– Tearing something down can sometimes be the most powerful way to build it up. For our design-to-value (DTV) experts, taking apart dishwashers, TVs, or wind turbines can yield important insights into how they are made—and lead to evidence-based recommendations for improvements.
“Our lab sometimes feels a little like Pawn Stars (the History Channel show set in a second-hand store),” says senior expert Guillermo Lopez Velarde. “As they say at the beginning of the show, ‘You never know what’s gonna come through that door.’”
Not long ago, a major consumer-goods player walked through the door with a product it felt was underperforming against the competition: a home-security device.
The product was suffering from poor consumer reviews because of unreliability. The client hoped the DTV team might solve that problem and also improve margins by either reducing its cost or boosting its value.
A conventional approach might look first at the product’s reliability issues and then later chase the margin opportunity. Design-to-value projects look at the product holistically, using design principles combined with deep engineering and supply-source insights.
The DTV team began by figuring out what’s most important to consumers. Through customer-insights analytics combined with targeted product-performance tests, the team found that consumers valued reliability and adjustability over all other product features and attributes.
“We could show the client hard data that the product was underperforming on both dimensions against competitors,” Guillermo says.
Then, after disassembling the product and comparing it part for part against top competitors, the DTV team found significant opportunities to reduce costs and add value in the product’s mechanical and electronic components.
“The product was overdesigned and not customer friendly,” says Guillermo. “We also learned that a particular sensor used by one competitor was better than the client’s. Switching to that sensor would improve reliability.”
Finally, on the supply side, the DTV team uncovered cost-reduction opportunities from a sizeable gap between supplier prices and best-in-class “should cost” benchmarks.
In the end, it all added up to dramatic improvements. Today the product earns four to four-and-a-half stars on online customer reviews and costs about 5 percent less to manufacture.
We have nine DTV facilities spread across North America, Europe, and Asia. Each includes a teardown lab, a brainstorming area, and a product gallery.
“Our largest European lab is in Munich, where we typically serve clients in the automotive and machinery sectors,” says senior expert Wolfgang Günthner, who leads our DTV projects across the continent. “We also just opened an expanded a cutting-edge lab in Wroclaw, Poland, where we specialize in cost engineering.”
The lab in Munich also houses a large 3-D scanner and printer. “In one situation, we were able to scan a product and produce a modified model of it overnight, so that the client could see exactly what we were proposing,” says Wolfgang. “It’s an incredibly powerful tool.”
As principal Dave Fedewa points out, however, DTV is more about people than high-tech gear. “The combination of depth and passion our people bring to the work is what really inspires clients to rethink their product designs. And there’s nothing that inspires the McKinsey team more than seeing a refreshed product hit the shelves.”