Product Cost-down / Value Engineering

Differentiated by Design

Cost-saving opportunities arise not only through negotiations and supplier diversification, but also within the engineering process itself. This, however, requires cross-functional collaboration, both within the organization and in partnership with suppliers.

Value Engineering

Engineering a product for cost optimization is never a one-person task, it begins with a product convention where multiple departments come together to collect and review existing measures, a baseline for the idea generation process. As part of this preparation phase, the team identifies and prioritizes the most cost-intensive or strategically important products. This targeted focus directs the idea generation toward areas with the highest potential impact, making the entire process more efficient and results-driven.

Sourcing Champions helps host a series of structured workshops for cross-functional teams idea generation. These workshops cover a structured sequence of activities. A bill of materials and supply base review helps identify expensive components and assesses sourcing efficiency. The design to customer need and complexity review focuses on eliminating overengineering, aligning specifications with real customer requirements. China sourcing workshops explore localized supplier options and benchmark pricing to uncover regional cost-saving opportunities. And, supplier workshops bring manufacturers into the process to provide feedback on design feasibility, suggest ways to reduce non-recurring charges (NRC), and propose improvements in manufacturability.

costdata: Our Digital Partner for Value ENgineering

The process culminates in a final product convention, where teams align refined ideas with stakeholders, prioritize them, and approve them for implementation. This final convention holds everything together, translating collaborative insights into concrete actions.

Category & Supplier Leveraging

Cost optimization extends across entire categories and supply chains. By leveraging category insights and supplier collaboration, we uncover savings opportunities not only in pricing but also in how products are sourced, produced, and delivered. This begins with a detailed supply market analysis to understand available alternatives, benchmark costs, and assess supplier capabilities. Through supplier profiling, we evaluate factors like performance, cost structures, geographical footprint, and potential for low-cost country sourcing.

Read our successful case involving category management and cost-saving

We guide strategic decisions using tools like total cost of ownership (TCO) and landed cost evaluations, ensuring that we consider all direct and indirect costs—not just the unit price. Where relevant, make-or-buy analyses help determine whether internal production or external sourcing provides greater value.

By combining this structured category approach with collaborative supplier engagement, we ensure that sourcing strategies are aligned with long-term business objectives while maximizing both resilience and value.

Every Component is Potential Cost-saving Opportunity

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