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P. Optimized product value

Products, processes and services with specifications that are firmly embedded in a company's processes are often the legacy of enduring experience, know-how and habits, and a solid knowledge base.

With competition from emerging markets, those habits are destabilized by challenging offers that are not only low cost, but also lower-spec or decontented, more finely differentiated or much more customized. On the other hand, premium offers are also developing and valued, creating a squeeze effect for many producers.

This challenge raises many questions regarding traditional product, process and service offers: What is the added value of each offer's attributes for customers? Do they really value this feature? Does it have the right positioning (entry or premium)? Is our offer over-engineered, over-specified or too risk-contained? Is there too much unsellable complexity or unvalued diversity? Is it too customized?

Roland Berger encourages its clients to rethink their product, process and service offers by helping them break free from preconceived ideas, realign team creativity with solutions that make offers more competitive, and help management make balanced trade-off decisions between economics, risk and customer satisfaction. This type of approach often leads to significant double-digit TCO improvement.

P.1 Product offer strategy

What our expert says


Jun Shen
Jun Shen
"In many companies, the product portfolio looks inconsistent, mainly because investments in product development are decided on a case by case basis. Trying instead to optimize the product portfolio to match strategic goals in a top-down manner will often reveal a mismatch between the business strategy and the current product portfolio. The Roland Berger approach takes a holistic look at the product portfolio and helps optimize the link between the strategy and the product portfolio. This approach works both for achieving top-line growth and for improving the bottom line."
 

Key questions

  • How do you develop a product portfolio that ensures that you reach your overall strategic goal?
  • What are the application markets of the targeted products? What is the best way to prioritize these markets? What is the competitive positioning of the product and the attractiveness of the markets?
  • What is the product strategy for each market segment? What is the overall product deployment plan (in line with market priority)?
  • What is the best way to include transversal architectural choices in the product strategy (such as platform and modularity)?

Typical results

  • Higher growth potential due to optimized product offer to more market segments
  • Better bottom line resulting from a better product portfolio with less complexity

P.2 Design-to-value

What our expert says


Oliver Knapp
Oliver Knapp
"Products and services, with their respective specifications firmly embedded in a company's processes, are the legacy of enduring experience and know-how. Design-to-value is a method of reviewing and aligning the company's offerings in order to focus on what customers really value. In other words, offering your customers the products/services which they really want for a price they are willing to pay, at minimum cost. Our approach helps to challenge current products/services, identify value levers (sales up and/or cost down) and thus ultimately boosts both your company's profitability and your customers' satisfaction."
 

Key questions

  • Which features do customers prefer? In which order? At what cost?
  • What drives costs and how can we influence them early on?
  • Which alternatives could optimize product cost/performance?
  • Which alternative is valued by customers and maximizes profitability?

Typical results

  • Products that fully satisfy consumers and improve profitability
  • Sustainable product value management in the organization

P.3 Modularization / Commonality

What our expert says


Sébastien Amichi
Sébastien Amichi
"Commonality management is the art of making totally different products for clients with a maximum of shared elements. An extreme case is illustrated with IKEA's kitchen furniture, where millions of different shapes can be achieved, with a very strong standardized concept (modular block size, standard components, etc.). Our approach aims at defining how the product offer can be made more modular, and how modularization can be increased across the range of variants. We also support companies in implementing the associated organizational adaptation and the new methods required to initiate the management changes that such a new philosophy implies."
 

Key questions

  • How can product policy be used as a differentiating factor (higher quality and complexity, lower time-to-market, etc.)?
  • What is the best way to identify/structure the right perimeter/number of platforms to cover market needs?
  • What is the best way to define clear modules that foster flexibility and stable interfaces within each platform? Which features should be considered to be standard, and which ones should be options or customizations?
  • What kind of organization and what processes are needed to support module/platform development?

Typical results

  • Shorter lead times (>20%)
  • More product launches (+40%-60%) with the same resources
  • Lower total cost
  • Higher quality

P.4 Complexity / Diversity optimization

What our expert says


Max Blanchet
Max Blanchet
"Tackling complexity and diversity is like separating the wheat from the chaff. Diversity gives customers value and differentiation, whereas complexity draws over-costs along the value chain. Our approach aims at measuring the cost of complexity along the entire value chain through our CCM (complexity cost model) and correctly allocating these costs to the variants that incurred them."
 

Key questions

  • What is complexity within the company?
  • How can valued diversity be distinguished from non-perceived technical or commercial proliferation?
  • How can complexity costs be modeled and quantified along the entire product lifecycle (variant trees, number of parts, etc.)?
  • What are the causes and drivers of complexity? Which ones can be addressed and suppressed?
  • Which levers will reduce complexity?
  • What is the best way to improve commonalization?

Typical results

  • Shared complexity definition
  • Complexity quantification model/tool
  • Evaluation of complexity reduction potential
  • Associated improvement plan definition (approximately 15%-30% reduction of complexity costs)

Video

Oliver Knapp provides insights into our approach to an optimized product value.>>  

Learn more about the IPE approach to reducing product complexity. >>  

Publications

think: act CONTENT "Product Value Management"

think: act CONTENT, 2013

Some companies have begun paying much more attention to what their customers want in their product development process. We have drawn on our cross-sector experience to develop a new concept called "Product Value Management" …  >>

 
Mastering product complexity

Study, 2012

Increasingly competitive environments and the strong expansion into global markets are driving product complexity. In fact, it has more than doubled over the last 15 years …  >>

 
Modular Products

Study, 2012

Modularization is a hot topic and a key enabler to utilize growth potentials in emerging markets …  >>

 
SMART products for profitable growth in low-/mid-end segments

Summary, 2011

To profitably grow in low-/mid-end segments, mechanical engineering companies need to develop SMART products. We offer a comprehensive method toolbox to support the design of SMART products at the right cost …  (PDF, 1439 KB)