7 Ways to Reduce Costs in the Product Development Cycle
While severe economic pressures can result in budget reductions and personnel layoffs, these changes fail to produce the organizational, process, or product improvements that are necessary for gaining a competitive advantage.
There are plenty of road blocks when it comes to meeting the challenge of reducing time and costs in the product development and engineering cycle. In spite of mandates from management to cut expenses and speed up the development process, there are many barriers to success. At the same time, there are proven methods for helping to remove these barriers to success.
Here are seven methods that are critical in your product development cycle:
1. Reduce prototype development time
Consistently, time is an overriding enemy when it comes to getting a product to market. Many times a barrier to success is the time required to build mockups. Technologies such as 3D digital prototyping have several advantages, ranging from lowering costs to speeding up the prototyping process and fostering innovation.
Today, there are engineers who continue to rely on creating physical prototypes. Unfortunately, the process creates bottlenecks, so engineers find themselves waiting around until the next prototype is finished. The costs are simply too high, both in time and money, for this to occur today.
With the absolute requirements of maximum efficiency, lowest possible costs, and getting to market in record time, management can help overcome engineering department reluctance by taking two steps: 1) make a commitment to change processes or outsource specific design and development functions, and 2) follow up by investing in the technology and training that makes the transition successful. Key elements in using virtual prototyping for effectiveness: ensuring that design reviews happen digitally and that all involved stakeholders learn to think "digitally" (making key decisions using only the digital prototype).
2. Reduce complexity
It may be that unnecessary complexity is a primary cost driver when it comes to product development. In many companies, products and product lines develop independently of each other, with engineers focusing on the task at hand. Unfortunately, engineers don't have easy access to or knowledge of products developed in the past, other than to try to find someone who may recall working on a similar project. It's always beneficial to focus on reducing complexity to save money in both new and existing products.
3. Use more technology, teamwork
Along with prototype building, technology offers other benefits. For example, it allows designers and engineers to work as teams, interacting quickly, whether they are in the same location or dispersed. Outsourcing to experts in design and engineering can be a tremendous time and money saver. Not only does this approach save valuable time, but the collaboration also allows them to achieve the best possible solution.
Technology can also speed up what has long been the time-consuming, tedious, and costly sign-off process. There is no reason to distribute physical sets of drawings when it can be done digitally. Changes and comments can be noted electronically and redistributed, if necessary, to say nothing of identifying any stragglers who have yet to respond.
4. Make better use of outsourced designers and suppliers
It's critical that designers, engineers and suppliers be part of the team at the start of a project. For example, a manufacturer saved millions of dollars a year on the cost of key components by listening to its outsourced designers and parts suppliers. By using a specific design with slight variations, the savings can be significant.
5. Think like a customer when it comes to features
It's easy to forget that the task is satisfying customers, not the engineers. By bringing in an outsourced designer and product development firm that is objective with a fresh perspective and specialized expertise, you can produce a superior product.
Apple, Inc. understood that most cell phone users hated their phones. While cell phones are technological marvels, they are essentially user-unfriendly. The intuitive iPhone avoided the common errors and quickly became an unparalleled success.
6. Design for cost savings, but don't sacrifice testing and verification
It's only necessary to point to huge product recalls, as well as spec changes on certain parts soon after a product has been introduced to validate this issue.
Whether the problem is caused by the need to meet a launch deadline or to abide by an ultimatum to reduce overall development costs, the result can be a costly disaster. Failing to verify performance is always unacceptable.
7. Create and rationalize specifications
If this seems painfully obvious, then why are there so many exceptions and costly mistakes? If, for one reason or another, a supplier happens to change specifications, how can they be held responsible if there were no approved specs?
Finally, having complete specifications facilitates the bidding process and results in better pricing and product quality. In effect, a company's product specs are its tool for eliminating redundancy, saving time, eliminating errors, and obtaining cost advantages.
Avoiding these barriers is a manufacturer's best guarantee for staying competitive or gaining a valuable competitive advantage in any economic environment, including very difficult times.
MechoTech uses innovation, creativity and expertise to provide a full range of product development and engineering services, including design and development, mechanical and electrical engineering and fast prototyping to make your product launch a success. Contact Moe Sarraf at MechoTech at (949) 215-7270 today for a no cost consultation.