C-Suite Agenda

Different Ways To Minimize Cost Of Production

Manufacturing

One of the most difficult aspects in product development is resource management. There have been many quality products that never reached the market simply because the cost of production was too high and the developers’ financial resources were exhausted. Many analysts say that 95% of new products fail.

Minimizing the cost of developed during product r&d is often the determining factor in whether or not a product reaches the market place. In this article, we will go over the most effective ways to minimize the cost of production.

Choosing The Right R&D Lab: Unless one is working for a large corporation, it likely that at least part of the R&D process will be contracted out to an R&D lab. This is because, simply, these companies already possess the equipment and technology necessary and already have the right employees on staff. It is cheaper to pay the R&D lab than it is to acquire these items.

Different labs charge different prices, largely determined by skill and reputation. Trying to save too much may result in poor results, thus costing more in the long run. On the other hand, paying too much may be too financially burdensome.

Focus On The Planning Stage: It is commonly said that the planning stage is the most time consuming but least costly stage of product development. The planning stage is the time to develop the product concept and do preliminary market research. Many product developers fail because they are up against a deadline and end up speeding through the planning stages, wanting to produce a prototype as soon as possible.

Product developers who experience success almost always spend more time on the planning phase than those who do not.

Reduce Complexity: A common mistake for product developers is trying to make their product provide too much functionality. Similarly, designing the product to do things that your target customer is not interested in is another way development teams increase product development costs. Focus on delivering the value that the customer desires.

Good Project Management: Project Management is a skill in itself. Sometimes hiring a consulting firm with relevant experience can help a developer minimize costs. Knowing what to spend money and what endeavors are best left on the whiteboard is something that comes with experience.

Reduce Marketing and Research Costs By Identifying Target Customer: It is very easy to spend large sums of money in market research and customer feedback. Many developers make the mistake of spending too much time and money researching the opinions of customers who are not likely to buy the product. Just about anyone will be willing to give their opinion on a product, especially if they are being paid. The trick is to identify the exact group who is likely to purchase the product and invest resources in outlining their opinions and needs. More quality data for less money can be achieved by following this principle.

Reduce Prototyping: Many product developers make the mistake of making too many prototypes. Prototypes cost money. Spending more time analyzing prototype failures and less time iteratively creating prototypes with minor changes will result in large savings costs.


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Ryan Miller

Ryan Miller

Global Assignment Editor
Ryan Miller is the Global Assignment Editor at CEOWORLD magazine. He covers anything and everything related to CEOs, CFOs, CIOs, senior management executives, business leaders, and high net worth individuals worldwide, whether lists or lifestyle, business or rankings. During his five-year tenure at CEOWORLD magazine, he has employed his expertise in data science across several roles. Ryan was previously responsible for data modelling and analytics, as well as secondary research, on the CEOWORLD magazine Custom Research team. He can be reached on email ryan-miller@ceoworld.biz. You can follow him on Twitter at @ceoworld.