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Why Design to Value Matters

A number of factors affecting product design continue to drive up procurement costs: increasing speed to market, greater innovation, competing design objectives, shorter product life-cycles, SKU proliferation, complex regulatory environments, and overall cost pressures.

Because 80% of product life-cycle cost is determined during the concept phase, companies should view design optimization as an important strategy for keeping overall product cost as low as possible. Design optimization also generates operational advantage by reducing lead time, defect rates, and nonconformance costs.

The “design to value” approach, which can be applied to new and existing products, identifies the most relevant sources of value, uncovers value-creating opportunities, enables cross-functional collaboration to identify potential design changes, and assesses, prioritizes, and implements the recommended changes.

Design to value is not a one-time event; rather, it’s an ongoing product development process driven by optimization of targeted design criteria. Done well, it can create significant procurement savings.

Three Steps to Design Optimization

Design to value is a three-step process that develops winning products and services at the best economics over the total product life-cycle.

  1. Design Criteria Prioritization. What is the definition of value that is making the case for change? Use customer insights, competitive benchmarking, and other data to identify the value you’re trying to unlock, such as serving new customers or improving product quality. From there, you can identify and prioritize design criteria.
  2. Catalyst Process. By generating fact-based ideas from cross-functional teams, external sources, and neutral parties, this process breaks down silos and addresses trade-offs for breakthrough decision-making. The goal of collaboration is to align on customer needs and product design requirements.
  3. Execution Management. To succeed in design to value, it’s critical to set clear accountability, allow for forward-looking course corrections, and stay transparent on what matters most. An initiative-tracking tool can help monitor the project from concept to full value capture.

Any process has its unique challenges and obstacles. For the best design to value results, pay special attention to these areas:

  • Information and Analysis. Are you relying on gut feelings or viewing your business too narrowly? Use fact-based analysis to uncover new insights and create one version of the truth.
  • Optimization and Decision-Making. Hampered by unclear goals, decision rights, and difficult trade-offs? Use cross-functional catalyst events to manage those trade-offs and drive firm decisions.
  • Execution. Is there a lack of follow-through and unrealized impact? Execution management ensures accountability and results.

Four Keys to Cultural Change

Design optimization requires a strong commitment to cultural change. To generate ongoing procurement savings, companies must embed design to value in their corporate culture. Here are four thoughts to keep in mind.

Think Big On Value

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Getting It Right Pays Off

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