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With design-to-value process, company innovates products, reduces costs

Through design-to-value process, an industrial equipment company lowers manufacturing costs by 12 percent,reduces fuel consumption and CO2 emissions.

Challenge

A manufacturer of materials-handling equipment was developing a new forklift truck with the goal of minimizing both its own manufacturing costs and the customers’ cost of operating the product. Recognizing that the vehicle’s weight was the key design factor (a lighter vehicle would require less fuel to run and would have lower materials costs), the company’s R&D engineers conducted systematic teardowns of competitors’ products to study new design possibilities.

Discovery

Meanwhile, executives brought in marketers, who learned that customers would indeed value the lower cost of ownership—and reduced CO2 emissions—of the new design, but they would be unwilling to pay a premium for them. This knowledge spurred the company’s engineers and purchasers to reduce the weight of the new forklift truck by 7% (200 kg), while ultimately lowering manufacturing costs by 12% through a combination of design changes, sourcing from low-cost countries, “clean-sheet” costing, and other traditional approaches.

Illustration

Equipment for lower costs

Impact

The resulting vehicle was more appealing to customers because it:

  • consumed 4% less fuel than its predecessor
  • emitted 8 tons less CO2 over its lifespan.

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