Next-Generation Product Cost Management: A Holistic and Networked Approach
Manufacturing companies today face numerous challenges, including volatile market environments and increasing competitive pressure. Product cost management plays a crucial role in maintaining profitability and competitiveness. However, most companies do not fully leverage the potential of product cost management, often relying on one-time measures to optimize the cost structure of a specific product. This approach yields short-term benefits but is not sustainable for future product development projects.
To address this challenge, Arthur D. Little offers a holistic and networked approach to product cost management. The approach is centered on establishing a design-to-cost framework that guides the product development process consistently through all levels. The framework includes the following steps: identifying customer requirements, defining product properties, selecting cost-reducing measures, and monitoring product cost.
By implementing sustainable concepts, organizations can monitor product cost and identify the right product properties to focus on for all future projects. This approach enables companies to maintain a competitive edge in the long term and sustain profitability.
