivity and competitiveness levers to optimize an existing design, with a set of constraints that have already been defined. Avencore can help you rethink the manufacturing dynamics of products that are already on the market, revise their specifications where possible, question technical choices, or work with suppliers, without compromising on product performance. Acting on the cost of products, associated services or, more broadly, industrial projects, makes it possible to target a significant portion of an industrial company’s costs.
Value Engineering: Innovating and maximizing the value of the product
Value Engineering is a strategic approach aimed at increasing the value-to-cost ratio by making design and process choices. Value Engineering emphasizes the importance of an integrated approach to product optimization that balances both cost and value, guaranteeing competitively priced products and services without sacrificing their quality or customer appeal. Value Engineering helps companies to focus their innovation efforts on those features that their customers are genuinely willing to pay for. Avencore has developed and applied a 6-step procedure for successful value analysis to nearly a thousand complex products, ranging from formalizing client needs to defining macro-scenarios.
Avencore has completed more than 1,000 Redesign-to-Cost projects, with 10% – 20% savings on production costs on average. The payback is excellent: the cost of our support usually pays for itself within a few weeks.
Design-to-Cost projects generate cost savings of up to 40% compared to the initial baseline.
“There are 6 signs that Value Engineering initiatives need to be launched urgently: increased competition in your market; a significant increase in the cost of raw materials; a growing gap between your current product offering and your customers’ expectations; the emergence of new technologies that are disrupting your market; a lack of innovation compared to your competitors; the launch of a new product.”