Some decades ago business strategy taught us we had to make a choice: it is either operational excellence, product leadership or customer intimacy. Today’s tight roped markets force manufacturers to do all of this simultaneously. But is it possible to innovate consumer products with both increased value ánd reduced cost?
Balancing costs and value may be a true challenge for consumer product manufacturers. After all, quality comes at a price. When suppliers suddenly increase their prices, it may not be possible to forward these into the consumer price. Last year we saw rising costs of food ingredients. Guess what the reaction was of fast food producers? They shrunk the size of hamburgers! A recent study indicates shrinking unit volumes is quite a common practice in fast food, as a reaction to higher ingredient prices. Improving or innovating products that combine both higher value ánd lower costs may seem the holy grail for designers, R&D-, marketers and production teams. Here is an example of a combined value-up-and-cost-down innovation.
For decades the Dutch have eaten ‘beschuit’; pre-baked, round-shaped breakfast biscuits originated from naval sailors’ food. Traditionally these round biscuits are packaged in a 20- piece stacked cardboard cylinder. One producer came up with an innovation that dramatically enhanced the user experience. Taking out a small corner of the round biscuit, has made whipping the biscuit out of the package much easier, while lowering material costs. Modern Dutch beschuit nowadays comes with a chip.
There is a scientific approach for bringing both value up and cost down. Design-to-value can be obtained through cost & value engineering. This method brings together bottom-up cost savings and top-down value enhancements in a step-wise process. Interested to learn how we can help you to obtain cost-down-and-value-up? Mail us at email@example.com