A product’s maximum value is achieved when it reliably fulfills its function at the lowest possible cost. To remain competitive in today’s intense market competition, companies must reduce costs to the greatest possible extent; however, this should never be done at the expense of product quality or performance. Value engineering ensures that customer benefits are increased, yet without reducing functionality for the customer. This is the only way companies can achieve technology leadership in the industry.
In an intensive, global competitive environment, demands regarding the flexibility, variety, and complexity of machines and systems are increasing. The relationship between customer benefit and the price offered is often disregarded, resulting in companies facing increasing price and cost pressure.
On the other hand, the actual customer benefit is often given too little consideration in the development of machines and systems or is over-fulfilled by the engineers. This drives up product costs, extends time-to-market, and increases development costs. Customers are usually not offered any real additional benefits, so they are not willing to pay the additional costs. Margin losses or unsaleable products with high development costs are the result.
By consistently integrating the clients’ needs and all parties involved in the value chain, a market-oriented price-performance ratio and a shorter time-to-market must be achieved. This ensures lower development costs and short-term project ROIs.
As part of profitability optimization, and together with our clients, our consultants use value-analytical methods to evaluate and prioritize requirements, expectations and wishes .
We create a quantifiable value proposition map in line with the business strategy, using benefit-centric design thinking methods. This compares customer needs with the potential functionalities of the product to be developed. We then quantify the customer benefit of the functionalities and define the resulting target costs.
Based on the analyses and target costing, we create well-founded and structured specifications for the new development. They are the basis for the development of the specified machines and plants under constant product cost evaluation. The fundamental building blocks of our approach to cost-oriented product development are the continuous involvement of all areas along the value chain and implementation-oriented project management.
ensign advisory uses value engineering methods to help clients achieve a 10% to 15% shorter time-to-market. Clients can also typically achieve 10 to 15% lower product manufacturing costs compared to the predecessor product due to a new product value chain trimmed for efficiency and 10% lower development and order processing costs. With ensign advisory as a partner, competitively positioned products, with high customer value and margins above 30%, can be achieved.
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