Manager, Mechanical Engineering
Insight Product Development LLC
In a recent Vantage Point, (M ←→ D→←↑←, Oct. 9, 2008, p.46) the author alluded to the idea that Design for Costing is a clever way to develop innovative products. Design for Costing works by setting a target cost from the start and focusing innovation on meeting this cost goal without exception. In my experience, this isn’t the best approach to product design because focusing on cost alone can sacrifice other important opportunities for innovation.
Let’s face facts. Three factors govern product development: speed, quality, and cost. Speed is the time it takes to bring a product to market and see a return on investment. Quality relates to the user’s impression of a product and includes features, reliability, and performance. Cost is the amount needed to develop and make the product, and it’s usually defined up front.
It’s the design engineer’s job to balance these three factors. Often, cost to the buyer is not what makes the product innovative. Rather, the claim to fame lies in being first to market or having unique features. It is usually possible to satisfy requirements for two factors, meaning something must be sacrificed. Sometimes that is cost.
Our firm recently developed a luxury backyard product for a client. When we began the project, the client said the manufactured cost could not exceed $100 yet the design had to meet specific requirements for ease of use and performance. We were also told that competitors had been plagued with failures, and we were to capitalize on the opportunity. Oh, and the product had to be on the market in about nine months. All in all, these were tough design goals.
First, we engaged in discovery research with potential users and stakeholders to truly determine what factors were essential to the product’s success. We found cost was important, but reliability and features were critical because they added substantial value. That key discovery let us focus our efforts on developing a high-quality product with differentiating features. Because cost was still important, we mapped areas of future savings and identified performance and feature trade-offs required to maximize those opportunities.
Using this approach, we delivered a product that met customer expectations before the spring selling season. While it did not meet initial cost requirements, the client realized through our research that speed and quality were more important. Now that the product has had a successful launch, many of these cost reductions are being implemented as the product enters its second season.
It is important to look at all the factors involved to decide what is most important for product success. Focusing on only one area can result in meaningless innovation. In today’s market, you will generally find that true product-differentiating innovation is a result of speed to market or the quality of a product’s features and performance, rather than cost alone.
Insight Product Development (insightpd.com) is a product-development firm with offices in the U.S. and China.