Many benefits – including cost reductions – are synergistic; benefits created during product development also catalyze additional benefits that become apparent during the following two phases:

The LTO Process - Many of the benefits linked with using a configurator surface now, including:

Increasing revenue by up-and-cross selling, particularly on higher margin options and accessories

Cutting quotation response time and costs to a minimum

Generating a valid product configuration – quickly and accurately – without iterative validating of the configuration

Producing ancillary drawings and documents automatically

Eliminating payment delays caused by order and invoice errors

Manufacturing/Customer Order Fulfillment - The newly popular term “Designing for Lean” speaks volumes about the relevance of product development results for Lean Manufacturing, making possible:

Increasing product quality

Lowering product cost

Reducing number of suppliers

Eliminating rework and scrap caused by mis-configured products

Reducing inventories

Cutting manufacturing and assembly cycle time to improve the order fulfillment rate

Enabling postponement

Postponement is a prime example of synergism. It is enabled by product modularization, use of a configurator, a Lean Manufacturing environment and a flexible distribution channel. A recent survey highlighted several significant benefits of postponement – the three highest rated: increased customer satisfaction, reduced inventory cost and improved order fill rate. (6)

Clearly, cost reductions are highly desirable, as noted by the benefits above. The results have a powerful, multiplier effect, improving product margins and driving increased profits.

Arguably, perhaps as significant as cost reduction, is freeing engineering personnel from non-value added activities, redirecting them to reap strategic benefits. As a vice president of engineering declared, “We can’t just reduce the product cost to gain competitiveness; innovative new products must be our answer”. A recent survey amplified his sentiments – accelerating product innovation is critical for growth. (7)