Design: 65% Product Cost Reduction

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Design: 65% reduction in product cost while adding new features

  • February 20, 2018
  • matt girvan
  • Design

Client – One of the largest food production equipment manufacturers in the US.

Challenge – There was a need to reduce the cost of all products in a production line to improve gross margin and enter new markets to drive new revenue.

Solution – we held a multi-kaizen event: 1 week with 2 teams working on 2 major products. The teams studied value analysis thinking to deliver a breakthrough design concept that was not only far cheaper but was higher quality and with new desirable customer features.

Result – One team produced a short term cost reduction of 25% to be followed by an all new breakthrough product for new markets saving 65% of the product cost. The second team drove a short term cost reduction of 35% followed by a breakthrough new design later, saving 52% of the product cost.