Product Lifecycle and Cost Improvement Part 1
Many organizations have a series of activities or processes (design reviews, analyses, verifications, validations, etc.) that they go through to produce the end product or service. The work will start with some kind of development process, which may be a matter of days, months or years, depending on the complexity of the product or service. As part of the decision to undertake the project, we must understand the business case. Specifically, we must understand whether we can achieve the cost targets for the project and the product or service as compared to the value we present to the customer. If we are a sophisticated organization, we may have a series of actions (tools and techniques) that we undertake to secure the cost of the product or service meets our project objectives. Among these tools are our project management activities and any gates or review points we have in the process that aide in identifying whether we can meet the cost targets. We may also employ tools like Pugh Matrix to facilitate creation and selection of the optimum design concept.
These activities are in place so we deliver the product at the best possible cost such that we can deliver the best value to the customer. There are considerable tools we can use to improve the value proposition. We discuss these tools at length in our book Reducing Process Costs with Lean, Six Sigma, and Value Engineering Techniques and can be found on Amazon. Cost improvement possibilities do not end when we launch the product or service. In fact, as the product or service matures, we may have increased competition or will become in the uncomfortable position of competing on price. We will have to ensure our product or service is ready to compete over the metaphorical lifetime.
Early on in the life of the product or service, there are few customers and possibly no or not much competition either. The product matures acquiring more customers along the way, however, if this is a profitable product it is likely our competitors will notice. At some point, we may have to start competing on cost with those competitors as the product races to the end of the useful lifecycle. That is okay, we have a variety of tools to improve our value proposition.