Design to cost and value

design_tocost_tovalue« Do today what everyone else will do tomorrow. »
Jean Cocteau

While Design to Cost is being adopted by an increasing number of companies, Design to Value interests more and more managers.
Actually, the accelerated transformation of products and services makes today all projects are both TO COST and TO VALUE :

  • The achievement of competitive costs remains inescapable,
  • The reinvention of Customer Value becomes an essential imperative.

How can Design to Cost and Value reconcile these seemingly antinomic objectives?

The stakes of Design to Cost and Value

Compagnies must in the same time:
Innovate on the markets…
You have to surprise, differanciate, radically transform the customer’s experience and simplify his life, but also respond to new or reinforced constraints : energy saving, ressources and environment preservation, security imperatives…

…and achieve high competitive costs.
Globalization and the emergence of new economic powers create new players particularly agressive in their conquest of market shares.

Numerous imperatives are added to this squaring of the circle:
– think services and not only products
– accelerate the projects and shorten the deadlines
– standardize and succeed the offers modularity
– Open up the functionings
– Transform the culture and work’s methods
– Impulse innovation and competitiveness in all minds and at all levels.

What is Design to Cost and Value?

Design to Cost and Value is an approach for products and services design that targets both the reinvention of the customer Value and drastic increase of competitiveness. It is particularly charaterized by its speed and pragmatism.

At the time of the agile company, complicated approaches are outdated. Design to Cost and Value assumes to focus on the essential and rejects the obsession of exhaustiveness of theoretician’s methods. It favors selective tools applied early in the project, without getting lost in details.

Extremely pragmatic, the approach gets focused on a quick and uncompromising diagnosis of existing offers and of their fundamental lacks, as well as the identification of drastic simplification fields (user experience, architecture, design, process, sourcing, flows, etc.) to open widely the fields of creativity. It then targets innovative and competitive concepts which will get the support of markets

Why implement a structured approach of Design to Cost and Value?

Because the efforts of R&D are not enough anymore
…neither those of Marketing, Industrialization, Production or Purchasing departments !
Too many companies have the feeling that preoccupations about innovation and cost reduction are already taken in consideration, without becoming aware that every day isolated efforts cannot be up to the issues.

Because it federates!
The approach associates concretely all teams in a seamless functioning, to a common objective. It extracts the quintessence of expertises and shares at the earliest between the project players a full visibility on the cost levers and the entire value chain.
The key transitions of development work with efficiency and transparency:
Marketing / R&D / Industrialization / Production / Purchasing / Logistics…but also suppliers and partners.

To break down the barriers!
Companies need to get out of their habits, excess of conservatism or expert visions which often unnecessarily penalize costs and engage the inclinations of innovation in wrong directions.
However, their players are eager to be enthusiastic about the reinvention of offers, if the approach is convincing and effective!

Because it is quick !
The approach highlights in a few weeks the levers of competitiveness and customer value.
It allows the best fundamental choices to be made from the very beginning of projects.

To redress the balance!
Design to Cost and Value also applies in cases of emergency, when the situation is critical and it is vital to get out of it.

Because it works everywhere !
The process has proved its effectiveness in all sectors and contexts: products, services, organizations, mass or unitary production, from catalogue or on tenders, in BtoB or BtoC, …
Throughout the company, it pushes actors out their comfort zone and to question the certainties.

Because it is extremely profitable!
The radical savings generated by Design to Cost and Value are essentialy obtained whithout heavy investment.

For fun!
Extremely pragmatic and concrete, the approach put the subject studied in the heart of reflections – and especially not the methodology – far from microscopic and bureaucratic approaches. Thus, it wins the support of teams and energizes projects.
Thanks to the achievement of ambitious objectives, Design to Cost and Value impulses change and modifies very concretely the ways of thinking and working in the company.

How to make succeed the Design to Cost and Value?

The choice of the right subject
It is not very difficult: it is strategic, unifying and at the heart of preoccupations of the company and its employees.
If it is a first pilot case, it is not necessarily gigantic but allows to benefit early of convincing results, which will push the dynamic.

An ambitious objective

You have to aim high ! With an objective breaking with the usual benefits observed in the company, even if seeming at first unachievable to the actors of the project.
Clearly expressed by the management, it will contribute to the surpassing of habits.

An efficient methodology

Run to a sustained rhythm, the approach has to lean on a detection logic to put in evidence the essential without get lost in complex and heavy approaches :
– A questioning about fundamental needs and customer value, key requirements and diversity of expectations.
– A quick overview of current offers (competition or similar sectors)
– The identification of all economic levers: potentially negotiable specifications, potentially questionable costs and complexities … all along the value chain.
– A very open creativity, but focused on the topics revealed by the diagnosis: insufficient or lack of customer value, unnecessary costs and complexities to eliminate…by seizing the opportunities offered by the technology.
– A visual and simple evaluation of possible concepts to give rhythm to the investigations and converge consensually on the best compromises.

Informed arbitrations

One of the strengths of this approach is to not decide too early on the acceptability or feasibility of solutions. On the contrary, it searches all the room for maneuver and open up the field of possibilities.
The arbitrations are only undertaken with the full visibility of the issues:
– A supported presentation of the diagnosis orients early the rest of investigations, in agreement with the strategy.
– A summary of evaluated concepts shares the alternatives to decide on the best choices and set boundaries for the further development.

A good service provider !
Call on the right external expert is a major advantage to succeed the implementation of Design to Cost and Value. However, some problems need to be avoid :
Some giants of consulting, masters in high level lobbying, sell very expensive their methodologically poor services, and then just put a terrible pressure on the operational staff.
Too many purists of value analysis cling to a cumbersome and complex methodology, out of step with the current timing of projects.
You can also find experts in purchasing or another precise sector which put in evidence their address books and supposed data bases as if they were panacea, at the risk of unnecessarily upsetting the players of the company.
Fortunately, there is also energetic and experienced consultants who know how to get involved with the teams to put the project at the heart of reflections, thanks to an efficient methodology.

Remarkable results

The benefits provided by Design to Cost and Value are high and usually surprising :

  • Radical direct cost reduction: -15, -30 even -50%on existing or new products
  • Creation of new concepts transforming the user’s experience or the customer’s benefits
  • Conquest of new markets
  • Securing of market share in front of new threats
  • Simplification of innovative concepts, made economically viable while maintaining their customer value
  • Winning of tenders in very competitive sectors, in France or by export
  • Clarification of innovation projects, avoiding stagnation or leading the wrong way

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