Design can improve your product’s profitability

In today’s challenging operating environment, improving and continuously maintaining competitiveness is perhaps more important than ever before. The key to improving a product’s competitiveness lies in its design. Redesigning an existing product can help achieve savings as high as 50%.

A high-performing product has many important features. It is high in quality and offers end users more added value than competing products. In addition, it is launched at just the right time to ensure that it meets current customer needs and market expectations as well as possible.

In order for the product to be competitive, it must naturally be able to measure up in comparisons, also in terms of price. The price cannot be too high, or else the product will not find enough buyers. On the other hand, a price that is too low is not profitable business for the company manufacturing the product.

Competitiveness from lower product costs

Whatever the industry, the market is packed with old products whose competitiveness has been chipped away over time. A product may have fallen behind its competitors due to its functionality, materials or high price.

If the stumbling block to competitiveness is price, it might be time to consider ways to lower the product’s price. It is good to aim for a price level that restores the product’s competitiveness while at the same time ensuring a sufficient sales margin for the company.

Product costs can be reduced in two ways: Downpricing refers to the benefits that can be achieved through purchasing, i.e. how lower-priced production, as well as more affordable materials and components, can be found by putting them out to tender. Downcosting refers to lowering the costs of a product’s manufacturability, assembly and production. With this method, the product’s competitiveness is influenced through the choices that are made in its design.

With the downpricing method, i.e. competitive tendering, the cost benefits are typically around 5%, whereas with downcosting, the savings in product costs can be as high as 50%. Many product companies nevertheless opt for the downpricing method to lower their product costs. Next, we explain why the focus should really be on design when the goal is to improve a product’s competitiveness.

At its best, design can bring significant added value

When seeking to lower costs and improve competitiveness through design, the product can be systematically examined by asking four basic questions: Is it possible to reduce, simplify, combine or remove any of the product’s parts, components or features?

When the entire product is examined with the focus on these basic questions, areas that can be influenced through design can generally be identified, and possibilities for lowering product costs gradually begin to appear. The added value that arises from redesigning the product can, at its best, be significant, especially if the development potential is found in costly and problematic parts, which also often involve the challenge of long delivery times.

In connection with examining the product, it also makes sense to assess whether a certain part or component can be produced at a lower cost using some other manufacturing method. 3D printing, i.e. additive manufacturing, is a prime example of a new manufacturing technology that can in many cases offer significant added value compared to conventional methods.

The possibilities do not end there, however, as companies can also influence a number of other factors through design. They can, for example, enhance the design of their product, embed it with new features, improve the product’s user experience and expand the product range. The possibilities extend all the way to the global manufacturing chain: the entire chain, from manufacturing and assembly to logistics and maintenance, can be designed to be more cost-effective.

Tero Hämeenaho

Tero Hämeenaho

Department Manager, Additive Manufacturing and Optimization
+358 103 072 757
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